YA HORNG ELECTRONIC CO., LTD.
PARENT COMPANY ONLY
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

Independent Auditors' Report Translated from Chinese

To YA HORNG ELECTRONIC CO., LTD.

Opinion

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

In our opinion, based on our audits, the parent company only financial statements referred to above present fairly, in all material respects, the financial position of the Company as of 31 December 2025 and 2024, and its financial performance and cash flows for the years ended 31 December 2025 and 2024, in conformity with the requirements of the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Financial Statements Auditing and Attestation Engagements of Certified Public Accountants and the Standards on Auditing of the Republic of China. Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Parent Company Only Financial Statements section of our report. We are independent of the Company in accordance with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China (the "Norm"), and we have fulfilled our other ethical responsibilities in accordance with the Norm. Based on our audits and the reports of other auditors, 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 parent company only financial statements. These matters were addressed in the context of our audit of the parent company only financial statements as a whole, and in forming our opinion thereon, 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$551,740 thousand, respectively. Net accounts receivable constituted 14% of total assets, which was considered material in the parent company only 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 judgment, analysis and estimates, and the result will affect the net account receivable, we therefore determined this a 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 parent company only financial statements.

Valuation for slow-moving inventories

As of 31 December 2025, the Company's net inventories amounted to NT$438,237 thousand and constitutes 11% of total 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 parent company only financial statements.

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

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

In preparing the parent company only financial statements, management is responsible for assessing the ability to continue as a going concern of the Company, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company 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.

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

Our objectives are to obtain reasonable assurance about whether the parent company only financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with the Standards on Auditing of the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these 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 parent company only financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control of the Company.
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. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors' report to the related disclosures in the parent company only financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors' report. However, future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the parent company only financial statements, including the accompanying notes, and whether the parent company only financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

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

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

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and 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 parent company only 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 public interest benefits of such communication.

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 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.
PARENT COMPANY ONLY 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	$408,836	$536,583
Financial assets at amortized cost-current	IV/VI.2.11	773,486	814,562
Trade receivables-net	IV/VI.3.11	552,665	594,276
Inventories	IV/VI.4	438,237	404,843
Other current assets		20,604	23,164
Total current assets		2,193,828	2,373,428
Non-current assets
Investments accounted for under the equity method	IV/VI.5	1,142,338	922,834
Property, plant and equipment	IV/VI.6	579,876	577,656
Right-of-use assets	IV/VI.12	4,647	3,136
Investment properties	IV/VI.7	15,426	15,960
Intangible assets	IV	276	490
Deferred tax assets	IV/VI.16	29,653	30,715
Prepayment for equipments	VII	-	200,537
Other assets-others		2,759	2,501
Total non-current assets		1,774,975	1,753,829
Total assets		$3,968,803	$4,127,257

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

LIABILITIES AND SHAREHOLDERS' EQUITY	Notes	31 Dec. 2025	31 Dec. 2024
Current liabilities
Current contract liabilities	IV/VI.10	$25,489	$37,525
Notes payables	IV	-	3,785
Accounts payables	IV	212,621	243,327
Accounts payables-related parties	IV/VII	656,110	698,584
Other payables	IV	117,344	127,160
Current tax liabilities	IV	30,075	48,646
Lease liabilities-current	IV/VI.16	2,242	2,192
Other current liabilities	IV/VI.12	15,806	12,289
Total current liabilities		1,059,687	1,173,508
Non-current liabilities
Deferred tax liabilities	IV/VI.16	51,752	52,277
Lease liabilities-non current	IV/VI.12	2,434	1,042
Net defined benefit liabilities-noncurrent	IV/VI.8	38,498	38,125
Guarantee deposits	IV	129	129
Total non-current liabilities		92,813	91,573
Total liabilities		1,152,500	1,265,081
Equity
Common stock	VI.9	892,000	892,000
Capital surplus	VI.9	333,357	333,325
Retained earnings
Legal reserve	VI.9	690,363	647,523
Special reserve	VI.9	57,702	83,200
Unappropriated earnings	VI.9	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		$3,968,803	$4,127,257

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

English Translation of Financial Statements Originally Issued in Chinese

YA HORNG ELECTRONIC CO., LTD.

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME

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.10/VI	$3,305,174	$3,288,833
Operating costs	IV/VI.4.8.12.13/VI	(2,699,115)	(2,615,613)
Gross profit		606,059	673,220
Unrealized gross profit on sales		(2,477)	(1,876)
Realized gross profit on sales		1,876	2,459
Gross profit-net		605,458	673,803
Operating expenses	IV/VI.8.11.12.13/VI
Sales and marketing expenses		(46,841)	(40,420)
General and administrative expenses		(122,801)	(122,047)
Research and development expenses		(111,904)	(109,806)
Subtotal		(281,546)	(272,273)
Operating income		323,912	401,530
Non-operating income and expenses
Interest income	VI.14	20,286	19,757
Other income	VI.14	7,671	6,145
Other gain and loss	IV/VI.14	7,398	27,018
Financial costs	VI.14	(83)	(155)
Share of profit or loss of subsidiaries, associates, and joint ventures accounted for using the equity method	IV/VI.5	39,767	62,309
Subtotal		75,039	115,074
Income from continuing operations before income tax		398,951	516,604
Income tax expense	IV/VI.16	(67,787)	(98,856)
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.8.15	(5,138)	13,314
Income tax relating to those items not to be reclassified to profit or loss	IV/VI.15.16	1,028	(2,663)
Items that may be reclassified subsequently to profit or loss
Exchange differences resulting from translating the financial statements of foreign operations	IV/VI.5.15	(20,199)	31,872
Income tax relating to those items that may be reclassified to profit or loss	IV/VI.5.15.16	4,040	(6,374)
Total other comprehensive income, net of tax		(20,269)	36,149
Total comprehensive income		$310,895	$453,897
Earnings per share (NTD)	VI.17
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 parent company only financial statements.)

English Translation of Financial Statements Originally Issued in Chinese
YA HORNG ELECTRONIC CO., LTD.
PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY
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 parent company only financial statements.)

English Translation of Financial Statements Originally Issued in Chinese

YA HORNG ELECTRONIC CO., LTD.

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

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	$398,951	$516,604	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)	23,752	19,742	Acquisition of property, plant and equipment	(23,205)	(186,580)
Amortization	484	1,987	Proceeds from disposal of property, plant and equipment	-	724
Interest expense	83	155	Acquisition of intangible assets	(270)	-
Interest revenue	(20,286)	(19,757)	Increase in other assets	(258)	-
Share of loss of subsidiaries, associates and joint ventures	(39,767)	(62,309)	Net cash provided by (used in) investing activities	17,343	(322,353)
Disposal of property, plant and equipment(profit)	-	(545)
Unrealized gross profit	2,477	1,876	Cash flows from financing activities:
Realized gross profit on sales	(1,876)	(2,459)	Payments of lease liabilities	(2,385)	(2,384)
Changes in operating assets and liabilities:			Cash dividends	(356,800)	(347,880)
Financial assets at fair value through profit or loss	-	(17)	Unclaimed overdue dividend	32	50
Accounts receivables-net	41,611	61,767	Net cash used in financing activities	(359,153)	(350,214)
Inventories	(33,394)	13,782
Other current assets	3,049	2,824	Net (decrease) in cash and cash equivalents	(127,747)	(163,085)
Contract liabilities	(12,036)	7,152	Cash and cash equivalents at beginning of period	536,583	699,668
Notes payables	(3,785)	3,775	Cash and cash equivalents at end of period	$408,836	$536,583
Accounts payables	(30,706)	(68,072)
Accounts payables-related parties	(42,474)	157,552
Other payables	(9,816)	(4,843)
Other current liabilities	3,517	7,102
Net defined benefit liabilities	(4,765)	(3,871)
Cash generated from operations	275,019	632,445
Interest received	19,797	19,645
Income tax paid	(80,753)	(142,608)
Net cash provided by operating activities	214,063	509,482

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

English Translation of Financial Statements Originally Issued in Chinese YA HORNG ELECTRONIC CO., LTD.
NOTES TO PARENT COMPANY ONLY 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 financial statements of the Company 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 Company 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 Company.

Standards or interpretations issued, revised or amended, by International Accounting Standards Board ("IASB") which have been endorsed by FSC, and not yet adopted by the Company as at the date when the Company'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 Company of insurance contracts at the total of the fulfilment cash flows and the contractual service margin. The carrying amount of a Company 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.

(c) Clarify the treatment of non-recourse assets and contractually linked instruments.
(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 company’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 Company.

Standards or interpretations issued, revised or amended, by IASB which have not been endorsed by FSC, and not yet adopted by the Company as at the date when the Company’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 Company’s financial statements were authorized for issue, the local effective dates are to be determined by FSC. As the Company 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 Company at this point in time. The remaining new or amended standards and interpretations have no material impact on the Company.

IV. SUMMARY OF MATERIAL ACCOUNTING POLICIES

Statement of Compliance

The parent company only financial statements for the years ended December 31, 2025 and 2024 were prepared in accordance with Regulations Governing the Preparation of Financial Reports by Securities Issuers ("the Regulations").

Basis of preparation

The Company prepared parent company only financial statements in accordance with Article 21 of the Regulations, which provided that the profit or loss and other comprehensive income for the period presented in the parent company only financial statements shall be the same as the profit or loss and other comprehensive income attributable to stockholders of the parent presented in the consolidated financial statements for the period, and the total equity presented in the parent company only financial statements shall be the same as the equity attributable to the parent company presented in the consolidated financial statements. Therefore, the Company accounted for its investments in subsidiaries using equity method and, accordingly, made necessary adjustments.

The parent company only financial statements have been prepared on a historical cost basis, except for financial instruments that have been measured at fair value.

Foreign currency transactions

The Company’s parent company only financial statements are presented in NT$, which is also the Company’s functional currency.

Transactions in foreign currencies are initially recorded 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.

4. Translation of financial statements in foreign currency

Each foreign operating of the Company determines its functional currency upon its primary economic environment and items included in the financial statements of each operation are measured using that functional 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 a partial disposal of an interest in an associate that includes a foreign operation is a 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.

5. Current and non-current distinction

An asset is classified as current when:

(a) The Company expects to realize the asset, or intends to sell or consume it, in its normal operating cycle.
(b) The Company holds the asset primarily for the purpose of trading.
(c) The Company 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 Company expects to settle the liability in its normal operating cycle.
(b) The Company 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 Company 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 Company 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 Company accounts for regular way purchase or sales of financial assets on the trade date.

The Company 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 Company’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 Company 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 Company applies the effective interest rate to the amortized cost of the financial asset in subsequent reporting periods.

(b) Impairment of financial assets

The Company 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 Company 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 Company 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 Company 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 Company has transferred the asset and substantially all the risks and rewards of the asset have been transferred.
C. The Company 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 Company 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 Company 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 Company 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 Company.

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 Company 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.

10. 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.

11. Investments accounted for under the equity method

The Company's investment in subsidiaries is presented based on Article 21 of the Securities Issuer's Financial Report Preparation Standards, expressed as "investments using the equity method" and made necessary evaluation adjustments to enable individual financial reporting of the current period's profit and loss and other comprehensive gains and losses. The current profit and loss and other comprehensive gains and losses in the financial report prepared on a consolidated basis are the same as the share of the owners of the parent company, and the owner's equity of the individual financial report is the same as the equity of the owners of the parent company in the financial report prepared on a consolidated basis. These adjustments are mainly due to the consideration of the treatment of the consolidated financial statements of the investment subsidiary in accordance with IFRS No. 10 "Consolidated Financial Statements" and the differences in the application of IFRS at different levels of reporting entities, and debits or credits to "investment account for under the equity method", "share of profits and losses of subsidiaries, affiliates and joint ventures using the equity method" or "share of other comprehensive profits and losses of subsidiaries, affiliates and joint ventures using the equity method".

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 Company 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	3~11 years
Molding equipment	2 years
Transportation equipment	3~ 5 years
Office equipment	3~ 8 years
Miscellaneous equipment	3~16 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 Company'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 Company transfers properties to or from investment properties according to the actual use of the properties.

The Company 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 Company 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 Company 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 Company 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 Company 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 Company for that component, or a similar component, separately. If an observable stand-alone price is not readily available, the Company estimates the stand-alone price, maximising the use of observable information.

Company as a lessee

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

At the commencement date, the Company 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 Company 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 Company 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 Company 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 Company 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 Company measures the right-of-use asset at cost less any accumulated depreciation and any accumulated impairment losses. That is, the Company measures the right-of-use applying a cost model.

If the lease transfers ownership of the underlying asset to the Company by the end of the lease term or if the cost of the right-of-use asset reflects that the Company will exercise a purchase option, the Company depreciates the right-of-use asset from the commencement date to the end of the useful life of the underlying asset. Otherwise, the Company 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 Company 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 Company accounted for as short-term leases or leases of low-value assets, the Company 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 Company 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 recognized 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).

16. Impairment of non-financial assets

The Company 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 Company 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 Company 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.

17. Revenue recognition

The Company’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 Company 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 Company is the electronic audio messaging and small household appliances and revenue is recognized based on the consideration stated in the contract.

The Company 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 Company's sale of goods is from 30 to 100 days. For most of the contracts, when the Company 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 Company 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 Company 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.

Post-employment benefits

All regular employees of the Company 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. Therefore fund assets are not included in the Company's financial statements.

For the defined contribution plan, the Company 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.

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. Past service costs are recognized in profit or loss on the earlier of:

(a) the date of the plan amendment or curtailment, and
(b) the date that the Company 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.

19. 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 Company 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 Company’s parent company only financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. 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 Company 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 Company 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 carryforward 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	$120	$120
Savings accounts	143,234	285,369
Cash equivalents (with maturity within 3 months)
Time deposits	2,682	36,894
Corporate notes	262,800	214,200
Total	$408,836	$536,583

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 Company classified certain financial assets as financial assets measured at amortized cost.

Please refer to Note VI. 11. for more details on loss allowance and Note X.II. 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	552,157	603,153
Less: allowance for doubtful accounts	(417)	(8,877)
Subtotal	551,740	594,276
Total	$552,665	$594,276

Trade receivables were not pledged.

Trade receivables are generally on 30-100 day terms. The total carrying amount were NT$553,082 thousand and NT$603,153 thousand as of 31 December 2025 and 2024 respectively.

Please refer to Note VI.11 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	$300,166	$234,976
Work in process	20,336	34,832
Finished goods	102,278	112,971
Merchandise	15,457	22,064
Net	$438,237	$404,843

The Company's cost of inventories recognized as expenses amounted to NT$2,699,115 thousand and NT$2,615,613 thousand for the years ended 31 December 2025 and 2024, including the losses of inventory price decline caused by the disposal of some sluggish inventories in the amount of NT$5,957 thousand and NT$5,154 thousand for the years ended 31 December 2025 and 2024, respectively.

Inventories were not pledged.

Investments Accounted For Under The Equity Method

	31 Dec. 2025		31 Dec. 2024
Investee Company	Amount	Percentage of ownership	Amount	Percentage of ownership
Investments in subsidiaries:
YA HORNG ELECTRONIC CO., LTD.(BVI)	$224,522	31%	$216,346	31%
HIGH GOAL INTERNATIONAL LIMITED	496,838	100%	479,189	100%
YA HORNG ELECTRONIC PHILIPPINES INC.	420,978	100%	227,299	100%
Total	$1,142,338		$922,834

(1) Investments in subsidiaries

The Company accounted for its investments in subsidiaries using equity method and, accordingly, made necessary adjustments.

(2) The aggregate financial information of the Company's investments in associates using equity method for the years ended 31 December 2025 and 2024 was as follows:

	2025	2024
Profit or loss from continuing operations	$39,767	$62,309
Other comprehensive income (post-tax)	(16,159)	25,498
Total comprehensive income	$23,608	$87,807

Property, plant and equipment

	Land	Buildings	Machinery and equipment	Molding equipment	Transportation equipment	Office equipment	Other facilities	Construction in progress and equipment awaiting examination	Total
Cost:
1 Jan. 2025	$477,570	$152,835	$55,296	$94,441	$7,549	$9,578	$46,871	$-	$844,140
Addition	-	-	335	1,690	670	361	1,871	18,278	23,205
Disposal	-	-	(452)	-	(770)	-	(960)	-	(2,182)
31 Dec. 2025	$477,570	$152,835	$55,179	$96,131	$7,449	$9,939	$47,782	$18,278	$865,163
1 Jan. 2024	$340,770	$115,911	$45,634	$92,591	$8,011	$16,062	$39,300	$9,409	$667,688
Addition	136,800	17,188	12,444	1,850	-	256	7,715	10,327	186,580
Disposal	-	-	(2,782)	-	(462)	(6,740)	(144)	-	(10,128)
Transfer	-	19,736	-	-	-	-	-	(19,736)	-
31 Dec. 2024	$477,570	$152,835	$55,296	$94,441	$7,549	$9,578	$46,871	$-	$844,140
Depreciation and impairment:
1 Jan. 2025	$-	$79,573	$40,863	$92,825	$6,217	$8,020	$38,986	$-	$266,484
Depreciation	-	9,491	4,494	1,828	532	817	3,823	-	20,985
Disposal	-	-	(452)	-	(770)	-	(960)	-	(2,182)
31 Dec. 2025	$-	$89,064	$44,905	$94,653	$5,979	$8,837	$41,849	$-	$285,287
1 Jan. 2024	$-	$73,091	$39,207	$90,873	$5,672	$14,043	$36,570	$-	$259,456
Depreciation	-	6,482	4,413	1,952	853	717	2,560	-	16,977
Disposal	-	-	(2,757)	-	(308)	(6,740)	(144)	-	(9,949)
31 Dec. 2024	$-	$79,573	$40,863	$92,825	$6,217	$8,020	$38,986	$-	$266,484
Net book value:
31 Dec. 2025	$477,570	$63,771	$10,274	$1,478	$1,470	$1,102	$5,933	$18,278	$579,876
31 Dec. 2024	$477,570	$73,262	$14,433	$1,616	$1,332	$1,558	$7,885	$-	$577,656

Property, plant and equipment were not pledged.

Investment property

The Company’s investment property includes owned investment property. The Company 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 Company’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

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.

The Company’s recognized expenses of the defined contribution plan for the years ended 31 December 2025 and 2024 were NT$11,236 thousand and NT$10,363 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 in charge of establishing and implementing the fund utilization plan in accordance with the Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund. The pension fund is invested in-house or under mandation, based on a passive-aggressive investment strategy for long-term profitability. The Ministry of Labor establishes checks and risk management mechanism based on the assessment of risk factors including market risk, credit risk and liquidity risk, in order to maintain adequate manager flexibility to achieve targeted return without over-exposure of risk. With regard to utilization of the pension fund, the minimum earnings in the annual distributions on the final financial statement shall not be less than the earnings attainable from the amounts accrued from two-year time deposits with the interest rates offered by local banks. Treasury Funds can be used to cover the deficits after the approval of the competent authority. As the Company does not participate in the operation and management of the pension fund, no disclosure on the fair value of the plan assets categorized in different classes could be made in accordance with paragraph 142 of IAS 19. The Company expects to contribute NT$5,371 to its defined benefit plan during the 12 months beginning after 31 December 2025.

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
(Continued to next page)

	Defined benefit obligation	Plan assets at fair value	Net defined benefit liabilities (assets)
(Continued from previous page)
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.

9. Equity

(1) Common stock

As of 31 December 2025, and 2024, YA HORNG ELECTRONIC CO., LTD.'s authorized capital was both 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

	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 a 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.13 for relevant information on estimation basis and recognized amount of employees compensations and remunerations to directors and supervisors.

10. Operating revenue

(1) Revenue from contracts with customers

For the year ended 31 December 2025 and 2024:

	2025	2024
Sales of goods	$3,305,174	$3,288,833
Timing of revenue recognition:
At a point in time	$3,305,174	$3,288,833

(2) Contract balances

Contract liabilities - 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 Company between 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.

11. 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 Company transacts with are financial institutions with good credit, no allowance for losses has been provided in this period.

The Company 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 Company's loss allowance as at 31 December 2025 and 2024 was as follows:

The Company 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

Group 1		Overdue
	Not yet due (Note)	1-90 days	91-180 days	181-270 days	271-360 days	Total
Gross carrying amount	$430,619	$121,075	$153	$331	$849	$553,027
Loss ratio	-%	-%	5%	30%	30%
Lifetime expected credit losses	-	-	(8)	(99)	(255)	(362)
Carrying amount	$430,619	$121,075	$145	$232	$594	$552,665

As at 31 December 2024

Group 1		Overdue
	Not yet due (Note)	1-90 days	91-180 days	181-270 days	271-360 days	Total
Gross carrying amount	$527,828	$65,527	$965	$-	$-	$594,320
Loss ratio	-%	-%	5%	-%	-%
Lifetime expected credit losses	-	-	(44)	-	-	(44)
Carrying amount	$527,828	$65,527	$921	$-	$-	$594,276

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

The movement in the provision for impairment of notes receivables and account 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 Company 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.

12. Leases

(1) Company as a lessee

The Company leases various properties, including real estate such as land, and buildings. The lease terms range for 3 years.

The Company’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

	31 Dec. 2025	31 Dec. 2024
Land	$993	$286
Building	2,647	836
Transportation equipment	1,007	2,014
Total	$4,647	$3,136

For the years ended 31 December 2025 and 2024, the Company’s additions to right-of-use assets amounting to NT$3,744 thousand and NT$3,020 thousand.

(b) Lease liabilities

	31 Dec. 2025	31 Dec. 2024
Current	$2,242	$2,192
Non-current	2,434	1,042
Total	$4,676	$3,234

Please refer to Note VI.14(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	$314	$312
Building	912	912
Transportation equipment	1,007	1,007
Total	$2,233	$2,231

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)	$164	$103

D. Cash outflow relating to leasing activities

For the years ended 31 December 2025 and 2024, the Company's total cash outflows for leases amounting to NT$2,549 thousand and NT$2,487 thousand.

For the year ended 31 December 2025 and 2024, the Company'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 benefits expense | | | | | | | | |
| Salaries | $139,325 | $146,685 | $- | 286,010 | $133,899 | $145,177 | $- | 279,076 |
| Insurance | 16,946 | 13,903 | - | 30,849 | 14,924 | 13,373 | - | 28,297 |
| Pension | 5,718 | 7,124 | - | 12,842 | 5,211 | 6,001 | - | 11,212 |
| Director's remuneration | 8,850 | 6,000 | - | 14,850 | 8,721 | 6,049 | - | 14,770 |
| Other personnel expenses | - | 7,316 | - | 7,316 | - | 9,452 | - | 9,452 |
| Depreciations | 13,522 | 9,696 | 534 | 23,752 | 11,637 | 7,571 | 534 | 19,742 |
| Amortization | 38 | 446 | - | 484 | 636 | 1,351 | - | 1,987 |

A. The number of the Company's employees as of 31 December 2025 and 2024 were 420 and 421, respectively, both including 3 directors who were not concurrently employees.

B. Companies which have been listed on Taiwan Stock Exchange or Taiwan Over-The Counter Securities Exchange should disclose the following information:

(1) Average employee benefits of 2025 and 2024 are NT$826 thousand and NT$798 thousand respectively.

(2) Average salaries of 2025 and 2024 are NT$686 thousand and NT$668 thousand respectively.

(3) The Company's average salary expense adjustment for the year ended December 31, 2025 increased by 2.69%.

The policies, standards, and composition of remuneration payment, procedures for determining remuneration, and the correlation between business performance and future risks:

(1) Directors' remuneration is authorized by Article 22-2 of the Company's Articles of Incorporation (hereinafter "the Articles"): Directors' remuneration shall be determined by the Board of Directors in accordance with the prevailing industry standards; the amount of directors' transportation and entertainment allowances shall also be determined by the Board of Directors based on prevailing industry standards. If a director holds a position in the Company, in addition to the director's remuneration allocated pursuant to Article 26 of the Articles, they may receive a monthly salary according to the Company's salary scale. The base salary of the General Manager and Deputy General Manager is paid according to the Company's salary payment standards, while their employee remuneration is distributed in accordance with Article 26 of the Articles. Therefore, the Company's business performance is closely related to the level of remuneration for directors and managerial employees.

(2) Directors' remuneration includes transportation and entertainment allowances, remuneration for performing duties, and profit-sharing remuneration. If a director concurrently serves as a company employee, they may be allocated employee remuneration. Managers, in addition to their base salary, receive additional allowances such as supervisory bonuses, position allowances, meal allowances, and employee remuneration based on their rank, position, and performance.

(3) The remuneration paid to the General Manager includes salary, bonuses, employee remuneration, and incentive measures. The Remuneration Committee reviews these payments by considering the position held, scope of authority and responsibility, contribution to the Company's operational goals, annual business performance, future risks, and the prevailing industry standards for similar positions, and submits the proposal to the Board of Directors for resolution.

In terms of employee welfare, the Company offers a diversified welfare system and a comprehensive retirement plan that complies with legal requirements. A job grade system is implemented, whereby employees are assigned different grades based on their skills, and salary adjustment ratios vary according to these grades while also being adjusted in response to changes in the cost of living.

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 higher than 5% of profit of the current year is distributable as remuneration to directors and supervisors. 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	$5,820	$8,595
Financial assets measured at amortized cost	14,466	11,162
Total	$20,286	$19,757

(2) Other income

	2025	2024
Rent income	$912	$912
Other income-other	6,759	5,233
Total	$7,671	$6,145

(3) Other gains and losses

	2025	2024
Gains on disposal of property, plant and equipment	$-	$545
Foreign exchange gains net	7,947	27,013
Other losses	(549)	(540)
Total	$7,398	$27,018

(4) Finance costs

	2025	2024
Interest on lease liabilities	$(83)	$(155)

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

17. 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	$71,090	$91,266
Adjustments in respect of current income tax of prior Periods	(8,908)	(4,461)
Deferred tax expense:
Deferred tax expense related to origination and reversal of temporary differences	5,605	12,051
Total Income tax expense	$67,787	$98,856

(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 was as follows:

The assessment of income tax returns

The Company

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	$398,951	$516,604
Tax at the domestic rates applicable to profits in the country concerned	$79,790	$103,320
Tax effect of revenues exempt from taxation	-	(3)
Change in deferred income assets/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	-
Others	(4,693)	-
Total income tax expenses recorded in profit or loss	$67,787	$98,856

(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)
(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)
Deferred income tax (expenses)		$(5,605)	$5,068
Deferred tax assets and liability net	$(21,562)			$(22,099)
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, 2024
	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)

18. 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

Information of the related parties that had transactions with the Company during the financial reporting period is as follow:

Name and nature of relationship of the related parties

Name of the related parties	Nature of relationship of the related parties
YA HORNG (DONGGUAN)ELECTRONIC CO., LTD	Subsidiary
YA HORNG ELECTRONIC PHILIPPINES INC.	Subsidiary

(1) Purchases

	2025	2024
YA HORNG (DONGGUAN)ELECTRONIC CO., LTD	$807,930	$784,289
YA HORNG ELECTRONIC PHILIPPINES INC.	501,268	487,590
Total	$1,309,198	$1,271,879

The Company's purchase prices from related parties are negotiated by both parties with reference to market prices. Since there is a single supplier, there are no other purchase prices available for comparison. The payment terms for purchases from related parties are comparable to those with general suppliers, with payment occurring approximately four months after offsetting receivables and payables.

(2) Sales

	2025	2024
YA HORNG (DONGGUAN)ELECTRONIC CO., LTD	$52,815	$50,190
YA HORNG ELECTRONIC PHILIPPINES INC.	94,098	106,658
Total	$146,913	$156,848

The Company's sales prices to related parties are negotiated by both parties with reference to market prices. Sales to related parties mainly consist of raw materials and parts, with a single customer involved, making price comparison unavailable. The payment terms are approximately four months after offsetting receivables and payables.

(3) Advance payment of investment

	Dec. 31, 2025	Dec. 31, 2024
YA HORNG ELECTRONIC PHILIPPINES INC.	$-	$200,537

(4) Accounts Payables - Related parties

	Dec. 31, 2025	Dec. 31, 2024
YA HORNG (DONGGUAN)ELECTRONIC CO., LTD	$560,254	$579,006
YA HORNG ELECTRONIC PHILIPPINES INC.	95,856	119,578
Total	$656,110	$698,584

(5) Key management personnel compensation

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

The main management of the Company 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.

VIII. 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)	$1,734,867	$1,945,301

Financial Liabilities

	31 Dec. 2025	31 Dec. 2024
Financial liabilities at amortized cost:
Payables	$986,075	$1,072,856
Guarantee deposit	129	129
Lease liabilities	4,676	3,234
Total	$990,880	$1,076,219

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

The Company 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 Company complies with its financial risk management policies at all times.

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

The Company has certain foreign currency receivables to be denominated in the same foreign currency with certain foreign currency payables, therefore natural hedge is received. The Company 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 Company.

The foreign currency sensitivity analysis of the possible change in foreign exchange rates on the Company’s profit is performed on significant monetary items denominated in foreign currencies as of the end of the reporting period. The Company’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 December 31, 2025 and 2024 would increase by NT$173 thousand and decrease by NT$1,139 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 Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’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 by NT$1,182 thousand and NT$1,351 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.

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 Company 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 Company’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 Company’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 94% and 95% of the total accounts receivables of the Company, 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 Company’s treasury in accordance with the Company’s policy. The Company 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 Company 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 Company 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 Company are described as follows:

Level of credit risk	Indicator	Measurement method for expected credit losses	Total amount
			31 Dec.2025	31 Dec. 2024
Simplified approach	(Note)	Lifetime expected credit losses	$553,082	$603,153

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 Company'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 Company'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	2to 3 years	4to 5 years	> 5 years	Total
31 Dec. 2025
Payables	$986,075	$-	$-	$-	$986,075
Lease liabilities	2,383	2,530	-	-	4,913
31 Dec. 2024
Payables	$1,072,856	$-	$-	$-	$1,072,856
Lease liabilities	2,273	1,063	-	-	3,336

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	$-	$-	$3,234	$3,234
Cash flows	-	-	(2,385)	(2,385)
Non-cash flows	-	-	3,827	3,827
31 Dec. 2025	$-	$-	$4,676	$4,676

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	$-	$-	$2,443	$2,443
Cash flows	-	-	(2,384)	(2,384)
Non-cash flows	-	-	3,175	3,175
31 Dec. 2024	$-	$-	$3,234	$3,234

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 Company 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. Unquoted equity instruments without an active market (e.g., privately placed stocks of listed companies, publicly issued stocks of companies without an active market, and unlisted company stocks) are measured at fair value using the market approach. This approach estimates fair value based on prices generated from market transactions of equity instruments of identical or comparable companies and other relevant information (such as lack of liquidity discounts, price-to-earnings ratios of similar companies, price-to-book ratios of similar companies, and other inputs).

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 Company'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 Company 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):

| | 31 Dec. 2025 | | | Unit: thousands
31 Dec. 2024 | | |
| --- | --- | --- | --- | --- | --- | --- |
| | Foreign Currency | Exchange | NTD | Foreign Currency | Exchange | NTD |
| Financial Assets | | | | | | |
| Monetary items: | | | | | | |
| USD | $20,949 | 31.38 | $657,380 | $26,264 | 32.735 | $859,752 |
| CNY | 1,486 | 4.471 | 46,644 | 10,614 | 4.453 | 47,264 |
| Financial Liabilities | | | | | | |
| Monetary items: | | | | | | |
| USD | 21,500 | 31.38 | 674,670 | 22,784 | 32.735 | 745,834 |
| CNY | 1,978 | 4.471 | 8,844 | 2,719 | 4.453 | 12,108 |

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

The Company 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$7,947 thousand and NT$27,013 thousand, respectively.

Capital management

The primary objective of the Company'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 Company manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Company may adjust dividend payment to shareholders, return capital to shareholders or issue new shares.

XIII. ADDITIONAL DISCLOSURES

The following are additional disclosures for the Company 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.

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) Significant transactions directly or indirectly conducted with investee companies in Mainland China through third regions, including their prices, payment terms, unrealized gains or losses, and other relevant information that helps to understand the impact of Mainland China investments on the financial reports: detailed in Appendix 1 and Appendix

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%	-

Attachment 2:

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	RMB 125,488 thousand	1.49	RMB 47,499 thousand	Flexible payments based on the funding needs of the subsidiary	RMB 12,756 thousand	-
YA HORNG ELECTRONIC PHILIPPINES INC.	The Company	Subsidiary of the Company	PHP 179,630 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
				Ending balance	Beginning balance	Number of shares (thousand)	Percentage of ownership (%)	Book value
The Company	YA HORNG ELECTRONIC CO., LTD. (BVI)	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
	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
	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

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 2024: (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. (BVI)	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	-
HIGH GOAL INTERNATIONAL LIMITED	YA HORNG ELECTRONIC CO., LTD. (BVI)	British Virgin Islands	Investment holding	USD 15,855 thousand	USD 15,855 thousand	14,890	69%	$492,787	$22,465	$15,427	-

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.

YA HORNG ELECTRONIC CO., LTD.
1. STATEMENT OF CASH AND CASH EQUIVALENTS
31 December 2025

In Thousands of New Taiwan Dollars
(Amounts in Thousands dollars of Foreign Currencies)

Item	Amount	Note
Cash and Petty cash	$120
Checking Deposits	1,010
Bank Deposits	26,464
Bank Deposits-Foreign currency cash
Foreign currency cash		The exchange rate
USD	3,468	108,830
HKD	1,314	5,265
CNY	150	671
EUR	22	791
JPY	782	155
CAD	1.56	36
GBP	0.28	12
Cash equivalents
Time deposits
Foreign Time deposits	RMB 600	2,682
Corporate notes		262,800
Total		408,836

YA HORNG ELECTRONIC CO., LTD.

STATEMENT OF ACCOUNTS RECEIVABLE

31 December 2025

In Thousands of New Taiwan Dollars

(Amounts in Thousands dollars of Foreign Currencies)

Client	Description	Amount	Note
Client A	USD 9,734	$305,461	1. The amount of individual client in others does not exceed 5%
Client B	USD 2,459	77,171	2. The exchange rate of the USD to the NTD is 1 : 31.38
Client C	USD 1,694	53,162
Others		116,363
Subtotal		552,157
Notes receivable		925
Less: Allowance for doubtful debts		(417)
Net amount		$552,665

YA HORNG ELECTRONIC CO., LTD.

3. STATEMENT OF INVENTORIES

31 December 2025

In Thousands of New Taiwan Dollars

Item	Amount		Note
	Cost	Net Realizable Value
Raw materials(including supplies)	$324,402	$342,402	1. Inventories are valued at lower of cost and net realizable value item by item.
Work in process	20,336	20,336
Finished goods	104,378	142,578
Merchandise(including goods in transit)	15,457	15,457	2.Including loss for obsolete and slow-moving inventories.
Subtotal	464,573	$502,773
Less: Allowance for inventory valuation losses	(26,336)
Total	$438,237

| YA HORNG ELECTRONIC CO., LTD.
4. STATEMENT OF OTHER CURRENT ASSETS
31 December 2025
In Thousands of New Taiwan Dollars | | | |
| --- | --- | --- | --- |
| Item | Description | Amount | Note |
| Tax refund receivable | Tax refund receivable | $13,363 | The amount of individual title
in others does not exceed 5% of
the account balance. |
| Prepaid expenses | Software service and maintenance fees | 4,256 | |
| Interest receivable | | 1,137 | |
| Other | Temporary payments | 1,848 | |
| Total | | $20,604 | |

YA HORNG ELECTRONIC CO., LTD.
5. STATEMENT OF CHANGES IN INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD
31 December 2025
In Thousands of New Taiwan Dollars

Investee Company	Beginning Balance		Additions		Decrease		Ending Balance			Fair value/Net assets value
	In thousands of shares	Amount	Shares	Amount	Shares	Amount	Shares	Shareholding ratio	Amount	Unit price (NTD)	Total Amount
YA HORNG ELECTRONIC CO., LTD. (BVI)	6,677	$216,346	-	$7,038 (Note1)
1,149 (Note2)	-	$(11) (Note3)	6,677	31%	$224,522	-	$224,522	None
HIGH GOAL INTERNATIONAL LIMITED	14,890	479,189	-	15,153 (Note1)
2,519 (Note2)	-	(23) (Note3)	14,890	100%	496,838	-	496,838	None
YA HORNG ELECTRONIC PHILIPPINES INC.	2,156	227,299	3,540	17,576 (Note1)
200,537 (Note4)	-	(23,867) (Note2)
(567) (Note3)	5,696	100%	420,978	-	420,978	None
Total		$922,834		$243,972		$(24,468)			$1,142,338

Note1: Net investment income or loss accounted for using equity method. (Included unrealized gain or loss on the transaction between the Company and its investees.)
Note2: Exange differences resulting on translation of foreign financial statements
Note3: Downstream transactions are written off.
Note4: Investment in a subsidiary.

YA HORNG ELECTRONIC CO., LTD.

STATEMENT OF CHANGES IN INTAGIBLE ASSETS

31 December 2025

In Thousands of New Taiwan Dollars

Item	As of January 1, 2024	Additions	Amortization	As of December 31, 2024	Note
Computer software cost	$490	$270	$(484)	$276

YA HORNG ELECTRONIC CO., LTD.
7. STATEMENT OF OTHER NON CURRENT ASSETS
31 December 2025
In Thousands of New Taiwan Dollars

Item	Description	Amount	Note
Refundable deposits	Golf certificate deposit and factory rental deposit	$2,501	The amount of individual title
in others does not exceed 5% of
the account balance.
Other		258
Total		$2,759

YA HORNG ELECTRONIC CO., LTD.

STATEMENT OF CURRENT CONTRACT LIABILITIES

31 December 2025

In Thousands of New Taiwan Dollars

Item	Amount	Note
Client A	$12,368	The amount of individual title in others does not exceed 5% of the account balance.
Client D	5,533
Client E	2,088
Client F	1,602
Other	3,898
Total	$25,489

YA HORNG ELECTRONIC CO., LTD.

STATEMENT OF ACCOUNTS PAYABLE

31 December 2025

In Thousands of New Taiwan Dollars

Client	Amount	Note
Client G	$13,138	The amount of individual title in others does not exceed 5% of the account balance.
Other	199,483
Total	$212,621

YA HORNG ELECTRONIC CO., LTD.
10. STATEMENT OF OTHER PAYABLES
31 December 2025
In Thousands of New Taiwan Dollars

Item	Description	Amount
Other payables
Salaries payable and bonuses	Bonus from January to December and December salary	$53,860
Employee's compensation		28,902
Compensation payable to directors		7,211
Unpaid leave bonus payable		6,673
Others		20,698
Total		$117,344

YA HORNG ELECTRONIC CO., LTD.
11. STATEMENT OF OTHER CURRENT LIABILITIES
31 December 2025
In Thousands of New Taiwan Dollars

Item	Description	Amount
Refund liabilities		$15,279
Other	temporary receipts and receipts under custody	527
Total		$15,806

YA HORNG ELECTRONIC CO., LTD.
12. STATEMENT OF OPERATING COSTS
For The Year Ended 31 December 2025
In Thousands of New Taiwan Dollars

Item	Amount	Note
Cost of Goods Sold of Self-made Product
Direct material
Beginning of year	$253,096
Add: Raw material purchased	1,350,935
Transfer from work in process	265,369
Transfer from other account	766
Less: Raw material, end of year	(324,402)
Sold raw materials	(141,626)
Transfer to other account(including loss on inventory valuation)	(43,868)
Direct material used	1,360,270
Direct labor	99,149
Factory overheads	135,867
Manufacturing cost	1,595,286
Add: Work in process, beginning of year	34,832
Less: Work in process, end of year	(20,366)
Transfer to material	(265,369)
Cost of finished goods	1,344,413
Add: Finished goods, beginning of year	115,230
Transfer from other account	521
Less: Finished goods, end of year	(104,378)
Cost of Goods Sold of Self-made Product(1)	1,355,786
Cost of Goods sold of Merchandise
Merchandise: Beginning of year	22,064
Add: Finished goods purchased	1,279,570
Transfer from other account(including inventory gains (overage))	19,755
Less: Merchandise, end of year	(15,457)
Transferred to other account(including loss on inventory valuation)	(109)
Cost of Goods sold of Merchandise(2)	1,323,823
Other operating costs
Sold raw materials and work in process	141,626
Losses on scrap of inventories	5,631
Losses on Inventory valuation and slow-moving	5,957
Other	(133,708)
Other operating costs (3)	19,506
Total Operating Costs (1)+(2)+(3)	$2,699,115

YA HORNG ELECTRONIC CO., LTD.

STATEMENT OF OPERATING EXPENSES

For The Year Ended 31 December 2025

In Thousands of New Taiwan Dollars

Item	Selling Expenses	General and Administrative Expenses	Research and Development Expenses	Total
Payroll expenses	$22,371	$71,360	$60,270	$154,001
Freight	3,609	3	106	3,718
Insurance expense	2,903	6,072	6,132	15,107
Depreciation expense	341	8,298	1,057	9,696
Materials cost for R&D	-	-	8,080	8,080
Certification fees	-	-	5,899	5,899
Export and import expense	5,578	-	-	5,578
Royalties	2,423	-	-	2,423
Other expense (Note)	9,616	37,068	30,360	77,044
Total	$46,841	$122,801	$111,904	$281,546

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

AI assistant

YAHORNG — Audit Report / Information 2025

52528_rns_2026-05-11_ec76a269-2252-40a4-a7d7-b434daded70a.pdf

Independent Auditors' Report Translated from Chinese

Opinion

Basis for Opinion

Key Audit Matters

Loss Allowance Accounts Receivable

Valuation for slow-moving inventories

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

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

4. Translation of financial statements in foreign currency

5. Current and non-current distinction

Financial liabilities at amortized cost

Derecognition of financial liabilities

(e) Offsetting of financial instruments

10. Inventories

11. Investments accounted for under the equity method

12. Property, plant and equipment

13. Investment property

14. Leases

15. Intangible assets

Computer software

16. Impairment of non-financial assets

17. Revenue recognition

19. Income taxes

Current income tax

Deferred tax

VI. CONTENTS OF SIGNIFICANT ACCOUNTS

1. Cash and Cash Equivalents

2. Financial assets measured at amortized cost

3. Trade Receivables

4. Inventories

9. Equity

(1) Common stock

(2) Capital surplus

(3) Retained earnings and dividend policies

10. Operating revenue

(1) Revenue from contracts with customers

(2) Contract balances

11. Expected credit losses

12. Leases

(1) Company as a lessee

(a) Right-of-use assets

17. Income Tax

18. Earnings per share

VII. RELATED PARTIES TRANSACTIONS

VIII. 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

5. Liquidity risk management

Non-derivative financial instruments

3. STATEMENT OF INVENTORIES

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YAHORNG Audit Report / Information 2025