Taiwan Steel Union Co., Ltd. and Subsidiary

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

DECLARATION OF CONSOLIDATED FINANCIAL STATEMENTS OF AFFILIATES

The companies required to be included in the consolidated financial statements of affiliates in accordance with the "Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises" for the year ended December 31, 2025 are all the same as the companies required to be included in the consolidated financial statements of parent and subsidiary companies as provided in International Financial Reporting Standard No. 10 "Consolidated Financial Statements". Relevant information that should be disclosed in the consolidated financial statements of affiliates has all been disclosed in the consolidated financial statements of parent and subsidiary companies. Hence, we do not prepare a separate set of consolidated financial statements of affiliates.

Very truly yours,

TAIWAN STEEL UNION CO., LTD.

Lin Tsai-Hsiang
President

February 25, 2026

INDEPENDENT AUDITORS' REPORT

The Board of Directors and Shareholders
Taiwan Steel Union Co., Ltd.

Opinion

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

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

Basis for Opinion

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

Key Audit Matters

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

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

Revenue recognition

The Group’s sales revenue from major customers was NT$1,074,781 thousand, representing 49% of the Group’s consolidated net sales revenue for the year ended December 31, 2025. Since sales revenue has significant changes compared to 2024, we identified the authenticity of sales revenue from major customers as a key audit matter. The accounting policy on the revenue recognition is disclosed in Note 4 to the consolidated financial statements.

The main audit procedures that we performed with respect to sales revenue from major customers included the following:

We obtained an understanding of the related internal controls on revenue recognition and tested the operating effectiveness of the related controls.
We selected samples from the transaction documents of sales revenue from major customers, including sales orders, shipping documents and receipts of payment, to confirm the authenticity of revenue recognition.
We received sales confirmation letters from major customers to verify the existence of revenue.

Other Matter

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

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

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and the IFRS, IAS, IFRIC, and 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 a reasonable assurance about whether the consolidated financial statements as a whole are free of material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Standards on Auditing of the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

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

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

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

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

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

The engagement partners on the audits resulting in this independent auditors' report are Jui-Lung Hsu and Done-Yuin Tseng.

Deloitte & Touche
Taipei, Taiwan
Republic of China

February 25, 2026

Notice to Readers

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

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

TAIWAN STEEL UNION CO., LTD. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2025 AND 2024

(In Thousands of New Taiwan Dollars)

	December 31, 2025		December 31, 2024
ASSETS	Amount	%	Amount	%
CURRENT ASSETS
Cash and cash equivalents (Notes 4 and 6)	$ 676,454	12	$ 756,988	14
Financial assets at amortized cost - current (Notes 4 and 7)	1,500	-	-	-
Notes receivables, net (Notes 4 and 8)	1,689	-	2,602	-
Trade receivables from unrelated parties, net (Notes 4,8 and 18)	152,900	3	188,674	4
Trade receivables from related parties, net (Notes 4, 8,18 and 25)	11,358	-	18,910	-
Other receivables (Notes 4, 8 and 25)	2,746	-	6,097	-
Inventories (Notes 4 and 9)	164,410	3	142,103	3
Other financial assets – current (Notes 4 and 22)	-	-	21,402	-
Other current assets (Notes 4, 13 and 18)	41,880	1	56,081	1
Total current assets	1,052,937	19	1,192,857	22
NON-CURRENT ASSETS
Investments accounted for using the equity method (Note 11)	7,849	-	-	-
Property, plant and equipment (Notes 4, 12, 22, 26 and 27)	4,173,362	77	4,127,745	76
Other intangible assets (Notes 4 and 25)	20,840	-	13,629	-
Deferred tax assets (Notes 4 and 20)	21,884	1	12,226	-
Prepayments for machinery and equipment (Notes 4 and 22)	82,635	2	22,598	1
Refundable deposits (Note 4)	5,879	-	5,705	-
Net defined benefit assets – non-current (Note 16)	1,110	-	-	-
Other financial assets – non-current (Notes 4, 22 and 26)	55,016	1	59,943	1
Other non-current assets (Note 13)	68	-	614	-
Total non-current assets	4,368,643	81	4,242,460	78
TOTAL	$ 5,421,580	100	$ 5,435,317	100
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Notes payables (Note 4)	$ -	-	$ 3,150	-
Trade payables (Notes 4 and 25)	57,815	1	46,154	1
Other payables (Notes 4, 15 and 25)	187,815	3	171,000	3
Current tax liabilities (Notes 4 and 20)	88,364	2	117,383	2
Current portion of long-term borrowings (Notes 14, 22 and 26)	38,267	1	38,267	1
Other current liabilities (Notes 15,18 and 25)	73,050	1	65,412	1
Total current liabilities	445,311	8	441,366	8
NON-CURRENT LIABILITIES
Long-term bank loans (Notes 14, 22 and 26)	481,522	9	519,789	10
Deferred tax liabilities (Notes 4 and 20)	347	-	487	-
Net defined benefit liabilities – non-current (Notes 4 and 16)	-	-	813	-
Other non-current liabilities (Note 4)	7,545	-	6,789	-
Total non-current liabilities	489,414	9	527,878	10
Total liabilities	934,725	17	969,244	18
EQUITY
Ordinary shares	1,112,709	21	1,112,709	21
Capital surplus	999,216	18	999,216	18
Retained earnings
Legal reserve	712,548	13	629,311	11
Unappropriated earnings	1,662,382	31	1,724,837	32
Total equity	4,486,855	83	4,466,073	82
TOTAL	$ 5,421,580	100	$ 5,435,317	100

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

TAIWAN STEEL UNION CO., LTD. AND SUBSIDIARY

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

	2025		2024
	Amount	%	Amount	%
SALES (Notes 4, 18 and 25)	$ 2,210,758	100	$ 2,378,461	100
COST OF GOODS SOLD (Notes 9, 16, 19 and 25)	1,082,513	49	1,108,970	46
GROSS PROFIT	1,128,245	51	1,269,491	54
OPERATING EXPENSES (Notes 16, 19, 25 and 27)
Selling and marketing expenses	94,648	4	106,276	4
General and administrative expenses	150,937	7	138,237	6
Research and development expenses	29,483	1	38,297	2
Total operating expenses	275,068	12	282,810	12
PROFIT FROM OPERATIONS	853,177	39	986,681	42
NON-OPERATING INCOME AND EXPENSES
Finance costs (Note 19)	(3,957)	-	(488)	-
Share of the profit or loss of subsidiary accounted for using the equity method (Note 11)	(1,151)	-	-	-
Interest income (Note 4)	6,257	-	6,150	-
Other income (Notes 4 and 19)	18,995	1	9,393	-
Net foreign exchange gain (loss) (Notes 4 and 28)	(398)	-	12,009	1
Other expenses	(78)	-	(198)	-
Loss on disposal of assets (Note 4)	(15,923)	(1)	(3,381)	-
Total non-operating income and expenses	3,745	-	23,485	1
PROFIT BEFORE INCOME TAX	856,922	39	1,010,166	43
INCOME TAX EXPENSE (Notes 4 and 20)	170,169	8	179,081	8
NET PROFIT FOR THE YEAR	686,753	31	831,085	35
OTHER COMPREHENSIVE INCOME
Items that will not be reclassified subsequently to profit or loss:
Remeasurement of defined benefit plans (Notes 4 and 16)	2,067	-	1,607	-
Income tax relating to items that will not be reclassified subsequently to profit or loss (Notes 4 and 20)	(413)	-	(321)	-
Other comprehensive income for the year, net of income tax	1,654	-	1,286	-
TOTAL COMPREHENSIVE INCOME FOR THE YEAR	$ 688,407	31	$ 832,371	35

(Continued)

TAIWAN STEEL UNION CO., LTD. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

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

	2025		2024
	Amount	%	Amount	%
EARNINGS PER SHARE (Note 21)
Basic	$ 6.17		$ 7.47
Diluted	$ 6.15		$ 7.45

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

TAIWAN STEEL UNION CO., LTD. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

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

	Ordinary Shares (Note 17)	Capital Surplus (Note 17)	Legal Reserve (Note 17)	Unappropriated Earnings (Note 17)	Total Equity
BALANCE AT JANUARY 1, 2024	$ 1,112,709	$ 999,216	$ 578,790	$ 1,421,452	$ 4,112,167
Appropriation of 2023 earnings
Legal reserve	-	-	50,521	(50,521)	-
Cash dividends – NT$4.3 per share	-	-	-	(478,465)	(478,465)
Net profit for the year ended December 31, 2024	-	-	-	831,085	831,085
Other comprehensive income for the year ended December 31, 2024, net of income tax	-	-	-	1,286	1,286
Total comprehensive income for the year ended December 31, 2024	-	-	-	832,371	832,371
BALANCE AT DECEMBER 31, 2024	1,112,709	999,216	629,311	1,724,837	4,466,073
Appropriation of 2024 earnings
Legal reserve	-	-	83,237	(83,237)	-
Cash dividends – NT$6 per share	-	-	-	(667,625)	(667,625)
Exercise of disgorgement	-	-	-	-	-
Net profit for the year ended December 31, 2025	-	-	-	686,753	686,753
Other comprehensive income for the year ended December 31, 2025, net of income tax	-	-	-	1,654	1,654
Total comprehensive income for the year ended December 31, 2025	-	-	-	688,407	688,407
BALANCE AT DECEMBER 31, 2025	$ 1,112,709	$ 999,216	$ 712,548	$ 1,662,382	$ 4,486,855

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

TAIWAN STEEL UNION CO., LTD. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

(In Thousands of New Taiwan Dollars)

	2025	2024
CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax	$ 856,922	$ 1,010,166
Adjustments for:
Depreciation expense	250,318	239,535
Amortization expense	6,848	4,767
Finance costs	3,957	488
Share of the profit or loss of subsidiary	1,151	-
Interest income	(6,257)	(6,150)
Loss on disposal of property, plant and equipment	15,923	3,381
Write-down of inventories	8,500	6,699
Unrealized foreign currency exchange gain, net	(468)	(1,920)
Changes in operating assets and liabilities
Notes receivables	913	(1,512)
Trade receivables	43,800	13,304
Other receivables	3,239	1,540
Inventories	(30,807)	6,071
Other current assets	14,201	(8,191)
Notes payables	(3,150)	3,150
Trade payables	11,661	(2,110)
Other payables	6,719	18,099
Other current liabilities	7,638	(32,975)
Net defined benefit liabilities	144	(980)
Cash generated from operations	1,191,252	1,253,362
Interest received	6,369	6,176
Interest paid	(3,989)	(488)
Income taxes paid	(209,399)	(195,326)
Net cash generated from operating activities	984,233	1,063,724
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of investments accounted for using equity method	(9,000)	-
Proceeds from disposal of financial assets at amortized cost	(1,500)	124,432
Payments for property, plant and equipment	(293,523)	(1,035,708)
Proceeds from disposal of property, plant and equipment	1,768	2,093
Increase in refundable deposits	(174)	-
Payments for intangible assets	(14,057)	(9,647)
Decrease in other financial assets	26,329	1,948
Decrease in other non-current assets	544	883
Increase in prepayments for machinery and equipment	(70,018)	(21,083)
Increase in deferred revenue	1,132	(81)
Net cash generated from (used in) investing activities	(358,499)	(937,163)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from short-term borrowings	-	80,000
Repayments of short-term borrowings	-	(80,000)

(Continued)

TAIWAN STEEL UNION CO., LTD. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024
(In Thousands of New Taiwan Dollars)

	2025	2024
Proceeds from long-term borrowings	$ -	$ 574,000
Repayments of long-term borrowings	(38,267)	(15,944)
Refund of guarantee deposits received	(376)	(1,441)
Dividends paid	(667,625)	(478,465)
Net cash generated from (used in) financing activities	(706,268)	78,150
NET INCREASE (DECREASE) IN CASH	(80,534)	204,711
CASH AT THE BEGINNING OF THE YEAR	756,988	552,277
CASH AT THE END OF THE YEAR	$ 676,454	$ 756,988

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

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TAIWAN STEEL UNION CO., LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

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

1. GENERAL INFORMATION

Taiwan Steel Union Co., Ltd (the "Company") was established in April 1995 and incorporated in August of the same year.

The Company's main business is to dispose and reuse general industrial waste and hazardous industrial waste as well as manufacture and trade non-ferrous metal (zinc oxide) and non-metallic mineral products.

The Company obtained the permission document of treating electric arc furnace dust for general use since December 28, 2017. The Company's shares have been listed on the Taiwan Stock Exchange (TWSE) since January 30, 2018.

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

2. APPROVAL OF FINANCIAL STATEMENTS

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

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

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

Amendments to IAS 21 "Lack of Exchangeability"

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

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

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

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Amendments to IFRS 9 and IFRS 7 “Amendments to the Classification and Measurement of Financial Instruments”

The amendments mainly amend the requirements for the classification of financial assets, including:

a) if a financial asset contains a contingent feature that could change the timing or amount of contractual cash flows and the contingent event itself does not relate directly to changes in basic lending risks and costs (e.g., whether the debtor achieves a contractually specified reduction in carbon emissions), the financial asset has contractual cash flows that are solely payments of principal and interest on the principal amount outstanding if, and only if,

In all possible scenarios (before and after the occurrence of a contingent event), the contractual cash flows are solely payments of principal and interest on the principal amount outstanding; and
In all possible scenarios, the contractual cash flows would not be significantly different from the contractual cash flows on a financial instrument with identical contractual terms, but without such a contingent feature.

b) to clarify that a financial asset has non-recourse features if an entity’s ultimate right to receive cash flows is contractually limited to the cash flows generated by specified assets.

c) to clarify that the characteristics of contractually linked instruments include a prioritization of payments to the holders of financial assets using multiple contractually linked instruments established through a waterfall payment structure, resulting in concentrations of credit risk and a disproportionate allocation of cash shortfalls from the underlying pool between the tranches.

The amendments to the application guidance of derecognition of financial liabilities

The amendments mainly stipulate that a financial liability is derecognized on the settlement date. However, when settling a financial liability in cash using an electronic payment system, the Group can choose to derecognize the financial liability before the settlement date if, and only if, the Group has initiated a payment instruction that resulted in:

The Group having no practical ability to withdraw, stop or cancel the payment instruction;
The Group having no practical ability to access the cash to be used for settlement as a result of the payment instruction; and
The settlement risk associated with the electronic payment system being insignificant.

An entity shall apply the amendments retrospectively but is not required to restate prior periods. The effect of initially applying the amendments shall be recognized as an adjustment to the opening balance at the date of initial application. An entity may restate prior periods if, and only if, it is possible to do so without the use of hindsight.

Except for the above impact, as of the date the consolidated financial statements were authorized for issue, the Group has assessed that the application of other standards and interpretations will not have a material impact on the Group’s financial position and financial performance.

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

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

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

Note 2: On September 25, 2025, the FSC announced that IFRS 18 will take effect starting from January 1, 2028. Domestic entities could elect to apply IFRS 18 for an earlier period after the endorsement of IFRS 18 by the FSC.

IFRS 18 “Presentation and Disclosures in Financial Statements” and consequential amendments

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

To classify items of income and expenses presented in the statement of profit or loss into the operating, investing, financing, income taxes and discontinued operations categories, the Group shall assess whether it has specified main business activities of investing in particular types of assets and providing financing to customers.
The statement of profit or loss shall present totals and subtotals for operating profit or loss, profit or loss before financing and income taxes and profit or loss.
Provides guidance to enhance the requirements of aggregation and disaggregation: The Group shall identify the assets, liabilities, equity, income, expenses and cash flows that arise from individual transactions or other events and shall classify and aggregate them into groups based on shared characteristics, so as to result in the presentation in the primary financial statements of line items that have at least one similar characteristic. The Group shall disaggregate items with dissimilar characteristics in the primary financial statements and in the notes. The Group labels items as ‘other’ only if it cannot find a more informative label.
Disclosures on Management-defined Performance Measures (MPMs): When in public communications outside financial statements and communicating to users of financial statements management’s view of an aspect of the financial performance of the Group as a whole, the Group shall disclose related information about its MPMs in a single note to the financial statements, including the description of such measures, calculations, reconciliations to the subtotal or total specified by IFRS Accounting Standards and the income tax and non-controlling interests effects of related reconciliation items.

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

The Group shall use operating profit or loss as the starting point when presenting cash flows from operating activities under the indirect method.
Interest and dividends received by the Group shall be classified as investing activities, while

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

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

4. SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION

a. Statement of compliance

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

b. Basis of preparation

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

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

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

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

Current assets include:

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

Current liabilities include:

1) Liabilities held primarily for the purpose of trading;
2) Liabilities due to be settled within 12 months after the reporting period, and
3) Liabilities for which the Group does not have the substantial right at the end of the reporting period to defer settlement for at least 12 months after the reporting period.

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

d. Basis of consolidation

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

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

All intra-group transactions, balances, income and expenses are eliminated in full upon consolidation.

See Note 10 and Tables 4 for detailed information on subsidiary (including the percentages of ownership and main businesses).

e. Foreign currencies

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

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

Non-monetary items that are measured at historical cost in a foreign currency are translated using the exchange rate at the date of transaction.

For the purpose of presenting consolidated financial statements, the financial statements of the Company and its foreign operations (including subsidiaries, associates that are prepared using functional currencies which are different from the currency of the Company are translated into the presentation currency, the New Taiwan dollar. Assets and liabilities are translated at the exchange rates prevailing at the end of the reporting period; and income and expense items are translated at the average exchange rates for the period. The resulting currency translation differences are recognized in other comprehensive income.

f. Inventories

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

g. Investments in associates

An associate is an entity over which the Group has significant influence and which is neither a subsidiary nor an interest in a joint venture.

The Group uses the equity method to account for its investments in associates

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

Any excess of the cost of acquisition over the Group's share of the net fair value of the identifiable

16 -

assets and liabilities of an associate at the date of acquisition is recognized as goodwill, which is included within the carrying amount of the investment and is not amortized. Any excess of the Group’s share of the net fair value of the identifiable assets and liabilities over the cost of acquisition, after reassessment, is recognized immediately in profit or loss.

The entire carrying amount of an investment is tested for impairment as a single asset by comparing its recoverable amount with its carrying amount. Any impairment loss recognized is not allocated to any asset, including goodwill, that forms part of the carrying amount of the investment. Any reversal of that impairment loss is recognized to the extent that the recoverable amount of the investment subsequently increases.

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

h. Property, plant and equipment

Property, plant and equipment are measured at cost less accumulated depreciation.

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

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

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

i. Contract cost-related assets

If the waste disposal provided by the Group and the expenditures of the clean-up and transport services directly related to customer’s contract enhance future resources which are used to fulfill contractual obligations, the amounts within the recoverable scope shall be recognized as the cost to fulfill a contract and transferred to cost of goods sold when the contractual obligations are fulfilled.

j. Intangible assets

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

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

k. Impairment of property, plant and equipment and intangible assets

At the end of each reporting period, the Group reviews the carrying amounts of its property, plant and equipment and intangible assets to determine whether there is any indication that those assets have suffered any impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. When it is not possible to estimate the

17 -

recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

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

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

1. Financial instruments

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

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

1) Financial asset

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

a) Measurement categories

Financial asset is classified as financial assets at amortized cost.

Financial assets at amortized cost

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

i. The financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and
ii. The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

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

Interest income is calculated by applying the effective interest rate to the gross carrying amount of such financial asset.

Cash equivalents include time deposits with original maturities within 3 months from the date of acquisition, which are highly liquid, readily convertible to a known amount of cash and are

18 -

subject to an insignificant risk of changes in value. These cash equivalents are held for the purpose of meeting short-term cash commitments.

b) Impairment of financial assets

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

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

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

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

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

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

The Group recognizes an impairment gain or loss in profit or loss for all financial instruments with a corresponding adjustment to their carrying amount through a loss allowance account.

c) Derecognition of financial assets

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

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

2) Financial liabilities

a) Subsequent measurement

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

b) Derecognition of financial liabilities

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

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m. Provisions

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

Carbon fee provision

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

n. Revenue recognition

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

Revenue from the sale of goods is recognized as revenue and trade receivables when the goods are delivered to the customer’s specific locations or when the goods are shipped because it is the time when the customer has the ownership of the goods and bears the risks.

Revenue from waste disposal and clean-up is recognized when the service is rendered, and when the performance obligations are fulfilled.

A contract liability is recognized when the Group receives consideration from a customer, has obligations to transfer products to a customer, or has obligations to perform services for a customer.

o. Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. All other borrowing costs are recognized in profit or loss in the period in which they are incurred.

p. Government grants

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

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

q. Employee benefits

1) Short-term employee benefits

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

2) Retirement benefits

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

20 -

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

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

r. Taxation

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

1) Current tax

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

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

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

2) Deferred tax

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

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

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

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liabilities are settled or the assets are realized, based on tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

3) Current and deferred taxes for the year

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

21 -

22 -

5. MATERIAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

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

When developing material accounting estimates, the Group considers the possible impact of on the cash flow projection, growth rates, discount rates, profitability and other relevant material estimates. The estimates and underlying assumptions are reviewed on an ongoing basis.

Based on the assessment of the Group’s management, the accounting policies, estimates, and assumptions adopted by the Group have not been subject to material accounting judgements, estimates and assumptions uncertainty.

6. CASH AND CASH EQUIVALENTS

	December 31
	2025	2024
Cash on hand and revolving funds	$ 217	$ 190
Checking accounts and demand deposits	621,237	656,798
Cash equivalents
Time deposits with original maturities of three months or less	55,000	100,000
	$ 676,454	$ 756,988

7. FINANCIAL ASSETS AT AMORTIZED COST

	December 31
	2025	2024
Current
Time deposits with original maturities of more than three months	$ 1,500	$ -

NOTES RECEIVABLES, TRADE RECEIVABLES AND OTHER RECEIVABLES

	December 31
	2025	2024
Notes receivables from unrelated parties	$ 1,689	$ 2,602
Trade receivables from unrelated parties
At amortized cost
Gross carrying amount	$ 153,059	$ 188,833
Less: Allowance for impairment loss	(159)	(159)
	$ 152,900	$ 188,674
Trade receivables from related parties	$ 11,358	$ 18,910
Other receivables
Tax refund receivable	$ 1,574	$ 4,200
Others	1,172	1,897
	$ 2,746	$ 6,097

The average credit period of sales of goods is 60 to 90 days. No interest is charged on trade receivables. The Group adopted a policy of only dealing with entities that have good credit ratings and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults. The Group uses other publicly available financial information or its own trading records to rate its major customers. The Group obtains credit reports from independent rating agencies for those customers who have higher risk. The Group's exposure and the credit ratings of its counterparties are continuously monitored.

The Group measures the loss allowance for trade receivables at an amount equal to lifetime ECLs. The expected credit losses on trade receivables are estimated using a provision matrix approach considering the past default experience of the customer, the customer's current financial position, economic condition of the industry in which the customer operates. As the Group's historical credit loss experience does not show significantly different loss patterns for different customer segments, the provision for loss allowance based on past due status is not further distinguished according to the Group's different customer base.

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

The following table details the loss allowance of notes receivables and trade receivables.

	Not Past Due
December 31, 2025
Expected credit loss rate	0%
Gross carrying amount	$ 166,106
Loss allowance (Lifetime ECLs)	(159)
Amortized cost	$ 165,947

Not Past Due

December 31, 2024

Expected credit loss rate
0%

Gross carrying amount
$ 210,345

Loss allowance (Lifetime ECLs)
(159)

Amortized cost
$ 210,186

The movements of the allowance for impairment loss recognized on notes receivables and trade receivables were as follows:

	For the Year Ended December 31
	2025	2024
Beginning and ending balance	$ 159	$ 159
9. INVENTORIES
	December 31
	2025	2024
Raw materials	$ 85,551	$ 84,516
Finished goods	78,859	57,587
	$ 164,410	$ 142,103

The cost of inventories recognized as cost of goods sold for the years ended December 31, 2025 and 2024 was $717,951 thousand and $732,043 thousand, respectively.

The cost of goods sold for the years ended December 31, 2025 and 2024 included inventory write-down of $8,500 thousand and $6,699 thousand, respectively.

10. SUBSIDIARY

Subsidiary included in the consolidated financial statements:

Investor	Investee	Main Business	% of Ownership
December 31	2025	2024
The Company	Taiwan Steel Resources Co., Ltd. (“TSR”)	Waste reuse services	100

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11. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

Investments in associate:

	December 31
	2025	2024
Associates that are not individually material
FENG LI INTERNET CO., LTD. (“Feng Li Co.”)	$ 7,849	$ -

Associates that are not individually material aggregate information of associates are summarized as follows:

	December 31
	2025	2024
The Group’s shares
Net income for continuing operations	$ (1,151)	$ -
Other comprehensive income	-	-
Total comprehensive income for the year	$ (1,151)	$ -

In January 2025, with the approval of the Board of Directors, the Group jointly established Feng Li Co. with Feng Hsin Steel Co., Ltd. and Feng Yu Resources Co., Ltd., with an investment amount of $9,000 thousand and holding 30% of the equity interests.

12. PROPERTY, PLANT AND EQUIPMENT

	For the Year Ended December 31, 2025
	Beginning Balance	Additions	Disposals	Reclassified Amount	Ending Balance
Cost
Land	$ 2,048,582	$ 5,740	$ -	$ -	$ 2,054,322
Land improvements	73,858	1,418	-	-	75,276
Buildings	1,704,970	57,837	(12,756)	11,341	1,761,392
Machinery equipment	3,067,987	154,813	(64,527)	10,285	3,168,558
Transportation equipment	251,840	9,324	(48)	-	261,116
Miscellaneous equipment	120,735	8,642	(1,094)	-	128,283
Construction in progress	8,847	65,871	-	(11,645)	63,073
	7,276,819	$ 303,645	$ (78,425)	$ 9,981	7,512,020
Accumulated depreciation
Land improvements	66,590	$ 2,041	$ -	$ -	68,631
Buildings	524,415	82,061	(2,233)	-	604,243
Machinery equipment	2,296,508	133,292	(57,432)	-	2,372,368
Transportation equipment	188,805	17,424	(44)	-	206,185
Miscellaneous equipment	72,756	15,500	(1,025)	-	87,231
	3,149,074	$ 250,318	$ (60,734)	$ -	3,338,658
	$ 4,127,745				$ 4,173,362

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	For the Year Ended December 31, 2024
	Beginning Balance	Additions	Disposals	Reclassified Amount	Ending Balance
Cost
Land	$ 1,216,738	$ 831,844	$ -	$ -	$ 2,048,582
Land improvements	71,538	1,708	-	612	73,858
Buildings	1,668,237	30,647	(1,723)	7,809	1,704,970
Machinery equipment	2,910,888	134,374	(44,432)	67,157	3,067,987
Transportation equipment	241,271	12,739	(2,170)	-	251,840
Miscellaneous equipment	100,800	20,311	(1,518)	1,142	120,735
Construction in progress	1,600	15,522	-	(8,275)	8,847
	6,211,072	$ 1,047,145	$ (49,843)	$ 68,445	7,276,819
Accumulated depreciation
Land improvements	63,537	$ 3,053	$ -	$ -	66,590
Buildings	447,707	77,582	(874)	-	524,415
Machinery equipment	2,211,777	124,793	(40,062)	-	2,296,508
Transportation equipment	170,052	20,789	(2,036)	-	188,805
Miscellaneous equipment	60,835	13,318	(1,397)	-	72,756
	2,953,908	$ 239,535	$ (44,369)	$ -	3,149,074
	$ 3,257,164				$ 4,127,745

Property, plant and equipment are depreciated on a straight-line basis over the estimated useful life of the assets as follows:

Land improvements 5-15 years

Buildings

Main buildings 25-50 years

Others 2-48 years

Machinery equipment 2-20 years

Transportation equipment 2-15 years

Miscellaneous equipment 2-15 years

Property, plant and equipment used by the Group and pledged as collateral for bank borrowings are set out in Note 26.

13. OTHER ASSETS

	December 31
	2025	2024
Current
Prepayments	$ 22,269	$ 47,081
Tax overpaid retained	9,291	2,276
Costs to fulfill a contract (Note 18)	7,234	5,968
Temporary payments (payments on behalf of others)	3,086	756
	$ 41,880	$ 56,081
Non-current
Long-term prepayments	$ 68	$ 614

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14. BORROWINGS

Long-term borrowings	December 31
	2025	2024
Secured borrowings (Note 26)	$ 519,789	$ 558,056
Less: Current portion	(38,267)	(38,267)
Long-term bank loans	$ 481,522	$ 519,789
Rate of interest per annum (%)	1.8	1.8

The company obtained a long-term loan of NT$574,000 from the Bank of Taiwan in July 2024 to purchase land. The loan period is from July 2024 to July 2039, divided into 180 installments over a total of 15 years. The principal and interest are repaid evenly on a monthly basis. The borrowing interest rate is calculated based on the Bank of Taiwan's two-year fixed deposit flexible interest rate.

15. OTHER PAYABLES AND OTHER CURRENT LIABILITIES

	December 31
	2025	2024
Other payables
Payables for salaries and bonuses	$ 77,803	$ 76,740
Payables for purchases of equipment	40,310	30,188
Payables for remuneration of directors	6,300	6,300
Payables for annual leave	5,375	4,784
Payables for donations	1,464	1,722
Others	56,563	51,266
	$ 187,815	$ 171,000
Other current liabilities
Contract liabilities (Note 18)	$ 69,015	$ 64,607
Provisions(Note)	1,608	-
Temporary credits (receipts under custody)	2,427	805
	$ 73,050	$ 65,412

Note: Beginning in 2025, the Group recognized a provision for carbon fee liabilities in accordance with the Regulations Governing the Collection of Carbon Fees and related regulations of the ROC. The Group assessed that it is highly likely to obtain approval from the competent authority for its self-determined reduction plan, and it is also highly likely to achieve the designated targets for 2025. It further expects to submit the 2025 progress report on the execution of the self-determined reduction plan by April 30, 2026. Therefore, the provision for carbon fee liabilities is calculated based on the preferential rate.

16. RETIREMENT BENEFIT PLANS

a. Defined contribution plans

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

b. Defined benefit plans

The defined benefit plans adopted by the Company in accordance with the Labor Standards Act is

operated by the government of the ROC. Pension benefits are calculated on the basis of the length of service and average monthly salaries of the 6 months before retirement. The Company contributes amounts equal to 8% of total monthly salaries and wages to a pension fund administered by the pension fund monitoring committee. Pension contributions are deposited in the Bank of Taiwan in the committee's name. Before the end of each year, the Company assesses the balance in the pension fund. If the amount of the balance in the pension fund is inadequate to pay retirement benefits for employees who conform to retirement requirements in the next year, the Company is required to fund the difference in one appropriation that should be made before the end of March of the next year. The pension fund is managed by the Bureau of Labor Funds, Ministry of Labor (the "Bureau"); the Company has no right to influence the investment policy and strategy.

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

		December 31
		2025	2024
Present value of defined benefit obligation		$ 26,175	$ 25,290
Fair value of plan assets		(27,285)	(24,477)
Net defined benefit liabilities		$ (1,110)	$ 813
Movements in net defined benefit liability were as follows:
	Present Value of the Defined Benefit Obligation	Fair Value of the Plan Assets	Net Defined Benefit Liabilities
Balance at January 1, 2024	$ 26,957	$ (23,557)	$ 3,400
Service cost
Current	863	-	863
Net interest expense (income)	305	(270)	35
Recognized in profit or loss	1,168	(270)	898
Remeasurement
Return on plan assets (excluding amounts included in net interest)	-	(2,316)	(2,316)
Actuarial loss (gain)
- changes in demographic assumptions	(1)	-	(1)
- changes in financial assumptions	(607)	-	(607)
- experience adjustments	1,317	-	1,317
Recognized in other comprehensive loss (income)	709	(2,316)	(1,607)
Contributions from the employer	-	(1,878)	(1,878)
welfare payments	(3,544)	3,544	-
Balance at December 31, 2024	25,290	(24,477)	813
Service cost
Current	848	-	848
Net interest expense (income)	386	(378)	8
Recognized in profit or loss	1,234	(378)	856
Remeasurement
Return on plan assets (excluding amounts included in net interest)	-	(1,718)	(1,718)
Actuarial loss (gain)
- changes in financial assumptions	336	-	336
- experience adjustments	(685)	-	(685)
Recognized in other comprehensive income	(349)	(1,718)	(2,067)
Contributions from the employer	-	(712)	(712)
Balance at December 31, 2025	$ 26,175	$ (27,285)	$ (1,110)

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

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

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

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

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

	December 31
	2025	2024
Discount rates	1.3%	1.55%
Expected rates of salary increase	3%	3%
Mortality rate	Taiwan Life Insurance Industry 6th Mortality Table According to different age groups, there are 0%-0.32%, etc. different assumptions.	Taiwan Life Insurance Industry 6th Mortality Table According to different age groups, there are 0%-0.35%, etc. different assumptions.
Turnover rate

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

	December 31
	2025	2024
Discount rate
0.25% increase	$ (336)	$ (369)
0.25% decrease	$ 342	$ 377
Expected rate of salary increase
0.25% increase	$ 336	$ 371
0.25% decrease	$ (331)	$ (365)

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

	December 31
	2025	2024
Expected contributions to the plan for the next year	$ 629	$ 637
Average duration of the defined benefit obligation	5 years	5 years

EQUITY

a. Share capital

	December 31
	2025	2024
Shares authorized (in thousands of shares)	160,000	160,000
Shares authorized	$ 1,600,000	$ 1,600,000
Shares issued and fully paid (in thousands of shares)	111,271	111,271
Shares issued	$ 1,112,709	$ 1,112,709

The authorized shares included 2,000 thousand shares allocated for the exercise of employee share options.

b. Capital surplus

	December 31
	2025	2024
Issuance of ordinary shares	$ 997,847	$ 997,847
Expired employee share options	1,138	1,138
Disgorgement	231	231
	$ 999,216	$ 999,216

Such capital surplus may be used to offset a deficit; in addition, when the Company has no deficit, such capital surplus may be distributed as cash dividends or transferred to share capital (limited to a certain percentage of the Company's capital surplus and to once a year). Expired employee share options and disgorgement can only be used to offset a deficit.

c. Retained earnings and dividends policy

Under the dividends policy as set forth in the Articles, where the Company made a profit in a fiscal year, the profit shall be first utilized for paying taxes, offsetting losses of previous years, setting aside as legal reserve 10% of the remaining profit, setting aside or reversing a special reserve in accordance with the laws and regulations, and then any remaining profit together with any undistributed retained earnings shall be used by the Company's board of directors as the basis for proposing a distribution plan, which should be resolved in the shareholders' meeting for the distribution of dividends and bonuses to shareholders. According to the Article 240-5 of the Company's Articles, if two thirds of directors or more attended the meeting and over half of the directors who attended approve the resolution, the Company may authorize the board of directors to appropriate part or of all of the accrued dividends or bonuses, by cash, and a report shall be submitted to the shareholders' meeting. For the policies on the distribution of compensation of employees and remuneration of directors, refer to compensation of employees and remuneration of directors in Note 19-e.

In addition, under the dividends policy set forth in the Articles, the Company may distribute dividends in cash or shares. If the Company decides to distribute in cash, in principle, the cash dividends shall not be lower than 10% of share dividends.

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

30 -

The Company held shareholders' meetings on May 27, 2025 and May 30, 2024, and the appropriations of earnings for 2024 and 2023 have been approved in the meetings, respectively, as follows:

	Appropriation of Earnings
	For the Year Ended December 31
	2024	2023
Legal reserve	$ 83,237	$ 50,521
Cash dividends	$ 667,625	$ 478,465
Dividends Per Share (NT$)	$ 6	$ 4.3

The appropriation of earnings for 2025, which were proposed by the Company's board of directors on February 25, 2026, were as follows:

	Appropriation of Earnings
Legal reserve	$ 68,841
Cash dividends	$ 589,736
Dividends Per Share (NT$)	$ 5.3

The appropriation of earnings for 2025 will be resolved by the shareholders in their meeting to be held on May 29, 2026.

18. REVENUE

a. Revenue from contracts with customers

	For the Year Ended December 31
	2025	2024
Revenue from sale of zinc oxide	$ 1,489,530	$ 1,619,231
Revenue from waste disposal	654,169	712,613
Revenue from sale of concrete	40,539	38,596
Other operating revenue	26,520	8,021
	$ 2,210,758	$ 2,378,461

b. Contract balance

	December 31, 2025	December 31, 2024	January 1, 2024
Notes receivables and trade receivables (Note 8)	$ 165,947	$ 210,186	$ 220,005
Contract liabilities (Note 15)	$ 69,015	$ 64,607	$ 97,678

c. Assets related to contract costs

	December 31
	2025	2024
Costs to fulfill a contract (Note 13)	$ 7,234	$ 5,968

Operating expenses mainly include depreciations of machinery and equipment, repair and maintenance expenses, salaries and wages of on-site personnel, materials, and any expenses related to handling

services and waste disposal.

At the end of each month, any costs which are related to unfulfilled contracts would be recognized in assets, "cost to fulfill a contract". After the performance obligations are fully satisfied, the assets would be transferred to operating costs.

19. NET PROFIT FROM CONTINUING OPERATIONS

a. Other revenue

	For the Year Ended December 31
	2025	2024
Government grants	$ 17,909	$ 8,836
Others	1,086	557
	$ 18,995	$ 9,393

b. Financial costs

	For the Year Ended December 31
	2025	2024
Interest on bank loans	$ 3,957	$ 326
Others	-	162
	$ 3,957	$ 488

Information about capitalized interest was as follows:

	For the Year Ended December 31
	2025	2024
Capitalization amount	$ 5,740	$ 4,725
Capitalization rate	1.8%	1.8%

c. Depreciation and amortization

	For the Year Ended December 31
	2025	2024
Property, plant and equipment	$ 250,318	$ 239,535
Other intangible assets	6,845	4,483
Other non-current assets	3	284
	$ 257,166	$ 244,302
An analysis of depreciation by function
Operating costs	$ 237,625	$ 225,751
Operating expenses	12,693	13,784
	$ 250,318	$ 239,535
An analysis of amortization by function
Operating costs	$ 1,855	$ 342
Operating expenses	4,993	4,425
	$ 6,848	$ 4,767

d. Employee benefits expense

	For the Year Ended December 31
	2025	2024
Short-term employee benefits	$ 227,205	$ 232,603
Post-employment benefits
Defined contribution plans	16,221	7,333
Defined benefit plans (Note 16)	856	898
	17,077	8,231
Other employee benefits	26,294	26,239
	$ 270,576	$ 267,073
An analysis of employee benefits expense by function
Operating costs	$ 160,914	$ 164,709
Operating expenses	109,662	102,364
	$ 270,576	$ 267,073

e. Compensation of employees and remuneration of directors

According to the Company's Articles, the Company accrues compensation of employees and remuneration of directors at rates of no less than 1% and no higher than 3%, respectively, of net profit before income tax, compensation of employees, and remuneration of directors. In accordance with the amendments to the Securities and Exchange Act in August 2024, the shareholders of the Company resolve the amendments to the Company's Articles at their 2025 regular meeting. The amendments explicitly stipulate the allocation of 1% of net profit before income tax, compensation of employees, and remuneration of directors as compensation distributions for non-executive employees. The compensation of employees (including non-executive employees) and remuneration of directors for the years ended December 31, 2025 and 2024, which were approved by the Company's board of directors on February 25, 2026 and January 20, 2025, respectively, are as follows:

	For the Year Ended December 31
	2025	2024
Accrual rate
Compensation of employees	4.09%	3.49%
Remuneration of directors	0.70%	0.60%
	For the Year Ended December 31
	2025	2024
Amount
Compensation of employees	$ 36,794	$ 36,724
Remuneration of directors	6,300	6,300

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

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

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

20. INCOME TAXES

a. Major components of income tax expense recognized in profit or loss are as follows:

	For the Year Ended December 31
	2025	2024
Current tax
In respect of the current year	$ 176,641	$ 183,240
Income tax on unappropriated earnings	4,075	-
Adjustments for prior years	(336)	(8,256)
	180,380	174,984
Deferred tax
In respect of the current year	(10,211)	4,097
Income tax expense recognized in profit or loss	$ 170,169	$ 179,081

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

	For the Year Ended December 31
	2025	2024
Profit before income tax	$ 856,922	$ 1,010,166
Income tax expense calculated at the statutory rate	$ 171,384	$ 202,033
Tax effect of adjusting items:
Non-deductible expenses in determining taxable income	(3,527)	(1,524)
Tax-exempt income	(1,427)	(13,172)
Income tax on unappropriated earnings	4,075	-
Adjustments for prior years’ tax	(336)	(8,256)
Income tax expense recognized in profit or loss	$ 170,169	$ 179,081

b. Deferred tax assets and liabilities

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

	For the Year Ended December 31, 2025
	Opening Balance	Recognized in Profit or Loss	Recognized in Other Comprehensive Income	Closing Balance
Deferred tax assets
Temporary differences
Defined benefit obligation	$ 163	$ 28	$ (191)	$ -
Unrealized intercompany profit	2,514	8,255	-	10,769
Inventory write-downs	8,836	1,462	-	10,298
Payables for annual leave	713	104	-	817
	$ 12,226	$ 9,849	$ (191)	$ 21,884
Deferred tax liabilities
Temporary differences
Defined benefit obligation	$ -	$ -	$ 222	$ 222
Effects of foreign currency exchange differences	487	(362)	-	125
	$ 487	$ (362)	$ 222	$ 347

35 -

	For the Year Ended December 31, 2024
	Opening Balance	Recognized in Profit or Loss	Recognized in Other Comprehensive Income	Closing Balance
Deferred tax assets
Temporary differences
Defined benefit obligation	$ 680	$ (196)	$ (321)	$ 163
Unrealized intercompany profit	6,264	(3,750)	-	2,514
Inventory write-downs	7,785	1,051	-	8,836
Payables for annual leave	668	45	-	713
Effects of foreign currency exchange differences	760	(760)	-	-
	$ 16,157	$ (3,610)	$ (321)	$ 12,226
Deferred tax liabilities
Temporary differences
Effects of foreign currency exchange differences	$ -	$ 487	$ -	$ 487

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

	December 31
	2025	2024
Loss carryforwards
Expiry in 2031	$ 66,878	$ 69,651
Expiry in 2030	-	11,111
	$ 66,878	$ 80,762

d. Income tax assessments

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

21. EARNINGS PER SHARE

	Net profit Attributable to Owners of the Company	Shares (In Thousands of Shares)	Earnings Per Share (NT$)
For the Year Ended December 31, 2025
Basic earnings per share
Profit for the year attributable to owners of the Company	$ 686,753	111,271	$6.17
Effect of potentially dilutive ordinary shares
Compensation of employees	-	364
Diluted earnings per share
Profit for the year attributable to owners of the Company plus effect of potentially dilutive ordinary shares	$ 686,753	111,635	$6.15

36 -

	Net profit Attributable to Owners of the Company	Shares (In Thousands of Shares)	Earnings Per Share (NT$)
For the Year Ended December 31, 2024
Basic earnings per share
Profit for the year attributable to owners of the Company	$ 831,085	111,271	$7.47
Effect of potentially dilutive ordinary shares
Compensation of employees	-	344
Diluted earnings per share
Profit for the year attributable to owners of the Company plus effect of potentially dilutive ordinary shares	$ 831,085	111,615	$7.45

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

22. NON-CASH TRANSACTIONS

The Group entered into the following non-cash investing and financing activities for the years ended December 31, 2025 and 2024:

	For the Year Ended December 31
	2025	2024
Non-cash transactions for investing and financing activities
Remeasurement of defined benefit plans	$ 2,067	$ 1,607
Transfers from prepayments for equipment to property, plant and equipment	$ 9,981	$ 68,445
Transfers from other financial assets - non-current to other financial assets - current	$ -	$ 20,221
Transfers from long-term bank loans to current portion	$ 38,267	$ 38,267

23. CAPITAL MANAGEMENT

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

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

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

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

24. FINANCIAL INSTRUMENTS

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

The management personnel of the Group determined that the carrying amount of financial assets and financial liabilities not measured at fair value approximates to their fair value or their fair value is unable to be measured reliably.

b. Categories of financial instruments

	December 31
	2025	2024
Financial assets
Financial assets at amortized cost (Note 1)	$ 907,542	$ 1,060,321
Financial liabilities
Financial liabilities at amortized cost (Note 2)	682,012	696,982

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

Note 2: The balances included financial liabilities measured at amortized cost, which comprise notes payables, trade payables, other payables, long-term bank loans (including the current portion) and guarantee deposits received.

c. Financial risk management objectives and policies

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

The corporate treasury and sales function report regularly to the management personnel of the Group. The management personnel oversee the impact of the financial risks.

1) Market risk

The Group’s activities exposed it primarily to the financial risks of changes in foreign currency exchange rates (refer to (a) below) and interest rates (refer to (b) below).

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

a) Foreign currency risk

The Group have foreign currency denominated sales, which exposes the Group to foreign currency risk.

37 -

The carrying amounts of the Group’s foreign currency denominated monetary assets and monetary liabilities are set out in Note 28.

Sensitivity analysis

The Group is mainly exposed to the USD. The following table details the Group’s sensitivity to a 1% increase and decrease in New Taiwan dollars (i.e., the functional currency) against USD. The sensitivity rate used when reporting foreign currency risk internally to key management personnel and representing management’s assessment of the reasonably possible change in foreign exchange rates is 1%. The sensitivity analysis included only outstanding foreign currency denominated monetary items, and adjusts their translation at the end of the year for a 1% change in foreign currency rates. A positive number below indicates a decrease in pre-tax profit with the New Taiwan dollars strengthening 1% against USD. For a 1% weakening of the New Taiwan dollars against USD, there would be an equal and opposite impact on pre-tax profit, and the balances below would be negative.

	For the Year Ended December 31
	2025	2024
Profit before income tax	$ 1,064	$ 1,392

b) Interest rate risk

The Group is exposed to interest rate risk because entities in the Group borrow funds at both fixed and floating interest rates. The risk is managed by the Group by maintaining an appropriate mix of fixed and floating rate borrowings. Hedging activities are evaluated regularly to align with interest rate views and defined risk appetites ensuring the most cost-effective hedging strategies are applied.

The carrying amounts of the Group’s financial assets and financial liabilities with exposure to interest rates at the end of the year were as follows:

	December 31
	2025	2024
Fair value interest rate risk
Financial assets	$ 56,500	$ 100,000
Cash flow interest rate risk
Financial assets	676,253	738,124
Financial liabilities	519,789	558,056

Sensitivity analysis

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

If interest rates had been 1% higher and all other variables were held constant, the Group’s pre-tax profit for the years ended December 31, 2025 and 2024 would have increased by $1,565 thousand and $1,801 thousand, respectively, which was mainly a result of variable-rate bank deposits and borrowings of the Group.

38 -

39 -

2) Credit risk

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

The Group adopted a policy of only dealing with creditworthy counterparties. In order to minimize credit risk, based on the Credit Management Guidelines, the management of the Group has delegated a team responsible for determining credit limits, credit approvals, and other monitoring procedures to ensure that follow-up action is taken to recover overdue receivables.

The Group assesses the financial positions of the customers with trade receivables continuously.

3) Liquidity risk

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

Liquidity and interest rate risk tables for non-derivative financial liabilities

The following table details the Group’s remaining contractual maturities for its non-derivative financial liabilities with agreed upon repayment periods. The table has been drawn up based on the undiscounted cash flows of financial liabilities from the earliest date on which the Group can be required to pay. The table includes both interest and principal cash flows. Specifically, bank loans with a repayment on demand clause were included in the earliest time band regardless of the probability of the banks choosing to exercise their rights. The maturity dates for other non-derivative financial liabilities were based on the agreed upon repayment dates.

	Less Than 1 Year	Over 1 Year
December 31, 2025
Non-interest bearing	$ 156,152	$ -
Variable interest rate liabilities	38,267	481,522
December 31, 2024
Non-interest bearing	$ 132,480	$ -
Variable interest rate liabilities	38,267	519,789

Additional information about the maturity analysis for financial liabilities:

	Less than 1 Year	1-5 Years	5-10 Years	10-15 Years
December 31, 2025
Non-interest bearing	$ 156,152	$ -	$ -	$ -
Variable interest rate liabilities	38,267	191,333	191,333	98,856
	$ 194,419	$ 191,333	$ 191,333	$ 98,856

40 -

	Less than 1 Year	1-5 Years	5-10 Years	10-15 Years
December 31, 2024
Non-interest bearing	$ 132,480	$ -	$ -	$ -
Variable interest rate liabilities	38,267	191,333	191,333	137,123
	$ 170,747	$ 191,333	$ 191,333	$ 137,123

25. TRANSACTIONS WITH RELATED PARTIES

Balances and transactions between the Company and its subsidiary, which are related parties of the Company, have been eliminated on consolidation and are not disclosed in this note. Besides information disclosed elsewhere in the other notes, details of transactions between the Group and other related parties are disclosed as follows.

a. Related party name and category

Related Party Name	Related Party Category
FENG LI INTERNET CO., LTD. (“Feng Li Co.”)	The Company’s associate
FENG HSIN STEEL CO., LTD. (“Feng Hsin Co.”)	The Company’s key management personnel
TUNG HO STEEL ENTERPRISE CORP. (“Tung Ho Co.”)	The Company’s key management personnel
HAI KWANG ENTERPRISE CORPORATION (“Hai Kwang Co.”)	The Company’s key management personnel
SHYEH SHENG FUAT STEEL & IRON WORKS CO., LTD. (“Shyeh Sheng Fuat Co.”)	The Company’s key management personnel
CHIEN SHUN STEEL CO., LTD. (“Chien Shun Co.”)	The Company’s key management personnel
UNITED STEEL CORPORATION (“United Co.”)	Related party in substance (Before May, 2025 it was the Company’s key management personnel)
KATEC CREATIVE RESOURCES CORP. (“Katec Co.”)	Related party in substance
FENG YU RESOURCES CO., LTD. (“Feng Yu Co.”)	Related party in substance
ZHENG TUNG ENVIRONMENTAL PROTECTION TECH CO., LTD. (“Zheng Tung Co.”)	Related party in substance

b. Sales

Line Item	Related Party Category/Name	For the Year Ended December 31
		2025	2024
Service revenue	The Company’s key management personnel
	Feng Hsin Co.	$ 63,172	$ 75,125
	Shyeh Sheng Fuat Co.	55,123	74,022
	Others	78,530	138,289
	Related parties in substance	17,741	21,377
		$ 214,566	$ 308,813
Sales revenue	Related parties in substance	$ 44	$ 15
Other operating revenue	The Company’s key management personnel	$ 34	$ 50

There are no significant differences for sales and payments terms between related parties and normal customers.

c. Purchases of goods

Related Party Category	For the Year Ended December 31
	2025	2024
Related parties in substance	$ 775	$ 775
The Company’s key management personnel	1	4
	$ 776	$ 779

There are no significant differences for purchases of goods and payments terms between related parties and normal suppliers.

d. Operating expenses

Line Item	Related Party Category	For the Year Ended December 31
		2025	2024
Other expenses	Related parties in substance	$ -	$ 18

e. Receivables from related parties

Line Item	Related Party Category	December 31
		2025	2024
Trade receivables	The Company’s key management personnel	$ 7,728	$ 17,995
	Related parties in substance	3,630	915
		$ 11,358	$ 18,910
Other receivables	Related parties in substance	$ -	$ 16

The outstanding trade receivables from related parties are unsecured. For the years ended December 31, 2025 and 2024, no impairment losses were recognized for trade receivables from related parties.

f. Payables to related parties

Line Item	Related Party Category	December 31
		2025	2024
Trade payables	The Company’s key management personnel	$ 70	$ 180
	Related parties in substance	3	4
		$ 73	$ 184
Other payables	Related parties in substance	$ 851	$ -

g. Contract liabilities

Line Item	Related Party Category	December 31
		2025	2024
Other current liabilities	The Company’s key management personnel	$ 5,945	$ 11,910
	Related parties in substance	3,042	3,762
		$ 8,987	$ 15,672

h. Acquisition of property, plant and equipment

		Purchase Price
		For the Year Ended December 31
Related Party Category/Name	Line Item	2025	2024
The Company’s associate	Intangible assets	$ 810	$ -

i. Remuneration of key management personnel

Remuneration of directors and key management personnel was as follows:

	For the Year Ended December 31
	2025	2024
Short-term employee benefits	$ 28,273	$ 21,524
Post-employment benefits	8,848	108
	$ 37,121	$ 21,632

The remuneration of directors and key executives, as determined by the remuneration committee, is based on the performance of individuals and market trends.

26. ASSETS PLEDGED AS COLLATERAL OR FOR SECURITY

The following assets were provided as collateral for guarantees and bank borrowings:

	December 31
	2025	2024
Property, plant and equipment	$ 1,752,444	$ 1,746,704
Other financial assets - non-current	55,016	59,943
	$ 1,807,460	$ 1,806,647

27. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

In addition to those disclosed in other notes, significant contingencies and unrecognized commitments of the Group at December 31, 2025 and 2024 were as follows:

a. The Group's unrecognized commitments were as follows:

	December 31
	2025	2024
Property, plant and equipment	$ 537,582	$ 63,408

b. Under the environmental protection agreement of clearance and recycling EAF dust, the Group has to make profit-sharing payments to Shengang Township and Xianxi Township, Changhua County. The payments would depend on the amount of clearance and recycling EAF dust each month. The profit-sharing payments are recognized as operating expenses, which amounted to $14,711 thousand and $17,704 thousand in 2025 and 2024, respectively.

43 -

28. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

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

	December 31, 2025
	Foreign Currency	Exchange Rate	Carrying Amount
Financial assets
Monetary item USD	$ 3,480	31.43 (USD:NTD)	$ 109,387
Financial liabilities
Monetary item USD	94	31.43 (USD:NTD)	2,966
	December 31, 2024
	Foreign Currency	Exchange Rate	Carrying Amount
Financial assets
Monetary item USD	$ 4,340	32.79 (USD:NTD)	$ 142,279
Financial liabilities
Monetary item USD	94	32.79 (USD:NTD)	3,083

The significant (realized and unrealized) foreign exchange gains (losses) were as follows:

	For the Year Ended December 31
	2025		2024
Foreign Currencies	Exchange Rate	Net Foreign Exchange Loss	Exchange Rate	Net Foreign Exchange Gain
USD	31.18 (USD:NTD)	$ (432)	32.11 (USD:NTD)	$ 11,996

29. SEPARATELY DISCLOSED ITEMS

a. Information about significant transactions and investees:

1) Financing provided to others. (Table 1)
2) Endorsements/guarantees provided. (Table 2)
3) Marketable securities held (excluding investments in subsidiary, associates and joint ventures). (None)
4) Total purchases from or sales to related parties amounting to at least NT$100 million or 20% of the paid-in capital. (None)

5) Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital. (None)
6) Other: intercompany relationships and significant intercompany transactions. (Table 3)

b. Information on investees (Table 4)
c. Information on investments in mainland China (None)

30. SEGMENT INFORMATION

Information reported to the chief operating decision maker for the purpose of resource allocation and assessment of segment performance focuses on the types of goods or services delivered or provided. The Company's main business is to dispose and reuse EAF dust and other waste, and recycle zinc oxide which has economic value when sold. Taiwan Steel Resources Co.'s main business is to dispose reducing slags and slags from the Company. The processed products can be used in civil engineering and ready-mixed concrete industries that comply with laws and regulations.

The chief operating decision maker considers the Company and TSR as separate operating segments for the purposes of financial statements presentation.

The Company and its subsidiary's revenue, operating results for the years ended December 31, 2025 and 2024, were as follows:

a. Segment revenue and results

	The Company	Taiwan Steel Resources Co.	Reconciliation and Elimination	Total
For the Year Ended December 31, 2025
Revenue from external customers	$ 1,886,882	$ 323,876	$ -	$ 2,210,758
Inter-segment revenue	8	96,816	(96,824)	-
Total revenue	$ 1,886,890	$ 420,692	$ (96,824)	$ 2,210,758
Segment's profit	$ 843,915	$ 10,322	$ (1,060)	$ 853,177
Interest revenue	4,966	1,291	-	6,257
Finance costs	(3,957)	-	-	(3,957)
Other non-operation income and expenses	11,998	(2,266)	(8,287)	1,445
Profit before income tax	856,922	9,347	(9,347)	856,922
Income tax expense	170,169	-	-	170,169
Net profit	$ 686,753	$ 9,347	$ (9,347)	$ 686,753
	The Company	Taiwan Steel Resources Co.	Unallocated Assets/Liabilities	Reconciliation and Elimination
December 31, 2025
Identifiable segment's assets	$ 5,291,177	$ 2,288,240	$ 76,900	$(2,234,737)
Identifiable segment's liabilities	$ 260,706	$ 78,457	$ 608,500	$(12,938)

	The Company	Taiwan Steel Resources Co.	Reconciliation and Elimination	Total
For the Year Ended December 31, 2024
Revenue from external customers	$ 1,945,114	$ 433,347	$ -	$ 2,378,461
Inter-segment revenue	-	103,483	(103,483)	-
Total revenue	$ 1,945,114	$ 536,830	$ (103,483)	$ 2,378,461
Segment’s profit	$ 918,234	$ 66,962	$ 1,485	$ 986,681
Interest revenue	6,332	740	(922)	6,150
Finance costs	(162)	(1,248)	922	(488)
Other non-operation income and expenses	85,762	(2,081)	(65,858)	17,823
Profit before income tax	1,010,166	64,373	(64,373)	1,010,166
Income tax expense	179,081	-	-	179,081
Net profit	$ 831,085	$ 64,373	$ (64,373)	$ 831,085
	The Company	Taiwan Steel Resources Co.	Unallocated Assets/Liabilities	Reconciliation and Elimination
December 31, 2024
Identifiable segment’s assets	$ 5,280,564	$ 2,284,524	$ 93,571	$ (2,223,342)
Identifiable segment’s liabilities	$ 220,193	$ 84,016	$ 675,926	$ (10,891)

Segment profit represented the profit before tax earned by each segment without interest income, other income, net foreign exchange gain (loss), finance costs, other expenses, loss on disposal of property, plant and equipment and income tax expense. This was the measure reported to the chief operating decision maker for the purpose of resource allocation and assessment of segment performance.

For the purpose of monitoring segment performance and allocating resources between segments:

1) All assets were allocated to reportable segments other than other financial assets and deferred tax assets; and
2) All liabilities were allocated to reportable segments other than borrowings and current and deferred tax liabilities.

b. Revenue from major products and services

For the Group’s revenue from continuing operations from its major products and services, please refer to Note 18.

c. Geographical information

The Group mainly operates in Taiwan and does not set up overseas operating institutions. There is no geographical segments.

d. Information about major customers

Single customers contributing 10% or more to the Group’s revenue were as follows:

	For the Year Ended December 31
	2025	2024
Customer A	$ 670,954	$ 653,671
Customer B	219,278	278,393
	$ 890,232	$ 932,064

46 -

TABLE 1

TAIWAN STEEL UNION CO., LTD. AND SUBSIDIARY

FINANCING PROVIDED TO OTHERS

FOR THE YEAR ENDED DECEMBER 31, 2025

(In Thousands of New Taiwan Dollars)

No. (Note 1)	Lender	Borrower	Financial Statement Account	Related Party	Highest Balance for the Period (Note 5)	Ending Balance (Note 5)	Actual Amount Borrowed (Note 6)	Interest Rate (%)	Nature of Financing (Note 3)	Business Transaction Amounts	Reasons for Short-term Financing	Loss Allowance	Collateral		Financing Limit for Each Borrower	Aggregate Financing Limits
													Item	Value
0	The Company	Taiwan Steel Resources Co., Ltd.	Receivable from related parties	Yes	$ 400,000	$ 200,000	$ -	2.22%	2	$ -	Operating turnover	$ -	-	$ -	$ 1,794,741 (Notes 2 and 7)	$ 1,794,741 (Notes 4 and 7)

Note 1: The numbers denote the following:
1) 0 represents the issuer.
2) Investees are numbered starting from 1.

Note 2: The financing limit for each borrower is up to 40% of the net worth of the Company.

Note 3: The nature of financing provided could be
1) Business relationships.
2) Short-term financing needs.

Note 4: The aggregate financing limit is up to 40% of the net worth of the Company.

Note 5: The ending balance amount has been approved by the board of directors.

Note 6: Significant intercompany accounts and transactions have been eliminated.

Note 7: According to the Company's guidelines for loaning funds, the maximum amount of loaning is based on the Company's net worth as stated in its latest audited (reviewed) financial statements. In December 2025, the Company announced that the Company's maximum amount of the loan to be provided to a single enterprise is $1,717,627 thousand and the maximum amount of the loan to be provided is $1,717,627 thousand. Because the 2025 annual financial statements have not been audited, these amounts were based on the financial statements for the nine months ended September 30, 2025. Thus, there is a difference between them.

TABLE 2

TAIWAN STEEL UNION CO., LTD. AND SUBSIDIARY

ENDORSEMENTS/GUARANTEES PROVIDED

FOR THE YEAR ENDED DECEMBER 31, 2025

(In Thousands of New Taiwan Dollars and Foreign Currencies)

No. (Note 1)	Endorser/Guarantor	Endorsee/Guaranteed Party		Limits on Endorsements/ Guarantees Given on Behalf of Each Party (Notes 3 and 5)	Maximum Amount Endorsed/ Guaranteed During the Year (Note 4)	Outstanding Endorsements/ Guarantees at the End of the Year (Note 4)	Actual Amount Borrowed	Amount Endorsed/ Guaranteed by Collaterals	Ratio of Accumulated Endorsements/ Guarantees to Net Equity in Latest Financial Statements (%)	Aggregate Endorsements/ Guarantees Limit (Notes 3 and 5)	Endorsements/ Guarantees Given by Parent on Behalf of Subsidiaries	Endorsements/ Guarantees Given by Subsidiaries on Behalf of Parent	Endorsements/ Guarantees Given on Behalf of Companies in Mainland China
		Name	Relationship (Note 2)
0	The Company	Taiwan Steel Resources Co., Ltd.	(2)	$ 2,198,558	$ 400,000	$ 300,000	$ -	$ -	6.69	$ 2,243,427	Y	N	N

Note 1: 1) Taiwan Steel Union Co., Ltd. is numbered 0.
2) Subsidiaries are numbered starting from 1.

Note 2: The relationship between endorser/guarantor and the endorsee/guarantee can be classified into the following four categories:

1) The companies with which it has business relations.
2) Subsidiaries in which the company held more than 50% of its total outstanding ordinary shares.
3) The companies in which the parent company and the subsidiary together held more than 50% of its outstanding ordinary shares.
4) The parent company which held, directly or indirectly through a subsidiary, more than 50% of its outstanding ordinary shares.

Note 3: The maximum amount of the endorsements/guarantees provided by the Company and its subsidiary shall not exceed 50% of the Company's net assets as stated in its latest financial statement. Endorsements/guarantees provided by the Company to a single enterprise shall not exceed 49% of the Company's net assets as stated in its latest financial statement.

Note 4: The ending balance and actual amount used are recorded using the prevailing exchange rate at balance sheet date.

Note 5: According to the Company's Guideline for Endorsements and Guarantees, the maximum amount of the endorsements/guarantees is based on the Company's net assets as stated in its latest audited (reviewed) financial statements. In December 2025, the Company announced that the Company's maximum amount of the endorsements/guarantees to a single enterprise is $2,104,093 thousand and the maximum amount of the endorsements/guarantees is $2,147,034 thousand. Because the 2025 annual financial statements have not been audited, these amounts were based on the financial statements for the nine months ended September 2025. Thus, there is a difference in between.

TABLE 3

TAIWAN STEEL UNION CO., LTD. AND SUBSIDIARY

INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT INTERCOMPANY TRANSACTIONS

FOR THE YEAR ENDED DECEMBER 31, 2025

(In Thousands of New Taiwan Dollars)

No.	Investee Company	Counterparty	Relationship (Note 1)	Transaction Details
				Financial Statement Account	Amount (Note 2)	Payment Terms	% of Total Sales or Assets
0	The Company	Taiwan Steel Resources Co., Ltd.	1	Cost of goods sold	$ 95,756	-	4

Note 1: Relationship of investee company to counterparty: (1) parent company to subsidiary
Note 2: Significant intercompany accounts and transactions have been eliminated.

49 -

TABLE 4

TAIWAN STEEL UNION CO., LTD. AND SUBSIDIARY

INFORMATION ON INVESTEES

FOR THE YEAR ENDED DECEMBER 31, 2025

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

Investor Company	Investee Company	Location	Main Businesses and Products	Original Investment Amount		As of December 31, 2025			Net Income (Loss) of the Investee	Share of Profit (Loss)	Note
				December 31, 2025	December 31, 2024	Number of Shares	%	Carrying Amount
The Company	Taiwan Steel Resources Co., Ltd.	Changhua	Waste reuse services	$ 2,300,000	$ 2,300,000	149,000,000	100	$ 2,222,223	$ 9,347	$ 8,287	Subsidiary
	Feng Li Internet Co., Ltd.	Taichung	Software development	9,000	-	900,000	30	7,849	(3,647)	(1,151)	Associate

Note: Significant intercompany accounts and transactions have been eliminated.

AI assistant

TSU — Audit Report / Information 2025

52587_rns_2026-03-30_1671cf4d-1e43-4d2e-97b2-9dfe419bf9e3.pdf

DECLARATION OF CONSOLIDATED FINANCIAL STATEMENTS OF AFFILIATES

INDEPENDENT AUDITORS' REPORT

Opinion

Basis for Opinion

Key Audit Matters

Revenue recognition

Other Matter

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

Auditors' Responsibilities for the Audit of the Consolidated Financial Statements

Notice to Readers

TAIWAN STEEL UNION CO., LTD. AND SUBSIDIARY

TAIWAN STEEL UNION CO., LTD. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

1. GENERAL INFORMATION

2. APPROVAL OF FINANCIAL STATEMENTS

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

4. SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION

1. Financial instruments

1) Financial asset

a) Measurement categories

5. MATERIAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

6. CASH AND CASH EQUIVALENTS

7. FINANCIAL ASSETS AT AMORTIZED COST

10. SUBSIDIARY

11. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

12. PROPERTY, PLANT AND EQUIPMENT

13. OTHER ASSETS

14. BORROWINGS

15. OTHER PAYABLES AND OTHER CURRENT LIABILITIES

16. RETIREMENT BENEFIT PLANS

18. REVENUE

19. NET PROFIT FROM CONTINUING OPERATIONS

20. INCOME TAXES

21. EARNINGS PER SHARE

22. NON-CASH TRANSACTIONS

23. CAPITAL MANAGEMENT

24. FINANCIAL INSTRUMENTS

Sensitivity analysis

b) Interest rate risk

Sensitivity analysis

25. TRANSACTIONS WITH RELATED PARTIES

26. ASSETS PLEDGED AS COLLATERAL OR FOR SECURITY

27. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

28. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

29. SEPARATELY DISCLOSED ITEMS

30. SEGMENT INFORMATION

TAIWAN STEEL UNION CO., LTD. AND SUBSIDIARY

FINANCING PROVIDED TO OTHERS

FOR THE YEAR ENDED DECEMBER 31, 2025

(In Thousands of New Taiwan Dollars)

TAIWAN STEEL UNION CO., LTD. AND SUBSIDIARY

ENDORSEMENTS/GUARANTEES PROVIDED

FOR THE YEAR ENDED DECEMBER 31, 2025

TAIWAN STEEL UNION CO., LTD. AND SUBSIDIARY

TAIWAN STEEL UNION CO., LTD. AND SUBSIDIARY

INFORMATION ON INVESTEES

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TSU Audit Report / Information 2025