YA HORNG ELECTRONIC CO., LTD. AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
WITH REPORT OF INDEPENDENT AUDITORS
FOR THE YEARS ENDED 31 DECEMBER 2025 AND 2024

Address: No. 35, Shalun, Zhongsha Vil., Anding Dist., Tainan City 745002, Taiwan (R.O.C.)
Telephone: 886-6-593-2201

The reader is advised that these financial statements have been prepared originally in Chinese. In the event of a conflict between these financial statements and the original Chinese version or difference in interpretation between the two versions, the Chinese language financial statements shall prevail

REPRESENTATION LETTER

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

Very truly yours,

YA HORNG ELECTRONIC CO., LTD.

Huang, Chin-I
Chairman

March 10, 2026

Independent Auditors' Report Translated from Chinese

To YA HORNG ELECTRONIC CO., LTD.

Opinion

We have audited the accompanying consolidated balance sheets of YA HORNG ELECTRONIC CO., LTD. (the "Company") as of 31 December 2025 and 2024, and the related consolidated statements of comprehensive income, changes in equity and cash flows for the years ended 31 December 2025 and 2024, and notes to the consolidated financial statements, including the summary of significant accounting policies (together "the consolidated financial statements").

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Company and its subsidiaries as of December 31, 2025 and 2024, and their consolidated financial performance and cash flows for the years ended December 31, 2025 and 2024, in conformity with the requirements of the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Financial Reporting Standards, International Accounting Standards, Interpretations developed by the International Financial Reporting Interpretations Committee or the former Standing Interpretations Committee as endorsed by Financial Supervisory Commission of the Republic of China.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and the Standards on Auditing of the Republic of China. Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Company in accordance with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China on Taiwan (the "Norm"), and we have fulfilled our other ethical responsibilities in accordance with the Norm. Based on our audits, 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 2025 consolidated financial statements. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, we do not provide a separate opinion on these matters.

Loss Allowance Accounts Receivable

As of 31 December 2025, the balance of net accounts receivable NT$560,561 thousand, respectively. Net accounts receivable constituted 16% of total their consolidated assets, which was considered material in the consolidated statements. Since the allowance for doubtful accounts was measured at the lifetime expected credit loss, the account receivables should be appropriately grouped during the measurement process and determine the use of related assumptions in the analysis and measurement, including appropriate aging intervals and their respective loss rate. As the measurement of expected credit loss involves making judgments, analysis and estimates, and the result will affect the net account receivable, we therefore determined this key audit matter.

Our audit procedures included, but not limited to, evaluating the appropriateness of management's provisioning policy of allowance for doubtful accounts. The Company was tested by provision matrix, including evaluating the appropriateness of the aging intervals and the accuracy of the basic data by reviewing the original certificates, performing tests on subsequent collection of receivables.

We also assessed the adequacy of disclosures of accounts receivable. Please refer to Notes 5, 6 and 12 to the consolidated financial statements.

Valuation for slow-moving inventories

As of 31 December 2025, the Company's net inventories amounted to NT$752,366 thousand and constitute 21% of total consolidated assets. Considering the significant amount of inventories and that the identification of slow-moving inventories as well as the assessment of the amount of inventory write-downs required significant management judgment, we determined this as a key audit matter.

Our audit procedures included, but not limited to, evaluating the appropriateness of management's provisioning policy of allowance of obsolescence loss, including sample testing the accuracy of inventory aging time period; performing and evaluating the changes in value of the slow-moving inventories reserve ratio and inventory aging and recalculating allowance to reduce inventory to market, to ensure that the valuation for slow-moving inventories followed accounting policies.

We also assessed the adequacy of disclosures of inventories. Please refer to Notes 5 and 6 to the consolidated financial statements.

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

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the requirements of the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Financial Reporting Standards, International Accounting Standards, Interpretations developed by the International Financial Reporting Interpretations Committee or the former Standing Interpretations Committee as endorsed by Financial Supervisory Commission of the Republic of China and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

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

Those charged with governance, including audit committee, are responsible for overseeing the financial reporting process of the Company and its subsidiaries.

Auditors' Responsibilities for the Audit of the Consolidated Financial Statements

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

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

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

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of 2025 consolidated financial statements 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 benefits of public interest such communication.

Other

We have audited and expressed an unqualified opinion including an Other Matter Paragraph on the parent company only financial statements of the Company as of and for the years ended December 31, 2025 and 2024.

Hu, Tzu-Ren

Yao, Shih Chieh

Ernst & Young, Taiwan

10 March 2026

Notice to Readers

The accompanying financial statements are intended only to present the financial position and results of operations 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 financial statements are those generally accepted and applied in the Republic of China.

Accordingly, the accompanying financial statements and report of independent auditors are not intended for use by those who are not informed about the accounting principles or the standards on auditing of the Republic of China, and their applications in practice. As the financial statements are the responsibility of the management, Ernest & Young cannot accept any liability for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the translation.

English Translation of Financial Statements Originally Issued in Chinese
YA HORNG ELECTRONIC CO., LTD.
CONSOLIDATED BALANCE SHEETS
31 December 2025 and 2024
(Expressed in Thousands of New Taiwan Dollars)

ASSETS	Notes	31 Dec. 2025	31 Dec. 2024
Current assets
Cash and cash equivalents	IV/VI.1	$576,994	$653,658
Financial assets at amortized cost-current	IV/VI.2.10	773,486	814,562
Trade receivables-net	IV/VI.3.10	561,486	599,868
Inventories-net	IV/VI.4	752,366	725,653
Other current assets		46,336	44,929
Total current assets		2,710,668	2,838,670
Non-current assets
Property, plant and equipment	IV/VI.5	664,651	672,597
Right-of-use assets	IV/VI.11	149,873	145,874
Investment properties-net	IV/VI.6	15,426	15,960
Intangible assets	IV	276	490
Deferred tax assets	IV/VI.15	29,653	30,715
Other assets-others		8,809	6,383
Total non-current assets		868,688	872,019
Total assets		$3,579,356	$3,710,689

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

LIABILITIES AND SHAREHOLDERS' EQUITY	Notes	31 Dec. 2025	31 Dec. 2024
Current liabilities
Trade receivables-net	IV/VI.9	$25,489	$37,525
Notes payables	IV	139	4,511
Accounts payable	IV	360,816	407,995
Other payables	IV / VII	184,917	199,456
Current tax liabilities	IV/VI.15	32,991	59,349
Lease liabilities-current	IV/VI.11	28,095	17,012
Other current liabilities		18,693	12,741
Total current liabilities		651,140	738,589
Non-current liabilities
Deferred tax liabilities	IV/VI.15	51,752	52,277
Lease liabilities-noncurrent	IV/VI.11	21,534	19,393
Net defined benefit liabilities-noncurrent	IV/VI.7	38,498	38,125
Guarantee deposits	IV	129	129
Total non-current liabilities		111,913	109,924
Total liabilities		763,053	848,513
Equity attributable to the parent company
Common stock	VI.8	892,000	892,000
Capital surplus	VI.8	333,357	333,325
Retained earnings
Legal reserve	VI.8	690,363	647,523
Special reserve	VI.8	57,702	83,200
Unappropriated earnings	VI.8	916,742	963,830
Subtotal		1,664,807	1,694,553
Other equity	IV	(73,861)	(57,702)
Total equity		2,816,303	2,862,176
Total liabilities and equity		$3,579,356	$3,710,689

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

English Translation of Financial Statements Originally Issued in Chinese
YA HORNG ELECTRONIC CO., LTD.
CONSOLIDATED BALANCE SHEETS
For the years ended December 31, 2025 and 2024
(Expressed in Thousands of New Taiwan Dollars, Except for Earnings Per Share)

ITEMS	NOTE	2025.1.1~ 2025.12.31	2024.1.1~ 2024.12.31
Operating revenues	IV/VI.9	$3,327,002	$3,318,224
Operating costs	IV/VI.4.7.12	(2,541,888)	(2,462,604)
Gross profit		785,114	855,620
Trade receivables-net
Operating expenses	IV/VI.7.10.12/VI
Sales and marketing expenses		(62,782)	(55,388)
General and administrative expenses		(220,572)	(218,610)
Research and development expenses		(112,425)	(114,658)
Subtotal		(395,779)	(388,656)
Operating income		389,335	466,964
Non-operating income and expenses
Interest income	VI.13	21,016	20,630
Other income	IV/VI.13	8,582	6,846
Other gain and loss	IV/VI.13	(3,810)	35,138
Financial costs	IV/VI.13	(3,062)	(2,325)
Subtotal		22,726	60,289
Income from continuing operations before income tax		412,061	527,253
Income tax expense	IV/VI.15	(80,897)	(109,505)
Net income		$331,164	$417,748
Other comprehensive income (loss)
Items that may not be reclassified subsequently to profit or loss
Remeasurements of the defined benefit plan	IV/VI.7.14	(5,138)	13,314
Income tax relating to those items not to be reclassified to profit or loss	IV/VI.14.15	1,028	(2,663)
Items that may be reclassified subsequently to profit or loss
Exchange differences resulting from translating the financial statements of a foreign operations	IV/VI.14	(20,199)	31,872
Income tax relating to those items that may be reclassified to profit or loss	IV/VI.14.15	4,040	(6,374)
Total other comprehensive income, net of tax		(20,269)	36,149
Total comprehensive income		$310,895	$453,897
Net income attributable to:
Stockholders of the parent		$331,164	$417,748
Comprehensive income attributable to:
Stockholders of the parent		$310,895	$453,897
Earnings per share (NTD)	VI.16
Earnings per share-basic		$3.71	$4.68
Earnings per share-diluted		$3.69	$4.64

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

English Translation of Financial Statements Originally Issued in Chinese

YA HORNG ELECTRONIC CO., LTD.

CONSOLIDATED BALANCE SHEETS

For the years ended December 31, 2025 and 2024

(Expressed in Thousands of New Taiwan Dollars)

ITEMS	Equity attributable to the parent company						Total Equity
	Common Stock	Capital Surplus	Retained Earnings			Other equity
			Legal Reserve	Special Reserve	Unappropriated Earnings	Exchange differences resulting from translating the financial statements of a foreign operations
Balance as of 1 January 2024	$892,000	$333,275	$608,299	$83,011	$922,724	$(83,200)	$2,756,109
Appropriation and distribution of 2023 retained earning
Legal reserve	-	-	39,224	-	(39,224)	-	-
Special reserve	-	-	-	189	(189)	-	-
Cash dividends	-	-	-	-	(347,880)	-	(347,880)
Other changes in additional paid-in capital	-	50	-	-	-	-	50
Net income for the year ended 31 December 2024	-	-	-	-	417,748	-	417,748
Other comprehensive income, net of tax for the year ended 31 December 2024	-	-	-	-	10,651	25,498	36,149
Total comprehensive income	-	-	-	-	428,399	25,498	453,897
Balance as of 31 December 2024	$892,000	$333,325	$647,523	$83,200	$963,830	$(57,702)	$2,862,176
Balance as of 1 January 2025	$892,000	$333,325	$647,523	$83,200	$963,830	$(57,702)	$2,862,176
Appropriation and distribution of 2024 retained earning
Legal reserve	-	-	42,840	-	(42,840)	-	-
Cash dividends	-	-	-	-	(356,800)	-	(356,800)
Reversal of special reserve	-	-	-	(25,498)	25,498	-	-
Other changes in additional paid-in capital	-	32	-	-	-	-	32
Net income for the year ended 31 December 2025	-	-	-	-	331,164	-	331,164
Other comprehensive income, net of tax for the year ended 31 December 2025	-	-	-	-	(4,110)	(16,159)	(20,269)
Total comprehensive income	-	-	-	-	327,054	(16,159)	310,895
Balance as of 31 December 2025	$892,000	$333,357	$690,363	$57,702	$916,742	$(73,861)	$2,816,303

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

English Translation of Financial Statements Originally Issued in Chinese

YA HORNG ELECTRONIC CO., LTD.

CONSOLIDATED BALANCE SHEETS

For the years ended December 31, 2025 and 2024

(Expressed in Thousands of New Taiwan Dollars)

ITEMS	2025.1.1~2025.12.31	2024.1.1~2024.12.31	ITEMS	2025.1.1~2025.12.31	2024.1.1~2024.12.31
Cash flows from operating activities:			Cash flows from investing activities:
Net income before tax	$412,061	$527,253	Acquisition of financial assets at amortized cost	(1,516,875)	(1,173,116)
Adjustments for:			Proceeds from redemption of financial assets measured at amortized cost	1,557,951	1,027,614
The profit or loss items which did not affect cash flows:			Proceeds from redemption of financial assets at fair value through profit or loss	-	9,005
Depreciation (including investment properties and right-of-use assets)	72,972	64,108	Acquisition of property, plant and equipment	(42,228)	(195,611)
Amortization	484	1,987	Proceeds from disposal of property, plant and equipment	1,712	1,301
Interest expense	3,062	2,325	Acquisition of intangible assets	(270)	-
Interest revenue	(21,016)	(20,630)	Increase in other non-current assets	(2,426)	(364)
Loss on disposal of property, plant and equipment	(1,663)	(935)	Net cash (used in) investing activities	(2,136)	(331,171)
Cha Financial assets at fair value through profit or loss			Cash flows from financing activities:
Notes receivable	-	(17)	Cash payments for the principal portion of the lease liabilities	(26,179)	(18,596)
Accounts receivable	38,382	63,027	Cash dividends paid	(356,800)	(347,880)
Inventories	(26,102)	39,505	Unclaimed overdue dividend	32	50
Other current assets	(866)	9,959	Net cash used in financing activities	(382,947)	(366,426)
Contract liabilities	(12,036)	7,152
Notes payable	(4,372)	3,922	Effect of exchange rate changes on cash and cash equivalents	(10,781)	29,424
Accounts payable	(47,179)	(82,991)	Net (decrease) in cash and cash equivalents	(76,664)	(175,566)
Other payables	(14,539)	(726)	Cash and cash equivalents at beginning of period	653,658	829,224
Other current liabilities	5,952	4,583	Cash and cash equivalents at end of period	576,994	653,658
Net defined benefit liabilities	(4,765)	(3,871)
Cash generated from operations	400,375	614,651
Interest received	20,475	20,518
Income tax paid	(101,650)	(142,562)
Net cash provided by operating activities	319,200	492,607

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

English Translation of Financial Statements Originally Issued in Chinese
YA HORNG ELECTRONIC CO., LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
31 December 2025 and 2024
(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Stated)

I. HISTORY AND ORGANIZATION

YA HORNG ELECTRONIC CO., LTD. (the "Company") was incorporated under the laws of the Republic of China on Taiwan (the "ROC") on 25 November 1981. The Company's registered office and the main business location is at No.35, Shalun, Anding Dist., Tainan City 745, Taiwan(R.O.C.) The Company's main profitable business projects are the electronic audio messaging, small household appliances, medical devices, and electronic components.
A resolution was passed during the shareholders' meeting held on March, 2000 to change company name to "YA HORNG ELECTRONIC CO., LTD." and change of company registration was approved.
The Company became a listed company on Taipei Exchange on 27 December 2002. The Company became a listed company on Taiwan Stock Exchange on 27 September 2004.

II. DATE AND PROCEDURES OF AUTHORIZATION OF FINANCIAL STATEMENTS FOR ISSUE

The consolidated financial statements of the Company and subsidiaries (hereinafter referred to as "the Group") for the year ended 31 December 2025 and 2024 were authorized for issue in accordance with a resolution of the Board of directors on 10 March 2026.

III. NEWLY ISSUED OR REVISED STANDARDS AND INTERPRETATIONS

Changes in accounting policies resulting from applying for the first time certain standards and amendments

The Group applied for the first time International Financial Reporting Standards, International Accounting Standards, and Interpretations issued, revised or amended which are recognized by Financial Supervisory Commission ("FSC") and become effective for annual periods beginning on or after 1 January 2025. The adoption of these new standards and amendments had no material impact on the Group.

Standards or interpretations issued, revised or amended, International Accounting Standards Board ("IASB") which have been endorsed by FSC, and not yet adopted by the Group as at the date when the Group's financial statements were authorized for issue, are listed below.

Items	New, Revised or Amended Standards and Interpretations	Effective Date issued by IASB
1	IFRS 17 “Insurance Contracts”	1 January 2023
2	Amendments to the Classification and Measurement of Financial Instruments – Amendments to IFRS 9 and IFRS 7	1 January 2026
3	Annual Improvements to IFRS Accounting Standards – Volume 11	1 January 2026
4	Contracts Referencing Nature-dependent Electricity – Amendments to IFRS 9 and IFRS 7	1 January 2026

(1) IFRS 17 "Insurance Contracts

IFRS 17 provides a comprehensive model for insurance contracts, covering all relevant accounting aspects (including recognition, measurement, presentation and disclosure requirements). The core of IFRS 17 is the General (building block) Model, under this model, on initial recognition, an entity shall measure a group of insurance contracts at the total of the fulfilment cash flows and the contractual service margin. The carrying amount of a group of insurance contracts at the end of each reporting period shall be the sum of the liability for remaining coverage and the liability for incurred claims.

Other than the General Model, the standard also provides a specific adaptation for contracts with direct participation features (the Variable Fee Approach) and a simplified approach (Premium Allocation Approach) mainly for short-duration contracts.

IFRS 17 was issued in May 2017 and it was amended in 2020 and 2021. The amendments include deferral of the date of initial application of IFRS 17 by two years to annual beginning on or after 1 January 2023 (from the original effective date of 1 January 2021); provide additional transition reliefs; simplify some requirements to reduce the costs of applying IFRS 17 and revise some requirements to make the results easier to explain. IFRS 17 replaces an interim Standard – IFRS 4 Insurance Contracts – from annual reporting periods beginning on or after 1 January 2023.

(2) Amendments to the Classification and Measurement of Financial Instruments - Amendments to IFRS 9 and IFRS 7

These amendments include:

(a) Clarify that a financial liability is derecognised on the settlement date and describe the accounting treatment for settlement of financial liabilities using an electronic payment system before the settlement date.

(b) Clarify how to assess the contractual cash flow characteristics of financial assets that include environmental, social and governance (ESG)-linked features and other similar contingent features.

(d) Require additional disclosures in IFRS 7 for financial assets and liabilities with contractual terms that reference a contingent event (including those that are ESG-linked), and equity instruments classified at fair value through other comprehensive income.

(3) Annual Improvements to IFRS Accounting Standards—Volume 11

(a) Amendment to IFRS 1
(b) Amendment to IFRS 7
(c) Amendments to Guidance on implementing IFRS 7
(d) Amendment to IFRS 9
(e) Amendment to IFRS 10
(f) Amendment to IAS 7

(4) Contracts Referencing Nature-dependent Electricity – Amendments to IFRS 9 and IFRS 7

These amendments include:

(a) Clarify the application of the ‘own-use’ requirements.
(b) Permit hedge accounting if these contracts are used as hedging instruments.
(c) Add new disclosure requirements to enable investors to understand the effect of these contracts on a Group’s financial performance and cash flows.

The abovementioned standards and amendments are applicable for annual periods beginning on or after 1 January 2026 and have no material impact on the Group.

Standards or interpretations issued, revised or amended, by IASB which have not been endorsed by FSC, and not yet adopted by the Group as at the date when the Group’s financial statements were authorized for issue, are listed below.

Items	New, Revised or Amended Standards and Interpretations	Effective Date issued by IASB
1	IFRS 10 “Consolidated Financial Statements” and IAS 28 “Investments in Associates and Joint Ventures” — Sale or Contribution of Assets between an Investor and its Associate or Joint Ventures	To be determined by IASB
2	IFRS 18 “Presentation and Disclosure in Financial Statements”	1 January 2027 (Note)
3	Disclosure Initiative – Subsidiaries without Public Accountability: Disclosures (IFRS 19)	1 January 2027
4	Translation to a Hyperinflationary Presentation Currency (Amendments to IAS 21 and IAS 29)	1 January 2027

Note: On 25 September 2025, the FSC announced in a press release that Taiwan will adopt IFRS 18 in 2028.

(1) IFRS 10“Consolidated Financial Statements” and IAS 28“Investments in Associates and Joint Ventures” — Sale or Contribution of Assets between an Investor and its Associate or Joint Ventures

The amendments address the inconsistency between the requirements in IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates and Joint Ventures, in dealing with the loss of control of a subsidiary that is contributed to an associate or a joint venture. IAS 28 restricts gains and losses arising from contributions of non-monetary assets to an associate or a joint venture to the extent of the interest attributable to the other equity holders in the associate or joint ventures. IFRS 10 requires full profit or loss recognition on the loss of control of the subsidiary. IAS 28 was amended so that the gain or loss resulting from the sale or contribution of assets that constitute a business as defined in IFRS 3 between an investor and its associate or joint venture is recognized in full.

IFRS 10 was also amended so that the gains or loss resulting from the sale or contribution of a subsidiary that does not constitute a business as defined in IFRS 3 between an investor and its associate or joint venture is recognized only to the extent of the unrelated investors' interests in the associate or joint venture.

(2) IFRS 18 “Presentation and Disclosure in Financial Statements”

IFRS 18 replaces IAS 1 Presentation of Financial Statements. The main changes are as below:

(a) Improved comparability in the statement of profit or loss (income statement)

IFRS 18 requires entities to classify all income and expenses within their statement of profit or loss into one of five categories: operating; investing; financing; income taxes; and discontinued operations. The first three categories are new, to improve the structure of the income statement, and requires all entities to provide new defined subtotals, including operating profit or loss. The improved structure and new subtotals will give investors a consistent starting point for analyzing entities’ performance and make it easier to compare entities.

(b) Enhanced transparency of management-defined performance measures

IFRS 18 requires entities to disclose explanations of those entity-specific measures that are related to the income statement, referred to as management-defined performance measures.

IFRS 18 sets out enhanced guidance on how to organize information and whether to provide it in the primary financial statements or in the notes. The changes are expected to provide more detailed and useful information. IFRS 18 also requires entities to provide more transparency about operating expenses, helping investors to find and understand the information they need.

(3) Disclosure Initiative — Subsidiaries without Public Accountability: Disclosures (IFRS) 19

This new standard and its amendments permits subsidiaries without public accountability to provide reduced disclosures when applying IFRS Accounting Standards in their financial statements. IFRS 19 is optional for subsidiaries that are eligible and sets out the disclosure requirements for subsidiaries that elect to apply it.

(4) Translation to a Hyperinflationary Presentation Currency (Amendments to IAS 21 and IAS 29)

The amendments include:

(a) Clarify that when the entity’s functional currency is that of a non hyperinflationary economy but its presentation currency is the currency of a hyperinflationary economy, the entity shall translate its results and financial position using the closing rate at the date of the most recent statement of financial position.

(b) In the above circumstances, when the presentation currency ceases to be hyperinflationary economy, the entity shall not retranslate amounts that arose before the beginning of the reporting period.

(c) When the entity’s functional currency and presentation currency are the currency of a hyperinflationary economy, the entity shall apply the relevant accounting treatment in accordance with paragraph 34 of IAS 29.

The abovementioned standards and interpretations issued by IASB have not yet endorsed by FSC at the date when the Group’s financial statements were authorized for issue, the local effective dates are to be determined by FSC. As the Group is still currently determining the potential impact of the new or amended standards and interpretations listed under (2), it is not practicable to estimate their impact on the Group at this point in time. The remaining new or amended standards and interpretations have no material impact on the Group.

IV. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1. Statement of Compliance

The Group’s consolidated financial statements for the years ended 31 December 2025 and 2024 were prepared in accordance with Regulations Governing the Preparation of Financial Reports by Securities Issuers (Regulations), IFRSs, IASs, IFRIC and SIC, which are endorsed by FSC (TIFRSs).

2. Basis of preparation

The consolidated financial statements have been prepared on a historical cost basis, except for financial instruments that have been measured at fair value. The consolidated financial statements are expressed in thousands of New Taiwan Dollars (“NT$”) unless otherwise stated.

3. Basis of consolidation

Preparation principle of consolidated financial statement

Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if and only if the Group has:

a. power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee)

b. exposure, or rights, to variable returns from its involvement with the investee

c. the ability to use its power over the investee to affect its returns.

When the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:

a. the contractual arrangement with the other vote holders of the investee
b. rights arising from other contractual arrangement
c. the Group’s voting rights and potential voting rights

The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control.

Subsidiaries are fully consolidated from the acquisition date, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases. The financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using uniform accounting policies. All intra-group balances, income and expenses, unrealized gains and losses and dividends resulting from intra-group transactions are eliminated in full.

A change in the ownership interest of a subsidiary, without a change of control, is accounted for as an equity transaction.

Total comprehensive income of the subsidiaries is attributed to the owners of the parent and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

If the group loses control of a subsidiary, it:

a. derecognizes the assets (including goodwill) and liabilities of the subsidiary
b. derecognizes the carrying amount of any non-controlling interest
c. recognizes the fair value of the consideration received
d. recognizes the fair value of any investment retained
e. recognizes any surplus or deficit in profit or loss
f. reclassifies the parent’s share of components previously recognized in other comprehensive income to profit or loss.

The consolidated entities are as follows:

Invest Company	Investee Company	Major business	Percentage of Ownership (%)
			31.Dec.2025	31.Dec.2024
The Company	HIGH GOAL	Investment	100%	100%
	INTERNATIONAL	holding
	LIMITED

Invest Company	Investee Company	Major business	Percentage of Ownership (%)
			31.Dec.2025	31.Dec.2024
The Company	YA HORNG ELECTRONIC CO., LTD. (BVI)	Investment holding	31%	31%
The Company	YA HORNG ELECTRONIC PHILIPPINES INC.	Manufacture and sale of automobile parts	100%	100%
HIGH GOAL	YA HORNG ELECTRONIC CO., LTD. (BVI)	Investment holding	69%	69%
YA HORNG ELECTRONIC CO., LTD. (BVI)	BEST YIELD INVESTMENT HOLDING LIMITED	Investment holding	100%	100%
BEST YIELD	YA HORNG (DONGGUAN)ELEC TRONIC CO., LTD)	Manufacture and sale of automobile parts	100%	100%

4. Foreign currency transactions

The Group's consolidated financial statements are presented in NT$, which is also the Company's functional currency. Each entity in the Group determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency.

Transactions in foreign currencies are initially recorded by the Group entities at their respective functional currency rates prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency closing rate of exchange ruling at the reporting date. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. Non-monetary items that are measured at historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions.

All exchange differences arising on the settlement of monetary items or on translating monetary items are taken to profit or loss in the period in which they arise except for the following:

(a) Exchange differences arising from foreign currency borrowings for an acquisition of a qualifying asset to the extent that they are regarded as an adjustment to interest costs are included in the borrowing costs that are eligible for capitalization.

(b) Foreign currency items within the scope of IFRS 9 Financial Instruments are accounted for based on the accounting policy for financial instruments.

(c) Exchange differences arising on a monetary item that forms part of a reporting entity’s net investment in a foreign operation is recognized initially in other comprehensive income and reclassified from equity to profit or loss on disposal of the net investment.

When a gain or loss on a non-monetary item is recognized in other comprehensive income, any exchange component of that gain or loss is recognized in other comprehensive income. When a gain or loss on a non-monetary item is recognized in profit or loss, any exchange component of that gain or loss is recognized in profit or loss.

Translation of financial statements in foreign currency

The assets and liabilities of foreign operations are translated into NT$ at the closing rate of exchange prevailing at the reporting date and their income and expenses are translated at an average rate for the period. The exchange differences arising on the translation are recognized in other comprehensive income. On the disposal of a foreign operation, the cumulative amount of the exchange differences relating to that foreign operation, recognized in other comprehensive income and accumulated in the separate component of equity, is reclassified from equity to profit or loss when the gain or loss on disposal is recognized. The following partial disposals are accounted for as disposals:

(a) when the partial disposal involves the loss of control of a subsidiary that includes a foreign operation; and

(b) when the retained interest after the partial disposal of an interest in a joint arrangement or partial disposal of an interest in an associate that includes a foreign operation is financial asset that includes a foreign operation.

On the partial disposal of a subsidiary that includes a foreign operation that does not result in a loss of control, the proportionate share of the cumulative amount of the exchange differences recognized in other comprehensive income is re-attributed to the non-controlling interests in that foreign operation. In partial disposal of an associate or joint arrangement that includes a foreign operation that does not result in a loss of significant influence or joint control, only the proportionate share of the cumulative amount of the exchange differences recognized in other comprehensive income is reclassified to profit or loss.

Any goodwill and any fair value adjustments to the carrying amounts of assets and liabilities arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and expressed in its functional currency.

Current and non-current distinction

An asset is classified as current when:

(a) The Group expects to realize the asset, or intends to sell or consume it, in its normal operating cycle.
(b) The Group holds the asset primarily for the purpose of trading.
(c) The Group expects to realize the asset within twelve months after the reporting period
(d) The asset is cash or cash equivalent unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

All other assets are classified as non-current.

A liability is classified as current when:

(a) The Group expects to settle the liability in its normal operating cycle.
(b) The Group holds the liability primarily for the purpose of trading.
(c) The liability is due to be settled within twelve months after the reporting period.
(d) The Group does not have the right at the end of the reporting period to defer settlement of the liability for at least twelve months after the reporting period.

All other liabilities are classified as non-current.

Cash and cash equivalents

Cash and cash equivalents comprises cash on hand, demand deposits and short-term, highly liquid time deposits (including ones that have maturity within 3 months) or investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

Financial instruments

Financial assets and financial liabilities are recognized when the Group becomes a party to the contractual provisions of the instrument.

Financial assets and financial liabilities within the scope of IFRS 9 Financial Instruments are recognized initially at fair value plus or minus, in the case of investments not at fair value through profit or loss, directly attributable transaction costs.

(a) Financial instruments: Recognition and Measurement

The Group accounts for regular way purchase or sales of financial assets on the trade date. The Group classified financial assets as subsequently measured at amortized cost, fair value through other comprehensive income or fair value through profit or loss considering both factors below:

A. the Group’s business model for managing the financial assets and
B. the contractual cash flow characteristics of the financial asset.

Financial assets measured at amortized cost

A financial asset is measured at amortized cost if both of the following conditions are met and presented as note receivables, trade receivables financial assets measured at amortized cost and other receivables etc., on balance sheet as at the reporting date:

A. the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows and
B. 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.

Such financial assets are subsequently measured at amortized cost (the amount at which the financial asset is measured at initial recognition minus the principal repayments, plus or minus the cumulative amortization using the effective interest method of any difference between the initial amount and the maturity amount and adjusted for any loss allowance) and is not part of a hedging relationship. A gain or loss is recognized in profit or loss when the financial asset is derecognized, through the amortization process or in order to recognize the impairment gains or losses.

Interest revenue is calculated by using the effective interest method. This is calculated by applying the effective interest rate to the gross carrying amount of a financial asset except for:

A. purchased or originated credit-impaired financial assets. For those financial assets, the Group applies the credit-adjusted effective interest rate to the amortized cost of the financial asset from initial recognition.
B. financial assets that are not purchased or originated credit-impaired financial assets but subsequently have become credit-impaired financial assets. For those financial assets, the Group applies the effective interest rate to the amortized cost of the financial asset in subsequent reporting periods.

(b) Impairment of financial assets

The Group recognizes a loss allowance for expected credit losses on debt instrument investments measured at fair value through other comprehensive income and financial asset measured at amortized cost. The loss allowance on debt instrument investments measured at fair value through other comprehensive income is recognized in other comprehensive income and not reduce the carrying amount in the statement of financial position.

The Group measures expected credit losses of a financial instrument in a way that reflects:

A. an unbiased and probability-weighted amount that is determined by evaluating a range of possible outcomes
B. the time value of money
C. reasonable and supportable information that is available without undue cost or effort at the reporting date about past events, current conditions and forecasts of future economic conditions.

The loss allowance is measured as follows:

A. At an amount equal to 12-month expected credit losses: the credit risk on a financial asset has not increased significantly since initial recognition or the financial asset is determined to have low credit risk at the reporting date. In addition, the Group measures the loss allowance at an amount equal to lifetime expected credit losses in the previous reporting period, but determines at the current reporting date that the credit risk on a financial asset has increased significantly since initial recognition is no longer met.
B. At an amount equal to the lifetime expected credit losses: the credit risk on a financial asset has increased significantly since initial recognition or financial asset that is purchased or originated credit-impaired financial asset.
C. For trade receivables or contract assets arising from transactions within the scope of IFRS 15, the Company measures the loss allowance at an amount equal to lifetime expected credit losses.

At each reporting date, the Group needs to assess whether the credit risk on a financial asset has increased significantly since initial recognition by comparing the risk of a default occurring at the reporting date and the risk of default occurring at initial recognition. Please refer to Note XII for further details on credit risk.

A financial asset is derecognized when:

A. The rights to receive cash flows from the asset have expired
B. The Group has transferred the asset and substantially all the risks and rewards of the asset have been transferred
C. The Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

On derecognition of a financial asset in its entirety, the difference between the carrying amount and the consideration received or receivable including any cumulative gain or loss that had been recognized in other comprehensive income, is recognized in profit or loss.

(d) Financial liabilities and equity

Classification between liabilities or equity

The Group classifies the instrument issued as a financial liability or an equity instrument in accordance with the substance of the contractual arrangement and the definitions of a financial liability, and an equity instrument.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. The transaction costs of an equity transaction are accounted for as a deduction from equity (net of any related income tax benefit) to the extent they are incremental costs directly attributable to the equity transaction that otherwise would have been avoided.

Financial liabilities

Financial liabilities within the scope of IFRS 9 Financial Instruments are classified as financial liabilities at fair value through profit or loss or financial liabilities measured at amortized cost upon initial recognition.

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated as at fair value through profit or loss. A financial liability is classified as held for trading if:

A. it is acquired or incurred principally for the purpose of selling or repurchasing it in the near term
B. on initial recognition it is part of a portfolio of identified financial instruments that are managed together and for which there is evidence of a recent actual pattern of short-term profit-taking
C. it is a derivative (except for a derivative that is a financial guarantee contract or a designated and effective hedging instrument).

If a contract contains one or more embedded derivatives, the entire hybrid (combined) contract may be designated as a financial liability at fair value through profit or loss; or a financial liability may be designated as at fair value through profit or loss when doing so results in more relevant information, because either:

A. it eliminates or significantly reduces a measurement or recognition inconsistency; or
B. a group of financial liabilities or financial assets and financial liabilities is managed and its performance is evaluated on a fair value basis, in accordance with a documented risk management or investment strategy, and information about the group is provided internally on that basis to the key management personnel.

Gains or losses on the subsequent measurement of liabilities at fair value through profit or loss including interest paid are recognized in profit or loss.

Financial liabilities at amortized cost

Financial liabilities measured at amortized cost include interest bearing loans and borrowings that are subsequently measured using the effective interest rate method after initial recognition. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the effective interest rate method amortization process.

Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or transaction costs.

Derecognition of financial liabilities

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires.

When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified (whether or not attributable to the financial difficulty of the debtor), such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss.

(e) Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount reported in the balance sheet if, and only if, there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, or to realize the assets and settle the liabilities simultaneously.

Derivative instrument

The Group uses derivative instruments to hedge its foreign currency risks and interest rate risks. A derivative is classified in the balance sheet as financial assets or liabilities at fair value through profit or loss except for derivatives that are designated as and effective hedging instruments which are classified as financial assets or liabilities for hedging.

Derivative instruments are initially recognized at fair value on the date on which a derivative contract is entered into and are subsequently remeasured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative. The changes in fair value of derivatives are taken directly to profit or loss, except for the effective portion of hedges, which is recognized in either profit or loss or equity according to types of hedges used.

When the host contracts are either non-financial assets or liabilities, derivatives embedded in host contracts are accounted for as separate derivatives and recorded at fair value if their economic characteristics and risks are not closely related to those of the host contracts and the host contracts are not designated at fair value though profit or loss.

Fair value measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

(a) In the principal market for the asset or liability, or
(b) In the absence of a principal market, in the most advantageous market for the asset or liability.

The principal or the most advantageous market must be accessible to by the Group.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

11. Inventories

Inventories are valued at lower of cost and net realizable value item by item.

Costs incurred in bringing each inventory to its present location and condition are accounted for as follows:

Raw materials – Purchase cost under weighted-average cost.

Finished goods and work in progress – Cost of direct materials and labor and a proportion of manufacturing overheads based on normal operating capacity but excluding borrowing costs.

Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.

12. Property, plant and equipment

Property, plant and equipment is stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. Such cost includes the cost of dismantling and removing the item and restoring the site on which it is located and borrowing costs for construction in progress if the recognition criteria are met. Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item is depreciated separately. When significant parts of property, plant and equipment are required to be replaced in intervals, the Group recognized such parts as individual assets with specific useful lives and depreciation, respectively. The carrying amount of those parts that are replaced is derecognized in accordance with the derecognition provisions of IAS 16 Property, plant and equipment. When a major inspection is performed, its cost is recognized in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognized in profit or loss as incurred.

Depreciation is calculated on a straight-line basis over the estimated economic lives of the following assets:

Buildings	5~51 years
Machinery and equipment	2~13 years
Molding equipment	2~ 8 years
Transportation equipment	3~ 8 years
Office equipment	3~ 8 years
Miscellaneous equipment	3~16 years
Leasehold improvements	3~5 years

An item of property, plant and equipment and any significant part initially recognized is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset is recognized in profit or loss.

The assets' residual values, useful lives and methods of depreciation are reviewed at each financial year end and adjusted prospectively, if appropriate.

13. Investment property

The Group's owned investment properties are measured initially at cost, including transaction costs. The carrying amount includes the cost of replacing part of an existing investment property at the time that cost is incurred if the recognition criteria are met and excludes the costs of day-to-day servicing of an investment property. Subsequent to initial recognition, other than those that meet the criteria to be classified as held for sale (or are included in a disposal group that is classified as held for sale) in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations, investment properties are measured using the cost model in accordance with the requirements of IAS 16 Property, plant and equipment for that model. If investment properties are held by a lessee as right-of-use assets and is not held for sale in accordance with IFRS 5, investment properties are measured in accordance with the requirements of IFRS 16.

Depreciation is calculated on a straight-line basis over the estimated economic lives of the following assets:

Buildings	26 years

Investment properties are derecognized when either they have been disposed of or when the investment property is permanently withdrawn from use and no future economic benefit is expected from its disposal. The difference between the net disposal proceeds and the carrying amount of the asset is recognized in profit or loss in the period of derecognition.

The Group transfers properties to or from investment properties according to the actual use of the properties.

The Group transfers to or from investment properties when there is a change in use for these assets. Properties are transferred to or from investment properties when the properties meet, or cease to meet, the definition of investment property and there is evidence of the change in use.

14. Leases

The Group assesses whether the contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset for a period of time, the Group assesses whether, throughout the period of use, has both of the following:

(a) the right to obtain substantially all of the economic benefits from use of the identified asset; and
(b) the right to direct the use of the identified asset.

For a contract that is, or contains, a lease, the Group accounts for each lease component within the contract as a lease separately from non-lease components of the contract. For a contract that contains a lease component and one or more additional lease or non-lease components, the Group allocates the consideration in the contract to each lease component on the basis of the relative stand-alone price of the lease component and the aggregate stand-alone price of the non-lease components. The relative stand-alone price of lease and non-lease components shall be determined on the basis of the price the lessor, or a similar supplier, would charge the Group for that component, or a similar component, separately. If an observable stand-alone price is not readily available, the Group estimates the stand-alone price, maximising the use of observable information.

Group as a lessee

Except for leases that meet and elect short-term leases or leases of low-value assets, the Group recognizes right-of-use asset and lease liability for all leases which the Group is the lessee of those lease contracts.

At the commencement date, the Group measures the lease liability at the present value of the lease payments that are not paid at that date. The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, the Group uses its incremental borrowing rate. At the commencement date, the lease payments included in the measurement of the lease liability comprise the following payments for the right to use the underlying asset during the lease term that are not paid at the commencement date:

(a) fixed payments (including in-substance fixed payments), less any lease incentives receivable;
(b) variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;
(c) amounts expected to be payable by the lessee under residual value guarantees;
(d) the exercise price of a purchase option if the Group is reasonably certain to exercise that option; and
(e) payments of penalties for terminating the lease, if the lease term reflects the lessee exercising an option to terminate the lease.

After the commencement date, the Group measures the lease liability on an amortised cost basis, which increases the carrying amount to reflect interest on the lease liability by using an effective interest method; and reduces the carrying amount to reflect the lease payments made.

At the commencement date, the Group measures the right-of-use asset at cost. The cost of the right-of-use asset comprises:

(a) the amount of the initial measurement of the lease liability;
(b) any lease payments made at or before the commencement date, less any lease incentives received;
(c) any initial direct costs incurred by the lessee; and
(d) an estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease.

For subsequent measurement of the right-of-use asset, the Group measures the right-of-use asset at cost less any accumulated depreciation and any accumulated impairment losses. That is, the Group measures the right-of-use applying a cost model.

If the lease transfers ownership of the underlying asset to the Group by the end of the lease term or if the cost of the right-of-use asset reflects that the Group will exercise a purchase option, the Group depreciates the right-of-use asset from the commencement date to the end of the useful life of the underlying asset. Otherwise, the Group depreciates the right-of-use asset from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term.

The Group applies IAS 36 "Impairment of Assets" to determine whether the right-of-use asset is impaired and to account for any impairment loss identified.

Except for those leases that the Group accounted for as short-term leases or leases of low-value assets, the Group presents right-of-use assets and lease liabilities in the balance sheet and separately presents lease-related interest expense and depreciation charge in the statements comprehensive income.

For short-term leases or leases of low-value assets, the Group elects to recognize the lease payments associated with those leases as an expense on either a straight-line basis over the lease term or another systematic basis.

15. Intangible assets

Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is its fair value as at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and accumulated impairment losses, if any. Internally generated intangible assets, excluding capitalized development costs, are not capitalized and expenditure is reflected in profit or loss for the year in which the expenditure is incurred.

The useful lives of intangible assets are assessed as either finite or indefinite.

Intangible assets with finite lives are amortized over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method for an intangible asset with a finite useful life is reviewed at least at the end of each financial year. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset is accounted for by changing the amortization period or method, as appropriate, and are treated as changes in accounting estimates.

Gains or losses arising from derecognition of an intangible asset are measured in profit or loss when the asset is derecognized.

Computer software

The cost of computer software is amortized on a straight-line basis over the estimated useful life (3 years).

Impairment of non-financial assets

The Group assesses at the end of each reporting period whether there is any indication that an asset in the scope of IAS 36 Impairment of Assets may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Group estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s (“CGU”) fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

For assets excluding goodwill, an assessment is made at each reporting date as to whether there is any indication that previously recognized impairment losses may no longer exist or may have decreased. If such indication exists, the Group estimates the asset’s or cash-generating unit’s recoverable amount. A previously recognized impairment loss is reversed only if there has been an increase in the estimated service potential of an asset which in turn increases the recoverable amount. However, the reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years.

An impairment loss of continuing operations or a reversal of such impairment loss is recognized in profit or loss.

Revenue recognition

The Group’s revenue arising from contracts with customers are primarily related to sale of goods. The accounting policies are explained as follows:

Sale of goods

The Group manufactures and sells products. Sales are recognized when control of the goods is transferred to the customer and the goods are delivered to the customers. The main product of the Group is the electronic audio messaging and small household appliances and revenue is recognized based on the consideration stated in the contract.

The Group provides its customer with a warranty with the purchase of the products. The warranty provides assurance that the product will operate as expected by the customers. And the warranty is accounted in accordance with IAS 37.

The credit period of the Group's sale of goods is from 30 to 100 days. For most of the contracts, when the Group transfers the goods to customers and has a right to an amount of consideration that is unconditional, these contracts are recognized as trade receivables. The Group usually collects the payments shortly after transfer of goods to customers; therefore, there is no significant financing component to the contract. However, for some rendering of services contracts, part of the consideration was received from customers upon signing the contract, and the Group has an obligation to provide the services subsequently; accordingly, these amounts are recognized as contract liabilities.

The period between the transfers of contract liabilities to revenue is usually within one year, thus, no significant financing component arises.

18. Post-employment benefits

All regular employees of the Company and its domestic subsidiaries are entitled to a pension plan that is managed by an independently administered pension fund committee. Fund assets are deposited under the committee's name in the specific bank account and hence, not associated with the Company and its domestic subsidiaries. Therefore fund assets are not included in the Group's consolidated financial statements. Pension benefits for employees of the overseas subsidiaries and the branches are provided in accordance with the respective local regulations.

For the defined contribution plan, the Company and its domestic subsidiaries will make a monthly contribution of no less than 6% of the monthly wages of the employees subject to the plan. The Company recognizes expenses for the defined contribution plan in the period in which the contribution becomes due. Overseas subsidiaries and branches make contribution to the plan based on the requirements of local regulations.

Post-employment benefit plan that is classified as a defined benefit plan uses the Projected Unit Credit Method to measure its obligations and costs based on actuarial assumptions. Re-measurements, comprising of the effect of the actuarial gains and losses, the effect of the asset ceiling (excluding net interest) and the return on plan assets, excluding net interest, are recognized as other comprehensive income with a corresponding debit or credit to retained earnings in the period in which they occur.

(a) the date of the plan amendment or curtailment, and
(b) the date that the Group recognizes restructuring-related costs or termination benefits.

Net interest is calculated by applying the discount rate to the net defined benefit liability or asset, both as determined at the start of the annual reporting period, taking account of any changes in the net defined benefit liability (asset) during the period as a result of contribution and benefit payment.

Income taxes

Income tax expense (income) is the aggregate amount included in the determination of profit or loss for the period in respect of current tax and deferred tax.

Current income tax

Current income tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period. Current income tax relating to items recognized in other comprehensive income or directly in equity is recognized in other comprehensive income or equity and not in profit or loss.

The income tax for undistributed earnings is recognized as income tax expense in the subsequent year when the distribution proposal is approved by the Shareholders’ meeting.

Deferred tax

Deferred tax is provided on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred tax liabilities are recognized for all taxable temporary differences, except:

(a) Where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination; at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and at the time of the transaction, does not give rise to equal taxable and deductible temporary differences.

(b) In respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint arrangements, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred tax assets are recognized for all deductible temporary differences, carry forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilized, except:

(a) Where the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination; at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and at the time of the transaction, does not give rise to equal taxable and deductible temporary differences.

(b) In respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint arrangements, deferred tax assets are recognized only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilized.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the reporting date. The measurement of deferred tax assets and deferred tax liabilities reflects the tax consequences that would follow from the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities. Deferred tax relating to items recognized outside profit or loss is recognized outside profit or loss. Deferred tax items are recognized in correlation to the underlying transaction either in other comprehensive income or directly in equity. Deferred tax assets are reassessed at each reporting date and are recognized accordingly.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current income tax assets against current income tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

The amendment in “International Tax Reform — Pillar Two Model Rules (Amendments to IAS 12)” has applied the exception. an exception to the requirements in IAS 12 that an entity does not recognize and does not disclose information about deferred tax assets and liabilities related to the pillar two income taxes.

V. SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS

The preparation of the Group’s consolidated financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities, at the end of the reporting period. However, uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

Estimation and assumptions

The key assumptions concerning the future and other key sources for estimating uncertainty at the reporting date, that would have a significant risk for a material adjustment to the carrying amounts of assets and liabilities within the next fiscal year are discussed below.

(1) Fair Value of Financial Instruments

Where the fair value of financial assets and financial liabilities recorded in the balance sheet cannot be derived from active markets, they are determined using valuation techniques including income approach (for example the discounted cash flow model) or the market approach. Changes in assumptions about these factors could affect the reported fair value of the financial instruments. Please refer to Note 12 for more details.

(2) Accounts receivables–estimation of impairment loss

The Group estimates the impairment loss of accounts receivables at an amount equal to lifetime expected credit losses. The credit loss is the present value of the difference between the contractual cash flows that are due under the contract (carrying amount) and the cash flows that expects to receive (evaluate forward looking information). However, as the impact from the discounting of short-term receivables is not material, the credit loss is measured by the undiscounted cash flows. Where the actual future cash flows are lower than expected, a material impairment loss may arise. Please refer to Note 6 for more details

(3) Inventory Valuation

Estimates of net realizable value of inventories take into consideration that inventories may be damaged, become wholly or partially obsolete, or their selling prices have declined. The estimates are based on the most reliable evidence available at the time the estimates are made. Please refer to Note 6 for more details.

(4) Pension benefits

The cost of post-employment benefit and the present value of the pension obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions. These include the determination rate, future salary increases, and decrease.

(5) Income tax

Uncertainties exist with respect to the interpretation of complex tax regulations and the amount and timing of future taxable income. Given the wide range of international business relationships and the long-term nature and complexity of existing contractual agreements, differences arising between the actual results and the assumptions made, or future changes to such assumptions, could necessitate future adjustments to tax income and expense already recorded. The Group establishes provisions, based on reasonable estimates, for possible consequences of audits by the tax authorities of the respective counties in which it operates. The amount of such provisions is based on various factors, such as experience of previous tax audits and differing interpretations of tax regulations by the taxable entity and the responsible tax authority. Such differences of interpretation may arise on a wide variety of issues depending on the conditions prevailing in the respective Group company’s domicile.

Deferred tax assets are recognized for all carry forward of unused tax losses, tax credits and deductible temporary differences to the extent that it is probable that future taxable profit will be available or there are sufficient taxable temporary differences against which the unused tax losses, unused tax credits or deductible temporary differences can be utilized. The amount of deferred tax assets determined to be recognized is based upon the likely timing and the level of future taxable profits and taxable temporary differences together with future tax planning strategies.

VI. CONTENTS OF SIGNIFICANT ACCOUNTS

1. Cash and Cash Equivalents

	31 Dec. 2025	31 Dec. 2024
Cash on hand	$4,862	$3,706
Demand deposits	271,077	393,949
Cash equivalents (with maturity within 3 months)
Time deposits	38,255	41,803
Corporate notes	262,800	214,200
Total	$576,994	$653,658

2. Financial assets measured at amortized cost

	31 Dec. 2025	31 Dec. 2024
Time deposits (with maturity above 3 months)	$696,586	$696,962
Corporate notes (with maturity above 3 months)	76,900	117,600
Total	$773,486	$814,562
Current	$773,486	$814,562

The Group classified certain financial assets as financial assets measured at amortized cost.

Please refer to Note VI.10 for more details on loss allowance and Note XII for more details on credit risk.

Financial assets measured at amortized cost were not pledged.

3. Trade Receivables

	31 Dec. 2025	31 Dec. 2024
Notes receivables — from operating	$925	$-
Less: allowance for doubtful accounts	-	-
Subtotal	925	-
Accounts Receivables	560,978	608,745
Less: allowance for doubtful accounts	(417)	(8,877)
Subtotal	560,561	599,868
Total	$561,486	$599,868

Trade receivables were not pledged.

Trade receivables are generally on 30-100 day terms. The total carrying amount were $561,903 thousand and NT$608,745 thousand as of 31 December 2025 and 2024 respectively.

Please refer to Note VI.10 for more details on impairment of trade receivable for the year ended 31 December 2025 and 2024 and Note XII for credit risk.

4. Inventories

	31 Dec. 2025	31 Dec. 2024
Raw materials	$506,174	$422,489
Work in process	61,690	82,707
Finished goods	163,518	196,828
Merchandise	20,984	23,629
Total	$752,366	$725,653

The Group's cost of inventories recognized as expenses amounted to NT$2,541,888 thousand and NT$2,462,604 thousand for the years ended 31 December 2025 and 2024, respectively, including the losses of inventory price decline caused by the disposal of some sluggish inventories in the amount of NT$23,925 thousand and NT$25,987 thousand for the years ended 31 December 2025 and 2024, respectively.

Inventories were not pledged.

Property, plant and equipment

	Land	Buildings	Machinery and equipment	Molding equipment	Transportation equipment	Office equipment	Other facilities	Leasehold Improvements	Construction in progress and equipment awaiting examination	Total
Cost :
1 Jan. 2025	$477,571	$443,013	$313,188	$253,157	$21,152	$17,371	$108,164	$19,085	$496	$1,653,197
Addition	-	-	11,789	3,286	670	361	5,500	2,344	18,278	42,228
Disposal	-	-	(22,640)	(16,720)	(787)	(249)	(1,306)	-	-	(41,702)
Transfer Other	-	-	-	(772)	-	-	-	-	-	(772)
Exchange difference	-	1,173	(1,814)	(47)	(63)	21	(1,374)	(1,085)	(27)	(3,216)
31 Dec. 2025	$477,571	$444,186	$300,523	$238,904	$20,972	$17,504	$110,984	$20,344	$18,747	$1,649,735
1 Jan. 2024	$340,771	$396,249	$307,865	$280,304	$20,560	$23,590	$99,031	$18,703	$9,409	$1,496,482
Addition	136,800	17,188	18,357	2,830	641	256	8,721	-	10,818	195,611
Disposal	-	-	(21,857)	(36,383)	(478)	(6,739)	(1,348)	-	-	(66,805)
Transfer	-	19,736	-	-	-	-	-	-	(19,736)	-
Other	-	-	-	-	-	-	-	(17)	-	(17)
Exchange difference	-	9,840	8,823	6,406	429	264	1,760	399	5	27,926
31 Dec. 2024	$477,571	$443,013	$313,188	$253,157	$21,152	$17,371	$108,164	$19,085	$496	$1,653,197
Depreciation and impairment:
1 Jan. 2025	$-	$333,042	$260,280	$249,889	$18,904	$15,814	$85,441	$17,230	$-	$980,600
Depreciation	-	18,809	14,091	2,986	799	816	8,174	1,248	-	46,923
Disposal	-	-	(22,591)	(16,720)	(787)	(249)	(1,306)	-	-	(41,653)
Other	-	-	-	(161)	-	-	-	-	-	(161)
Exchange difference	-	1,387	(464)	(10)	(17)	22	(576)	(967)	-	(625)
31 Dec. 2025	$-	$353,238	$251,316	$235,984	$18,899	$16,403	$91,733	$17,511	$-	$985,084
1 Jan. 2024	$-	$308,227	$260,633	$276,857	$17,599	$21,512	$78,014	$14,209	$-	$977,051
Depreciation	-	16,511	13,643	3,066	1,216	781	7,385	2,691	-	45,293
Disposal	-	-	(21,645)	(36,384)	(323)	(6,739)	(1,348)	-	-	(66,439)
Exchange difference	-	8,304	7,649	6,350	412	260	1,390	330	-	24,695
31 Dec. 2024	$-	$333,042	$260,280	$249,889	$18,904	$15,814	$85,441	$17,230	$-	$980,600
Net book value:
31 Dec. 2025	$477,571	$90,948	$49,207	$2,920	$2,073	$1,101	$19,251	$2,833	$18,747	$664,651
31 Dec. 2024	$477,571	$109,971	$52,908	$3,268	$2,248	$1,557	$22,723	$1,855	$496	$672,597

Property, plant and equipment were not pledged.

Investment property

The Group's investment property includes owned investment property. The Group has entered into commercial property leases on its owned investment property with terms of five years.

	Land	Buildings	Total
Cost:
1 Jan. 2025	$15,115	$13,885	$29,000
Additions from acquisitions	-	-	-
31 Dec. 2025	$15,115	$13,885	$29,000
1 Jan. 2024	$15,115	$13,885	$29,000
Additions from acquisitions	-	-	-
31 Dec. 2024	$15,115	$13,885	$29,000
Depreciation and impairment:
1 Jan. 2025	$-	$13,040	$13,040
Depreciation	-	534	534
31 Dec. 2025	$-	$13,574	$13,574
1 Jan. 2024	$-	$12,506	$12,506
Depreciation	-	534	534
31 Dec. 2024	$-	$13,040	$13,040
Net book value:
31 Dec. 2025	$15,115	$311	$15,426
31 Dec. 2024	$15,115	$845	$15,960

Investment property were not pledged.

The Group's investment property located in Zhongzheng Dist., Taipei City is not measured at fair value but for which the fair value is disclosed. Valuations were made based on most recent transaction prices of similar and comparable properties and official price. The fair value of investment property was shown below:

	31 Dec. 2025	31 Dec. 2024
Book Value	$15,426	$15,960
Fair Value	69,279	79,016

7. Post-Employment Benefits

Defined contribution plan

The Company adopt a defined contribution plan in accordance with the Labor Pension Act of the R.O.C. Under the Labor Pension Act, the Company will make monthly contributions of no less than 6% of the employees' monthly wages to the employees' individual pension accounts. The Company has made monthly contributions of 6% of each individual employee's salaries or wages to employees' pension accounts.

Subsidiaries located in the Mainland China will contribute social welfare benefits based on a certain percentage of employees' salaries or wages to the employees' individual pension accounts.

Pension benefits for employees of overseas subsidiaries and branches are provided in accordance with the local regulations.

The Group's recognized expenses of the defined contribution plan for the years ended 31 December 2025 and 2024 were NT$12,755 thousand and NT$10,755 thousand, respectively.

Defined benefits plan

The Company adopts a defined benefit plan in accordance with the Labor Standards Act of the R.O.C. The pension benefits are disbursed based on the units of service years and the average salaries in the last month of the service year. Two units per year are awarded for the first 15 years of services while one unit per year is awarded after the completion of the 15th year. The total units shall not exceed 45 units. Under the Labor Standards Act, the Company contributes an amount equivalent from 2% to 8% of the employees' total salaries and wages on a monthly basis to the pension fund deposited at the Bank of Taiwan in the name of the administered pension fund committee. Before end of each year, the Company make estimates of the balance in the designated labor pension fund. If the amount is inadequate to pay pensions calculated for workers retiring in the following year, the Company will make up the difference in one appropriation before the end of March of the following year.

The Ministry of Labor is responsible for the asset allocation of the Labor Retirement Fund in accordance with the Regulations for the Revenue, Expenditure, Safeguard, and Utilization of the Labor Retirement Fund. The Fund's investments are managed through both direct management and delegated management, employing a combination of active and passive investment strategies with a medium- to long-term focus. In consideration of market, credit, and liquidity risks, the Ministry of Labor establishes risk limits and control measures to ensure sufficient flexibility to achieve target returns without excessive risk exposure. The minimum annual return distributed from the Fund's financial statements shall not be less than the return calculated based on two-year fixed deposits offered by local banks. Any shortfall will be covered by the Treasury upon approval by the competent authority. As the Company does not have the right to participate in the Fund's operations and management, it is unable to disclose the classification of the fair value of plan assets in accordance with paragraph 142 of IAS 19. As of December 31, 2025, the Company expects to contribute NT$5,371 thousand to its defined benefit plan for the following year.

The average duration of the defined benefits plan obligation as at 31 December 2025 and 2024 are 8 years and 9 years.

Pension costs recognized in profit or loss for the years ended 31 December 2025 and 2024:

	2025	2024
Current service cost	$-	$174
Net interest on the net defined benefit liabilities	606	675
Total	$606	$849

Changes in the defined benefit obligation and fair value of plan assets are as follows:

	31 Dec. 2025	31 Dec. 2024
Defined benefit obligation	$177,771	$169,218
Plan assets at fair value	(139,273)	(131,093)
Net defined benefit liabilities	$38,498	$38,125

Reconciliations of liabilities (assets) of the defined benefit plan are as follows:

	Defined benefit obligation	Plan assets at fair value	Net defined benefit liabilities (assets)
As of 1 January 2024	$174,118	$ (118,808)	$55,310
Current service cost	174	-	174
Interest expense (income)	2,124	(1,449)	675
Subtotal	176,416	(120,257)	56,159
Remeasurements of the defined benefit liabilities/assets:
Actuarial gains and losses arising from changes in financial assumptions	(7,721)	-	(7,721)
Experience adjustments	5,184	-	5,184
Remeasurements of the defined benefit assets	-	(10,777)	(10,777)
Subtotal	(2,537)	(10,777)	(13,314)
Payment of benefit obligation	(4,661)	4,661	-
Contribution by employer	-	(4,720)	(4,720)
As of 31 December 2024	$169,218	$(131,093)	$38,125
Current service cost	-	-	-
Interest expenses (income)	2,690	(2,084)	606
Subtotal	171,908	(133,177)	38,731
Remeasurements of the defined benefit liabilities/assets:
Actuarial gains and losses arising from changes in financial assumptions	3,089	-	3,089
Experience adjustments	11,096	-	11,096
Remeasurements of the defined benefit assets	-	(9,047)	(9,047)
Subtotal	14,185	(9,047)	5,138
Payment of benefit obligation	(8,322)	8,322	-
Contribution by employer	-	(5,371)	(5,371)
As of 31 December 2025	$177,771	$(139,273)	$38,498

The following significant actuarial assumptions are used to determine the present value of the defined benefit obligation:

	31 Dec. 2025	31 Dec. 2024
Discount Rate	1.38%	1.59%
Expected rate of salary increase	3.00%	3.00%

A sensitivity analysis for significant assumption as at 31 December 2025 and 2024 is as shown below:

	2025		2024
	Defined benefit obligations increase	Defined benefit obligations decrease	Defined benefit obligations increase	Defined benefit obligations decrease
Discount rate increase by 0.5%	$-	$(7,211)	$-	$(7,224)
Discount rate decrease by 0.5%	7,726	-	7,760	-
Future salary increase by 0.5%	7,562	-	7,612	-
Future salary decrease by 0.5%	-	(7,134)	-	(7,162)

The sensitivity analysis above are based on a change in a significant assumption (for example: change in discount rate or future salary), keeping all other assumptions constant. The sensitivity analysis may not be representative of an actual change in the defined benefit obligation as it is unlikely that changes in assumptions would occur in isolation of one another.

There was no change in the methods and assumptions used in preparing the sensitivity analysis compared to the previous period.

8. Equity

(1) Common stock

As of 31 December 2025, and 2024, YA HORNG ELECTRONIC CO., LTD.'s authorized capital was all NT$1,200,000 thousand with par value at NT$10 per share. Its paid-in capital amounted to NT$892,000 thousand with 89,200 thousand common shares. Each share has a right to vote and receive dividends.

(2) Capital surplus

	As at
	31 Dec. 2025	31 Dec. 2024
Issuance premium	$320,000	$320,000
Disposition asset gains	13,190	13,190
Other	167	135
Total	$333,357	$333,325

According to the Company Act, the capital reserve shall not be used except for making good the deficit of the company. When a company incurs no loss, it may distribute the capital reserves related to the income derived from the issuance of new shares at a premium or income from endowments received by the company. The distribution could be made in cash or in the form of dividend shares to its shareholders in proportion to the number of shares being held by each of them.

(3) Retained earnings and dividend policies

The Company’s Articles of Incorporation provide that the current net income, after deducting the previous years’ losses, shall appropriate 10% as legal reserve and special reserve according to the company laws and other regulations of R.O.C. If there is still more than the accumulated undistributed income in the previous year, the board of directors shall propose an income distribution proposal. When issuing new shares, it should be submitted to the shareholders meeting for resolution. The board of directors of the Company is able to distribute more than two-thirds of the directors and more than half of the directors’ resolutions, and for all or part of the dividends and bonuses, which is a part of the legal reserve or capital surplus, shall be distributed in cash and reported to the board of directors.

The policy of dividend distribution should reflect factors such as the current and future investment environment, fund requirements, domestic and international competition and capital budgets; as well as the interest of the shareholders, share bonus equilibrium and long-term financial planning etc. The Board of Directors shall make the distribution proposal annually and present it at the shareholders’ meeting. Accordingly, at least 50% of the dividends must be paid in the form of cash.

According to the Company Act, the Company needs to set aside amount to legal reserve unless where such legal reserve amounts to the total paid-in capital. The legal reserve can be used to make good the deficit of the Company. When the Company incurs no loss, it may distribute the portion of legal serve which exceeds 25% of the paid-in capital by issuing new shares or by cash in proportion to the number of shares being held by each of the shareholders.

When the Company distributing distributable earnings, it shall set aside to special reserve, an amount equal to “other net deductions from shareholders” equity for the current fiscal year, provided that if the company has already set aside special reserve according to the requirements for the adoption of IFRS, it shall set aside supplemental special reserve based on the difference between the amount already set aside and other net deductions from shareholders’ equity. For any subsequent reversal of other net deductions from shareholders’ equity, the amount reversed may be distributed from the special reserve.

The FSC on 31 March 2021 issued Order No. Financial-Supervisory-Securities-Corporate-1090150022, which sets out the following provisions for compliance:

On a public company's first-time adoption of the IFRS, for any unrealized revaluation gains and cumulative translation adjustments (gains) recorded to shareholders' equity that the Company elects to transfer to retained earnings by application of the exemption under IFRS 1, the Company shall set aside special reserve. For any subsequent use, disposal or reclassification of related assets, the Company can reverse the special reserve by the proportion of the special reserve first appropriated and distribute it.

The appropriations of earnings for 2025 were resolved at the board of directors' meeting on 10 March 2026. The appropriations of earning for 2024 were resolved at the general shareholders' meeting on 10 June 2025. The plans were as follows:

	Appropriation of earnings		Dividend per share (NT$)
	2025	2024	2025	2024
Legal reserve	$32,705	$42,840
Special reserve/(Reversal) of special reserve	16,159	(25,498)
Common stock -cash dividend	276,520	356,800	$3.10	$4.00

Please refer to Note VI.12 for relevant information on estimation basis and recognized amount of employees compensations and remunerations to directors and supervisors.

9. Operating revenue

(1) Revenue from contracts with customers

For the year ended 31 December 2025 and 31 December 2024:

	2025	2024
Sale of goods	$3,327,002	$3,318,224
Timing of revenue recognition:
At a point in time	$3,327,002	$3,318,224

(2) Contract balances

Contract assets - current

	Beginning balance	Ending balance	Number of differences
Sales of goods	$37,525	$25,489	$(12,036)

There was no significant change in the balance of contractual liabilities of the Group in the 2025 and 2024, of which the opening balance was NT$21,675 thousand and NT$19,319 thousand, recognized as revenue in the current period.

10. Expected credit losses

	2025	2024
Operating Expense- Expected credit losses
Accounts Receivables	$140	$445

Please refer to Note VII for more details on credit risk.

The credit risk for measured at amortized cost is assessed as low (the same as the assessment result in the beginning of the period). Therefore, the loss allowance is measured at an amount equal to 12-month expected credit losses. As the Group transacts with are financial institutions with good credit, no allowance for losses has been provided in this period.

The Group measures the loss allowance of its trade receivables (including notes receivables and trade receivables) at an amount equal to lifetime expected credit losses. The assessment of the Group's loss allowance as at 31 December 2025 and 2024 was as follows:

The Group considers that the credit loss is actually included in the impairment loss except for individual customers by counterparties' credit rating, by geographical region and by industry sector and its loss allowance is measured individually. As at 31 December 2025 and 2024, dollar amounts were NT$55 thousand and NT$8,833 thousand, respectively. Loss allowance recognized were NT$55 thousand and NT$8,833 thousand, respectively. For other loss allowance revenues by using provision matrix, details are as follow:

As at 31 December 2025

	Not yet due (Note)	Overdue				Total
		1-90 days	91-180 days	181-270 days	271-360 days
Gross carrying amount	$439,440	$121,075	$153	$331	$849	$561,848
Loss ratio	-%	-%	5%	30%	30%
Lifetime expected credit losses	-	-	(8)	(99)	(255)	(362)
Carrying amount	$439,440	$121,075	$145	$232	$594	$561,486

As at 31 December 2024

	Not yet due (Note)	Overdue				Total
		1-90 days	91-180 days	181-270 days	271-360 days
Gross carrying amount	$533,420	$65,527	$965	$-	$-	$599,912
Loss ratio	-%	-%	5%	-%	-%
Lifetime expected credit losses	-	-	(44)	-	-	(44)
Carrying amount	$533,420	$65,527	$921	$-	$-	$599,868

Note : The Group’s note receivables are not overdue.

The movement in the provision for impairment of notes receivables and trade receivables ended 2025 and 2024 is as follows:

	Receivables
1 Jan. 2025	$8,877
Addition for the current period	140
Write-off due to uncollectability (Note)	(8,600)
31 Dec. 2025	$417
1 Jan. 2024	$8,432
Addition for the current period	445
31 Dec. 2024	$8,877

Note: The financial assets of the Group that were written off in 2025 and 2024, and which remain subject to ongoing recovery efforts, have contract amounts of NT$8,600 thousand and NT$0, respectively.

11. Leases

Group as a lessee

The Group leases various properties, including real estate such as land, and buildings. The lease terms range from 3 to 75 years.

The Group’s leases effect on the financial position, financial performance and cash flows are as follow:

A. Amounts recognized in the balance sheet

(a) Right-of-use assets

The carrying amount of right-of-use assets

	As at
	31 Dec. 2025	31 Dec. 2024
Land	$104,547	$111,083
Building	44,319	32,777
Transportation equipment	1,007	2,014
Total	$149,873	$145,874

For the years ended 31 December 2025 and 2024, the Group's additions to right-of-use assets amounting to NT$37,176 thousand and NT$25,127 thousand.

(b) Lease liabilities

	31 Dec. 2025	31 Dec. 2024
Current	$28,095	$17,012
Non-current	21,534	19,393
Total	$49,629	$36,405

Please refer to NoteVI.13.(4) for the interest on lease liabilities recognized for the years ended 31 December 2025 and 2024 and refer to Note XII.5 Liquidity Risk Management for the maturity analysis for lease liabilities as at 31 December 2025 and 2024.

B. Amounts recognized in the statement of profit or loss

Depreciation charge for right-of-use assets

	2025	2024
Land	$2,117	$2,172
Building	22,391	15,102
Transportation equipment	1,007	1,007
Total	$25,515	$18,281

C. Income and costs relating to leasing activities

	2025	2024
The expenses relating to leases of low-value assets
(Not including the expenses relating to short-term
leases of low-value assets)	$1,769	$2,402

D. Cash outflow relating to leasing activities

For the years ended 31 December 2025 and 2024, the Group's total cash outflows for leases amounting to NT$27,948 thousand and NT$20,998 thousand.

For the year ended 31 December 2025 and 2024, the Group's aggregate information on personnel, depreciation and amortization expenses were as follows:

| Function
Character | 2025 | | | | 2024 | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | Classified as operating costs | Classified as operating expenses | Non operating expenses | Total | Classified as operating costs | Classified as operating expenses | Non operating expenses | Total |
| Employee benefit expenses | | | | | | | | |
| Salaries | $249,678 | $205,360 | $- | $455,038 | $236,889 | $204,550 | $- | $441,439 |
| Insurance | 25,842 | 21,458 | - | 47,300 | 23,873 | 20,951 | - | 44,824 |
| Pension | 6,868 | 7,495 | - | 14,361 | 5,519 | 6,085 | - | 11,604 |
| Other personnel expenses | 12,840 | 6,705 | - | 19,545 | 12,790 | 6,729 | - | 19,519 |
| Depreciations | 55,666 | 16,772 | 534 | 72,972 | 47,827 | 15,747 | 534 | 64,108 |
| Amortization | 38 | 446 | - | 484 | 636 | 1,351 | - | 1,987 |

According to the Articles of Incorporation, 2% of profit of the current year is distributable as employees' compensation of which no less than 50% shall be distributed to frontline employees. and no more than 5% shall be allocated as directors' remuneration. However, the Company's accumulated losses shall have been covered. The Company may, by a resolution adopted by a majority vote at a meeting of Board of Directors attended by two-thirds of the total number of directors, have the profit distributable as employees' compensation in the form of shares or in cash; and in addition, thereto a report of such distribution is submitted to the shareholders' meeting. Information on the Board of Directors' resolution regarding the employees' compensation and remuneration to directors and supervisors can be obtained from the "Market Observation Post System" on the website of the TWSE.

Based on the profit level, employees' compensation and remuneration to directors and supervisors are estimated at rates of 7% and 2%, respectively. The Company estimated NT$ 28,902 thousand employees' compensation and NT$ 7,211 thousand remuneration to directors and supervisors as salaries expenses. A resolution was approved at a Board of Directors meeting held on 10 March 2026 to distribute NT$28,902 thousand and NT$7,211 thousand in cash as employee's compensation and remuneration to directors and supervisors, respectively.

The actual amount of employee remuneration and directors' remuneration distributed by the Company in 2024 was NT$ 37,405 thousand and NT$ 9,350 thousand respectively. There is no significant difference compared to the estimated amounts in the financial statements for the year ended 2024.

Non-operating income and expenses

(1) Interest income

	2025	2024
Bank deposits	$6,550	$9,468
Financial assets measured at amortized cost	14,466	11,162
Total	$21,016	$20,630

(2) Other income

	2025	2024
Rental income	$912	$936
Other income-other	7,670	5,910
Total	$8,582	$6,846

(3) Other gains and losses

	2025	2024
Gains on disposal of property, plant and equipment	$1,663	$935
Foreign exchange (losses) gains net	(4,923)	34,747
Other losses	(550)	(544)
Total	$(3,810)	$35,138

(4) Finance costs

	2025	2024
Interest on lease liabilities	$(3,062)	$(2,325)

Components of other comprehensive income(loss)

For the year ended Dec. 31, 2025	Arising during the period	Other comprehensive income	Income tax profit	Net of Tax
Items that will not be reclassified subsequently to profit or loss:
Remeasurements of defined benefit pension plans	$(5,138)	$(5,138)	$1,028	$(4,110)
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translation of foreign operations	(20,199)	(20,199)	4,040	(16,159)
Total other comprehensive income	$(25,337)	$(25,337)	$5,068	$(20,269)

For the year ended Dec. 31, 2024	Arising during the period	Other comprehensive income	Income tax profit	Net of Tax
Items that will not be reclassified subsequently to profit or loss:
Remeasurements of defined benefit pension plans	$13,314	$13,314	$(2,663)	$10,651
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translation of foreign operations	31,872	31,872	(6,374)	25,498
Total other comprehensive income	$45,186	$45,186	$(9,037)	$36,149

15. Income Tax

The major components of income tax expense (income) for the years ended 2025 and 2024 were as follows:

(1) Income tax recorded in profit or loss

	2025	2024
Current income tax expense (benefit):
Current income tax charge	$84,200	$101,915
Adjustments in respect of current income tax of prior Periods	(8,908)	(4,461)
Deferred tax expense (income):
Deferred tax expense (income) related to origination and reversal of temporary differences	5,605	12,051
Total Income tax expense	$80,897	$109,505

(2) Income tax relating to components of other comprehensive income

	2025	2024
Deferred income tax expense (income):
Exchange differences on translation of foreign operations	$(4,040)	$6,374
Remeasurements of the defined benefit plan	(1,028)	2,663
Income tax relating to components of other comprehensive income	$(5,068)	$9,037

(3) The assessment of income tax returns

As of 31 December 2025, the assessment of the income tax returns of the Company and its subsidiaries was as follows:

The Company	The assessment of income tax returns
	2023

(4) A reconciliation between tax expense and the product of accounting profit multiplied by applicable tax rate is as follows:

	2025	2024
Net profit before tax from continuing operations	$412,061	$527,253
Tax at the domestic rates applicable to profits in the country concerned	92,900	113,969
Tax effect of revenues exempt from taxation	-	(3)
Tax effect of deferred tax assets or liabilities	(43)	-
Adjustments in respect of current income tax of prior periods	(8,908)	(4,461)
Corporate income surtax on undistributed retained earnings	1,641	-
Other income tax adjustments under tax laws	(4,693)	-
Total income tax expenses recorded in profit or loss	$80,897	$109,505

(5) Significant components of deferred income tax assets and liabilities are as follows:

For the year ended December 31, 2025

	As of 1 Jan. 2025	Recognized in income	Recognized in other comprehensive income	As of 31 Dec. 2025
Temporary differences
Unrealized exchange losses (gain)	$288	$2,516	$-	$2,804
Allowance for doubtful debts	526	(526)	-	-
Allowance for inventory valuation losses	4,076	1,191	-	5,267
Valuation foreign investment under equity method loss	16,491	(4,438)		12,053
Valuation foreign investment under equity method (gain)	(20,946)	(3,515)	-	(24,461)
Unrealized profits or losses on transactions with associates	375	120	-	495
Exchange differences on translation of foreign operations	(12,374)	-	4,040	(8,334)
Net defined benefit liabilities, non-current	7,625	(953)	1,028	7,700
Compensated absences provisions	1,334	-	-	1,334
Reserve for land value increment tax	(18,957)	-	-	(18,957)
Deferred income tax (expenses)		$(5,605)	$5,068
Deferred tax assets and liability net	$(21,562)			$(22,099)
(Continued to next page)

	As of 1 Jan. 2025	Recognized in income	Recognized in other comprehensive income	As of 31 Dec. 2025
(Continued from previous page)
As presented on the financial statement:
Deferred tax assets	$30,715			$29,653
Deferred tax liabilities	$(52,277)			$(51,752)
For the year ended December 31, 2023
	As of 1 Jan. 2024	Recognized in income	Recognized in other comprehensive income	As of 31 Dec. 2024
Temporary differences
Unrealized exchange losses (gain)	$185	$103	$-	$288
Allowance for doubtful debts	357	169	-	526
Allowance for inventory valuation losses	3,045	1,031	-	4,076
Valuation foreign investment under equity method loss	14,952	1,539	-	16,491
Valuation foreign investment under equity method (gain)	(6,945)	(14,001)	-	(20,946)
Unrealized profits or losses on transactions with associates	493	(118)	-	375
Exchange differences on translation of foreign operations	(6,000)	-	(6,374)	(12,374)
Net defined benefit liabilities, non-current	11,062	(774)	(2,663)	7,625
Compensated absences provisions	1,334	-	-	1,334
Reserve for land value increment tax	(18,957)	-	-	(18,957)
Deferred income tax (expenses)		$(12,051)	$(9,037)
Deferred tax assets and liability net	$(474)			$(21,562)
As presented on the financial statement:
Deferred tax assets	$31,428			$30,715
Deferred tax liabilities	$(31,902)			$(52,277)

16. Earnings per share

Basic earnings per share amounts are calculated by dividing the net profit for the year attributable to ordinary equity holders of the parent entity by the weighted average number of ordinary shares outstanding during the year.

Diluted earnings per share amounts are calculated by dividing the net profit attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the period plus the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares.

	2025	2024
(1) Basic earnings per share
Profit attributable to ordinary equity holders of the Company (in thousand NT$)	$331,164	$417,748
Weighted average number of ordinary shares outstanding for basic earnings per share (in thousands of shares)	89,200	89,200
Basic earnings per share (NT$)	$3.71	$4.68
(2) Diluted earnings per share
Profit attributable to ordinary equity holders of the Company (in thousand NT$)	$331,164	$417,748
Weighted average number of ordinary shares outstanding for basic earnings per share (in thousands of shares)	89,200	89,200
Effect of dilution:
Employee bonus—stock (in thousands)	614	760
Weighted average number of ordinary shares outstanding after dilution (in thousands)	89,814	89,960
Diluted earnings per share (NT$)	$3.69	$4.64

No other transactions that would significantly affect the outstanding common shares or potential ordinary shares incurred during the period after reporting date and up to the approval date the financial statements.

VII. RELATED PARTIES TRANSACTIONS

Significant related party transactions

Key management personnel compensation

	2025	2024
Short-term employee benefits	$20,701	$22,907

The main management of the Group includes directors and managers.

For more information on the total remuneration of the above key management, please refer to the annual report of the shareholders' association.

VII. ASSETS PLEDGED AS SECURITY

None.

IX. SIGNIFICANT CONTINGENCIES AND UNRECOGNIZED CONTRACT COMMITMENT

None.

X. SIGNIFICANT DISASTER LOSS

None.

XI. SIGNIFICANT SUBSEQUENT EVENTS

None.

XII. OTHER

Categories of financial instruments

Financial Assets	31 Dec. 2025	31 Dec. 2024
Financial assets measured at amortized cost (Note)	1,907,104	2,064,382
Financial Liabilities	2025.12.31	2024.12.31
Financial liabilities at amortized cost:
Payables	$545,872	$611,962
Guarantee deposit	129	129
Lease liabilities	49,629	36,405
Total	$595,630	$648,496

Note: Includes cash and cash equivalents (excluding cash on hand), financial assets measured at amortized cost, notes receivable and accounts receivables.

Financial risk management objectives and policies

The Group's risk management objective is to manage the market risk, credit risk and liquidity risk related to its operating activities. The Group identifies measures and manages the aforementioned risks based on policy and risk appetite.

The Group has established appropriate policies, procedures and internal controls for financial risk management. Before entering into significant financial activities, due approval process by the board of directors and audit committee must be carried out based on related protocols and internal control procedures. The Group always complies with its financial risk management policies.

3. Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market prices comprise currency risk, interest rate risk, and other price risk (such as equity instruments related risks).

In practice, it is rarely the case that a single risk variable will change independently from other risk variable, there is usually interdependencies between risk variables. However the sensitivity analysis disclosed below does not take into account the interdependencies between risk variables.

Foreign currency risk

The Group's exposure to the risk of changes in foreign exchange rates relates primarily to the Group's operating activities (when revenue or expense is denominated in a different currency from the Group's functional currency) and the Group's net investments in foreign subsidiaries.

The Group has certain foreign currency receivables to be denominated in the same foreign currency with certain foreign currency payables, therefore natural hedge is received. The Group also uses forward contracts to hedge the foreign currency risk on certain items denominated in foreign currencies. Hedge accounting is not applied as they did not qualify for hedge accounting criteria. Furthermore, as net investments in foreign subsidiaries are for strategic purposes, they are not hedged by the Group.

The foreign currency sensitivity analysis of the possible change in foreign exchange rates on the Group's profit is performed on significant monetary items denominated in foreign currencies as of the end of the reporting period. The Group's foreign currency risk is mainly affected by USD. Sensitivity analysis is as follows:

When NTD strengthens/weakens against USD by 1%, the profit for the years ended 31 December 2025 and 2024 would increase by NT$4,486 thousand and NT$7,515 thousand, respectively.

Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group’s exposure to the risk of changes in market interest rates relates primarily to the Group’s debt instrument investment at variable interest rates.

At the reporting date, an increase/decrease of 10 basis points of interest rate in a reporting period could cause the profit for the year ended 31 December 2025 and 2024 to increase/decrease by NT$1,346 thousand and NT$1,465 thousand, respectively.

If the interest rate changes relative to a decrease, and all other factors of change remain unchanged, there will be an equal but opposite impact on the amount of interest rate risk exhibited for the year ended 31 December 2025 and 2024.

4. Credit risk management

Credit risk is the risk that a counterparty will not meet its obligations under a contract, leading to a financial loss. The Group is exposed to credit risk from operating activities (primarily for accounts receivables and notes receivables) and from its financing activities, including bank deposits and other financial instruments.

Customer credit risk is managed by each business unit subject to the Group’s established policy, procedures and control relating to customer credit risk management. Credit limits are established for all customers based on their financial position, rating from credit rating agencies, historical experience, prevailing economic condition and the Group’s internal rating criteria etc. Certain customer’s credit risk will also be managed by taking credit enhancement procedures, such as requesting for prepayment or insurance.

As of 31 December 2025 and 2024 accounts receivables from top ten customers represented 93% and 95% of the total accounts receivables of the Group, respectively. The credit concentration risk of other accounts receivables is insignificant.

Credit risk from balances with banks, fixed income securities and other financial instruments is managed by the Group’s treasury in accordance with the Group’s policy. The Group only transacts with counterparties approved by the internal control procedures, which are banks and financial institutions, companies and government entities with good credit rating and with no significant default risk. Consequently, there is no significant credit risk for these counterparties.

The Group adopted IFRS 9 to assess the expected credit losses. Except for contract assets and trade receivables, the remaining debt instrument investments which are not measured at fair value through profit or loss, low credit risk for these investments is a prerequisite upon acquisition and by using their credit risk as a basis for the distinction of categories. The Group makes an assessment at each reporting date as to whether the debt instrument investments are still considered low credit risk, and then further determines the method of measuring the loss allowance and the loss rates. The details of the assessment for the credit risk of the Group are described as follows:

Level of credit risk	Indicator	Measurement method for expected credit losses	31 Dec. 2025	31 Dec. 2024
Simplified approach	(Note)	Lifetime expected credit losses	$561,903	$608,745

Note: By using simplified approach loss allowance is measured at (lifetime expected credit losses), including trade and notes receivables.

Financial assets are written off when there is no realistic prospect of future recovery (the issuer or the debtor is in financial difficulties or bankruptcy).

5. Liquidity risk management

The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of cash and cash equivalents, bank borrowings and finance leases. The table below summarizes the maturity profile of the Group’s financial liabilities based on the contractual undiscounted payments and contractual maturity. The payment amount includes the contractual interest. The undiscounted payment relating to borrowings with variable interest rates is extrapolated based on the estimated interest rate yield curve as of the end of the reporting period.

Non-derivative financial instruments

	Less than 1 year	2 to 3 years	4 to 5 years	> 5 years	Total
31 Dec. 2025
Payables	$545,872	$-	$-	$-	$545,872
Lease liabilities	30,255	22,338	-	-	52,593
31 Dec. 2024
Payables	$611,962	$-	$-	$-	$611,962
Lease liabilities	18,932	20,236	-	-	39,168

Reconciliation of liabilities arising from financing activities

Reconciliation of liabilities for the year ended 31 December 2025:

	Short-term borrowings	Long-term Borrowings (current portion included)	Lease liabilities	Total liabilities from financing activities
1 Jan. 2025	$-	$-	$36,405	$36,405
Cash flows	-	-	(26,179)	(26,179)
Non-cash flows	-	-	39,403	39,403
31 Dec. 2025	$-	$-	$49,629	$49,629

Reconciliation of liabilities for the year ended 31 December 2024:

	Short-term borrowings	Long-term Borrowings (current portion included)	Lease liabilities	Total liabilities from financing activities
1 Jan. 2024	$-	$-	$23,694	$23,694
Cash flows	-	-	(18,596)	(18,596)
Non-cash flows	-	-	31,307	31,307
31 Dec. 2024	$-	$-	$36,405	$36,405

Fair value of financial instruments

(1) The methods and assumptions applied in determining the fair value of financial instruments:

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following methods and assumptions were used by the Group to measure or disclose the fair values of financial assets and financial liabilities:

A. The carrying amount of cash and cash equivalents, accounts receivables, accounts payable and other current liabilities approximate their fair value due to their short maturities.

B. For financial assets and liabilities traded in an active market with standard terms and conditions, their fair value is determined based on market quotation price (including listed equity securities etc.) at the reporting date.

C. Fair value of debt instruments without market quotations, bank loans, bonds payable and other non-current liabilities are determined based on the counterparty prices or valuation method. The valuation method uses DCF method as a basis, and the assumptions such as the interest rate and discount rate are primarily based on relevant information of similar instrument (such as yield curves published by the GreTai Securities Market, average prices for Fixed Rate Commercial Paper published by Reuters and credit risk, etc.)

D. Fair value of debt instrument investments without active market quotations, bank loans, bonds payable, and other non-current liabilities are determined based on counterparty prices or valuation techniques. The valuation technique is primarily based on discounted cash flow analysis, with assumptions such as interest rates and discount rates mainly referencing relevant information of similar instruments. (such as yield curves published by the Taipei Exchange, average prices for Fixed Rate Commercial Paper published by Reuters and credit risk, etc.)

E. The fair value of derivatives which are not options and without market quotations, is determined based on the counterparty prices or discounted cash flow analysis using interest rate yield curve for the contract period. Fair value of option-based derivative financial instruments is obtained using on the counterparty prices or appropriate option pricing model (for example, Black-Scholes model) or other valuation method (for example, Monte Carlo Simulation).

(2) Fair value of financial instruments measured at amortized cost The book value of the Group's financial assets and liabilities measured at amortized cost approximate their fair value.

Fair value measurement hierarchy

Fair value measurement hierarchy

All asset and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, based on the lowest level input that is significant to the fair value measurement as a whole. Level 1, 2 and 3 inputs are described as follows:

Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities that the entity can access at the measurement date

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly

Level 3 - Unobservable inputs for the asset or liability

For assets and liabilities that are recognized in the financial statements on a recurring basis, the Group determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization at the end of each reporting period.

Significant assets and liabilities denominated in foreign currencies

Information regarding the significant assets and liabilities denominated in foreign currencies is listed below (Amounts in thousands of Foreign Currencies):

Unit: thousands

	31 Dec. 2025			31 Dec. 2024
	Foreign Currency	Exchange	NTD	Foreign Currency	Exchange	NTD
Financial Assets
Monetary items:
USD	$24,263	31.38	$761,373	$27,189	32.735	$890,032
CNY	13,176	4.471	58,910	24,977	4.453	111,223
Financial Liabilities
Monetary items:
USD	9,967	31.38	312,764	4,231	32.735	138,502
CNY	21,899	4.471	97,910	26,173	4.453	116,458

The above information is disclosed based on the carrying amounts of the foreign currencies (after conversion to the functional currency).

The Group has various functional currencies, No information about the foreign exchange gains or losses by a specific currency is available. For the year ended 31 December 2025 and 2024, the foreign exchange gains or losses on monetary financial assets and financial liabilities were NT$(4,923) thousand and NT$34,747 thousand, respectively.

Capital management

The primary objective of the Group's capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximize shareholder value. The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Group may adjust dividend payment to shareholders, return capital to shareholders or issue new shares.

XIII. ADDITIONAL DISCLOSURES

The following are additional disclosures for the Group and its affiliates as required by the R.O.C. Securities and Futures Bureau:

(a) Financing provided to others for the year ended 31 December 2025: None.
(b) Endorsement/Guarantee provided to others for the year ended 31 December 2025: None.
(c) Securities held as of 31 December 2025 (excluding subsidiaries, associates and joint venture): None.

(d) Related party transactions for purchases and sales amounts exceeding the lower of NT$100 million or 20 percent of the capital stock for the year ended 31 December 2025: Please refer to Attachment 1.

(e) Receivables from related parties with amounts exceeding the lower of NT$100 million or 20 percent of capital stock as of 31 December 2025: Please refer to Attachment 2.

(f) The business relationship, significant transactions and amounts between parent company and subsidiaries: Please refer to Attachment 5.

Information on investees:

(a) For investee companies outside Mainland China in which there is significant influence, control, or joint venture interests directly or indirectly, the following information should be disclosed: name, location, main business activities, original investment amount, shareholding status at the end of the period, current period profit or loss, and recognized investment income or loss. Details are provided in Appendix 3 and Appendix 3-1.

(b) For investee companies outside Mainland China in which there is significant influence, control, or joint venture interests directly or indirectly, additional disclosure of information related to the transactions mentioned in items one to three of the preceding paragraph is required: None.

Investment:

(a) Investee company name, main businesses and products, total amount of capital, method of investment, accumulated inflow and outflow of investments from Taiwan, net income (loss) of investee company, percentage of ownership, investment income (loss), carrying amount of investments, cumulated inward remittance of earnings and limits on investment in Mainland China: Please refer to Attachment 4.

(b) Directly or indirectly significant transactions through third regions with the investees in Mainland China, including price, payment terms, unrealized gain or loss, and other events with significant effects on the operating results and financial condition: Please refer to Attachment 1, Attachment 2 and Attachment 5.

XIV. SEGMENT INFORMATION

For management purposes, the Group is organized into business units based on its products and services and has two reportable segments as follows:

Headquarter: In charge of manufacturing and selling electronic audio messaging and small household appliances in Taiwan.

Production plant in China and Southeast Asia: In charge of manufacturing and selling audio products and small household appliances in China and Southeast Asia.

Management monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on operating profit or loss and is measured consistently with operating profit or loss in the consolidated financial statements.

Transfer prices between operating segment are on an arm's length basis in a manner similar to transactions with third parties.

Segment information about profit and loss.

2025	Headquarter	Production plant in China and Southeast Asia	Adjustments and eliminations	Total
Revenue
External customers	$3,303,692	$23,310	$-	$3,327,002
Inter-segment	1,482	1,331,538	(1,333,020)	-
Total revenue	$3,305,174	$1,354,848	$(1,333,020)	$3,327,002
Segment profit	$398,951	$68,303	$(55,193)	$412,061

Note(1): Inter-segment revenue are eliminated under consolidation.

Note(2): None of the operating division's profit/loss included profit attributable to non-controlling interest (loss) of NT$(55,193) thousand.

2024	Headquarter	Production plant in China and Southeast Asia	Adjustments and eliminations	Total
Revenue
External customers	$3,286,993	$31,231	$-	$3,318,224
Inter-segment	1,841	1,285,753	(1,287,594)	-
Total revenue	$3,288,834	$1,316,984	$(1,287,594)	$3,318,224
Segment profit	$516,603	$67,479	$(56,829)	$527,253

Note(1): Inter-segment revenue are eliminated under consolidation.

Note(2): None of the operating division's profit/loss included profit attributable to non-controlling interest (loss) of NT$(56,829) thousand.

Geographic information

From external client revenue:

Country	2025	2024
America	$2,135,411	$2,180,745
Japan	410,772	299,436
France	338,054	244,401
Canada	184,258	245,129
China(Including Hong Kong)	114,738	164,272
Others	143,769	184,241
Total	$3,327,002	$3,318,224

Based on the country of the customer.

Non-current assets:

Country	31 Dec. 2025	31 Dec. 2024
Taiwan	$602,985	$599,743
China	51,723	67,495
Philippines	184,327	174,066
Total	$839,035	$841,304

Product information:

Product	2025	2024
Electronic audio messaging	$2,793,792	$2,754,034
Healthcare Appliances	430,859	371,620
Others	102,351	192,570
Total	$3,327,002	$3,318,224

Important client information:

	2025	2024
Client A	$1,821,027	$1,954,906
Client B	338,054	169,507

Attachment 1: Related party transactions for purchases and sales exceeding the lower of NT$100 million or 20 percent of the capital stock as of 31 December 2025

Related party	Counterparty	Relationship	Intercompany Transactions				Details of non-arm/s length transaction		Notes and accounts receivable (payable)		Note
			Purchases (Sales)	Amount	Percentage of total consolidated purchase (Sales)	Terms	Unit price	Terms	Carrying amount	Percentage of total consolidated receivables (payable)
The Company	YA HORNG ELECTRONIC PHILIPPINES INC.	Subsidiary of the Company	Purchases	$501,268	18%	About four month after the creditor's right and debt are settled	N/A	The payment terms from the related party suppliers and are between 3-4 months	Accounts payable $95,856	11%	-
	YA HORNG (DONGGUAN)ELECTRONIC CO., LTD	Subsidiary of the Company	Purchases	807,930	29%	About four month after the creditor's right and debt are settled	N/A	The payment terms from the related party suppliers and are between 3-4 months	Accounts payable 560,254	64%	-

(Note)The above transactions made between consolidated entities in the Group have been eliminated.

Attachment 2:

For those which may exercise control over the investee, directly or indirectly, it is necessary to disclose the information about the investee further:

Receivables from related parties with amounts exceeding the lower of NT$100 million or 20 percent of capital stock as of 31 December 2025

Related party	Counterparty	Relationship	Amount	Average collection turnover	Overdue account receivable-related parties		Amount received in subsequent period	Allowance for doubtful debts
					Amount	Processing method
YA HORNG (DONGGUAN)ELECTRONIC CO., LTD	The Company	Subsidiary of the Company	RMB125,488 thousand	1.49	RMB 47,799 thousands	Flexible payments based on the funding needs of the subsidiary	RMB 12,756 thousands	-
YA HORNG ELECTRONIC PHILIPPINES INC.	The Company	Subsidiary of the Company	PHP179,630 thousand	4.73	-	-	-	-

Attachment 3: Names, locations, main businesses and products, original investment amount, investment as of 31 December 2025, net income (loss) of investee company and investment income (loss) recognized as of 31 December 2025: (Excluding investment in Mainland China)

Investor	Investee company	Address	Main businesses and products	Initial Investment		Investment as of 31 December 2025			Net income (loss) of investee company	Investment income (loss) recognized	Note
				Ending balance	Beginning balance	Number of shares (thousand)	Percentage of ownership (%)	Book value
The Company	YA HORNG ELECTRONIC CO., LTD.	British Virgin Islands	Investment holding	$232,826 (USD 6,903 thousand)	$232,826 (USD 6,903 thousand)	6,677	31%	$224,522	$22,465	$7,038	(Note)
	HIGH GOAL INTERNATIONAL LIMITED	British Virgin Islands	Investment holding	64,708 (USD 2,057 thousand)	64,708 (USD 2,057 thousand)	14,890	100%	496,838	15,153	15,153	(Note)
	YA HORNG ELECTRONIC PHILIPPINES INC.	PHILIPPINES	Electronic Contract Manufacturing	330,817 (USD 11,200 thousand)	125,719 (USD 4,372 thousand)	5,696	100%	420,978	17,576	17,576	(Note)

(Note)The above transactions made between consolidated entities in the Group have been eliminated.

Attachment 3-1: Names, locations, main businesses and products, original investment amount, investment as of 31 December 2025, net income (loss) of investee company and investment income (loss) recognized as of 31 December 2025: (Excluding investment in Mainland China)

Investor	Investee company	Address	Main businesses and products	Initial Investment		Investment as of 31 December 2025			Net income (loss) of investee company	Investment income (loss) recognized	Note
				Ending balance	Beginning balance	Number of shares	Percentage of ownership (%)	Book value
YA HORNG ELECTRONIC CO., LTD.	BEST YIELD INVESTMENT HOLDING LIMITED	Hong Kong	Investment holding	USD 21,740 thousand	USD 21,740 thousand	21,740	100%	$717,574	$22,467	$22,467	(Note)
HIGH GOAL INTERNATIONAL LIMITED	YA HORNG ELECTRONIC CO., LTD.	British Virgin Islands	Investment holding	USD 15,855 thousand	USD 15,855 thousand	14,890	69%	492,787	22,465	15,427	(Note)

(Note)The above transactions made between consolidated entities in the Group have been eliminated.

Attachment 4: Investment in Mainland China

Investee company	Main Businesses and Products	Total Amount of Paid-in Capital	Method of Investment (Note 1)	Accumulated Outflow of Investment from Taiwan as of 1 January 2025	Investment Flows		Accumulated Outflow of Investment from Taiwan as of 31 December 2025	Net income (loss) of investee company	Percentage of Ownership	Investment income (loss) recognized	Carrying Value as of 31 December 2025
					Outflow	Inflow
YA HORNG (DONGGUAN) ELECTRONIC CO., LTD	Production and sales of electronic products and home appliances	The registered capital is HK$168,500 thousand, and as of 2025.12.31, HK$168,500 (equivalent to RMB$177,495 thousand) has been invested	Indirectly investment in Mainland China through companies registered in a third region	$692,902 (USD 22,081 thousand)	$-	$-	$692,902 (USD 22,081 thousand)	$22,472	100%	$22,472 (Note 2)	$717,528
Accumulated Investment in Mainland China (Note 1)	Investment Amounts Authorized by Investment Commission, MOEA (Note 1)	Upper Limit on Investment (Note 3)
---	---	---
$692,902 (USD 22,081 thousand)	$692,902 (USD 22,081 thousand)	-

(Note 1) The number of NTD in this column is shown at the exchange rate of 31.38 at the end of December 2025.
(Note 2) The financial statements of the visa have been verified by the Taiwan parent company Visa Accountants.
(Note 3) According to the provisions of 97.8.22 "Investment or Technical Cooperation Licensing in Mainland China" and "Investment or Technical Cooperation Review Principles in Mainland China", the cumulative amount of investors' investment in mainland China depends on the upper limit of other enterprises: net value or a combined net value of $60\%$ , whichever is higher. However, the Ministry of Economic Affairs issued the certificate of compliance with the business scope of the company's operating headquarters. The enterprise or multinational company is not limited to this. The company is applicable to the corporate operation headquarters, so there is no quota.

Attachment 5: Significant intercompany transactions between consolidated entities

No. (Note 1)	Related party	Counterparty	Relationship with the Company (Note 2)	Transactions
				Account	Amount	Collection Periods	Percentage of consolidated operating revenues or consolidated total assets (Note 3)
0	The Company	YA HORNG (DONGGUAN)ELECTRONIC CO., LTD	1	Purchases	$807,930	Approximately four months after the offsetting of receivables and payables.	24%
0	The Company	YA HORNG (DONGGUAN)ELECTRONIC CO., LTD	1	Accounts payable	560,254	Approximately four months after the offsetting of receivables and payables.	16%
0	The Company	YA HORNG ELECTRONIC PHILIPPINES INC.	1	Purchases	501,268	Approximately four months after the offsetting of receivables and payables.	15%

Note 1: The Company and its subsidiaries are coded as follows:
1. The Company is coded "0".
2. The subsidiaries are coded consecutively beginning from "1" in the order presented in the table above.

Note 2: Transactions are categorized as follows:
1. The holding company to subsidiary.
2. Subsidiary to subsidiary.

Note 3: The percentage with respect to the consolidated asset/liability for transactions of balance sheet items are based on each item's balance at period-end.

For profit or loss items, cumulative balances are used as basis.

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YAHORNG — Audit Report / Information 2025

52528_rns_2026-05-11_9e55291f-d50b-4119-8f9c-a22175513a24.pdf

REPRESENTATION LETTER

Valuation for slow-moving inventories

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

Auditors' Responsibilities for the Audit of the Consolidated Financial Statements

Other

Notice to Readers

IV. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1. Statement of Compliance

2. Basis of preparation

3. Basis of consolidation

Preparation principle of consolidated financial statement

4. Foreign currency transactions

Financial liabilities at amortized cost

Derecognition of financial liabilities

11. Inventories

12. Property, plant and equipment

13. Investment property

14. Leases

Group as a lessee

15. Intangible assets

Computer software

18. Post-employment benefits

VI. CONTENTS OF SIGNIFICANT ACCOUNTS

1. Cash and Cash Equivalents

2. Financial assets measured at amortized cost

3. Trade Receivables

4. Inventories

7. Post-Employment Benefits

Defined contribution plan

Defined benefits plan

8. Equity

(1) Common stock

(2) Capital surplus

9. Operating revenue

(1) Revenue from contracts with customers

(2) Contract balances

10. Expected credit losses

11. Leases

15. Income Tax

16. Earnings per share

VII. RELATED PARTIES TRANSACTIONS

VII. ASSETS PLEDGED AS SECURITY

IX. SIGNIFICANT CONTINGENCIES AND UNRECOGNIZED CONTRACT COMMITMENT

X. SIGNIFICANT DISASTER LOSS

XI. SIGNIFICANT SUBSEQUENT EVENTS

XII. OTHER

3. Market risk

Foreign currency risk

Interest rate risk

4. Credit risk management

5. Liquidity risk management

Non-derivative financial instruments

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