Walton Advanced Engineering, Inc.

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

Deloitte.

勤業眾信

勤業眾信聯合會計師事務所

110421 台北市信義區松仁路100號20樓

Deloitte & Touche

20F, Taipei Nan Shan Plaza

No. 100, Songren Rd.,

Xinyi Dist., Taipei 110421, Taiwan

Tel: +886 (2) 2725-9988

Fax: +886 (2) 4051-6888

www.deloitte.com.tw

INDEPENDENT AUDITORS' REPORT

The Board of Directors and Shareholders

Walton Advanced Engineering, Inc.

Opinion

We have audited the accompanying parent company only financial statements of Walton Advanced Engineering, Inc. (the "Corporation"), which comprise the parent company only balance sheets as of December 31, 2025 and 2024, and the parent company only statements of comprehensive income, changes in equity and cash flows for the years then ended, and notes to the parent company only financial statements, including material accounting policy information (collectively referred to as the "parent company only financial statements").

In our opinion, the accompanying parent company only financial statements present fairly, in all material respects, the parent company only financial position of the Corporation as of December 31, 2025 and 2024, and its parent company only financial performance and its parent company only cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing 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 Parent Company Only Financial Statements section of our report. We are independent of the Corporation 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 parent company only financial statements for the year ended December 31, 2025. These matters were addressed in the context of our audit of the parent company only financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

The key audit matter of the Corporation's parent company only financial statements for the year ended December 31, 2025 is described as follows.

Recognition of revenue from specific products

The Corporation is mainly engaged in semiconductor packaging and testing. The sales revenue from specific products contributes significantly to gross profit. Since management may be under pressure to achieve expected goals and meet market expectations, there is a risk of overstatement of sales. Hence, we considered the occurrence of the sales transactions of the aforementioned products as a key audit matter.

For the related accounting policies, refer to Note 4 to the parent company only financial statements.

The main audit procedures we performed in response to the above-mentioned key audit matter are as follows:

We obtained an understanding of the internal control related to the sales cycle, evaluated the design and tested the operating effectiveness of the controls.
We selected samples from the sales lists and verified the related documents and account records to confirm the authenticity of the amount of the recognized revenue.
We sent confirmation requests and conducted testing of receivables to confirm the authenticity of the recognized revenue.

Responsibilities of Management and Those Charged with Governance for the Parent Company Only Financial Statements

Management is responsible for the preparation and fair presentation of the parent company only financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and for such internal control as management determines is necessary to enable the preparation of parent company only financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the parent company only financial statements, management is responsible for assessing the Corporation’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 Corporation 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 Corporation’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Parent Company Only Financial Statements

Our objectives are to obtain reasonable assurance about whether the parent company only financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an 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 parent company only 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 parent company only financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. 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 Corporation’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 Corporation’s ability to continue as a going concern. If we conclude that a material
2 -

uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the parent company only financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Corporation to cease to continue as a going concern.

Evaluate the overall presentation, structure and content of the parent company only financial statements, including the disclosures, and whether the parent company only financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient and appropriate audit evidence regarding the financial information of entities or business activities within the Corporation to express an opinion on the parent company only financial statements. We are responsible for the direction, supervision, and performance of the Corporation 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 parent company only 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-Hsuan Hsu and Yu-Hsiang Liu.

Deloitte & Touche
Taipei, Taiwan
Republic of China

March 11, 2026

Notice to Readers

The accompanying parent company only financial statements are intended only to present the 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 parent company only financial statements are those generally applied in the Republic of China.

For the convenience of readers, the independent auditors’ report and the accompanying parent company only 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 parent company only financial statements shall prevail.

WALTON ADVANCED ENGINEERING, INC.

PARENT COMPANY ONLY BALANCE SHEETS

AS OF 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 (Note 6)	$ 1,808,524	12	$ 1,431,022	11
Financial assets at fair value through profit or loss-current (Notes 4 and 7)	685,619	5	216,235	1
Contract assets - current (Notes 21 and 27)	209,064	2	113,377	1
Accounts receivable, net (Notes 10 and 21)	714,929	5	484,323	4
Accounts receivable - related parties (Notes 10, 21 and 27)	467,877	3	392,596	3
Other receivables (Note 10)	17,655	-	16,996	-
Other receivables - related parties (Notes 10 and 27)	940,638	6	1,179,832	9
Current tax assets (Note 23)	-	-	6,995	-
Inventories (Notes 4 and 11)	427,034	3	233,732	2
Other financial assets - current (Notes 12 and 28)	-	-	799,569	6
Other current assets	43,429	-	20,889	-
Total current assets	5,314,769	36	4,895,566	37
NON-CURRENT ASSETS
Financial assets at fair value through other comprehensive income - non-current (Notes 4 and 8)	1,675,969	11	1,384,460	10
Financial assets at amortized cost - non-current (Notes 4 and 9)	620,015	4	323,380	2
Investments accounted for using the equity method (Notes 4 and 13)	2,225,510	15	1,414,094	11
Property, plant and equipment (Notes 4, 14, 27, 28 and 29)	4,711,459	32	4,681,154	35
Right-of-use assets (Notes 4 and 15)	41,421	-	36,863	-
Deferred tax assets (Notes 4 and 23)	163,516	1	325,822	3
Refundable deposits	54,791	1	183,283	1
Prepaid investments (Note 13)	-	-	148,428	1
Other non-current assets	9,089	-	3,966	-
Total non-current assets	9,501,770	64	8,501,450	63
TOTAL	$ 14,816,539	100	$ 13,397,016	100
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Short-term borrowings (Note 16)	$ 403,672	3	$ 600,000	4
Contract liabilities - current (Note 21)	-	-	12,422	-
Notes payable (Note 17)	3,232	-	3,128	-
Accounts payable (Notes 17 and 27)	518,400	3	342,222	3
Payables for equipment purchased	31,670	-	16,686	-
Other payables (Notes 18 and 27)	673,776	5	608,702	5
Current tax liabilities (Note 23)	9,115	-	34,984	-
Lease liabilities - current (Notes 4 and 15)	2,235	-	3,022	-
Current portion of long-term borrowings (Notes 16 and 28)	144,440	1	144,460	1
Refund liabilities	2,067	-	-	-
Other current liabilities	12,154	-	11,873	-
Total current liabilities	1,800,761	12	1,777,499	13
NON-CURRENT LIABILITIES
Long-term bank borrowings (Notes 16 and 28)	657,500	5	1,100,860	8
Deferred tax liabilities (Notes 4 and 23)	4,620	-	24,780	-
Lease liabilities - non-current (Notes 4 and 15)	42,579	-	36,996	1
Net defined benefit liabilities - non-current (Notes 4 and 19)	43,587	-	30,039	-
Total non-current liabilities	748,286	5	1,192,675	9
Total liabilities	2,549,047	17	2,970,174	22
EQUITY (Notes 4 and 20)
Ordinary shares	5,177,399	35	5,177,399	39
Capital surplus	648,675	4	461,461	3
Retained earnings
Legal reserve	713,567	5	700,026	5
Special reserve	141,319	1	141,319	1
Unappropriated earnings	4,465,725	30	3,295,202	25
Total retained earnings	5,320,611	36	4,136,547	31
Other equity	1,211,906	8	858,903	6
Treasury shares	(91,099)	-	(207,468)	(1)
Total equity	12,267,492	83	10,426,842	78
TOTAL	$ 14,816,539	100	$ 13,397,016	100

The accompanying notes are an integral part of the parent company only financial statements.

WALTON ADVANCED ENGINEERING, INC.

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME

FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

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

	For the Year Ended December 31
	2025		2024
	Amount	%	Amount	%
OPERATING REVENUES (Notes 4, 21 and 27)	$ 5,101,954	100	$ 5,009,366	100
OPERATING COSTS (Notes 11 and 22)	4,745,101	93	4,573,508	91
GROSS PROFIT	356,853	7	435,858	9
OPERATING EXPENSES (Notes 22 and 27)
Selling and marketing expenses	46,397	1	46,144	1
General and administrative expenses	340,017	7	188,562	4
Research and development expenses	31,198	-	36,006	1
Total operating expenses	417,612	8	270,712	6
GAIN (LOSS) FROM OPERATIONS	(60,759)	(1)	165,146	3
NON-OPERATING INCOME AND EXPENSES
(Notes 22 and 27)
Interest income	108,998	2	101,550	2
Other income	56,600	1	39,474	1
Other gains and losses	1,016,132	20	347,510	7
Finance costs	(32,525)	(1)	(39,372)	(1)
Share of profit or loss of subsidiaries and associates	329,205	7	(409,989)	(8)
(Note 13)
Total non-operating income and expenses	1,478,410	29	39,173	1
PROFIT BEFORE INCOME TAX	1,417,651	28	204,319	4
INCOME TAX EXPENSE (Notes 4 and 23)	163,388	3	70,050	2
NET PROFIT FOR THE YEAR	1,254,263	25	134,269	2
OTHER COMPREHENSIVE INCOME (LOSS)
(Notes 4, 19, 20 and 23)
Items that will not be reclassified subsequently to profit or loss
Remeasurement of defined benefit plans	(27,867)	-	1,432	-
Unrealized gain (loss) on investments in equity instruments at fair value through other comprehensive income	376,265	7	(422,884)	(8)
				(Continued)

WALTON ADVANCED ENGINEERING, INC.

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME

FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

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

	For the Year Ended December 31
	2025		2024
	Amount	%	Amount	%
Share of the other comprehensive loss of subsidiaries and associates accounted for using the equity method	$ (3,525)	-	$ (6,044)	-
Income tax relating to items that will not be reclassified subsequently to profit or loss	5,573	-	(286)	-
Items that may be reclassified subsequently to profit or loss
Share of the other comprehensive income of subsidiaries and associates accounted for using the equity method	33,506	-	64,714	1
Other comprehensive income (loss) for the year, net of income tax	383,952	7	(363,068)	(7)
TOTAL COMPREHENSIVE INCOME (LOSS) FOR THE YEAR	$ 1,638,215	32	$ (228,799)	(5)
EARNINGS PER SHARE (Note 24)
Basic	$ 2.48		$ 0.26
Diluted	$ 2.47		$ 0.26

The accompanying notes are an integral part of the parent company only financial statements. (Concluded)

WALTON ADVANCED ENGINEERING, INC.

PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

(In Thousands of New Taiwan Dollars)

	Ordinary Share Capital	Capital Surplus	Retained Earnings			Other Equity				Treasury Shares	Total Equity
			Legal Reserve	Special Reserve	Unappropriated Earnings	Exchange Differences on Translation of the Financial Statements of Foreign Operations	Unrealized Valuation Gain (Loss) on Financial Assets at Fair Value Through Other Comprehensive Income	Other	Total Other Equity
BALANCE AT JANUARY 1, 2024	$ 5,177,399	$ 378,390	$ 700,026	$ 141,319	$ 3,262,935	$ (149,559)	$ 1,484,178	$ (435,350)	$ 899,269	$ (25,270)	$ 10,534,068
Appropriation of 2023 earnings (Note 20) Cash dividends	-	-	-	-	(103,148)	-	-	-	-	-	(103,148)
Net profit for the year ended December 31, 2024	-	-	-	-	134,269	-	-	-	-	-	134,269
Other comprehensive income (loss) for the year ended December 31, 2024, net of income tax	-	-	-	-	1,146	64,714	(428,928)	-	(364,214)	-	(363,068)
Total comprehensive income (loss) for the year ended December 31, 2024	-	-	-	-	135,415	64,714	(428,928)	-	(364,214)	-	(228,799)
Buy-back of ordinary shares (Note 20)	-	-	-	-	-	-	-	-	-	(182,198)	(182,198)
Changes in percentage of ownership interests in subsidiaries (Note 20)	-	83,071	-	-	-	-	-	323,848	323,848	-	406,919
BALANCE AT DECEMBER 31, 2024	5,177,399	461,461	700,026	141,319	3,295,202	(84,845)	1,055,250	(111,502)	858,903	(207,468)	10,426,842
Appropriation of 2024 earnings (Note 20) Legal reserve	-	-	13,541	-	(13,541)	-	-	-	-	-	-
Cash dividends	-	-	-	-	(101,148)	-	-	-	-	-	(101,148)
	-	-	13,541	-	(114,689)	-	-	-	-	-	(101,148)
Net profit for the year ended December 31, 2025	-	-	-	-	1,254,263	-	-	-	-	-	1,254,263
Other comprehensive income (loss) for the year ended December 31, 2025, net of income tax	-	-	-	-	(22,294)	33,506	372,740	-	406,246	-	383,952
Total comprehensive income for the year ended December 31, 2025	-	-	-	-	1,231,969	33,506	372,740	-	406,246	-	1,638,215
Changes in percentage of ownership interests in subsidiaries (Note 20)	-	54,212	-	-	-	-	-	-	-	-	54,212
Transfer of treasury shares to employees under employee share option plan (Note 20)	-	133,002	-	-	-	-	-	-	-	116,369	249,371
Disposals of investments in equity instruments at fair value through other comprehensive income (Note 20)	-	-	-	-	53,243	-	(53,243)	-	(53,243)	-	-
BALANCE AT DECEMBER 31, 2025	$ 5,177,399	$ 648,675	$ 713,567	$ 141,319	$ 4,465,725	$ (51,339)	$ 1,374,747	$ (111,502)	$ 1,211,906	$ (91,099)	$ 12,267,492

The accompanying notes are an integral part of the parent company only financial statements.

WALTON ADVANCED ENGINEERING, INC.

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

(In Thousands of New Taiwan Dollars)

	For the Year Ended December 31
	2025	2024
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before income tax	$ 1,417,651	$ 204,319
Adjustments for:
Depreciation expense	1,167,042	1,173,457
Amortization expense	2,035	1,298
Net loss (gain) on fair value changes of financial assets at fair value through profit or loss	(644,978)	167,258
Finance costs	32,525	39,372
Interest income	(108,998)	(101,550)
Dividend income	(34,683)	(30,339)
Compensation cost of employee share options	133,340	-
Share of loss (profit) of subsidiaries and associates	(329,205)	409,989
Gain on disposal of property, plant and equipment	(306,182)	(91,437)
Gain on disposal of associates	(57,497)	(12,871)
Write-down of inventories	-	25,000
Unrealized gain on transactions with subsidiaries	6,888	-
Unrealized loss (gain) on foreign currency exchange	27,164	(11,884)
Changes in operating assets and liabilities
Contract assets	(95,687)	46,426
Accounts receivable	(230,606)	(194,998)
Accounts receivable - related parties	(75,281)	(38,940)
Other receivables	2,644	(4,767)
Other receivables - related parties	(15,626)	(5,487)
Inventories	(193,302)	138,791
Other current assets	10,388	(405)
Contract liabilities	(12,422)	11,061
Notes payable	104	(171)
Accounts payable	176,178	92,442
Other payables	65,038	59,865
Other current liabilities	281	49
Net defined benefit liabilities	(14,319)	(87,357)
Refund liabilities	2,067	(44,565)
Cash generated from operations	924,559	1,744,556
Income taxes paid	(34,543)	(47,246)
Net cash generated from operating activities	890,016	1,697,310
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of financial assets at fair value through other comprehensive income	84,756	-
Acquisition of financial assets at amortized cost	(327,679)	(284,249)
Acquisition of financial assets at fair value through profit or loss	(114,316)	(136,435)
		(Continued)

WALTON ADVANCED ENGINEERING, INC.

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

(In Thousands of New Taiwan Dollars)

	For the Year Ended December 31
	2025	2024
Proceeds from disposal of financial assets at fair value through profit or loss	$ 361,932	$ -
Acquisition of investments accounted for using the equity method	-	(9,402)
Proceeds from disposal of investments accounted for using the equity method	24,035	28,033
Increase in prepayments for investments	-	(148,428)
Acquisition of property, plant and equipment	(1,198,291)	(461,611)
Proceeds from disposal of property, plant and equipment	25,717	5,038
Decrease in refundable deposits	95,564	9,686
Decrease in other accounts receivable - related parties	264,200	88,885
Decrease (increase) in other financial assets	799,569	(67,130)
Increase in other non-current assets	(7,158)	(3,024)
Interest received	109,207	97,256
Dividends received	34,683	30,339
Proceeds from government grants for property, plant and equipment	1,500	-
Net cash generated from (used in) investing activities	153,719	(851,042)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from short-term borrowings	778,968	1,843,550
Repayments of short-term borrowings	(975,296)	(1,543,910)
Proceeds from long-term bank borrowings	-	950,000
Repayments of long-term bank borrowings	(444,460)	(1,850,790)
Repayments of the principal portion of lease liabilities	(3,866)	(4,491)
Cash dividends distributed	(101,148)	(103,148)
Proceeds from exercise of employee share options	116,031	-
Payments for buy-back of ordinary shares	-	(182,198)
Interest paid	(36,462)	(47,480)
Net cash used in financing activities	(666,233)	(938,467)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	377,502	(92,199)
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR	1,431,022	1,523,221
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR	$ 1,808,524	$ 1,431,022

The accompanying notes are an integral part of the parent company only financial statements. (Concluded)

WALTON ADVANCED ENGINEERING, INC.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

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

1. GENERAL INFORMATION

On April 6, 1995, Walsin Advanced Engineering, Inc. ("Walsin") was founded by Walsin Lihwa Corp. (shareholding of 21% as of December 31, 2025), Winbond Electronics Corp. (shareholding of 10% as of December 31, 2025), and other investors to test, package, and sell integrated circuits (ICs). In July 2002, Walsin changed its name to Walton Advanced Engineering, Inc. (the "Corporation").

On August 1, 2002, the Corporation merged with its 59% - owned subsidiary, Walton Advanced Electronics Ltd., with the Corporation as the surviving company.

The Corporation's shares have been trading on the Taipei Exchange since August 2006 and were transferred for listing on the Taiwan Stock Exchange (TWSE) since October 30, 2007.

The parent company only financial statements are presented in the Corporation's functional currency, the New Taiwan dollar.

2. APPROVAL OF FINANCIAL STATEMENTS

The parent company only financial statements were approved by the Corporation's board of directors and authorized for issue 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)

The application of the amendments to the IFRS Accounting Standards endorsed and issued into effect by the FSC did not have any material impact on the Corporation's accounting policies.

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

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

As of the date the parent company only financial statements were authorized for issue, the Corporation has assessed that the application of other standards and interpretations will not have a material impact on its financial position and financial performance.

c. The IFRS Accounting Standards in issue but not yet endorsed and issued into effect by the FSC

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

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

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

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

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

To classify items of income and expenses presented in the statement of profit or loss into the operating, investing, financing, income taxes and discontinued operations categories, the Corporation 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 Corporation 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 Corporation shall disaggregate items with dissimilar characteristics in the primary financial statements and in the notes. The Corporation 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 Corporation as a whole, the Corporation 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 Corporation 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 Corporation shall be classified as investing activities, while interest and dividends paid shall be classified as financing activities. However, if, after assessment, the Corporation 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 parent company only financial statements were authorized for issue, the Corporation is continuously assessing the other impacts of the above amended standards and interpretations on its 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 parent company only financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

b. Basis of preparation

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

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

1) Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities;

2) Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

3) Level 3 inputs are unobservable inputs for the asset or liability.

When preparing these parent company only financial statements, the Corporation used the equity method to account for its investments in subsidiaries, and associates. In order for the amounts of the net profit for the year, other comprehensive income for the year and total equity in the parent company only financial statements to be the same with the amounts attributable to the owners of the Corporation in its consolidated financial statements, adjustments arising from the differences in accounting treatments between the parent company only basis and the consolidated basis were made to investments accounted for using the equity method, the share of profit or loss of subsidiaries and associates, the share of other comprehensive income of subsidiaries and associates, and the related equity items.

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 used for an exchange or used to settle a liability for more than 12 months after the reporting period.

Current liabilities include:

1) Liabilities held primarily for the purpose of trading;

2) Liabilities due to be settled within 12 months after the reporting period even if an agreement to refinance, or to reschedule payments, on a long-term basis is completed after the reporting period and before the parent company only financial statements are authorized for issue; and

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

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

d. Foreign currencies

In preparing the parent company only financial statements transactions in currencies other than the Corporation’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 denominated in foreign currencies that are measured at fair value are retranslated at the rates prevailing at the date when the fair value is determined. Exchange differences arising from the retranslation of non-monetary items are included in profit or loss for the period except for exchange differences arising from the retranslation of non-monetary items in respect of which gains and losses are recognized directly in other comprehensive income, in which cases, the exchange differences are also recognized directly in other comprehensive income.

Non-monetary items denominated in a foreign currency and measured at historical cost are stated at the reporting currency as originally translated from the foreign currency.

For the purpose of presenting the parent company only financial statements, the functional currencies of the Corporation’s foreign operations (including subsidiaries in other countries or those that use currencies that is different from the currency of the Corporation) are translated into the presentation currency - the New Taiwan dollar, as follows: Assets and liabilities are translated at the exchange rates prevailing at the end of the reporting period; income and expense items are translated at the average exchange rates for the period. The resulting currency translation differences are recognized in other comprehensive income.

e. Inventories

Inventories include raw materials (excluding chips entrusted for processing), supplies and work in process, are stated at the lower of cost and net realizable value. Inventory write-downs are made by item, except where it may be appropriate to group similar or related inventories. Net realizable value is the estimated selling prices of inventories less all estimated costs of completion and estimated costs necessary to make the sale. Inventories are recorded at standard cost and are adjusted to approximate the weighted average cost on the balance sheet date.

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f. Investments in subsidiaries

The Corporation uses the equity method to account for its investments in subsidiaries.

A subsidiary is an entity that is controlled by the Corporation.

Under the equity method, an investment is initially recognized at cost and adjusted thereafter to recognize the Corporation’s share of the profit or loss and other comprehensive income of the subsidiary. The Corporation also recognizes the changes in the share of other equity of subsidiaries.

Changes in the Corporation’s ownership interests in subsidiaries that do not result in the Corporation losing of control of the subsidiary are accounted for as equity transactions. Differences between the carrying amounts of the investment and the fair value of the consideration paid or received are directly recognized in equity.

When the Corporation’s share of losses of a subsidiary equals or exceeds its equity in the subsidiary (which includes any carrying amount of the investment accounted for using the equity method and long-term interests that, in substance, form part of the Corporation’s net investment in the subsidiary), the Corporation continues recognizing its share of further loss, if any, based on shareholding ratio.

The Corporation assesses its investment for any impairment by comparing the carrying amount with the estimated recoverable amount as assessed based on the investee’s financial statements as a whole. Impairment loss is recognized when the carrying amount exceeds the recoverable amount. If the recoverable amount of the investment subsequently increases, the Corporation recognizes a reversal of the impairment loss; the adjusted post-reversal carrying amount should not exceed the carrying amount that would have been recognized (net of amortization or depreciation) had no impairment loss been recognized in prior years.

When the Corporation loses control of a subsidiary, it recognizes the investment retained in the former subsidiary at its fair value at the date when control is lost. The difference between the fair value of the retained investment plus any consideration received and the carrying amount of previous investment at the date when control is lost is recognized as a gain or loss in profit or loss. Besides, the Corporation accounts for all amounts previously recognized in other comprehensive income in relation to that subsidiary on the same basis as would be required if the Corporation had directly disposed of the related assets or liabilities.

Unrealized profits or losses resulting from downstream transactions with subsidiaries are eliminated in the parent company only financial statements. Profits or losses resulting from upstream transactions and transactions with subsidiaries are recognized in the parent company only financial statements only to the extent of interests in the subsidiary that are not related to the Corporation.

g. Investments in associates

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

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

When the Corporation subscribe for additional new shares of the associate at a percentage different from its existing ownership percentage, the resulting carrying amount of the investment differs from the amount of the Corporation’s proportionate interest in the associate. The Corporation records such a difference as an adjustment to investments with the corresponding amount charged or credited to capital surplus - changes in capital surplus from investments in associates accounted for using the equity

14 -

method. If the Corporation’s ownership interest is reduced due to its additional subscription of the new shares of the associate, the proportionate amount of the gains or losses previously recognized in other comprehensive income in relation to that associate is reclassified to profit or loss on the same basis as would be required had the investee directly disposed of the related assets or liabilities. When the adjustment should be debited to capital surplus, but the capital surplus recognized from investments accounted for using the equity method is insufficient, the shortage is debited to retained earnings.

When impairment loss is evaluated, the entire carrying amount of the investment (including goodwill) is tested for impairment as a single asset by comparing its recoverable amount with its carrying amount. Any impairment loss recognized is deducted from the carrying amount of the investment. Any reversal of that impairment loss is recognized to the extent that the recoverable amount of the investment has subsequently increased.

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

When the Corporation transacts with its associates, profits and losses on these transactions are recognized in the financial statements only to the extent of interests in the associates that are not related to the Corporation.

h. Property, plant and equipment

Property, plant and equipment are initially stated at cost and subsequently measured at cost less accumulated depreciation and accumulated impairment loss.

Property, plant and equipment in the course of construction are measured at cost. Cost includes professional fees and borrowing costs eligible for capitalization. Samples produced when testing whether an item of property, plant and equipment is functioning properly before that assets reaches its intended use are measured at the lower of cost or net realizable value, and any proceeds from selling those samples and the cost of those samples are recognized in profit or loss. Such assets are depreciated and classified to the appropriate categories of property, plant and equipment when completed and ready for their intended use.

The depreciation of property, plant and equipment is recognized using the straight-line method over their estimated useful lives. Each significant part is depreciated separately. The estimated useful lives, residual values and depreciation method 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 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. Impairment of property, plant and equipment, and right-of-use assets

At the end of each reporting period, the Corporation reviews the carrying amounts of its property, plant and equipment, and right-of-use assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. When it is not possible to estimate the recoverable amount of an individual asset, the Corporation estimates the recoverable amount of the cash-generating unit to which the asset belongs. Corporate assets are allocated to the individual cash-generating units on a reasonable and consistent basis of allocation; otherwise, they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be

15 -

identified.

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. The impairment loss is recognized in profit or loss.

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

j. Financial instruments

Financial assets and financial liabilities are recognized when the Corporation 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 issue 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 assets

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

a) Measurement category

Financial assets are classified into the following categories: Financial assets at FVTPL, financial assets at amortized cost, and investments in equity instruments at FVTOCI.

i Financial asset at FVTPL

Financial assets are classified as at FVTPL when such financial assets are mandatorily classified or designated as at FVTPL. Financial assets classified as at FVTPL include investments in equity instruments which are not designated as at FVTOCI.

Financial assets at FVTPL are subsequently measured at fair value, and any dividends, interest earned and remeasurement gains or losses on such financial assets are recognized in profit or loss. Fair value is determined in the manner described in Note 26.

ii 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.

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Financial assets at amortized cost, including cash and cash equivalents, accounts receivable (including related parties) at amortized cost, other receivables (including related parties), other financial assets and refundable deposits, are measured at amortized cost, which equals the gross carrying amount determined by 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 a financial asset, except for:

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

ii) Financial assets that are not credit impaired on purchase or origination but have subsequently become credit impaired, for which interest income is calculated by applying the effective interest rate to the amortized cost of such financial assets in subsequent reporting periods.

Credit-impaired financial assets are those for which the issuer or the debtor has experienced significant financial difficulty, has defaulted, where the debtor is likely to declare bankruptcy or undergo other financial reorganization, or the disappearance of an active market for the financial asset due to financial difficulty.

Cash equivalents include time deposits, negotiable certificates of deposit and bonds with repurchase agreements 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 subject to an insignificant risk of changes in value. These cash equivalents are held for the purpose of meeting short-term cash commitments.

iii Investments in equity instruments at FVTOCI

On initial recognition, the Corporation may make an irrevocable election to designate investments in equity instruments as at FVTOCI. Designation at FVTOCI is not permitted if the equity investment is held for trading or if it is contingent consideration recognized by an acquirer in a business combination.

Investments in equity instruments at FVTOCI are subsequently measured at fair value with gains and losses arising from changes in fair value recognized in other comprehensive income and accumulated in other equity. The cumulative gain or loss will not be reclassified to profit or loss on disposal of the equity investments, instead, they will be transferred to retained earnings.

Dividends on these investments in equity instruments are recognized in profit or loss when the Corporation's right to receive the dividends is established, unless the dividends clearly represent a recovery of part of the cost of the investment.

b) Impairment of financial assets and contract assets

The Corporation recognizes a loss allowance for expected credit losses on financial assets at amortized cost (including accounts receivable) and contract assets.

The Corporation always recognizes lifetime expected credit loss (ECLs) for accounts receivable and contract assets. For other financial assets, the Corporation recognizes lifetime ECLs when there has been a significant increase in credit risk since initial recognition. If, on the other hand, the credit risk on the financial instrument has not increased significantly since initial recognition, the Corporation measures the loss allowance for that financial instrument at an

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amount equal to 12-month ECLs.

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

For the purpose of internal credit risk management, if internal or external information shows that the debtor is no longer able to pay off the debt, the Corporation would determine that the financial asset has defaulted, without considering the collateral held.

The Corporation recognizes an impairment 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 Corporation 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. On derecognition of an investment in a debt instrument at FVTOCI in its entirety, the difference between the asset's carrying amount and the sum of the consideration received and receivable (including any accumulated gains or losses that had been recognized in other comprehensive income) is recognized in profit or loss. On derecognition of an investment in an equity instrument at FVTOCI in its entirety, the cumulative gain or loss is transferred directly to retained earnings, without recycling through profit or loss.

2) Equity instruments

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

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

The repurchase of the Corporation's own equity instruments is recognized in and deducted directly from equity and its carrying amounts are calculated based on weighted average by share types and calculated separately by repurchase category. No gain or loss is recognized in profit or loss on the purchase, sale, issuance or cancellation of the Corporation's own equity instruments.

3) 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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k. Carbon fee provision

In accordance with the Regulations Governing the Collection of Carbon Fees and related regulations of the R.O.C., 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.

l. Revenue recognition

The Corporation identifies the contracts with customers, allocates transaction prices to performance obligations, and recognize revenue when performance obligations are satisfied.

For contracts where the period between the date on which the Corporation transfers a promised good or service to a customer and the date on which the customer pays for that good or service is one year or less, the Corporation does not adjust the promised amount of consideration for the effects of a significant financing component.

The Corporation provides semiconductor packaging and testing services for customers according to agreed specifications. Customers control goods while they are still being manufactured. The Corporation measures the progress of completion on the basis of costs incurred relative to the total expected costs as there is a direct relationship between the costs incurred and the progress of satisfaction of the performance obligations.

Contract assets are recognized during the manufacturing process and are reclassified to accounts receivable when the manufacturing process is completed or when the goods are shipped upon the customer's request.

m. Leases

At the inception of a contract, the Corporation assesses whether the contract is, or contains, a lease.

1) The Corporation as lessor

Leases are classified as finance leases whenever the terms of a lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

2) The Corporation as lessee

The Corporation recognizes right-of-use assets and lease liabilities for all leases at the commencement date of a lease, except for short-term leases and low-value asset leases accounted for applying a recognition exemption where lease payments are recognized as expenses on a straight-line basis over the lease terms.

Right-of-use assets are initially measured at cost, which comprises the initial measurement of lease liabilities. Right-of-use assets are subsequently measured at cost less accumulated depreciation and impairment losses and adjusted for any remeasurement of the lease liabilities. Right-of-use assets are presented on a separate line in the parent company only balance sheets.

Right-of-use assets are depreciated using the straight-line method from the commencement dates to the earlier of the end of the useful lives of the right-of-use assets or the end of the lease terms.

Lease liabilities are initially measured at the present value of the lease payments, which comprise fixed payment, and variable lease payment depending on index or rate. The lease payments are discounted using the interest rate implicit in a lease, if that rate can be readily determined. If that rate cannot be readily determined, the Corporation uses the lessee's incremental borrowing rate.

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Subsequently, lease liabilities are measured at amortized cost using the effective interest method, with interest expense recognized over the lease terms. When there is a change in future lease payments resulting from a change in a lease term, an index or a rate used to determine those payments, the Corporation remeasures the lease liabilities with a corresponding adjustment to the right-of-use-assets. However, if the carrying amount of the right-of-use assets is reduced to zero, any remaining amount of the remeasurement is recognized in profit or loss. For a lease modification that is not accounted for as a separate lease, the Corporation accounts for the remeasurement of the lease liability by decreasing the carrying amount of the right-of-use asset of lease modifications that decreased the scope of the lease, and recognizing in profit or loss any gain or loss on the partial or full termination of the lease. Lease liabilities are presented on a separate line in the parent company only balance sheets.

n. 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.

Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization.

Other than that stated above, all other borrowing costs are recognized in profit or loss in the period in which they are incurred.

o. Government grants

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

Government grants related to income are recognized as a reduction of the related costs on a systematic basis over the periods in which the Corporation recognizes as expenses the related costs that grants are intended to compensate.

Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Corporation with no future related costs are recognized in profit or loss in the period in which they become receivable.

p. 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.

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 net interest on the net defined benefit liabilities are recognized as employee benefits expense in the period in which they occur. Remeasurement, comprising actuarial gains and losses and the return on plan assets (excluding interest), is recognized in other comprehensive income in the period in which they occur. Remeasurement recognized in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to

20 -

profit or loss.

Net defined benefit liabilities represent the actual deficit in the Corporation’s defined benefit plans.

q. Employee share options

The fair value at the grant date of the employee share options is expensed on a straight-line basis over the vesting period, based on the Corporation’s best estimate of the number of options that are expected to ultimately vest, with a corresponding increase in capital surplus - employee share options. The expense is recognized in full at the grant date if the grants are vested immediately. The grant date of treasury shares transferred to employees is the date on which number of shares that the employees purchase is confirmed.

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 R.O.C., an additional tax on unappropriated earnings is provided for in the year the shareholders approve to retain earnings.

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

2) Deferred tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities 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 and unused loss carryforwards to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized. Such deferred tax assets and liabilities are not recognized if the temporary difference arises from the initial recognition of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

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

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. A previously unrecognized deferred tax asset is also reviewed at each balance sheet date 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

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that have been enacted or substantively enacted by the balance sheet date. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Corporation expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

3) Current and deferred tax

Current and deferred tax 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 tax are also recognized in other comprehensive income or directly in equity respectively.

MATERIAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

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

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised if the revisions affect only that period or in the period of the revisions and future periods if the revisions affect both current and future periods.

CASH AND CASH EQUIVALENTS

	December 31
	2025	2024
Cash on hand	$ 731	$ 773
Checking accounts and demand deposits	270,227	188,557
Foreign currency demand deposits	451,441	489,917
Cash equivalents (investments with original maturities of 3 months or less)
Time deposits	281,000	261,800
Repurchase agreements collateralized by bills	805,125	489,975
	$ 1,808,524	$ 1,431,022

FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS (FVTPL)

	December 31
	2025	2024
Current
Listed shares	$ 685,619	$ 216,235

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8. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME (FVTOCI)

	December 31
	2025	2024
Investments in equity instruments
Domestic investments
Listed shares	$ 1,562,779	$ 1,290,790
Unlisted shares	113,190	93,670
	$ 1,675,969	$ 1,384,460

These investments in equity instruments are not held for trading; instead, they are held for medium to long-term strategic purposes. Accordingly, the management elected to designate these investments in equity instruments as at FVTOCI as they believe that recognizing short-term fluctuations in these investments' fair value in profit or loss would not be consistent with the Corporation's strategy of holding these investments for long-term purposes.

9. FINANCIAL ASSETS AT AMORTIZED COST - NON-CURRENT

	December 31
	2025	2024
Corporate bonds	$ 620,015	$ 323,380
The above information of corporate bonds was as follows:
	December 31
	2025	2024
Maturity date	August 2028	August 2028
	-May 2034	-May 2034
Coupon rate (%)	4.65-5.80	4.85-5.80
Effective interest rate (%)	4.62-5.80	4.67-5.80

10. ACCOUNTS RECEIVABLE (INCLUDING RELATED PARTIES) AND OTHER RECEIVABLES (INCLUDING RELATED PARTIES)

	December 31
	2025	2024
Accounts receivable (including related parties) (a)
At amortized cost
Gross carrying amount	$ 1,182,806	$ 876,919
Less: Allowance for impairment loss	-	-
	$ 1,182,806	$ 876,919
Other receivables (including related parties) (b)
Loans to others	$ 783,000	$ 1,047,200
Technical service income	111,821	116,632
		(Continued)

	December 31
	2025	2024
Receivables on equipment	$ 18,547	$ 7,722
Interest receivable	17,734	14,063
Rent	15,371	676
Payments for others	11,779	8,133
Others	41	2,402
	$ 958,293	$ 1,196,828
		(Concluded)

a. Accounts receivable (including related parties)

The Corporation's average credit term was 30 to 90 days. For the financial risk management objectives and policies, please refer to Note 26 d. The Corporation evaluates the risk and probability of credit loss by reference to the default records and financial condition of each customer, as well as general economic conditions, competitive advantage and future development of the industry in which the customer operates. The Corporation then reviews the recoverable amount of each individual account receivable at each balance sheet date to ensure that adequate allowance is made for possible irrecoverable amounts. In this regard, management believes the Corporation's credit risk was significantly reduced. In addition, the Corporation measures the loss allowance for accounts receivable at an amount equal to lifetime ECLs. The expected credit losses on accounts receivable are estimated using a provision matrix prepared by reference to the past default records of the debtor and an analysis of the debtor's current financial position, adjusted for general economic conditions of the industry in which the debtors operate and an assessment of both the current as well as the forecast direction of economic conditions at each balance sheet date. As the Corporation's historical credit loss experience shows significantly different loss patterns for different customer segments, the provision for loss allowance based on past due status is further distinguished according to the Corporation's different customer base.

The Corporation writes off an account receivable when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery. For accounts receivable that have been written off, the Corporation 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 accounts receivable based on the Corporation's provision matrix:

December 31, 2025

	Not Overdue	Overdue 1 to 60 days	Overdue 61 to 90 Days	Overdue 91 to 180 Days	Overdue 181 to 365 Days	Overdue Over 365 Days	Total
Expected credit loss rate (%)	-	-	-	-	-	100
Gross carrying amount	$ 995,277	$ 136,691	$ 48,651	$ 2,187	$ -	$ -	$ 1,182,806
Loss allowance (Lifetime ECLs)	-	-	-	-	-	-	-
	$ 995,277	$ 136,691	$ 48,651	$ 2,187	$ -	$ -	$ 1,182,806

December 31, 2024

	Not Overdue	Overdue 1 to 60 days	Overdue 61 to 90 Days	Overdue 91 to 180 Days	Overdue 181 to 365 Days	Overdue Over 365 Days	Total
Expected credit loss rate (%)	-	-	-	-	-	100
Gross carrying amount	$ 798,083	$ 69,828	$ 9,008	$ -	$ -	$ -	$ 876,919
Loss allowance (Lifetime ECLs)	-	-	-	-	-	-	-
	$ 798,083	$ 69,828	$ 9,008	$ -	$ -	$ -	$ 876,919

b. Other receivables (including related parties)

As of December 31, 2025 and 2024, no expected credit losses were recognized for the overdue receivables based on the assessment.

11. INVENTORIES

	December 31
	2025	2024
Raw materials	$ 370,292	$ 194,714
Supplies	40,392	29,421
Work in process	16,350	9,597
	$ 427,034	$ 233,732

Operating costs related to inventories for the years ended December 31, 2025 and 2024 were NT$4,745,101 thousand and NT$4,573,508 thousand, respectively, including write-down of inventories of NT$25,000 thousand for the year ended December 31, 2024.

12. OTHER FINANCIAL ASSETS - CURRENT

	December 31
	2025	2024
Pledged time deposits (Note 28)	$ -	$ 799,569
The range of discount rates for other financial assets was as follows:
	December 31
	2025	2024
Annual percentage rate (%)	-	0.68-4.70

13. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

	December 31
	2025	2024
Investments in subsidiaries	$ 2,219,741	$ 1,370,975
Investments in associates	5,769	43,119
	$ 2,225,510	$ 1,414,094

a. Investments in subsidiaries

	December 31
	2025		2024
	Amount	Share Holding (%)	Amount	Share Holding (%)
Unlisted company
Walton Holding Universal Ltd.	$ 2,208,777	100	$ 1,370,975	100
AMB Technology Co., Ltd. (AMB Technology)	10,964	74	-	-
	$ 2,219,741		$ 1,370,975

In December 2003, the Corporation established Walton Holding Universal Ltd. in the British Virgin Islands, holding 100% of its shares, and obtained approved from the Investment Review Committee of the Ministry of Economic Affairs to invest in Walton Advanced Engineering (Suzhou) Inc. (100% shares) and Walton Holding (Hong Kong) Ltd. (Walton Holding (HK)) (100% shareholding). Walton Advanced Engineering (Suzhou) Inc. is mainly engaged in semiconductor packaging and testing; Walton Holding (HK) is mainly engaged in professional investment. As of the end of 2025, the Corporation's cumulative investment in Walton Holding Universal Ltd. amounted to NT$2,696,238 thousand (US$88,805 thousand), and the Corporation reinvested through Walton Holding Universal Ltd. in Walton Holding (HK) amounting to NT$145,002 thousand (US$4,803 thousand), Walton Advanced Engineering (Suzhou) Inc. amounting to NT$1,512,020 thousand (US$47,400 thousand) and Waltech Advanced Engineering (Suzhou) Inc. amounting to NT$929,401 thousand (US$35,000 thousand).

In the second half of 2024, the Corporation participated in the cash capital increase of AMB Technology by making a prepayment for share subscription in the amount of NT$148,428 thousand. The record date for the capital increase was set on October 20, 2025, and the registration was completed in November 2025, upon which the Corporation acquired 14,843 thousand shares. AMB Technology is principally engaged in the business of electronic components and semiconductor packaging and testing.

b. Investments in associates

	December 31
	2025		2024
	Amount	Share Holding (%)	Amount	Share Holding (%)
Walsin New Energy Corporation	$ 5,769	15	$ 6,765	15
Horng Tong	-	-	36,354	10
	$ 5,769		$ 43,119

Although the Corporation held less than 20% of shares of associate that are not individually material. Since the Corporation holds one seat in the board of directors of associate and can exercise significant influence, therefore are accounted for using the equity method.

In August 2023, the Corporation invested in Walsin New Energy Corporation, a company that provides electricity supply.

In November 2018, the Corporation invested in Horng Tong Enterprise Co., Ltd. ("Horng Tong"), a company that manufactures professional connectors. And from 2024, the Corporation disposed of part of its shareholding, with proceeds from disposal was NT$28,200 thousand and the gain on disposal was

26 -

NT$12,871 thousand. In January 2025, as the cumulative transfer of shares exceeded one-half of the shares held at the time of appointment, the Corporation's board seat was automatically vacated, resulting in the loss of significant influence. The fair value of the remaining equity interest held by the Corporation at the date when significant influence was lost amounted to NT$72,022 thousand, which was reclassified as financial asset at FVTPL. The Corporation disposed of all remaining shares as of December 31, 2025. The amount recognized in profit or loss arising from this transaction is calculated as follows:

For the Year Ended December 31 2025

Proceeds from disposal	$ 23,722
Fair value of retained investment	72,022
Less: Carrying amount of investment at the date of loss of significant influence	36,354
Less: Share of other comprehensive income of the associate	1,893
Gain on disposal	$ 57,497

14. PROPERTY, PLANT AND EQUIPMENT

For the year ended December 31, 2025

	Buildings and Improvements	Machinery and Equipment	Transportation Equipment	Office Equipment	Other Equipment	Construction in Progress and Machinery in Transit	Total
Cost
Balance at January 1, 2025	$ 3,109,346	$ 35,179,380	$ 25,365	$ 199,588	$ 5,751	$ 174,336	$ 38,693,766
Additions	61,693	984,730	3,901	900	-	168,058	1,219,282
Disposals	(139,356)	(2,896,304)	(1,231)	(17,191)	-	-	(3,054,082)
Reclassified	(1,950)	(10,294)	308	6,608	5,328	-	-
Balance at December 31, 2025	$ 3,029,733	$ 33,257,512	$ 28,343	$ 189,905	$ 11,079	$ 342,394	$ 36,858,966
Accumulated depreciation and impairment
Balance at January 1, 2025	$ 2,299,197	$ 31,501,453	$ 16,868	$ 189,392	$ 5,702	$ -	$ 34,012,612
Depreciation expense	138,507	1,018,244	2,808	4,333	-	-	1,163,892
Disposals	(139,356)	(2,871,219)	(1,231)	(17,191)	-	-	(3,028,997)
Reclassified	(1,950)	(10,294)	289	6,578	5,377	-	-
Balance at December 31, 2025	$ 2,296,398	$ 29,638,184	$ 18,734	$ 183,112	$ 11,079	$ -	$ 32,147,507
Balance at December 31, 2025, net	$ 733,335	$ 3,619,328	$ 9,609	$ 6,793	$ -	$ 342,394	$ 4,711,459

For the year ended December 31, 2024

	Buildings and Improvements	Machinery and Equipment	Transportation Equipment	Office Equipment	Other Equipment	Construction in Progress and Machinery in Transit	Total
Cost
Balance at January 1, 2024	$ 3,225,959	$ 37,405,056	$ 24,216	$ 210,006	$ 5,751	$ 628,130	$ 41,499,118
Additions	-	872,550	2,563	2,210	-	(453,794)	423,529
Disposals	(116,613)	(3,098,226)	(1,414)	(12,628)	-	-	(3,228,881)
Balance at December 31, 2024	$ 3,109,346	$ 35,179,380	$ 25,365	$ 199,588	$ 5,751	$ 174,336	$ 38,693,766
Accumulated depreciation and impairment
Balance at January 1, 2024	$ 2,271,272	$ 33,574,157	$ 16,100	$ 196,979	$ 5,632	$ -	$ 36,064,140
Depreciation expense	144,538	1,017,915	2,182	5,041	70	-	1,169,746
Disposals	(116,613)	(3,090,619)	(1,414)	(12,628)	-	-	(3,221,274)
Balance at December 31, 2024	$ 2,299,197	$ 31,501,453	$ 16,868	$ 189,392	$ 5,702	$ -	$ 34,012,612
Balance at December 31, 2024, net	$ 810,149	$ 3,677,927	$ 8,497	$ 10,196	$ 49	$ 174,336	$ 4,681,154

Property, plant and equipment are depreciated on a straight-line basis over their useful lives as follows:

Buildings and improvements
Main building of plant	5-40 years
Mechanical and electrical facilities	2-15 years
Machinery and equipment	2-8 years
Transportation equipment	2-6 years
Office equipment	2-8 years
Other equipment	2-6 years

The Corporation leases some houses and buildings to related parties under operating leases, refer to Note 27 for the details.

Refer to Note 28 for the carrying amounts of property, plant and equipment that had been pledged by the Corporation to secure borrowings.

15. LEASE ARRANGEMENTS

a. Right-of-use assets

	December 31
	2025	2024
Carrying amount
Land	$ 41,421	$ 36,263
Transportation equipment	-	600
	$ 41,421	$ 36,863
	For the Year Ended December 31
	2025	2024
Depreciation charge for right-of-use assets
Land	$ 2,550	$ 3,055
Transportation equipment	600	656
	$ 3,150	$ 3,711

b. Lease liabilities

	December 31
	2025	2024
Carrying amount
Current	$ 2,235	$ 3,022
Non-current	$ 42,579	$ 36,996

Range of discount rate for lease liabilities was as follows:

	December 31
	2025	2024
Land (%)	2.20-2.68	2.20
Transportation equipment (%)	-	2.80

c. Material lease activities and terms

The Corporation leases land for the use of plants and offices from the government, there were three leases as of December 31, 2025, with lease terms that will expire successively before August 2035. The Corporation has the option to extend the lease terms by 5-10 years at the expiry of the lease terms. The Corporation does not have bargain purchase options to acquire the leasehold land at the end of the lease terms.

d. Other lease information

Other related lease information

	For the Year Ended December 31
	2025	2024
Expenses relating to short-term leases	$ 2,448	$ 3,745
Total cash outflow for leases	$ 7,268	$ 9,323

All lease commitments with lease terms commencing after the balance sheet dates are as follows:

	December 31
	2025	2024
Lease commitments	$ 20,479	$ 4,333

BORROWINGS

a. Short-term borrowings

	December 31
	2025	2024
Unsecured loans	$ 403,672	$ 600,000
Range of interest rates (%)	0.84-1.85	1.80-1.86

b. Long-term borrowings

	December 31
	2025	2024
Syndicated bank loans
The non-revolving loan amount is NT$1.5 billion. Repayment of the loan is made in 9 instalment periods starting from April 2025, with every 6 months as 1 period until April 2029. The interest rate was 2.41% and 2.23% as of December 31, 2025 and 2024, respectively.	$ 501,940	$ 645,320
Credit loans
The revolving loan amount is NT$500 million and is to be repaid in November 2027. The interest rate was 2.00% as of December 31, 2025.	300,000	-
The revolving loan amount is NT$500 million was terminated in advance in November 2025. The interest rate was 1.99% as of December 31, 2024.	-	300,000
(Continued)

	December 31
	2025	2024
The revolving loan amount is NT$300 million was terminated in advance in November 2025. The interest rate was 2.00% as of December 31, 2024.	$ -	$ 300,000
	801,940	1,245,320
Less: Current portion	144,440	144,460
	$ 657,500	$ 1,100,860
Secured loans	$ 501,940	$ 645,320
Unsecured loans	300,000	600,000
	801,940	1,245,320
Less: Current portion	144,440	144,460
	$ 657,500	$ 1,100,860
		(Concluded)

Long-term loans are loans with floating interest rates.

In January 2024, the Corporation signed an agreement for a syndicated bank loan of NT$3 billion with 12 financial institutions including CTBC Bank and Mega Bank. According to the agreement, the Corporation must meet certain financial ratio restrictions and comply with other covenants during the loan period (financial ratios are reviewed once every six months, or whenever the lead bank deems necessary, based on the Corporation's audited annual consolidated financial statements or reviewed semi-annual consolidated financial statements). If the Corporation fails to meet the above-mentioned financial ratio restrictions or breaches other covenants as stated in the agreement and fails to make improvements after the contractual improvement period, the lead bank has the right to notify the Corporation in writing based on the majority resolution of the syndicate of banks, and may immediately suspend the use of the credit line or announce that the unutilized principal and interest are due.

The Corporation was in compliance with all of the financial covenants as of June 30 and December 31, 2025.

17. NOTES PAYABLE AND ACCOUNTS PAYABLE

	December 31
	2025	2024
Notes payable
Non-operating	$ 3,232	$ 3,128
Accounts payable	$ 518,400	$ 342,222

The Corporation purchases raw materials on credit.

The average payment days are 30-90 days, and no additional interest will be charged from the date of the invoice of the accounts payable.

31 -

18. OTHER PAYABLES

	December 31
	2025	2024
Salaries and bonuses	$ 348,370	$ 322,117
Accrued utilities	55,200	52,109
Accrued employees’ compensation and remuneration of directors (Note 22)	74,613	10,754
Accrued insurance	16,273	16,031
Accrued pension	9,664	10,025
Accrued repair and maintenance	2,448	37,512
Others	167,208	160,154
	$ 673,776	$ 608,702

19. RETIREMENT BENEFIT PLANS

a. Defined contribution plans

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

b. Defined benefit plans

The Corporation has a defined benefit plan in accordance with the Labor Standards Act; the pension plan is operated by the government of the R.O.C.. Pension benefits are calculated on the basis of the length of service and average monthly salaries of the 6 months before retirement. The Corporation contributes amounts equal to 2% 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 Corporation 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 Corporation 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 Corporation has no right to influence the investment policy and strategy.

The amounts included in the parent company only balance sheets in respect of the Corporation’s defined benefit plans were as follows:

	December 31
	2025	2024
Present value of defined benefit obligation	$ 259,493	$ 238,080
Fair value of plan assets	(215,906)	(208,041)
Net defined benefit liabilities	$ 43,587	$ 30,039

Movements of net defined benefit liabilities were as follows:

	Present Value of the Defined Benefit Obligation	Fair Value of the Plan Assets	Net Defined Benefit Liabilities
Balance at January 1, 2025	$ 238,080	$ (208,041)	$ 30,039
Service cost
Current service cost	444	-	444
Interest expense (income)	3,571	(3,160)	411
Recognized in profit or loss	4,015	(3,160)	855
Remeasurement
Return on plan assets (excluding amounts included in net interest)	-	(14,441)	(14,441)
Actuarial loss
Changes in financial assumptions	2,674	-	2,674
Experience adjustments	39,634	-	39,634
Recognized in other comprehensive income (loss)	42,308	(14,441)	27,867
Contributions from the employer	-	(15,174)	(15,174)
Benefits paid	(24,910)	24,910	-
Balance at December 31, 2025	$ 259,493	$ (215,906)	$ 43,587
Balance at January 1, 2024	$ 256,595	$ (137,767)	$ 118,828
Service cost
Current service cost	565	-	565
Interest expense (income)	3,207	(1,756)	1,451
Recognized in profit or loss	3,772	(1,756)	2,016
Remeasurement
Return on plan assets (excluding amounts included in net interest)	-	(14,412)	(14,412)
Actuarial (gain) loss
Changes in financial assumptions	(5,634)	-	(5,634)
Experience adjustments	18,614	-	18,614
Recognized in other comprehensive income (loss)	12,980	(14,412)	(1,432)
Contributions from the employer	-	(89,373)	(89,373)
Benefits paid	(35,267)	35,267	-
Balance at December 31, 2024	$ 238,080	$ (208,041)	$ 30,039

An analysis by function of the amounts recognized in profit or loss in respect of the defined benefit plans is as follows:

For the Year Ended December 31
2025 2024

Operating costs	$ 674	$ 1,623
Selling and marketing expenses	14	29
General and administrative expenses	162	352
Research and development expenses	5	12
	$ 855	$ 2,016

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

1) Investment risk

The plan assets are invested in domestic and foreign equity securities, debt securities, and bank deposits, etc. The investment is conducted at the discretion of the Bureau of Labor Funds, Ministry of Labor 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 and corporate bond interest rate will increase the present value of the defined benefit obligation; however, this will be partially offset by an increase in the return on the plan's debt investments.

3) Salary risk

The present value of the defined benefit obligation is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the present value of the defined benefit obligation.

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

	December 31
	2025	2024
Discount rate (%)	1.375	1.500
Expected rate of salary increase (%)	2.000	2.000

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

	December 31
	2025	2024
Discount rate
0.25% increase	$ (5,306)	$ (5,447)
0.25% decrease	$ 5,480	$ 5,634
		(Continued)

34 -

December 31

	2025	2024
Expected rate of salary increase
0.25% increase	$ 5,348	$ 5,497
0.25% decrease	$ (5,204)	$ (5,341)
		(Concluded)

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

December 31

	2025	2024
Expected contributions to the plans for the next year	$ 5,429	$ 5,305
Average duration of the defined benefit obligation	8.3 years	9.3 years

20. EQUITY

a. Share capital

	December 31
	2025	2024
Number of shares authorized (in thousands)	700,000	700,000
Shares authorized	$ 7,000,000	$ 7,000,000
Number of shares issued and fully paid (in thousands)	517,740	517,740
Shares issued
Ordinary shares	$ 5,177,399	$ 5,177,399

Fully paid ordinary shares, which have a par value of NT$10, carry one vote per share and the right to dividends.

b. Capital surplus

	December 31
	2025	2024
May be used to offset a deficit, distributed as cash dividends or transferred to share capital (Note)
Issuance of ordinary shares	$ 268,469	$ 268,469
Treasury share transactions	190,758	57,756
Expired employee share options	4,726	4,726
Expired redemption right of convertible bonds	12,267	12,267
May be used to offset deficit only
Changes of share in equity of subsidiaries	172,455	118,243
	$ 648,675	$ 461,461

Note: The capital surplus may be used to offset a deficit, distributed as cash dividends or transferred to capital when the Corporation has no deficit (limited to a certain percentage of the Corporation's paid-in capital and once a year).

c. Retained earnings and dividends policy

Under the Corporation's dividends policy, where the Corporation 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 Corporation'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 to shareholders.

The Corporation is still in the growth stage and will continue to monitor the economic environment to pursue sustainable operations and long-term development. When proposing the plan for the distribution of retained earnings, the board of directors places emphasis on the stability and growth of dividends, and only up to 90% of unappropriated earnings should be distributed as dividends and bonuses, out of which cash dividends should be at least 10% of the total dividends and bonuses distributed.

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

The appropriations of earnings for 2024 and 2023, which were approved in the shareholders' meetings in June 2025 and 2024, were as follows:

	Appropriation of Earnings		Dividends Per Share (NT$)
	For the Year Ended December 31		For the Year Ended December 31
	2024	2023	2024	2023
Legal reserve	$ 13,541	$ -
Cash dividends	101,148	103,148	$ 0.20	$ 0.20

d. Other equity items

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

	For the Year Ended December 31
	2025	2024
Balance at January 1	$ (84,845)	$ (149,559)
Recognized for the year
Share from subsidiaries and associates accounted for using the equity method	31,613	63,698
Reclassification adjustments
Proceeds from disposal of associates accounted for using the equity method	1,893	1,016
Balance at December 31	$ (51,339)	$ (84,845)

2) Unrealized gains and losses on financial assets at FVTOCI

	For the Year Ended December 31
	2025	2024
Balance at January 1	$ 1,055,250	$ 1,484,178
Recognized for the year
Cumulative unrealized gain or loss of equity instruments transferred to retained earnings due to disposal	(53,243)	-
Unrealized gains and losses - equity instruments	376,265	(422,884)
Share from subsidiaries accounted for using the equity method	(3,525)	(6,044)
Balance at December 31	$ 1,374,747	$ 1,055,250

3) Other equity items

	For the Year Ended December 31
	2025	2024
Balance at January 1	$ (111,502)	$ (435,350)
Reversal for the current year
Share from subsidiaries accounted for using the equity method	—	323,848
Balance at December 31	$ (111,502)	$ (111,502)

Recognition of equity instrument put options from the disposal of subsidiaries, refer to Note 20 of consolidated financial statements.

e. Treasury shares

(Number of shares and amounts in thousands)

Purpose of Buy Back	Number of Shares (Beginning of Year)	For the Year Ended December 31		December 31
		Addition	Reduction	Number of Shares	Carrying Amount
For the year ended December 31, 2025
Transfer to employees	12,000	—	7,000	5,000	$ 91,099
For the year ended December 31, 2024
Transfer to employees	2,000	10,000	—	12,000	$ 207,468

In 2024, The Corporation repurchased 10,000 thousand shares of its shares from the open market, for transferring to its employees, with consideration of NT$182,198 thousand.

In 2025, the transfer of treasury shares to employees and incurred a compensation cost of NT$133,340 thousand, of which NT$133,002 thousand was recognized as capital surplus - treasury share transactions after deducting relevant transaction costs.

Information on employee share options for treasury shares is as follows:

	For the Year Ended December 31, 2025
	Number of shares (Thousands)	Exercise Price (NT$)
Granted during the current year	7,000	$ 12.64-18.22
Exercised during current year	(7,000)	12.64-18.22
Outstanding shares at the end of the year	-
Fair value of the share options granted (NT$)	$ 3.32-25.34

Under the Securities and Exchange Act, the number of treasury shares shall not exceed 10% of the total issued shares, and cash paid for the acquisition of treasury shares shall not exceed the sum of retained earnings, additional paid-in capital from the issuance of ordinary shares and realized capital surplus. According to the Act, if the treasury shares acquired by the Corporation are for transferring to its employees, the transfer of the shares should be completed within 5 years from the acquisition date.

Under the Securities and Exchange Act, the Corporation shall neither pledge treasury shares nor exercise shareholders' rights on these shares, such as the rights to dividends and the rights to vote.

21. OPERATING REVENUE

a. Contract balance

	December 31		January 1, 2024
	2025	2024
Accounts receivable (including related parties)	$ 1,182,806	$ 876,919	$ 642,981
Contract assets - current Packaging and testing income	$ 209,064	$ 113,377	$ 159,803
Contract liabilities - current Advance payments	$ -	$ 12,422	$ 1,361

The changes in the balance of contract assets and contract liabilities primarily resulted from the timing difference between the Corporation's satisfaction of performance obligations and the respective customer's payment.

b. Disaggregation of revenue

	For the Year Ended December 31
	2025	2024
Packaging and testing income	$ 4,963,066	$ 4,791,380
Other income (mainly from the sale of material)	138,888	217,986
	$ 5,101,954	$ 5,009,366

38 -

22. PROFIT BEFORE INCOME TAX

Net profit from continuing operations attributable to:

a. Interest income

	For the Year Ended December 31
	2025	2024
Bank deposits	$ 49,522	$ 51,446
Loans to others (Note 27)	30,215	36,961
Others	29,261	13,143
	$ 108,998	$ 101,550

b. Other income

	For the Year Ended December 31
	2025	2024
Rental income (Note 27)	$ 21,917	$ 9,135
Dividend income	34,683	30,339
	$ 56,600	$ 39,474

c. Other gains and losses

	For the Year Ended December 31
	2025	2024
Net foreign exchange gain (loss)	$ (110,561)	$ 206,741
Gain on disposal of property, plant and equipment	306,182	91,437
Gain on disposal of investments accounted for using equity method	57,497	12,871
Gain (loss) arising from financial assets mandatorily classified as at FVTPL	644,978	(167,258)
Technical service income	83,831	177,164
Others	34,205	26,555
	$ 1,016,132	$ 347,510
Foreign exchange gain	$ 22,525	$ 230,161
Foreign exchange loss	(133,086)	(23,420)
Net foreign exchange gain (loss)	$ (110,561)	$ 206,741

d. Finance costs

	For the Year Ended December 31
	2025	2024
Interest on bank loans	$ 37,578	$ 44,384
Interest on lease liabilities	954	1,087
	38,532	45,471
Less: Amounts included in the cost of qualifying assets	6,007	6,099
	$ 32,525	$ 39,372

Information about capitalized interest was as follows:

	For the Year Ended December 31
	2025	2024
Capitalized interest amount	$ 6,007	$ 6,099
Capitalization rates (%)	1.98-2.19	1.90-2.01
e. Depreciation and amortization
	For the Year Ended December 31
	2025	2024
Property, plant and equipment	$ 1,163,892	$ 1,169,746
Right-of-use assets	3,150	3,711
Others (mainly information systems, etc.)	2,035	1,298
	$ 1,169,077	$ 1,174,755
Analysis of depreciation by function
Operating costs	$ 1,161,059	$ 1,166,882
Operating expenses	5,983	6,575
	$ 1,167,042	$ 1,173,457
Analysis of amortization by function
Operating costs	$ 2,035	$ 1,298
f. Employee benefits
	For the Year Ended December 31
	2025	2024
Short-term employee benefits
Salaries	$ 1,199,334	$ 1,037,096
Labor and health insurance	97,481	101,490
Others	48,130	32,545
	1,344,945	1,171,131
Post-employment benefits
Defined contribution plans	38,716	41,158
Defined benefit plans	855	2,016
	39,571	43,174
Termination benefits	16,389	304
	$ 1,400,905	$ 1,214,609
Analysis of employee benefits by function
Operating costs	$ 1,085,767	$ 1,043,335
Operating expenses	315,138	171,274
	$ 1,400,905	$ 1,214,609

g. Employees' compensation and the remuneration to directors

In accordance with the amendments to the Securities and Exchange Act in August 2024, the shareholders of the Corporation resolved the amendments to the Corporation’s Articles at their 2025 regular meeting. The amendments explicitly stipulate the allocation of compensation of employees, and remuneration of directors is at rate of 2%-10% and no higher than 2% of pre-tax profit, respectively. Of the total employee remuneration, not less than 50% shall be allocated for non-executive employees.

The compensation of employees and remuneration of directors for 2025 and 2024 are as follows:

	For the Year Ended December 31
	2025	2024
Accrual rate
Compensation of employees (%)	3.6	3.6
Remuneration of directors (%)	1.4	1.4
Amount
Compensation of employees	$ 53,721	$ 7,743
Remuneration of directors	$ 20,892	$ 3,011

There is no difference between the actual amounts of compensation of employees and remuneration of directors paid and the amounts recognized in the parent company only financial statements for the years ended December 31, 2025.

The appropriations of employees’ compensation and remuneration of directors (all in cash) for 2024 and 2023 which had been resolved by the board of directors in February 2025 and 2024, respectively, were as follows:

	For the Year Ended December 31, 2024		For the Year Ended December 31, 2023
	Employees’ Compensation	Remuneration of Directors	Employees’ Compensation	Remuneration of Directors
Amount approved in the board of directors’ meeting	$ 7,743	$ 3,011	$ -	$ -
Amount recognized in the parent company only financial statements	7,743	3,011	-	-
Differences	$ -	$ -	$ -	$ -

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

40 -

41 -

23. INCOME TAX EXPENSE

a. Income tax expense recognized in profit

	For the Year Ended December 31
	2025	2024
Current income tax
In respect of the current year	$ 19,182	$ 45,922
Adjustments for prior years	(3,513)	41,196
Deferred income tax
In respect of the current year	147,719	17,150
Adjustments for prior years	-	(34,218)
	$ 163,388	$ 70,050

The reconciliation of accounting profit and income tax expense was as follows:

	For the Year Ended December 31
	2025	2024
Profit before tax	$ 1,417,651	$ 204,319
Income tax expense calculated at the statutory rate	$ 283,530	$ 40,864
Non-deductible expenses in determining taxable income	(117,941)	22,208
(Unrecognizable income in determining income)	(3,513)	6,978
Adjustments for prior years’ tax	1,312	-
Additional income tax under the Alternative Minimum Tax Act	$ 163,388	$ 70,050

b. Income tax expense recognized in other comprehensive income (loss)

	For the Year Ended December 31
	2025	2024
Remeasurement of defined benefit plans	$ 5,573	$ (286)

c. Current tax assets and liabilities

	December 31
	2025	2024
Current tax assets
Tax refund receivable	$ -	$ 6,995
Current tax liabilities
Income tax payable	$ 9,115	$ 34,984

d. Deferred tax assets and liabilities

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

For the year ended December 31, 2025

	Balance, Beginning of the Year	Recognized in Profit or Loss	Recognized in Other Comprehensive Income	Balance, End of the Year
Deferred Tax Assets
Temporary differences
Differences on depreciation	$ 2,123	$ (6)	$ -	$ 2,117
Foreign investment losses	214,858	(93,533)	-	121,325
Unrealized loss on inventories	20,748	(6,825)	-	13,923
Defined benefit plans	6,007	(2,863)	5,573	8,717
Unrealized deferred gains	63,358	(57,568)	-	5,790
Others	18,728	(7,084)	-	11,644
	$ 325,822	$(167,879)	$ 5,573	$ 163,516
Deferred Tax Liabilities
Temporary differences
Unrealized exchange gains, net	$ 24,780	$ (20,160)	$ -	$ 4,620
For the year ended December 31, 2024
	Balance, Beginning of the Year	Recognized in Profit or Loss	Recognized in Other Comprehensive Income	Balance, End of the Year
Deferred Tax Assets
Temporary differences
Differences on depreciation	$ 2,129	$ (6)	$ -	$ 2,123
Foreign investment losses	134,247	80,611	-	214,858
Unrealized loss on inventories	19,071	1,677	-	20,748
Defined benefit plans	23,765	(17,472)	(286)	6,007
Unrealized exchange losses, net	651	(651)	-	-
Unrealized deferred gains	82,132	(18,774)	-	63,358
Others	22,265	(3,537)	-	18,728
	$ 284,260	$ 41,848	$ (286)	$ 325,822
Deferred Tax Liabilities
Temporary differences
Unrealized exchange gains, net	$ -	$ 24,780	$ -	$ 24,780

e. Income tax assessment

The income tax returns of the Corporation through 2023 have been assessed by the tax authorities.

43 -

24. EARNINGS PER SHARE

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

Net profit for the year

	For the Year Ended December 31
	2025	2024
Earning used in the computation of basic earnings per share	$ 1,254,263	$ 134,269

Weighted average number of ordinary shares outstanding (in thousands of shares)

	For the Year Ended December 31
	2025	2024
Weighted average number of ordinary shares used in the computation of basic earnings per share	506,238	509,257
Effect of dilutive potential ordinary shares: Employees’ compensation	1,006	555
Weighted average number of ordinary shares used in the computation of diluted earnings per share	507,244	509,812

The Corporation may settle the compensation paid to employees by cash or shares; therefore, the Corporation assumes that the entire amount of the compensation will be settled in shares and the resulting potential shares will be included in the weighted average number of shares outstanding used in the computation of diluted earnings per share, as the shares have a dilutive effect. Such dilutive effect of the potential shares is included in the computation of diluted earnings per share until the shareholders resolve the number of shares to be distributed to employees at their meeting in the following year.

25. CAPITAL MANAGEMENT

The Corporation manages its capital to ensure that the Corporation will be able to continue as going concern while maximizing the return to shareholders through the optimization of the debt and equity balance. The capital structure of the Corporation consists of debt and equity. In addition, as agreed in the loan contract, the debt ratio and the tangible net value shall be maintained as agreed in the contract. The Corporation reviews the capital structure quarterly. The review includes consideration of the cost of various types of funds and related risks. At present, the Corporation will balance its overall capital structure by improving the Corporation's profit ability and repaying borrowings.

26. FINANCIAL INSTRUMENTS

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

The management of the Corporation evaluates that the carrying amount of financial assets and financial liabilities that are not measured at fair value approximates their fair value.

44 -

	Level 1	Level 2	Level 3	Total
December 31, 2025
Financial assets at amortized cost
Corporate bonds	$ 634,486	$ -	$ -	$ 634,486
December 31, 2024
Financial assets at amortized cost
Corporate bonds	$ 322,842	$ -	$ -	$ 322,842

b. Fair value of financial instruments that are measured at fair value on a recurring basis

1) Fair value hierarchy

	Level 1	Level 2	Level 3	Total
December 31, 2025
Financial assets at FVTPL
Domestic listed shares	$ 685,619	$ -	$ -	$ 685,619
Financial assets at FVTOCI
Domestic listed shares	$ 1,562,779	$ -	$ -	$ 1,562,779
Domestic unlisted shares	-	-	113,190	113,190
	$ 1,562,779	$ -	$ 113,190	$ 1,675,969
December 31, 2024
Financial assets at FVTPL
Domestic listed shares	$ 216,235	$ -	$ -	$ 216,235
Financial assets at FVTOCI
Domestic listed shares	$ 1,290,790	$ -	$ -	$ 1,290,790
Domestic unlisted shares	-	-	93,670	93,670
	$ 1,290,790	$ -	$ 93,670	$ 1,384,460

There were no transfers between Level 1 and Level 2 of the fair value hierarchy during the years ended December 31, 2025 and 2024.

2) Reconciliation of Level 3 fair value measurements of financial assets

	For the Year Ended December 31
	2025	2024
Balance, beginning of the year	$ 93,670	$ 101,259
Recognized in other comprehensive income (included in unrealized valuation gain (loss) on financial assets at FVTOCI)	19,520	(7,589)
Balance, end of the year	$ 113,190	$ 93,670

3) Valuation techniques and inputs applied for the purpose of Level 3 fair value measurement

The fair values of unlisted shares and a part of foreign unlisted certificates of entitlement were determined based on the Corporation’s net value.

c. Categories of financial instruments

	December 31
	2025	2024
Financial assets
Financial assets at amortized cost (Note 1)	$ 4,657,357	$ 4,811,001
Financial assets at FVTOCI	1,675,969	1,384,460
Financial assets at FVTPL	685,619	216,235
Financial liabilities
Financial liabilities at amortized cost (Note 2)	2,434,757	2,816,058

1) The balances include financial assets measured at amortized cost, which comprise cash and cash equivalents, accounts receivable (including related parties), other receivables (including related parties), other financial assets and refundable deposits (including current portion).

2) The balances include financial liabilities measured at amortized cost, which comprise short-term borrowings, notes and accounts payable, other payables, refund liabilities, payables for equipment purchased, and long-term borrowings (including current portion).

d. Financial risk management objectives and policies

The Corporation’s major financial instruments include equity investments, accounts receivable, accounts payable, short-term borrowings and long-term borrowings (including current portion). The Corporation’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 Corporation through internal risk reports that analyze exposures by degree and magnitude of risks. These risks include market risk (including foreign currency risk, interest rate risk and other price risk), credit risk and liquidity risk.

The Corporation seeks to minimize the effects of these risks by using derivative financial instruments to hedge risk exposures. The use of financial derivatives is governed by the Corporation’s policies approved by the board of directors, which provided written principles on foreign currency risk, interest rate risk, credit risk, the use of financial derivatives and non-derivative financial instruments, and the investment of excess liquidity. Compliance with policies and exposure limits is reviewed by the internal auditors on a continuous basis. The Corporation did not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes.

1) Market risk

a) Foreign currency exchange rate risk

The Corporation is engaged in non-functional currency-denominated transactions, resulting in exposure to exchange rate fluctuations. About 40% of the operating income of the Corporation is based on transactions that are not denominated in functional currencies, and about 20% of the operating costs is based on transactions that are not denominated in functional currencies.

45 -

For the carrying amounts of the Corporation’s significant non-functional currency denominated monetary assets and liabilities at the balance sheet date, refer to Note 30.

Sensitivity analysis

The Corporation is mainly exposed to the Currency USD.

The following table details the Corporation’s sensitivity to a 5% increase and decrease in the New Taiwan dollar (i.e., the functional currency) against the relevant foreign currencies. Scenario 1 indicates the increase/decrease in pre-tax profit associated with the New Taiwan dollar strengthening 5% against the relevant currency; Scenario 2 indicates the increase/decrease in pre-tax profit associated with the New Taiwan dollar weakening 5% against the relevant currency.

	USD Impact
	For the Year Ended December 31
	2025	2024
Scenario 1-Pre-tax profit or loss	$ (150,264)	$ (160,312)
Scenario 2-Pre-tax profit or loss	150,264	160,312

Note: These were mainly attributable to the exposure on outstanding cash and equivalents, accounts receivable, other receivables, other financial assets, refundable deposits, short-term borrowings, accounts payable and other payables without cash flow hedging arranged at the balance sheet date.

In management’s opinion, the sensitivity analysis was unrepresentative of the inherent foreign exchange risk because the exposure at the balance sheet date did not reflect the exposure during the year. The sales denominated in U.S. dollars will be affected by customer orders and seasonal needs of the industry.

b) Interest rate risk

The Corporation was exposed to interest rate risk because the Corporation borrowed funds at both fixed and floating interest rates. The risk is managed by the Corporation by maintaining an appropriate mix of fixed and floating rate borrowings and using interest rate swap contracts and forward interest rate contracts. 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 Corporation’s financial assets and financial liabilities with exposure to interest rates at each balance sheet date were as follows:

	December 31
	2025	2024
Fair value interest rate risk
Financial assets	$ 2,489,140	$ 2,921,924
Financial liabilities	44,814	390,018
Cash flow interest rate risk
Financial assets	718,369	675,148
Financial liabilities	1,205,612	1,495,320

47 -

Sensitivity analysis

The sensitivity analysis below was determined based on the Corporation’s exposure to interest rates for both derivative and non-derivative instruments at the end of the year. For floating rate liabilities, the analysis was prepared assuming the amount of each liability outstanding at the end of the year was outstanding for the whole year. The interest rate of 1% represents the management’s assessment of the reasonably possible range of changes in interest rates.

If interest rates of the financial liabilities held by the Corporation had been 1% higher/lower and all other variables were held constant, the Corporation’s cash in the next year for the years ended December 31, 2025 and 2024 would have increased/decreased by NT$12,056 thousand and NT$14,953 thousand, respectively.

c) Other price risk

The Corporation was exposed to equity price risk through their investments in mutual funds, and listed shares. The Corporation manages risks by holding different risk investment portfolios and asset allocations. Equity prices are mainly concentrated in the shares. The Corporation evaluates on the basis of the closing prices of equity securities on a monthly basis.

Sensitivity analysis

The following sensitivity analysis is based on the equity price risk on the balance sheet date. After considering the market price fluctuations of the main investment target, the fluctuation range of 1% is taken as the basis for the sensitivity analysis of equity securities.

If equity prices had been 1% higher/lower, for the years ended December 31, 2025 and 2024, based on the investment positions in equity securities of NT$2,248,398 thousand and NT$1,507,025 thousand, the pre-tax profit or loss would have increased/decreased by NT$6,856 thousand and NT$2,162 thousand, respectively, as a result of the fair value changes of financial assets at FVTPL, and the other comprehensive income for the years ended December 31, 2025 and 2024 would have increased/decreased by NT$15,628 thousand and NT$12,908 thousand, respectively, as a result of the changes in fair value of financial assets at FVTOCI.

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 Corporation. As at the balance sheet date, the Corporation’s maximum exposure to credit risk is the carrying amount of the financial assets on the parent company only balance sheets.

The policy adopted by the Corporation is to only trade with companies rated at or above the investment level, and obtain sufficient guarantees under necessary circumstances to reduce the risk of financial losses due to defaults.

The rating information is provided by an independent rating agency. If such information is not available, the Corporation will use other publicly available financial information and mutual transaction records to rate major customers. The Corporation continues to monitor the credit risk and the credit ratings of the counterparties, and the credit risk is controlled through the yearly review and approval of counterparty credit limits by the financial department.

Financial assets are potentially affected by the Corporation’s counterparties or other parties' failure to perform contractual obligations. The impacts include the degree of credit risk concentration, constituent elements, contract amounts and other receivables of financial products engaged in by the Corporation. The credit risk of the Corporation is assessed based on contracts with a positive fair value on the balance sheet date.

The Corporation's accounts receivable transactions are significantly concentrated. Most of the counterparties to the transactions are engaged in similar business activities and have similar economic characteristics. Therefore, these companies' abilities to perform contractual obligations are similarly affected by economic or other conditions, and there is a significant concentration of credit risk. This reflects the characteristics of the industry to which the Corporation belongs.

The balances of the Corporation's accounts receivable and other receivables from customers with significant concentration of credit risk are as follows:

	December 31
	2025	2024
Walton Advanced (Suzhou)	$ 756,482	$ 1,053,937
Winbond Electronics Corporation	459,919	389,125
Customer A	227,243	303,961
Customer B	491,117	185,891
	$ 1,934,761	$ 1,932,914

3) Liquidity risk

The management of the Corporation continuously monitors the movement of cash flows, net cash position, significant capital expenditures and the utilization of bank loan commitments to adjust the proportion of the long-term and short-term bank loans or issue bonds payable, and ensures compliance with loan covenants.

The table below summarizes the maturity profile of the Corporation's financial liabilities or the duration of financial guarantee contracts based on contractual undiscounted payments.

December 31, 2025

	Up to 1 Year	1 to 5 Years	More than 5 Years	Total
Non-derivative financial liabilities
Non-interest bearing liabilities	$ 1,227,397	$ -	$ -	$ 1,227,397
Leases liabilities	3,240	12,960	40,514	56,714
Variable interest rate liabilities	553,344	688,568	-	1,241,912
Loan commitments	249,790	-	-	249,790
	$ 2,033,771	$ 701,528	$ 40,514	$ 2,775,813

Addition information about the maturity analysis for lease liabilities:

	Less than 1 Year	1 to 5 Years	5 to 10 Years	10 to 15 Years	15 to 20 Years	More than 20 Years
Leases liabilities	$ 3,240	$ 12,960	$ 15,578	$ 7,077	$ 6,194	$ 11,665

December 31, 2024

	Up to 1 Year	1 to 5 Years	More than 5 Years	Total
Non-derivative financial liabilities
Non-interest bearing liabilities	$ 969,026	$ -	$ -	$ 969,026
Leases liabilities	3,866	10,678	36,909	51,453
Variable interest rate liabilities	398,651	1,155,376	-	1,554,027
Fixed Rate Liabilities	350,321	-	-	350,321
Loan commitments	978,436	262,858	-	1,241,294
	$ 2,700,300	$ 1,428,912	$ 36,909	$ 4,166,121

Addition information about the maturity analysis for lease liabilities:

	Less than 1 Year	1 to 5 Years	5 to 10 Years	10 to 15 Years	15 to 20 Years	More than 20 Years
Leases liabilities	$ 3,866	$ 10,678	$ 9,977	$ 7,833	$ 6,194	$ 12,905

27. TRANSACTIONS WITH RELATED PARTIES

Except as disclosed in other notes, the transactions between the Corporation and other related parties are as follows:

a. The names of the related parties and their relationships with the Corporation

Related Party Name	Relationship
Walsin Lihwa Corporation	Key management personnel of the Corporation
Winbond Electronics Corporation (WB)	Key management personnel of the Corporation
Walton Advanced Engineering (Suzhou) Inc. (Walton Advanced (Suzhou))	Subsidiary
Waltech Advanced Engineering (Suzhou) Inc. (Waltech Advanced (Suzhou))	Subsidiary
AMB Technology Co., Ltd. (AMB Technology)	Subsidiary (Since November 2025)
Walsin Technology Corporation (WTC)	Other related party
Nuvoton Technology Corporation	Other related party
Energy Helper TCC Corporation (Energy Helper TCC)	Other related party
VVG Inc.	Other related party
PSA Charitable Foundation	Other related party
Hefei Xingfeng Technology Inc. (Hefei Xingfeng)	Associate (formerly a subsidiary, which lost control from September 2025)

b. Operating trade

Account Items	Related Party Types/Name	For the Year Ended December 31
		2025	2024
Revenue from sale of goods	Key management personnel of the Corporation WB	$ 2,769,118	$ 2,968,237
	Associate	9,918	-
	Subsidiaries	8,210	11,675
		$ 2,787,246	$ 2,979,912

The selling prices of goods sold to key management personnel were not comparable to that of third parties, while the selling prices of goods sold to others are similar to those of general customers. The collection terms were similar to those of general customers.

Account Item	Related Party Types/Name	For the Year Ended December 31
		2025	2024
Purchases of goods	Subsidiaries	$ 61	$ 1,217

Purchases were made at market prices and discounted to reflect the quantity of goods purchased and the relationships between the parties.

c. Contract assets

Related Party Type/Name	December 31
	2025	2024
Key management personnel of the Corporation WB	$ 99,694	$ 69,909

No impairment loss was recognized for contract assets from related parties for the years ended December 31, 2025 and 2024.

d. Receivables from related parties

Account Item	Related Party Type/Name	December 31
		2025	2024
Accounts receivable	Key management personnel of the Corporation WB	$ 451,734	$ 388,523
	Associate	16,143	-
	Hefei Xingfeng	-	4,073
	Subsidiaries	$ 467,877	$ 392,596
			(Continued)

51 -

Account Item	Related Party Type/Name	December 31
		2025	2024
Other receivables	Subsidiaries
	Walton Advanced (Suzhou)	$ 756,482	$ 1,053,937
	Hefei Xingfeng	-	57,879
	Waltech Advanced (Suzhou)	75,175	65,941
	AMB Technology	30,072	-
	Associate
	Hefei Xingfeng	70,724	-
	Key management personnel of the Corporation	8,185	602
	Other related parties WTC	-	1,473
		$ 940,638	$ 1,179,832 (Concluded)

No guarantees had been received for receivables from related parties and other receivables, and no bad debt loss was recognized for the years ended December 31, 2025 and 2024.

e. Lease agreements

The Corporation leases buildings to WTC under operating leases, with the lease terms expiring at various dates before July 2026. As of December 31, 2025 and 2024, the lease receivables were NT$0 thousand and NT$524 thousand, respectively. The rental income for 2025 and 2024 was NT$5,985 thousand.

The Corporation leases machinery and equipment to Hefei Xingfeng under an operating lease, with the lease term expiring in June 2026. As of December 31, 2025 and 2024, the lease receivables were NT$15,368 thousand and NT$152 thousand, respectively. The rental income was NT$14,852 thousand and NT$2,572 thousand for the years ended December 31, 2025 and 2024, respectively.

The Corporation leases machinery and equipment to Waltech Advanced (Suzhou) under an operating lease, with the lease term expiring in December 2026. As of December 31, 2025 and 2024, the lease receivables had been fully collected. The rental income was NT$1,047 thousand and NT$542 thousand for the years ended December 31, 2025 and 2024, respectively.

f. Loans to related parties

Account Item	Type/Name	December 31
		2025	2024
Other receivables	Subsidiaries
	Walton Advanced (Suzhou)	$ 753,000	$ 1,052,199
	AMB Technology	30,000	-
		$ 783,000	$ 1,052,199

Account Item	Type/Name	For the Year Ended December 31
		2025	2024
Interest income	Subsidiaries
	Walton Advanced (Suzhou)	$ 30,143	$ 32,914
	AMB Technology	72	-
	Hefei Xingfeng	-	4,047
		$ 30,215	$ 36,961
Interest rate (%)		2.15-3.05	3.15-3.18

The Corporation provided its subsidiaries, Walton Advanced (Suzhou), AMB Technology and Hefei Xingfeng, with unsecured short-term loans at rates comparable to market interest rates.

g. Disposal of property, plant and equipment

The Corporation sold machinery and equipment to its subsidiary, Waltech Advanced (Suzhou) for NT$36,460 thousand and NT$9,555 thousand for the years ended December 31, 2025 and 2024, respectively. The prices were negotiated between the parties, and gains on disposal of NT$11,375 thousand and NT$2,658 thousand were recognized, respectively, which were included as debits to the investment accounted for using the equity method. As of December 31, 2025 and 2024, receivables for machinery and equipment amounted to NT$18,547 thousand and NT$6,979 thousand, respectively.

The Corporation sold machinery and equipment to its subsidiary, Walton Advanced (Suzhou) for NT$724 thousand for the year ended December 31, 2024. The price was negotiated between the parties, and a gain on disposal of NT$13 thousand was recognized, which was included as debits to the investment of the using equity method. As of December 31, 2024, the machinery and equipment receivables amounted to NT$743 thousand.

h. Other income

The Corporation provided technical services of NT$27,694 thousand (US$888 thousand) and NT$119,268 thousand (US$3,672 thousand) to its subsidiary, Hefei Xingfeng (as a subsidiary before September 2025) for the years ended December 31, 2025 and 2024, which had not been recovered NT$55,346 thousand and NT$57,727 thousand as of December 31, 2025 and 2024, respectively (included in other receivables-related parties).

The Corporation provided technical services of NT$56,137 thousand (US$1,800 thousand) and NT$57,896 thousand (US$1,800 thousand) to its subsidiary, Waltech Advanced (Suzhou), for the years ended December 31, 2025 and 2024, which had not been recovered NT$56,475 thousand and NT$58,905 thousand as of December 31, 2025 and 2024, respectively (included in other receivables-related parties).

i. Endorsements/guarantees provided

As of December 31, 2025 and 2024, the amount of endorsements/guarantees which Corporation provided for subsidiaries were as follows:

53 -

	December 31
	2025	2024
Subsidiary - Waltech Advanced (Suzhou)
Amount of guarantee	$ 80,000	$ 2,030,000
Amount actually drawn	77,254	349,719
	$ 2,746	$ 1,680,281
Subsidiary - Walton Advanced (Suzhou)
Amount of guarantee	$ 175,149	$ -
Amount actually drawn	172,536	-
	$ 2,613	$ -
Subsidiary - Hefei Xingfeng
Amount of guarantee	$ -	$ 1,886,700
Amount actually drawn	-	891,575
	$ -	$ 995,125

j. Others

Account Item	Related Party Type/Name	For the Year Ended December 31
		2025	2024
Other expenses	Other related parties
	Energy Helper TCC	$ 16,569	$ 6,189
	WTC	6,498	6,322
	Others	100	323
	Key management personnel of the Corporation
	WB	18,616	9,792
	Others	1,825	1,407
	Subsidiaries	278	-
		$ 43,886	$ 24,033

Other expenses are mainly consultant management fees, technical service fees, green energy costs and service sharing fees, etc.

Account Item	Related Party Type	December 31
		2025	2024
Accounts payable	Subsidiaries	$ 205	$ 820
	Key management personnel of the Corporation	264	-
		$ 469	$ 820
			(Continued)

54 -

Account Item	Related Party Type	December 31
		2025	2024
Other payables	Other related parties	$ 1,192	$ 1,167
	Key management personnel of the Corporation
	WB	12,643	5,020
	Others	348	278
		$ 14,183	$ 6,465 (Concluded)

Accounts payable and other payables are not guaranteed and will be paid off in cash.

k. Remuneration of key management personnel

The remuneration of directors and other members of key management personnel were as follows:

	For the Year Ended December 31
	2025	2024
Short-term employee benefits	$ 160,454	$ 47,933
Post-employment benefits	832	1,016
	$ 161,286	$ 48,949

28. ASSETS PLEDGED AS COLLATERAL OR FOR SECURITY

The following assets were provided as collateral for bank borrowings:

	December 31
	2025	2024
Other financial assets - current
Time deposits	$ -	$ 799,569
Property, plant and equipment
Buildings and structures	172,875	210,879
Machinery and equipment	237,187	435,849
	$ 410,062	$ 1,446,297

29. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

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

a. Commitments to buy machinery and equipment for about NT$1,114,069 thousand, of which NT$775,974 thousand had not been paid.

b. NT$36,000 thousand of guarantee for custom duties provided by the banks.

55 -

30. SIGNIFICANT FINANCIAL ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

The significant assets and liabilities of the Corporation denominated in foreign currencies were as follows:

	Foreign Currency (In Thousands)	Exchange Rate	Carrying Amount (In Thousands of New Taiwan Dollars)
December 31, 2025
Financial assets
Monetary items
USD	$ 107,570	31.375	$ 3,375,009
JPY	111,413	0.2033	22,650
Financial liabilities
Monetary items
USD	11,784	31.375	369,723
JPY	1,074,742	0.2033	218,495
December 31, 2024
Financial assets
Monetary items
USD	104,995	32.725	3,435,961
JPY	215,434	0.2093	45,090
Financial liabilities
Monetary items
USD	7,020	32.725	229,730
JPY	2,541	0.2093	532

The total realized and unrealized foreign exchange gains (losses) were losses of NT$110,561 thousand and gains of NT$206,741 thousand for the years ended December 31, 2025 and 2024, respectively. It is impractical to disclose net foreign exchange gains and losses by each significant foreign currency due to the variety of the foreign currency transactions and functional currencies of each entity.

31. SEPARATELY DISCLOSED ITEMS

a. Information about significant transactions and b. investees:

1) Financing provided to others: Table 1
2) Endorsements guarantees provided: Table 2
3) Significant marketable securities held (excluding investments in subsidiaries): Table 3
4) Total purchase from or sales to related parties of at least NT$100 million or 20% of the paid-in capital: Table 4
5) Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital: Table 5

6) The business relationship between the parent and the subsidiaries and significant transactions between them: Table 6

7) Information on investees: Table 7

c. Information on investments in mainland China

1) Information on any investee company in mainland China, showing the name, principal businesses activities, paid in capital, method of investment, inward and outward remittance of funds, ownership percentage, income (loss) of the investee, investment income or loss, carrying amount of the investment at the end of the year, repatriations of investment income, and limit on the amount of investment in the mainland China area: Table 8

2) Any of the following significant transactions with investee companies in mainland China, either directly or indirectly through a third party, and their prices, payment terms, and unrealized gains or losses:

a) The amount and percentage of purchases and the balance and percentage of the related payables at the end of the year: Note 27

b) The amount and percentage of sales and the balance and percentage of the related receivables at the end of the year: Note 27

c) The amount of property transactions and the amount of the resultant gains or losses: Note 27

d) The balance of negotiable instrument endorsements or guarantees or pledges of collateral at the end of the year and the purposes: Table 2

e) The highest balance, the end of year balance, the interest rate range, and total current year interest with respect to financing of funds: Table 1

f) Other transactions that have a material effect on the profit or loss for the year or on the financial position, such as the rendering or receiving of services: None

SEGMENT INFORMATION

Disclosure of the segment information in the parent company only financial statements is not required.

56 -

TABLE 1

WALTON ADVANCED ENGINEERING, INC. AND SUBSIDIARIES

FINANCING PROVIDED TO OTHERS

FOR THE YEAR ENDED DECEMBER 31, 2025

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

No.	Financing Company	Counter-party	Financial Statement Account	Related Party	Maximum Balance for the Year	Ending Balance (Note 2)	Amount Actually Drawn (Note 2)	Interest Rate	Nature for Financing	Transaction Amounts	Reason for Financing	Allowance for Bad Debt	Collateral		Financing Limits for Each Borrowing Company	Financing Company's Aggregate Financing Amount Limits	Note
													Item	Value
0	Walton Advanced Engineering, Inc.	Walton Advanced Engineering (Suzhou) Inc.	Other receivables	Yes	$ 2,008,000	$ 1,004,000	$ 753,000	3.05	Short-term financing	$ -	Operating capital	$ -	-	$ -	$ 4,906,996	$ 4,906,996	Note 1
0	Walton Advanced Engineering, Inc.	AMB Technology Co., Ltd.	Other receivables	Yes	100,000	100,000	30,000	2.15	Short-term financing	-	Operating capital	-	-	-	4,906,996	4,906,996	Note 1
0	Walton Advanced Engineering, Inc.	Hefei Xingfeng Technology Inc.	Other receivables	Yes	152,575	-	-	-	Short-term financing	-	Operating capital	-	-	-	-	-

Note 1: According to "The Process of Financing Others" established by the Corporation, the total available amount for lending to others and the total amount for lending to a company shall not exceed 40% of the net worth of the Corporation, respectively.
Note 2: The amount is converted at an exchange rate at the date of balance sheet.

TABLE 2

WALTON ADVANCED ENGINEERING, INC. AND SUBSIDIARIES

ENDORSEMENTS/GUARANTEES PROVIDED

FOR THE YEAR ENDED DECEMBER 31, 2025

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

NO.	Endorsement/Guarantee Provider	Endorsed/Guarantee		Limits on Endorsement/ Guarantors Amount Provided to Each Guaranteed Party (Note 1)	Maximum Balance for the Year (Note 2)	Ending Balance (Note 2)	Amount Actually Drawn (Note 2)	Guarantee Provided to Subsidiaries in Mainland China	Ratio of Accumulated Endorsement Guarantee to Net Equity per Latest Financial Statements (%)	Maximum Endorsement/ Guarantors Amount Allowable (Note 1)	Guarantee Provided by Parent Company	Guarantee Provided by Subsidiary	Guarantee Provided to Subsidiaries in Mainland China
		Name	Nature of Relationship
0	Walton Advanced Engineering, Inc.	Walton Advanced Engineering (Suzhou) Inc.	The Corporation holds the subsidiary's 100% of voting shares indirectly.	$ 6,133,746	$ 175,149	$ 175,149	$ 172,536	$ -	1	$ 9,813,993	Y	N	Y
0	Walton Advanced Engineering, Inc.	Walttech Advanced Engineering (Suzhou) Inc.	The Corporation holds the subsidiary's 100% of voting shares indirectly.	6,133,746	80,000	80,000	77,254	-	1	9,813,993	Y	N	Y
0	Walton Advanced Engineering, Inc.	Hefei Xingfeng Technology Inc.	Associate, formerly a 60%-owned subsidiary, which lost control from September 2025.	-	1,855,800	-	-	-	-	-	Y	N	Y

Note 1: According to "The Process of making endorsements/guarantees" established by the Corporation and subsidiaries, the maximum amount of endorsement/guarantee and the corporation for each company shall not exceed 50% of the net worth of the Corporation, and the total amount of endorsement/guarantee shall not exceed 80% of the net worth of the Corporation.
Note 2: The amount is converted at an exchange rate at the date of balance sheet.

TABLE 3

WALTON ADVANCED ENGINEERING, INC. AND SUBSIDIARIES

SIGNIFICANT MARKETABLE SECURITIES HELD

DECEMBER 31, 2025

(Amounts in Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Holding Company Name	Type and Name of Marketable Securities	Relationship with The Company	Financial Statement Account	December 31, 2025
				Shares/Units	Carrying Amount	Percentage of Ownership (%)	Fair Value
Walton Advanced Engineering, Inc.	Ordinary shares
Winbond Electronics Corporation	Director of the Corporation	Financial assets at FVTPL - current	8,300,474	$ 685,619	-	$ 685,619
	Ordinary shares
Walsin Technology Corporation	The same chairman	Financial assets at FVOCI - non-current	13,357,083	1,562,779	3	1,562,779

TABLE 4

WALTON ADVANCED ENGINEERING, INC. AND SUBSIDIARIES

TOTAL PURCHASES FROM OR SALES TO RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL

FOR THE YEAR ENDED DECEMBER 31, 2025

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

Buyer	Related Party	Relationship	Relationship				Abnormal Transaction		Notes/Accounts Receivable (Payable)
			Purchase/Sale	Amount	% of Total	Payment Terms	Unit Price	Payment Terms	Ending Balance	% of Total
Walton Advanced Engineering, Inc.	Winbond Electronics Corporation	The director of the Corporation	Sales	$ (2,769,118)	(54 )	Receivables were collected within 90 days.	No third-party to compare	General trading conditions	$ 451,734	38
Walttech Advanced Engineering (Suzhou) Inc.	Novoton Technology Corporation	Other related parties	Sales	(1,584,144)	(91 )	Receivables were collected within 60 days.	No third-party to compare	General trading conditions	504,631	94

TABLE 5

WALTON ADVANCED ENGINEERING, INC. AND SUBSIDIARIES

RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST NTS100 MILLION OR 20% OF THE PAID-IN CAPITAL

DECEMBER 31, 2025

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

Company Name	Related Party	Relationship	Account	Ending Balance	Turnover Rate (%)	Overdue		Amount Received in Subsequent Period	Allowance for Impairment Loss
						Amount	Actions Taken
Walton Advanced Engineering, Inc.	Winbond Electronics Corporation	The director of the Corporation	Accounts receivable	$ 451,734	6.59	$ -	-	$ 451,734	$ -
Walton Advanced Engineering, Inc.	Walton Advanced Engineering (Suzhou) Inc.	Subsidiary	Other receivables	756,482	Note 1	-	-	-	-
Walton Advanced Engineering (Suzhou) Inc.	Hefei Xingfeng Technology Inc.	Associate	Other receivables	726,443	Note 2	726,428	Note 10 (b) to the Consolidated Financial Statements	-	-
Waltech Advanced Engineering (Suzhou) Inc.	Nuvoton Technology Corporation	Other related parties	Accounts receivable	504,631	2.92	-	-	84,922	-

Note 1: The content is the financing to funds and interest, which are calculated at the inapplicable turnover rate.
Note 2: The content is the payment on behalf of others and the receivables of the equipment sold, which are calculated at the inapplicable turnover rate.

TABLE 6

WALTON ADVANCED ENGINEERING, INC. AND SUBSIDIARIES

INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT INTERCOMPANY TRANSACTIONS

FOR THE YEAR ENDED DECEMBER 31, 2025

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

No.	Investee Company	Counterparty	Relationship	Transaction Details			% of Total Operating Revenues or Assets
				Financial Statement Account	Amount	Payment Terms
0	Walton Advanced Engineering, Inc.	Walton Advanced Engineering (Suzhou) Inc.	Parent company to Subsidiary	Other receivables	$ 753,000	Financing provided to other expected to be received within one year	5

TABLE 7

WALTON ADVANCED ENGINEERING, INC. AND SUBSIDIARIES

INFORMATION ON INVESTEES

FOR THE YEAR ENDED DECEMBER 31, 2025

(Amounts in Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Investor Company	Investor Company	Location	Main Businesses and Products	Original Investment Amount		As of December 31, 2025			Net Income (Loss) of the Investor	Share of Profit (Loss)	Note
				December 31, 2025	December 31, 2024	Number of Shares	Shareholding Percentage (%)	Carrying Amount
Walton Advanced Engineering, Inc.	Walton Holding Universal Ltd.	British Virgin Islands	Professional Investment	$ 2,696,238	$ 2,696,238	8,881	100	$ 2,208,777	$ 454,232	$ 467,665	Subsidiary (Note)
Walton Advanced Engineering, Inc.	AMB Technology Co., Ltd.	Republic of China	Electronic components and semiconductor packaging and testing	148,428	-	14,842,808	74	10,964	(182,394)	(137,464)	Subsidiary
Walton Advanced Engineering, Inc.	Waltin New Energy Corporation	Republic of China	Electricity supply	7,500	7,500	750,000	15	5,769	(6,643)	(996)
Walton Holding Universal Ltd.	Walton Holding (Hong Kong) Ltd.	Hong Kong	Professional Investment	145,002	145,002	4,000,000	100	123,060	(2,638)	(2,638)	Subsidiary
Walton Holding (Hong Kong) Ltd.	GHPW Enterprise Corporation (HK) Limited	Hong Kong	Professional Investment	144,908	144,908	4,000,000	20	122,964	(13,172)	(2,634)

Note: The carrying amount of the shares held at the end of the year is deduction of deferred credits and income of NT$28,952 thousand. All the transactions had been eliminated when preparing the consolidated financial statements.

TABLE 8

WALTON ADVANCED ENGINEERING, INC. AND SUBSIDIARIES

INFORMATION ON INVESTMENTS IN MAINLAND CHINA

FOR THE YEAR ENDED DECEMBER 31, 2025

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

Investee Company	Main Businesses and Products	Paid-in Capital	Method of Investment	Accumulated Outward Remittance for Investment from Taiwan as of December 31, 2024	Remittance of Funds		Accumulated Outward Remittance for Investment from Taiwan as of December 31, 2025	Net Income (Loss) of the Investee	% Ownership of Direct or Indirect Investment	Investment Gain (Loss) (Note 1)	Carrying Amount as of December 31, 2025	Accumulated Repatriation of Investment Income as of December 31, 2025	Note
					Outward	Inward
Walton Advanced Engineering (Suzhou) Inc.	Engaged in the packaging and testing of semiconductors	$ 1,512,020	Invest through Walton Holding Universal Ltd	$ 1,512,020	$ -	$ -	$ 1,512,020	$ 491,740	100	$ 491,740	$ 544,957	$ -	Note 1
Waltech Advanced Engineering (Suzhou) Inc.	IC equipment designing and selling	929,401	Invest through Walton Holding Universal Ltd	980,755	-	-	980,755	(30,920)	100	(30,920)	1,568,530	-	Note 1
Hafsi Xingling Technology Inc.	IC equipment trading and manufacturing	1,587,853	Direct investment of Walton Advanced Engineering (Suzhou) Inc.	-	-	-	-	(403,720)	23	(225,275)	134,026	-	Note 1
GHPW Enterprise Corporation (Chongqing) Limited	Corporate property management	759,600	Direct investment of GHPW Enterprise Corporation (HK) Limited	151,920	-	-	151,920	(12,897)	20	(2,579)	122,922	-	Note 1
Investee Company	Accumulated Outward Remittance for Investment in Mainland China as of December 31, 2025	Investment Amount Authorized by Investment Commission, MOEA	Upper Limit on the Amount of Investment Stipulated by the Investment Commission, MOEA (Note 2)
---	---	---	---
Walton Advanced Engineering, Inc.	$ 2,644,695	$ 2,644,695	$ -

Note 1: The basis for recognition of investment income (loss) is based on the financial statements audited by R.O.C. CPA.
Note 2: Based on Article 3 of the "Principle of Investment or Technical Cooperation in Mainland China" of the Investment Review Committee issued on August 29, 2008, the Corporation has obtained the certificate of qualification for operating headquarters, therefore, the limit on investment in mainland China is not applicable.

THE CONTENTS OF STATEMENTS OF MAJOR ACCOUNTING ITEMS

ITEM	STATEMENT INDEX
MAJOR ACCOUNTING ITEMS IN ASSETS, LIABILITIES AND EQUITY
STATEMENT OF CASH AND CASH EQUIVALENTS	1
STATEMENT OF FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS - CURRENT	2
STATEMENT OF ACCOUNTS RECEIVABLE	3
STATEMENT OF OTHER RECEIVABLES	Note 10
STATEMENT OF INVENTORIES	4
STATEMENT OF OTHER CURRENT ASSETS	5
STATEMENT OF CHANGES IN FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME - NON-CURRENT	6
FINANCIAL ASSETS AT AMORTIZED COST - NON-CURRENT	7
STATEMENT OF CHANGES IN INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD	8
STATEMENT OF CHANGES IN RIGHT-OF-USE ASSETS	9
STATEMENT OF CHANGES IN PROPERTY, PLANT AND EQUIPMENT	Note 14
STATEMENT OF CHANGES IN ACCUMULATED DEPRECIATION OF PROPERTY, PLANT AND EQUIPMENT	Note 14
STATEMENT OF DEFERRED TAX ASSETS	Note 23
STATEMENT OF SHORT-TERM BORROWINGS	10
STATEMENT OF ACCOUNTS PAYABLES	11
STATEMENT OF OTHER PAYABLES	Note 18
STATEMENT OF OTHER CURRENT LIABILITIES	12
STATEMENT OF LONG-TERM BANK BORROWINGS	13
STATEMENT OF LEASE LIABILITIES	14
STATEMENT OF DEFERRED TAX LIABILITIES	Note 23
MAJOR ACCOUNTING ITEMS IN PROFIT OR LOSS
STATEMENT OF OPERATING REVENUE	15
STATEMENT OF OPERATING COSTS	16
STATEMENT OF OPERATING EXPENSES	17
STATEMENT OF OTHER GAINS AND LOSSES	Note 22
STATEMENT OF FINANCE COSTS	Note 22
STATEMENT OF EMPLOYEE BENEFITS, DEPRECIATION AND AMORTIZATION	18

65 -

STATEMENT 1

WALTON ADVANCED ENGINEERING, INC.

STATEMENT OF CASH AND CASH EQUIVALENTS
DECEMBER 31, 2025
(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Item	Maturity Date	Interest Rate (%)	Amount
Cash on hand			$ 581
Revolving funds			150
Bank deposits
Checking accounts			3,299
Demand deposits			266,928
Foreign currency demand deposits-including US$13,667 thousand, JPY111,343 thousand (Note)			451,441
Cash equivalents
Time deposits (NT$30,000 thousand, US$8,000 thousand) (Note)	2026.01-2026.03	1.72-3.87	281,000
Bonds with repurchase agreements (NT$460,000 thousand, US$11,000 thousand) (Note)	2026.01-2026.02	1.35-4.10	805,125
			$ 1,808,524

Note: US$1=NT$31.375, JPY1=NT$0.2033

STATEMENT 2

WALTON ADVANCED ENGINEERING, INC.

STATEMENT OF FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS - CURRENT

DECEMBER 31, 2025

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

Name of Marketable Securities	Shares/Units	Par Value (NT$)	Carrying Amount	Interest Rate (%)	Acquisition Cost	Fair Value (Note)
						Unit Price (NT$)	Total
Listed share - domestic
Winbond Electronics Corporation	8,300,474	$ 10	$ 83,005	-	$ 194,022	$82.60	$ 685,619

Note: The fair value is calculated based on the closing price of the shares at the balance sheet date.

STATEMENT 3

WALTON ADVANCED ENGINEERING, INC.

STATEMENT OF ACCOUNTS RECEIVABLE

DECEMBER 31, 2025

(In Thousands of New Taiwan Dollars)

Customer Name	Amount
Related parties
Winbond Electronics Corporation	$ 451,734
Others (Note)	16,143
	$ 467,877
Non-related parties
Company A	$ 223,812
Company B	491,117
	$ 714,929

Note: The amount of individual customer included in others does not exceed 5% of the account balance.

68 -

STATEMENT 4

WALTON ADVANCED ENGINEERING, INC.

STATEMENT OF INVENTORIES

DECEMBER 31, 2025

(In Thousands of New Taiwan Dollars)

Item	Amount
	Carrying Amount	Net Realizable Value (Note)
Raw materials	$ 370,292	$ 427,198
Supplies	40,392	45,996
Work in progress	16,350	19,164
	$ 427,034	$ 492,358

Note: Refer to Note 4.

69 -

STATEMENT 5

WALTON ADVANCED ENGINEERING, INC.

STATEMENT OF OTHER CURRENT ASSETS
DECEMBER 31, 2025
(In Thousands of New Taiwan Dollars)

Item	Amount
Refundable deposits	$ 32,928
Temporary payments	4,637
Prepaid expense	4,376
Others (Note)	1,488
	$ 43,429

Note: The amount of individual item included in others does not exceed 5% of the account balance.

70 -

STATEMENT 6

WALTON ADVANCED ENGINEERING, INC.

STATEMENT OF CHANGES IN FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME - NON-CURRENT

FOR THE YEAR ENDED DECEMBER 31, 2025

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

Name	Balance, January 1, 2025		Additions		Reductions		Balance, December 31, 2025
	Shares/Units	Fair Value	Shares/Units	Fair Value (Note)	Shares/Units	Fair Value (Note)	Shares/Units	Fair Value (Note)	Collateral	Note
Domestic listed shares
Walsin Technology Corporation	13,357,083	$ 1,235,530	-	$ 327,249	-	$ -	13,357,083	$ 1,562,779	None
Prosperity Dielectrics Co., Ltd.	1,295,673	55,260	-	-	1,295,673	55,260	-	-	None
		1,290,790		327,249		55,260		1,562,779
Domestic unlisted shares
Tsai Yi Corporation	4,914,928	93,670	-	19,520	-	-	4,914,928	113,190	None
		$ 1,384,460		$ 346,769		$ 55,260		$ 1,675,969

Note: Fair values are measured on the basis of the closing price on the balance sheet date or measured using the valuation techniques in Note 26.

STATEMENT 7

WALTON ADVANCED ENGINEERING, INC.

STATEMENT OF CHANGES IN FINANCIAL ASSETS AT AMORTIZED COST - NON-CURRENT
FOR THE YEAR ENDED DECEMBER 31, 2025
(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Name	Balance, January 1, 2025		Additions		Reductions		Balance, December 31, 2025		Accumulated Impairment	Collateral
	Shares/Units	Carrying Amount	Shares/Units	Carrying Amount	Shares/Units	Carrying Amount	Shares/Units	Carrying Amount
Corporate bonds
Sumitomo Mitsui Trust Bank, Limited	965,000	$ 32,038	-	$ -	-	$ 1,431	965,000	$ 30,607	$ -	None
Mercedes-Benz Finance North America LLC	990,000	32,533	-	-	-	1,372	990,000	31,161	-	None
Toyota Motor Credit Corporation	940,000	32,120	-	-	-	1,520	940,000	30,600	-	None
Roche Holdings, Inc.	960,000	32,092	-	-	-	1,478	960,000	30,614	-	None
Philip Morris International Inc.	956,000	31,823	-	-	-	1,392	956,000	30,431	-	None
Bristol-Myers Squibb Company	943,000	32,426	-	-	-	1,556	943,000	30,870	-	None
ANZ New Zealand (Intl) (London Branch)	986,000	32,606	-	-	-	1,428	986,000	31,178	-	None
Thermo Fisher Scientific Inc.	970,000	32,292	-	-	-	1,409	970,000	30,883	-	None
Cathay Life Insurance Co., Ltd.	2,000,000	65,450	-	-	-	2,700	2,000,000	62,750	-	None
Pfizer Inc.	-	-	1,970,000	64,641	-	2,764	1,970,000	61,877	-	None
Cisco Systems, Inc.	-	-	1,930,000	64,201	-	2,855	1,930,000	61,346	-	None
UnitedHealth Group Incorporated	-	-	1,990,000	65,304	-	2,790	1,990,000	62,514	-	None
International Business Machines Corporation	-	-	1,990,000	65,369	-	2,799	1,990,000	62,570	-	None
Eli Lilly and Company	-	-	1,980,000	65,462	-	2,848	1,980,000	62,614	-	None
		$ 323,380		$ 324,977		$ 28,342		$ 620,015

72 -

STATEMENT 8

WALTON ADVANCED ENGINEERING, INC.

STATEMENT OF CHANGES IN INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

FOR THE YEAR ENDED DECEMBER 31, 2025

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

Investees	Balance, January 1, 2025		Additions (Note 1)		Reductions (Note 2)		Investment Gain (Loss)	Balance, December 31, 2025			Market Value or Net Assets Value (Note 3)
	Number of Shares	Amount	Number of Shares	Amount	Number of Shares	Amount		Number of Shares	% of Ownership	Amount	Unit Price (NT$)	Total Amount	Collateral
Unlisted company
Hong Tong Enterprise Co., Ltd.	6,443,654	$ 36,354	-	$ -	6,443,654	$ 36,354	$ -	-	-	$ -	$ -	$ -	None
Walton New Energy Corporation	750,000	6,765	-	-	-	-	(996 )	750,000	15	5,769	7.69	5,769	None
Walton Holding Universal Ltd.	8,881	1,370,975	-	373,662	-	3,525	467,665	8,881	100	2,208,777	251.97	2,237,729	None
AMR Technology Co., Ltd.	-	-	14,602,808	148,428	-	-	(137,464 )	14,602,808	74	10,964	0.74	10,964	None
		$ 1,414,094		$ 522,090		$ 39,879	$ 329,205			$ 2,225,510		$ 2,254,462

Note 1: Changes this year including increase investment NT$148,428 thousand and increase in exchange rate conversion adjustments, adjustments to the (un)realized gains and losses of downstream transactions and the changes in percentage of ownership interests in subsidiaries.
Note 2: Changes this year include including increase the recognition of unrealized loss on financial assets, decrease in exchange rate conversion adjustments, and disposal of investments.
Note 3: The net equity value is calculated based on the financial statements audited by the accountant or the self-closing statements of the investee company based on the company's shareholding ratio.

STATEMENT 9

WALTON ADVANCED ENGINEERING, INC.

STATEMENT OF RIGHT-OF-USE ASSETS
FOR THE YEAR ENDED DECEMBER 31, 2025
(In Thousands of New Taiwan Dollars)

Item	Balance, January 1, 2025	Additions	Reductions	Balance, December 31, 2025
Cost
Land	$ 58,677	$ 7,708	$ -	$ 66,385
Transportation equipment	1,966	-	1,966	-
Total	60,643	$ 7,708	$ 1,966	66,385
Accumulated depreciation
Land	22,414	$ 2,550	$ -	24,964
Transportation equipment	1,366	600	1,966	-
Total	23,780	$ 3,150	$ 1,966	24,964
	$ 36,863			$ 41,421

STATEMENT 10

WALTON ADVANCED ENGINEERING, INC.

STATEMENT OF SHORT-TERM BORROWINGS

DECEMBER 31, 2025

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

Type	Contract Period	Range of Interest Rates (%)	Balance, End of The Year	Loan Commitments	Collateral
Unsecured loans
Mega International Commercial Bank Co., Ltd.	2025.11.26-2026.02.26	1.85	$ 200,000	NT$300 million	None
Hua Nan Commercial Bank Ltd.	2025.06.20-2026.06.20	0.84	12,300	NT$100 million	None
First Commercial Bank Co., Ltd.	2025.09.16-2026.07.31	1.35	66,418	US$4,000 thousand	None
Bank of Taiwan	2025.08.07-2026.08.07	1.35	124,954	US$10,000 thousand	None
			$ 403,672

75 -

STATEMENT 11

WALTON ADVANCED ENGINEERING, INC.

STATEMENT OF ACCOUNTS PAYABLE
DECEMBER 31, 2025
(In Thousands of New Taiwan Dollars)

Vendor Name	Amount
Related Parties
WB	$ 205
Waltech Advanced (Suzhou)	264
	469
Non-related Parties
Taiwan Tanaka Kikinzoku Co., Ltd.	95,974
MK Electron Co., Ltd.	89,507
Ryowa Co., Ltd.	50,609
Chang Wah Electromaterials Inc.	43,123
(HONG KONG) Leading Interconnect International Limited	33,089
Taiwan Branch
Others (Note)	205,629
	517,931
	$ 518,400

Note: The amount of individual vendor in others does not exceed 5% of the account balance.

76 -

STATEMENT 12

WALTON ADVANCED ENGINEERING, INC.

STATEMENT OF OTHER CURRENT LIABILITIES
DECEMBER 31, 2025
(In Thousands of New Taiwan Dollars)

Item	Amount
Receipts under custody	$ 11,040
Temporary credits	1,114
	$ 12,154

77 -

STATEMENT 13

WALTON ADVANCED ENGINEERING, INC.

STATEMENT OF LONG-TERM BANK BORROWINGS

DECEMBER 31, 2025

(In Thousands of New Taiwan Dollars)

Bank Name	Contract Period and Repayment Method	Interest Rate (%)	Balance, December 31, 2025			Collateral
			Current	Over 1 Year	Total
Syndicated Loans (Note)	The non-revolving loan amount is NT$1.5 billion. The period starts from April 2025, with every 6 months as one period. The quota decreases over 9 period and is amortized until April 2029.	2.41	$ 144,440	$ 357,500	$ 501,940	Note 28
Unsecured Loans
Entie Bank	The revolving loan is NT$500 million, and the period is from November 2025 to November 2027. Repaid at maturity.	2.00	-	300,000	300,000	None
			$ 144,440	$ 657,500	$ 801,940

Note: With Chinatrust Commercial Bank, Mega International Commercial Bank Co., Ltd., Taishin International Bank, Hua Nan Commercial Bank, First Commercial Bank, Land Bank of Taiwan, Chang Hwa Commercial Bank and KGI Commercial Bank Co., Ltd. as the main bank. Besides the lead bank, there are a total of 12 banks, including Far Eastern International Bank, Taiwan cooperative Bank, Bank of Taiwan and O-Bank.

STATEMENT 14

WALTON ADVANCED ENGINEERING, INC.

STATEMENT OF LEASE LIABILITIES
DECEMBER 31, 2025
(In Thousands of New Taiwan Dollars)

Item	Object	Period	Discount Rate (%)	Amount
Land	Lease of land	2023.07-2055.05	2.20-2.68	$ 44,814
Less: Current portion				(2,235)
Lease liabilities - non-current				$ 42,579

79 -

STATEMENT 15

WALTON ADVANCED ENGINEERING, INC.

STATEMENT OF OPERATING REVENUE
FOR THE YEAR ENDED DECEMBER 31, 2025
(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Item	Quantity (In Thousands)	Amount
Revenue from packaging test processing	1,250,315	$ 4,963,066
Sale of raw materials and supplies, etc.	-	138,888
		$ 5,101,954

80 -

STATEMENT 16

WALTON ADVANCED ENGINEERING, INC.

STATEMENT OF OPERATINGS COSTS
FOR THE YEAR ENDED DECEMBER 31, 2025
(In Thousands of New Taiwan Dollars)

Item	Amount
Raw materials used
Raw materials, beginning of the year	$ 194,714
Raw material purchased	1,409,851
Raw materials, end of the year	(370,292)
Cost of raw materials sold	(87,975)
Others	(58,251)
Material consumption for the year	1,088,047
Direct labor	550,634
Manufacturing expenses	3,025,010
Manufacturing cost	4,663,691
Work in progress, beginning of the year	9,597
Work in progress, end of the year	(16,350)
Cost of finished goods	4,656,938
Cost of raw materials and supplies sold	104,886
Revenue from sale of scraps	(16,723)
	$ 4,745,101

81 -

STATEMENT 17

WALTON ADVANCED ENGINEERING, INC.

STATEMENT OF OPERATING EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 2025
(In Thousands of New Taiwan Dollars)

Item	Selling and Marketing Expenses	General and Administrative Expenses	Research and Development Expenses	Total
Payroll expense	$ 17,075	$ 283,283	$ 14,780	$ 315,138
Professional Fee	-	12,724	4,125	16,849
Import and outpost expense	12,458	-	-	12,458
Tax fee	112	7,346	5,368	12,826
Depreciation expense	296	5,687	-	5,983
Materials expense	-	-	3,613	3,613
Traveling expense	7,403	1,422	1,714	10,539
Information fees	86	5,614	768	6,468
Entertainment	5,143	584	-	5,727
Others	3,824	23,357	830	28,011
	$ 46,397	$ 340,017	$ 31,198	$ 417,612

82 -

STATEMENT 18

WALTON ADVANCED ENGINEERING, INC.

STATEMENT OF EMPLOYEE BENEFITS, DEPRECIATION AND AMORTIZATION

FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

(In Thousands of New Taiwan Dollars)

	For the Year Ended December 31, 2025			For the Year Ended December 31, 2024
	Classified as Operating Costs	Classified as Operating Expenses	Total	Classified as Operating Costs	Classified as Operating Expenses	Total
Employee benefits
Salaries	$ 933,344	$ 265,990	$ 1,199,334	$ 895,752	$ 141,344	$ 1,037,096
Labor and health insurance	85,325	12,156	97,481	88,965	12,525	101,490
Post-employment benefits	33,196	6,375	39,571	36,302	6,872	43,174
Termination benefits	14,840	1,549	16,389	304	-	304
Remuneration of directors	-	21,477	21,477	-	3,537	3,537
Others	19,062	7,591	26,653	22,012	6,996	29,008
	$ 1,085,767	$ 315,138	$ 1,400,905	$ 1,043,335	$ 171,274	$ 1,214,609
Depreciation	$ 1,161,059	$ 5,983	$ 1,167,042	$ 1,166,882	$ 6,575	$ 1,173,457
Amortization	2,035	-	2,035	1,298	-	1,298

Note 1: For the years ended December 31, 2025 and 2024, the Corporation had average 1,400 and 1,540 employees, respectively, out of which 7 were directors that did not serve concurrently as employees for both years.

Note 2: Additional disclosures are as follows:

1) Average employee benefits for the year ended December 31, 2025 was NT$990 thousand (amount of employee benefits for the year ended December 31, 2025 less amount of remuneration of directors for the year ended December 31, 2025/number of employees for the year ended December 31, 2025 less number of directors not serving concurrently as employees for the year ended December 31, 2025)

Average employee benefits for the year ended December 31, 2024 was NT$790 thousand (amount of employee benefits for the year ended December 31, 2024 less amount of remuneration of directors for the year ended December 31, 2024/number of employees for the year ended December 31, 2024 less number of directors not serving concurrently as employees for the year ended December 31, 2024)

2) Average salaries for the year ended December 31, 2025 was NT$861 thousand (amount of salaries for the year ended December 31, 2025/number of employees for the year ended December 31, 2025 less number of directors not serving concurrently as employees for the year ended December 31, 2025)

Average salaries for the year ended December 31, 2024 was NT$677 thousand (amount of salaries for the year ended December 31, 2024/number of employees for the year ended December 31, 2024 less number of directors not serving concurrently as employees for the year ended December 31, 2024)

(Continued)

3) Average salaries increase by 27% year-on-year (average salaries for the year ended December 31, 2025 less average salaries for the year ended December 31, 2024/average salaries for the year ended December 31, 2024)

4) An audit committee had been set up in 2025 and 2024. Therefore, there was no compensation to the supervisor.

5) The Corporation’s remuneration and compensation policies were as follows:

a) Policies on remuneration of directors

i) Remuneration of directors (including independent directors): According to Article 14 of the Corporation’s articles of incorporation: “If the Corporation makes a profit for the year, the additional allocation shall not exceed 2% for the director’s remuneration. However, if the Corporation still has accumulated losses, an amount for the offset of losses shall first be set aside. The remuneration of individual directors is determined by the remuneration committee and submitted to the Board of directors for approval.

ii) Honorarium: The Corporation will pay the honorarium if one attends the meeting of the board of directors and functional committee set up under the Corporation’s board of directors.

b) Policies on remuneration of managers

The remuneration of executives consists of basic monthly salaries, various bonuses (including year-end bonuses), and other incentive compensation (such as performance bonuses, special allowances, and employee share options). The determination of remuneration takes into account job responsibilities, performance evaluation outcomes, with reference to the Corporation’s overall profitability and future development prospects, prevailing price levels (inflation rate), and external market competitiveness. Any adjustments are proposed by the president and the Chief Executive Officer based on performance assessments, and are subject to review by the most recent meeting of the Remuneration Committee and approval by the Board of Directors before taking effect.

c) Policies on employees’ compensation

The main items of employees’ compensation include a basic salary and bonuses. Employees’ compensation is based on job responsibilities, and is determined with reference to industry standards, financial status of the Corporation, and organizational structure; salary and bonuses are based on the Corporation’s profitability and employee performance for the current year.

(Concluded)

84 -

AI assistant

WALTON — Audit Report / Information 2025

52720_rns_2026-04-28_c157ac46-456f-453a-9a45-52f4a0abc304.pdf

INDEPENDENT AUDITORS' REPORT

Opinion

Basis for Opinion

Key Audit Matters

Recognition of revenue from specific products

Responsibilities of Management and Those Charged with Governance for the Parent Company Only Financial Statements

Auditors’ Responsibilities for the Audit of the Parent Company Only Financial Statements

Notice to Readers

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

8. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME (FVTOCI)

9. FINANCIAL ASSETS AT AMORTIZED COST - NON-CURRENT

10. ACCOUNTS RECEIVABLE (INCLUDING RELATED PARTIES) AND OTHER RECEIVABLES (INCLUDING RELATED PARTIES)

11. INVENTORIES

12. OTHER FINANCIAL ASSETS - CURRENT

13. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

14. PROPERTY, PLANT AND EQUIPMENT

15. LEASE ARRANGEMENTS

17. NOTES PAYABLE AND ACCOUNTS PAYABLE

18. OTHER PAYABLES

19. RETIREMENT BENEFIT PLANS

20. EQUITY

21. OPERATING REVENUE

22. PROFIT BEFORE INCOME TAX

23. INCOME TAX EXPENSE

24. EARNINGS PER SHARE

25. CAPITAL MANAGEMENT

26. FINANCIAL INSTRUMENTS

Sensitivity analysis

b) Interest rate risk

Sensitivity analysis

Sensitivity analysis

27. TRANSACTIONS WITH RELATED PARTIES

28. ASSETS PLEDGED AS COLLATERAL OR FOR SECURITY

29. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

30. SIGNIFICANT FINANCIAL ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

31. SEPARATELY DISCLOSED ITEMS

WALTON ADVANCED ENGINEERING, INC. AND SUBSIDIARIES

FINANCING PROVIDED TO OTHERS

WALTON ADVANCED ENGINEERING, INC. AND SUBSIDIARIES

ENDORSEMENTS/GUARANTEES PROVIDED

WALTON ADVANCED ENGINEERING, INC. AND SUBSIDIARIES

WALTON ADVANCED ENGINEERING, INC. AND SUBSIDIARIES

WALTON ADVANCED ENGINEERING, INC. AND SUBSIDIARIES

WALTON ADVANCED ENGINEERING, INC. AND SUBSIDIARIES

WALTON ADVANCED ENGINEERING, INC. AND SUBSIDIARIES

WALTON ADVANCED ENGINEERING, INC. AND SUBSIDIARIES

WALTON ADVANCED ENGINEERING, INC.

STATEMENT OF FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS - CURRENT

WALTON ADVANCED ENGINEERING, INC.

STATEMENT OF ACCOUNTS RECEIVABLE

DECEMBER 31, 2025

(In Thousands of New Taiwan Dollars)

WALTON ADVANCED ENGINEERING, INC.

WALTON ADVANCED ENGINEERING, INC.

STATEMENT OF CHANGES IN FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME - NON-CURRENT

WALTON ADVANCED ENGINEERING, INC.

STATEMENT OF CHANGES IN INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

FOR THE YEAR ENDED DECEMBER 31, 2025

WALTON ADVANCED ENGINEERING, INC.

WALTON ADVANCED ENGINEERING, INC.

STATEMENT OF EMPLOYEE BENEFITS, DEPRECIATION AND AMORTIZATION

FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

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