STOCK SYMBOL : 1340

Victory New Materials Limited Company

Chandra

勝悅新材料有限公司

Victory New Materials Limited Company

2025 ANNUAL REPORT

THIS IS A TRANSLATION OF THE 2025 ANNUAL REPORT (THE "ANNUAL REPORT") OF VICTORY NEW MATERIALS LIMITED COMPANY (THE "COMPANY"). THIS TRANSLATION IS INTENDED FOR REFERENCE ONLY AND NOTHING ELSE, THE COMPANY HEREBY DISCLAIMS ANY AND ALL LIABILITIES WHATSOEVER FOR THE TRANSLATION. THE CHINESE TEXT OF THE ANNUAL REPORT SHALL GOVERN ANY AND ALL MATTERS RELATED TO THE INTERPRETATION OF THE SUBJECT MATTER STATED HEREIN.

III

VICTORY NEW MATERIALS LIMITED COMPANY
TABLE OF CONTENT

I. REPORTS TO SHAREHOLDERS ... 7

II. CORPORATE GOVERNANCE REPORT (II) INFORMATION OF DIRECTORS, SUPERVISORS, GENERAL MANAGER, VICE GENERAL MANAGER, ASSISTANT MANAGER, DEPARTMENT MANAGERS AND MANAGERS OF BRANCH OFFICES: ... 10

(III) CIRCUMSTANCES OF COMPANY GOVERNANCE OPERATION ... 32
(IV) INFORMATION ABOUT PROFESSIONAL FEES OF THE CERTIFIED PUBLIC ACCOUNTANT ... 60
(V) INFORMATION ON CHANGE OF ACCOUNTANT: NONE ... 60
(VI) CIRCUMSTANCES OF CHANGES IN STOCKHOLDERS’ EQUITY TRANSFER AND PLEDGE FOR THE DIRECTORS, SUPERVISORS, MANAGERS AND SHAREHOLDERS WITH SHAREHOLDING RATIO OVER 10% IN RECENT YEARS AND TILL THE PRINTING DATE OF THE ANNUAL REPORT. THE RELATIVE PERSON OF THE STOCKHOLDERS’ EQUITY TRANSFER OR PLEDGE IS A RELATED PERSON, THEN THE NAME OF THE RELATIVE PERSON, HIS/HER RELATION WITH THE COMPANY, DIRECTORS, SUPERVISORS, SHAREHOLDERS WITH OVER 10% SHAREHOLDINGS, THE NUMBER OF OBTAINED OR PLEDGED STOCK SHOULD BE DISCLOSED. ... 60
(VII) INFORMATION ON THE SHAREHOLDERS WHO ARE THE TOP 10 ON SHAREHOLDING RATIO LIST AND ARE RELATED PERSONS, SPOUSE OR SECOND-DEGREE RELATIVE BETWEEN THEM ... 62
(VIII) THE NUMBER OF SHAREHOLDINGS FOR THE SAME RE-INVESTMENT BUSINESS FROM THE COMPANY, THE DIRECTORS, SUPERVISORS, MANAGERS AND THE DIRECT OR INDIRECT CONTROL BUSINESS OF THE COMPANY AND THE COMBINATION OF THE TOTAL SHAREHOLDING RATIO ... 63

IV. FUNDING SITUATIONS ... 64

(I) SOURCE OF CAPITAL STOCK ... 64
(II) LIST OF MAIN SHAREHOLDERS ... 65
(III) DIVIDEND POLICY AND ENFORCEMENT OF THE COMPANY ... 67
(IV) IMPACT ON THE BUSINESS PERFORMANCE OF OUR COMPANY AND EARNING PER SHARE BY THE PROPOSED STOCK GRANTS DURING THIS SHAREHOLDERS’ MEETING ... 67
(V) EMPLOYEE BONUS AND THE REMUNERATION OF DIRECTORS AND SUPERVISORS ... 67
(VI) STOCK BOUGHT BACK BY OUR COMPANY: NONE ... 68
(VII) SITUATIONS OF CORPORATE BOND (INCL. OVERSEAS CORPORATE BOND): NONE ... 68
(VIII) SITUATIONS OF PREFERRED STOCK: NONE ... 68
(IX) SITUATIONS OF PARTICIPATION IN THE ISSUANCE OF OVERSEAS DEPOSITARY RECEIPT: NONE ... 68
(X) SITUATIONS OF EMPLOYEE STOCK OPTION CERTIFICATES: NONE ... 68
(XI) SITUATIONS OF MERGER: NONE ... 68

(XII) SITUATIONS OF THE ISSUANCE OF NEW STOCK BY TRANSFERRING OTHER COMPANY’S STOCK: NONE 68
(XIII) ENFORCEMENT OF THE APPLICATION PROGRAM FOR FUNDS: 68
(XIV) STATUS OF FUND UTILIZATION PLAN EXECUTION: NONE 68

IV. OVERVIEW OF BUSINESS OPERATIONS 69

(I) CONTENT OF THE BUSINESS 69
(II) OVERVIEW OF MARKET AND SALES 74
(III) NUMBER OF WORKING EMPLOYEES IN THE CURRENT YEAR FOR THE PAST TWO YEARS AND TILL THE PRINTING DATE OF THE ANNUAL REPORT 78
(IV) INFORMATION ON ECO-FRIENDLY EXPENDITURE 79
(V) LABOR RELATIONS 79

I. IMPORTANT CONTRACTS 82

V. REVIEW AND ANALYSIS OF FINANCIAL STATUS AND FINANCIAL PERFORMANCE AND OTHER IMPORTANT MATTERS 85

(I) FINANCIAL STATUS 85
(II) FINANCIAL PERFORMANCE 86
(III) CASH FLOW 88
(IV) IMPACT ON FINANCIAL BUSINESS BY MAJOR CAPITAL EXPENDITURE IN RECENT YEARS 88
(V) RE-INVESTMENT POLICY AND THE MAJOR REASONS AND IMPROVEMENT PLANS FOR THE PROFIT OR LOSS IN RECENT YEARS AND THE INVESTMENT PLAN FOR THE FUTURE YEAR: NONE 89
(VI) ANALYSIS AND ASSESSMENT ON RISK MATTERS IN RECENT YEARS AND TILL THE PRINTING DATE OF THE ANNUAL REPORT 89
(VIII) OTHER IMPORTANT MATTERS: 92

VIII. SPECIAL NOTES 93

(I) RELEVANT INFORMATION ON AFFILIATED COMPANY 1. OVERVIEW OF RELATED COMPANIES: ORGANIZATIONAL CHART OF RELATED COMPANIES 93
(II) CIRCUMSTANCES OF PRIVATE OFFERING OF SECURITIES IN RECENT YEARS: NONE 96
(III) CIRCUMSTANCES OF THE STOCK OF OUR COMPANY HELD BY OR DISPOSED OF BY THE SUBSIDIARY IN RECENT YEARS AND TILL THE PRINTING DATE OF THE ANNUAL REPORT: NONE 96
(IV) OTHER NECESSARY MATTERS FOR SUPPLEMENTARY: NONE 96
(V) IF THERE ARE MATTERS THAT CAUSED MAJOR EFFECTS ON THE STOCKHOLDER’S EQUITY OR SECURITIES PRICE STATED IN SUBPARAGRAPH 2 OF PARAGRAPH 2 OF ARTICLE 36 OF THE ACT IN RECENT YEARS AND TILL THE PRINTING DATE OF THE ANNUAL REPORT, THEY SHOULD BE STATED IN DETAIL: NONE 96

VI
(VI) WHETHER SPECIFIC CONTENTS FOR PROTECTING STOCKHOLDER'S EQUITY HAS BEEN STIPULATED IN COMPANY LAW OR THE DOCUMENTS OF THE ORGANIZATION ... 97
(VII) OTHERS ... 113

I. Letters to Shareholders

1. Operating Results for 2025

(1) Business Report

Victory New Materials Limited Company (hereinafter referred to as the “Company”) reported consolidated operating revenue of NT$42,394 thousand for 2025, representing a decrease of NT$5,752 thousand, or 12%, compared to NT$48,146 thousand in 2024.

The consolidated net loss after tax for 2025 was NT$398,410 thousand, representing a decrease of 51% compared to the consolidated net loss after tax of NT$808,030 thousand in 2024. Earnings per share (EPS) for the year was NT$(2.61).

(2) Financial Report

1. Assets, Liabilities, and Equity

As of December 31, 2025, the Company’s consolidated total assets amounted to NT$2,941,187 thousand. Total liabilities amounted to NT$333,962 thousand, accounting for 11.35% of total assets, while total equity amounted to NT$2,607,225 thousand, accounting for 88.65% of total assets. The ratio of liabilities to total assets remained relatively low.

2. Profit and Loss

From January 1 to December 31, 2025, the Company’s consolidated operating revenue totaled NT$42,394 thousand. Profit/(loss) before tax amounted to NT$(360,989) thousand, while net profit/(loss) after tax attributable to the parent company amounted to NT$(398,410) thousand. Compared to the net loss after tax of NT$(808,030) thousand in 2024, the loss decreased by NT$409,620 thousand, representing an improvement of 50.69%.

The reduction in post-tax losses was primarily attributable to adjustments in the Company’s operating strategy, reductions in operating costs, and lower asset impairment provisions.

(3) Budget Execution Status

The Company did not publicly disclose any financial forecasts for 2025.

Business Plan Summary for 2026 and Future Development Strategy

In view of the current economic and market environment, the Company will cooperate with the globally recognized hotel brand Holiday Inn in 2026 to enter the hospitality industry by leveraging the unique geographical advantages of the Company’s office building.

Following the end of the pandemic, the tourism industry in Mainland China has continued to recover steadily. The Holiday Inn Quanzhou Jinjiang Airport Hotel, jointly developed by the Company and Holiday Inn, is expected to provide stable growth momentum for the Company due to its advantageous location.

The Company will continue adjusting its operating strategies in response to the overall economic downturn by reducing operating costs. Efforts will also be made to strengthen hotel advertising and marketing initiatives in order to improve room occupancy rates and average room prices. In addition, the Company will optimize the management of its office building and Cizao Production Center to enhance overall asset efficiency.

Impact of External Competition, Regulatory Environment, and Overall Business Environment

In recent years, alongside the continuous growth of Mainland China’s economy, consumer spending and tourism demand have increased significantly. As a result, China’s hotel industry has experienced unprecedented development opportunities, achieving substantial progress not only in scale but also in service management, brand development, and technological innovation.

Particularly in the post-pandemic era, the recovery of the tourism industry has ushered the hotel sector into a new golden period of growth.

Due to the impact of the COVID-19 pandemic over the past several years, the Company’s core outsole manufacturing business experienced a significant decline in performance compared to previous years. Accordingly, the Company adjusted its operating strategies by substantially reducing operating costs. Beginning in the middle of last year, the Company gradually shut down production workshops and leased out its self-owned factory facilities in order to optimize asset returns.

At the same time, leveraging the unique geographical advantages of its self-owned office building, the Company renovated Office Building No. 1 and entered into cooperation with the internationally renowned hotel brand Holiday Inn to launch the Holiday Inn Quanzhou Jinjiang Airport Hotel. This project is expected to create new growth potential for the Company in the future.

We sincerely wish all shareholders good health and every success.

Board of Director:
Chuang, Kuo-Ching

Manager:
Chuang, Hui-Huang

Accounting Manager:
Chen, Tu-Yen

II. Corporate Governance Report

(II) Information of directors, supervisors, general manager, vice general manager, assistant manager, department managers and managers of branch offices:

A. Information of directors and supervisors

Our company does not have supervisors.

Apr. 10, 2026

Position	Name	Gender/age	Nationality or domicile	First elective date	Elective date	Period	Shareholding when elected		Current shareholdings		Current shareholding of spouse, minor children		Shareholding in the name of others		Major education & experiences	Current positions in our company and other companies	Spouse or second-degree relatives who are managers, directors or supervisors
							Number of shares	Shareholding ratio	Number of shares	Shareholding ratio	Number of shares	Shareholding ratio	Number of shares	Shareholding ratio			Position	Name	Relationship
Board of Director	Chuang, Kuo-Ching	Male/56	Hong Kong	2025/6/16	2028/6/15	3 years	(Rema rk 1)	(Rema rk 1)	(Rema rk 1)	(Rema rk 1)	-	-	-	-	Complete the President Class of Modern Enterprise Capital Operation in School of Management, Xiamen University
Director of Jinjiang Zhonghe elementary school
Vice President of Jinjiang Qingyang Chambers of Commerce
Managing director of Jinjiang Shoe-making Association
Managing director of Jinjiang Qingyang Overseas Community Association	Board of Director of our company
Executive Director of Jinjiang Chandra Shoes Industry Co. Ltd
Super Light Shoe Soles Company Limited
Director and General Manager of Super Light Shoe Soles Company Limited
Director of Chandra Shoes Industry Co. Ltd
Chang Xing Investment Limited (BVI) - Cheng Yue Investment Limited (BVI)
Director of Chang Xing Investment Limited (BVI) and Director of Cheng Yue Investment Limited (BVI)	-	-	-
Director	Chuang, Hui-Huang	Male/57	PRC	2025/6/16	2028/6/15	3 years	(Rema rk 2)	(Rema rk 2)	(Rema rk 2)	(Rema rk 2)	-	-	-	-	Complete President Class in Xiamen University	General Manager of our company Vice General	-	-	-

Position	Name	Gender/age	Nationality or domicile	First elective date	Elective date	Period	Shareholding when elected		Current shareholdings		Current shareholding of spouse, minor children		Shareholding in the name of others		Major education & experiences	Current positions in our company and other companies	Spouse or second-degree relatives who are managers, directors or supervisors
							Number of shares	Shareholding ratio	Number of shares	Shareholding ratio	Number of shares	Shareholding ratio	Number of shares	Shareholding ratio			Position	Name	Relationship
																Manager of Jinjiang Chandra Co. Ltd
Supervisor of Jinjiang Chandra Shoes Industry Co. Ltd
Director of Bai Cheng Investment Limited (BVI)
Director of Victory New Materials Limited Company
Director of Victory New Materials Limited Company
Director	Hsu, Jui-Hsia	Female/54	ROC	2025/6/16	2028/6/15	3 years	(Rema rk 3)	(Rema rk 3)	(Rema rk 3)	(Rema rk 3)	-	-	-	-	Graduated from Department of Accounting in Ming Chuan University
Assisting Manager of Deloitte & Touche CPAs Firm	Accountant of Chial CPAs Firm	-	-	-
Director	Chen, Tu-Yen	Male/48	Australia	2025/6/16	2028/6/15	3 years	-	-	-	-	-	-	-	-	Master's degree in Accounting in Australia
Macquarie University
Registered Accountant of Australia CPA, Registered Financial analyst of CFA and Passed the test for Financial Risk Manager FRM
Accountant in Cabot Square Pty Ltd Tax
Analyst in Falkiner Global Investors Limited	Chief Financial Officer of Victory New Materials Limited Company

Position	Name	Gender/age	Nationality or domicile	First elective date	Elective date	Period	Shareholding when elected		Current shareholdings		Current shareholding of spouse, minor children		Shareholding in the name of others		Major education & experiences	Current positions in our company and other companies	Spouse or second-degree relatives who are managers, directors or supervisors
							Number of shares	Shareholding ratio	Number of shares	Shareholding ratio	Number of shares	Shareholding ratio	Number of shares	Shareholding ratio			Position	Name	Relationship
															Project Manager in Evalueserve Business Consulting Ltd. Company (Shanghai)
Independent Director	Lin, Jian-huang	Male/50	PRC	2021/8/30	2022/6/30	3 years	-	-	-	-	-	-	-	-	Department of Accounting, Chung Yuan University Assisting Manager in Ernst & Young CPAs	Accountant of YuanFu CPAs Firm	-	-	2-
Independent Director	Lin, Shih-Hsun	Male/53	ROC	2021/8/30	2022/6/30	3 years	-	-	-	-	-	-	-	-	Master of Law in National Chung Cheng University Graduated from Department of Law in National Chung Hsing University Pass the Attorney of higher examination in ROC Pass Legal Affairs Section of the higher examination for public servants Proxy for ROC Patent Adjunct lecturer of Law credits program in Culture University Jianyuan Assisting Manager for legal affairs in Electronic Toll Collection Ltd. Company Senior Lawyer in Jianye Law Firm	Lawyer of YuCheng Law Firm	-	-	2
Independe	Lin,	Male/58	ROC	2021/8/30	2022/6/30	3	-	-	-	-	-	-	-	-	Bachelor’s degree from	Accountant of YuanFu CPAs	-	-	2

Position	Name	Gender/age	Nationality or domicile	First elective date	Elective date	Period	Shareholding when elected		Current shareholdings		Current shareholding of spouse, minor children		Shareholding in the name of others		Major education & experiences	Current positions in our company and other companies	Spouse or second-degree relatives who are managers, directors or supervisors
							Number of shares	Shareholding ratio	Number of shares	Shareholding ratio	Number of shares	Shareholding ratio	Number of shares	Shareholding ratio			Position	Name	Relationship
nt Director	Chen-Hsiang					years									Department of Accounting in Feng Chia University Master's degree from accounting group in Department of Accounting and Information Technology in Chung Cheng University Financial and Accounting Manager in QST International Corp. Assisting Manager in Ernst & Young CPAs	Firm
Independent Director	Ou Ming-Tai	Male/47	ROC	2025/6/16	2028/6/15	3 years	-	-	-	-	-	-	-	-	Bachelor's Degree in Accounting, Fu Jen Catholic University Master's Degree in Accounting, National Taipei University	Certified Public Accountant, Cheng Hsing Certified Public Accountants			3
Independent Director	Huang Hui-Chan	Male/44	ROC	2025/6/16	2028/6/15	3 years	-	-	-	-	-	-	-	-	Department of Accounting, National Dong Hwa University Graduate Institute of Business Administration, National Dong Hwa University Senior Auditor / Audit	Certified Public Accountant, Kaibo Certified Public Accountants			3

Position	Name	Gender/age	Nationality or domicile	First elective date	Elective date	Period	Shareholding when elected		Current shareholdings		Current shareholding of spouse, minor children		Shareholding in the name of others		Major education & experiences	Spouse or second-degree relatives who are managers, directors or supervisors
							Number of shares	Shareholding ratio	Number of shares	Shareholding ratio	Number of shares	Shareholding ratio	Number of shares	Shareholding ratio		Position	Name	Relationship
															Assistant Manager, Deloitte Taiwan
Senior Accounting Manager, Semiconductor Manufacturing International Corporation
Independent Director	Chen You-Huan	Male/43	ROC	2025/6/16	2028/6/15	3 years	-	-	-	-	-	-	-	-	Department of Accounting, National Dong Hwa University
Senior Auditor / Audit Assistant Manager, Tiaohe Certified Public Accountants (Firm)
Finance Assistant Manager, Marketech International Corp.
Deputy Financial Director, ASE Technology Holding Co., Ltd. Dingwei Real Estate Development Co., Ltd.	Deputy Finance Director, Dingwei Real Estate Development Co., Ltd. of ASE Technology Holding Co., Ltd.			3

Note 1: Chuang, Kuo-Ching holds 3,029,104 shares of the Company, representing 1.98% of the total outstanding shares, through Chang Xing Investment Limited, a company wholly owned by him. In addition, he holds 27,501,175 shares, representing 17.98% of the total outstanding shares, through Cheng Yue Investment Limited, also wholly owned by him.
Note 2: Independent Directors Lin Chien-Huang, Lin Shih-Hsun, and Lin Chen-Hsiang completed their terms in June 2025 and stepped down from their positions as Independent Directors of the Company.
Note 3: Independent Directors Ou Ming-Tai, Huang Hui-Chan, and Chen Yu-Huan were elected as Independent Directors of the Company at the shareholders' meeting held on June 16, 2025.

2025.4.18

Major shareholders of corporate shareholders

Name of legal person shareholder	Major shareholders of corporate shareholders
Chang Xing Investment Limited	Chuang, Kuo-Ching
Cheng Yue Investment Limited	Chuang, Kuo-Ching

Remark: Corporate shareholders belong to a company organization

Disclosure of professional qualifications of directors and supervisors, as well as independence information of independent directors

Name	Professional qualifications and experience	Independence status
Chuang, Kuo-Ching	Chairman of the Board of Directors, Executive Director of Jinjiang Chengchang Footwear Co., Ltd., Director and General Manager of Super Light Shoe Soles Company Limited, Director of Chengchang Footwear Co., Ltd., Director of Chang Xing Investment Limited (BVI), Director of Cheng Yue Investment Limited (BVI).	Not Applicable
Chuang, Hui-Huang	General Manager of the company, Vice General Manager of Jinjiang Chengchang, Supervisor of Jinjiang Chengchang Footwear Co., Ltd., Director of Bai Cheng Investment Limited (BVI), Director of Victory New Materials Limited Company, Executive Director of Century Victory New Materials Technology Co., Ltd.	Not Applicable
Hsu, Jui-Hsia	Assistant Manager at Deloitte & Touche, Accountant at Grant Thornton.	Not Applicable
Chen, Tu-Yen	Master of Accounting from Macquarie University in Australia, Certified Public Accountant (CPA) in Australia, Chartered Financial Analyst (CFA) charterholder, Financial Risk Manager (FRM) certified, Tax Accountant at Cabot Square Pty Ltd, Analyst at Falkiner Global Investors Limited, Project Manager at Evis Business Consulting (Shanghai) Co., Ltd.	Not Applicable

Lin, Jian-huang	Manager at Ernst & Young (EY), Accountant at Yuen Fu Certified Public Accountants.	The independent directors meet the following conditions during the two years prior to their appointment and throughout their term of office: (1) They are not employees of the company or its affiliated enterprises. (2) They are not directors or supervisors of the company or its affiliated enterprises (except for independent directors who concurrently serve as independent directors of the company's parent company, subsidiary, or subsidiary of the same parent company as permitted by this law or local laws and regulations). (3) Neither they nor their spouses, minor children, or natural persons who hold 1% or more of the total issued shares of the company or are among the top ten shareholders hold shares in the company under another person's name. (4) They are not (1) managers listed in item (1) or (2) and (3) personnel listed in item (2) or (3) who are spouses, relatives within the second degree of kinship, or relatives within the third degree of kinship by direct blood relationship. (5) They do not directly hold 5% or more of the total issued shares of the company, rank among the top five shareholders, or serve as directors or supervisors of corporate shareholders who are appointed as directors or supervisors or employees of the company under Article 27, Paragraph 1 or Paragraph 2 of the Company Law (except for independent directors who concurrently serve as independent directors of the company's parent company, subsidiary, or subsidiary of the same parent company as permitted by this law or local laws and regulations). (6) They are not directors, supervisors, or employees of other companies who control more than half of the company's director seats or voting rights through the same person (except for independent directors who concurrently serve as independent directors of the company or its parent company, subsidiary, or subsidiary of the same parent company as permitted by this law or local laws and regulations). (7) They are not directors (trustees), supervisors (auditors), or employees of other companies or organizations, including spouses, who are directors, supervisors, or employees of the company's chairman, general manager, or equivalent positions (except for independent directors who concurrently serve as independent directors of the company's parent company, subsidiary, or subsidiary of the same parent company as permitted by this law or local laws and regulations). (8) They are not directors (trustees), supervisors (auditors), managers, or shareholders holding 5% or more of specific companies or organizations that have financial or business dealings with the company (except for specific companies or organizations that hold 20% or more but not exceeding 50% of the company's total issued shares and are subsidiaries of the company, its parent company,	0
Lin, Shih-Hsun	Qualified in the Taiwan Bar Exam, passed the civil service exam in the legal category, registered patent agent in the Republic of China, part-time lecturer in the credit program at the University of Culture, Legal Counsel at Jianyuan Electronic Toll Collection Co., Ltd., Senior Lawyer at Jianye Law Firm, Responsible Lawyer at Yucheng Law Firm.		0
Lin, Chen-Hsiang	Yu Xin International Co., Ltd. - Finance and Accounting Manager Ernst & Young - Associate at the Accounting Firm Yuanfu United Accounting Firm - Accountant		0
Ou Ming-Tai	Certified Public Accountant, Cheng Hsing Certified Public Accountants		0

Huang Hui-Chan	Certified Public Accountant, Kaibo Certified Public Accountants	subsidiary, or subsidiary of the same parent company as permitted by this law or local laws and regulations). (9) They are not professionals, sole proprietors, partners, directors (trustees), supervisors (auditors), managers, or their spouses who provide business, legal, financial, accounting, or related services to the company or its affiliated enterprises and have not received cumulative remuneration exceeding NTD 500,000 in the past two years. However, this does not apply to members of the Remuneration Committee, Public Acquisition Review Committee, or Merger Special Committee who perform their duties in accordance with securities laws or corporate merger laws. (10) They do not have a spouse or relatives within the second degree of kinship with other directors. (11) They do not fall under any of the circumstances specified in Article 30 of the Company Law. (12) They have not been elected as representatives of the government, legal persons, or their representatives under Article 27 of the Company Law.
Chen You-Huan	Deputy Finance Director, Dingwei Real Estate Development Co., Ltd. of ASE Technology Holding Co., Ltd.		0

Board Diversity:

In order to achieve the aforementioned goals and strengthen effectiveness, the Company proposes a Board Diversity Policy for its Board members in accordance with Article 20, Paragraph 3 of the Corporate Governance Practice Principles. The composition of the Board members shall consider diversity. Except for directors who concurrently serve as company executives, the number of such directors should not exceed one-third of the total number of directors. Furthermore, appropriate diversity policies shall be formulated based on the operation, business model, and development needs of the Company. These policies should include, but are not limited to, the following two major aspects:

Basic Criteria and Values: Gender, age, nationality, and culture, etc.

Professional Knowledge and Skills: Professional backgrounds (such as law, accounting, industry, finance, marketing, or technology), professional skills, and industry experience, etc.

The current Board of Directors of the Company consists of 7 members, including 3 independent directors. Their professional fields cover finance and accounting, law, manufacturing, brand distribution, and technical research. Among the Board members, there is 1 female director, 1 director of Australian nationality, and 2 directors of Hong Kong nationality. Among the 3 independent directors, 2 have served for more than 9 years and 1 for more than 2 years. The Company has always been committed to gender equality among its Board members. At present, the target ratio of female directors is set at above $10\%$ , and the current ratio among the 7 directors is $14.29\%$ .

Board Independence:

The Company's current Board of Directors consists of 7 members, including 4 directors and 3 independent directors, with independent directors accounting for $42.85\%$ . There are no spousal relationships among all directors, and no more than half of the directors have second-degree relatives. This complies with the provisions of Article 26-3, Paragraph 3, and Paragraph 4 of the Securities Exchange Act.
The Company's Board of Directors guides the Company's strategy, supervises the management, and is responsible to the Company and its shareholders. In various operations and arrangements of the corporate governance system, the Board of Directors exercises its powers in accordance with laws, articles of incorporation, or resolutions of the shareholders' meeting. The Board of Directors emphasizes independent operation and transparency, and both directors and independent directors are independent individuals who independently exercise their powers. The three independent directors also follow relevant laws and regulations, coordinate with the Audit Committee to review the control of existing or potential risks of the Company, and ensure effective implementation of internal controls, the selection (appointment) of auditing accountants, and the proper preparation of financial statements. In addition, according to the Company's "Director Nomination Procedure", the selection of directors and independent directors adopts a candidate nomination system, encouraging shareholder participation. Shareholders holding a certain number of shares or more are eligible to submit a list of candidates. The qualification review of the candidates and the confirmation of whether there are any violations of the provisions listed in Article 30 of the Company Law are conducted in accordance with the law, and relevant acceptance procedures are carried out and announced to safeguard shareholder rights, prevent the monopolization or excessive proliferation of nomination rights, and maintain independence.

B. Information of General Manager, Vice General Manager, Assistant Manager, Department Managers and Managers of Branch Offices:

Apr. 10, 2026

Position	Name	Gender	Nationality	Date of inauguration	Shareholding		Current shareholding of spouse, minor children		Shareholding in the name of others		Major Education & Experiences	Spouse or second-degree relatives who are managers, directors or supervisors
					Number of Shares	Shareholding Ratio	Number of Shares	Shareholding Ratio	Number of Shares	Shareholding Ratio		Position	Name	Relationship
General Manager	Chuang, Kuo-Ching	Male	Hong Kong	1998.1	(Remark 1)	(Remark 1)	-	-	-	-	Complete the President Class of Modern Enterprise Capital Operation in School of Management, Xiamen University
Director of Jinjiang Zhonghe elementary school
Vice President of Jinjiang Qingyang Chambers of Commerce
Managing director of Jinjiang Shoe-making Association
Managing director of Jinjiang Qingyang Overseas Community Association	Board of Director and General Manager of our company
Executive Director of Jinjiang Chandra Shoes Industry Co. Ltd
Super Light Shoe Soles Company Limited
Director and General Manager of Super Light Shoe Soles Company Limited
Director of Chandra Shoes Industry Co. Ltd
Director of Chang Xing Investment Limited (BVI) and Director of Cheng Yue Investment Limited (BVI)	-	-	-	-
Vice General Manager	Chuang, Hui-Huang	Male	PRC	1998.1	(Remark 2)	(Remark 2)	-	-	-	-	Complete the President Class of Tsing Hua University in Quanzhou
Vice President of Chinese Hokkien	Vice General Manager of Jinjiang Chandra Co. Ltd	-	-	-	-

Position	Name	Gender	Nationality	Date of inauguration	Shareholding		Current shareholding of spouse, minor children		Shareholding in the name of others		Major Education & Experiences	Current positions in our company and other companies	Spouse or second-degree relatives who are managers, directors or supervisors			Status of Manager s obtaining Employee stock option certificates
					Number of Shares	Shareholding Ratio	Number of Shares	Shareholding Ratio	Number of Shares	Shareholding Ratio			Position	Name	Relationship
											Chamber of Commerce in Russia	Supervisor of Jinjiang Chandra Shoes Industry Co. Ltd Director of Bai Cheng Investment Limited (BVI) Director of Victory New Materials Limited Company Director of Victory New Materials Limited Company
Chief Financial Officer	Chen, Tu-Yen	Male	Australia	2011.2	-	-	-	-	-	-	Master's degree in Accounting in Australia Macquarie University Registered Accountant of Australia CPA, Registered Financial analyst of CFA and Passed the test for Financial Risk Manager FRM Accountant in Cabot Square Pty Ltd Tax Analyst in Falkiner Global Investors Limited Project Manager in Evalueserve	Chief Financial Officer and Director of Victory New Materials Limited Company	-	-	-	-

Position	Name	Gender	Nationality	Date of inauguration	Shareholding		Current shareholding of spouse, minor children		Shareholding in the name of others		Major Education & Experiences	Current positions in our company and other companies	Spouse or second-degree relatives who are managers, directors or supervisors			Status of Managers obtaining Employee stock option certificates
					Number of Shares	Shareholding Ratio	Number of Shares	Shareholding Ratio	Number of Shares	Shareholding Ratio			Position	Name	Relationship
											Business Consulting Ltd. Company (Shanghai)

Remark 1: Chuang, Kuo-Ching holds 3,029,104 shares of the Company, representing 1.98% of the total outstanding shares, through Chang Xing Investment Limited, a company wholly owned by him. In addition, he holds 27,501,175 shares, representing 17.98% of the total outstanding shares, through Cheng Yue Investment Limited, also wholly owned by him..

C. Salary Paid to directors, supervisors, general manager and vice general manager

Salary of directors (incl. independent directors):

Unit: NT$

Position	Name	Remuneration of director	Ratio of Total of the four items A, B, C and D accounted for net profit	Relevant remuneration obtained as an adjunct employee	Ratio of Total of the four items A, B, C, D, E, F and G accounted for net profit	W h e t h e r o b t a i n e d e m u n e r a t i o n f r o m e - i n v e s t m e n t b u s i n e s s o t h e r
Salary (A)	Separation Pay & Pension (B)	Salary from distribution of surplus (C)	Expenses for performing business operations (D)	Salary, reward, special disbursement (E)	Separation Pay & Pension (F)	Employee bonus from the distribution of surplus (G)
Our Company	All the Companies in the Financial Statements	Our Company	All the Companies in the Financial Statements	Our Company	All the Companies in the Financial Statements	Our Company


Board of Director	Chuang, Kuo-Ching	-	-	-	-	-	-	-	-	-	-	3,217,176	-	-	-	-	-	-	-	-	-	-	-	3,217,176 (0.81%)	-
Director	Chuang, Hui-Huang	-	-	-	-	-	-	-	-	-	-	1,608,588	-	-	-	-	-	-	-	-	-	-	-	1,608,588 (0.40%)	-
Director	Hsu, Jui-Hsia	-	-	-	-	-	-	-	-	-	-	321,718	-	-	-	-	-	-	-	-	-	-	-	321,718 (0.08%)	-
Director	Chen, Tu-Yen	-	-	-	-	-	-	-	-	-	-	2,680,980	-	-	-	-	-	-	-	-	-	-	-	2,680,980 (0.67%)	-
Independent Director	Lin Jian-huang	160,859	160,859	-	-	-	-	-	160,859 (0.04%)	160,859 (0.04%)	-	-	-	-	-	-	-	-	-	-	-	160,859 (0.04%)	160,859 (0.04%)	-
Independent Director	Lin, Shih-Hsun	160,859	160,859	-	-	-	-	-	160,859 (0.04%)	160,859 (0.04%)	-	-	-	-	-	-	-	-	-	-	-	160,859 (0.04%)	160,859 (0.04%)	-
Independent Director	Lin, Chen-Hsiang	160,859	160,859	-	-	-	-	-	160,859 (0.04%)	160,859 (0.04%)	-	-	-	-	-	-	-	-	-	-	-	160,859 (0.04%)	160,859 (0.04%)	-
Independent Director	Ou Ming-Tai	160,859	160,859						160,859 (0.04%)	160,859 (0.04%)												160,859 (0.04%)	160,859 (0.04%)
Independent Director	Huang Hui-Chan	160,859	160,859						160,859 (0.04%)	160,859 (0.04%)												160,859 (0.04%)	160,859 (0.04%)
Independent Director	Chen You-Huan	160,859	160,859						160,859 (0.04%)	160,859 (0.04%)												160,859 (0.04%)	160,859 (0.04%)

Note 1: The policy, system, standards, and structure for the remuneration of Independent Directors, as well as the correlation between remuneration amounts and factors such as responsibilities undertaken, risks assumed, and time invested, are determined in accordance with the evaluation indicators and standards set forth in Article 8 of the Company's Board Performance Evaluation Regulations. The evaluation results of the Independent Directors are reviewed by the Remuneration Committee, which considers each director's level of participation in the Company's operations and contribution value, links compensation to the reasonableness and fairness of performance risks, and takes into account the Company's operating performance and appropriate industry standards before submitting recommendations to the Board of Directors for resolution.

Note 2: Except as disclosed in the table above, no remuneration was paid in the most recent fiscal year to the Company’s directors for services provided to all entities included in the financial reports (such as serving as consultants to the parent company, entities included in the financial reports, or investee companies in capacities other than as employees).
Note 3: Independent Directors Lin Chien-Huang, Lin Shih-Hsun, and Lin Chen-Hsiang completed their terms in June 2025 and stepped down from their positions as Independent Directors of the Company; Independent Directors Ou Ming-Tai, Huang Hui-Chan, and Chen Yu-Huan were elected as Independent Directors of the Company at the shareholders’ meeting held on June 16, 2025.

Remuneration Grading Table

Remuneration grading of each director paid by our company	Name of the director
	Total amount of the first four items for remuneration (A+B+C+D)		Total amount of the first seven items for remuneration (A+B+C+D)
	Our company (Remark 10)	All the Companies in the Financial Statements I	Our company	All the Companies in the Financial Statements J
Less than 2,000,000	Chuang, Kuo-Ching, Chuang, Hui-Huang, Chen, Tu-Yen, Lin, Chen-Hsiang, Lin, Shih-Hsun, Wang, Liang-En	Chuang, Kuo-Ching, Chuang, Hui-Huang, Chen, Tu-Yen, Lin, Chen-Hsiang, Lin, Shih-Hsun, Wang, Liang-En	Lin, Chen-Hsiang, Lin, Shih-Hsun, Wang, Liang-En	Lin, Chen-Hsiang, Lin, Shih-Hsun, Wang, Liang-En
2,000,000 (incl.) ~5,000,000 (not incl.)	-		Chuang, Kuo-Ching, Chen, Tu-Yen	Chuang, Kuo-Ching, Chen, Tu-Yen
5,000,000 (incl.) ~10,000,000 (not incl.)	-	-	-	-
10,000,000 (incl.) ~15,000,000 (not incl.)	-	-	-	-
15,000,000 (incl.) ~30,000,000 (not incl.)	-	-	-	-
30,000,000 (incl.) ~50,000,000 (not incl.)	-	-	-	-
50,000,000 (incl.) ~100,000,000 (not incl.)	-	-	-	-
100,000,000 or more	-	-	-	-
Total	7 people	7 people	7 people	7 people

Remuneration for supervisor: None.

Renumeration for general manager and vice general manager in recent years
(1) Renumeration for general manager and vice general manager

Renumeration for general manager and vice general manager
Unit: NT$

Position	Name	Salary (A)		Separation Pay & Pension (B)		Reward & special disbursement (C)		Employee bonus from distribution of surplus (D)				Ratio of Total of the four items A, B, C and D accounted for net profit (%)		Number of employee stock option certificates		Number of limited new stock obtained under employee rights		Whether obtained remuneration from re-investment business other than subsidiaries
		Our Company	All the Companies in the Financial Statements	Our Company	All the Companies in the Financial Statements	Our Company	All the Companies in the Financial Statements	Our Company		All the Companies in the Financial Statements		Our Company	All the Companies in the Financial Statements	Our Company	All the Companies in the Financial Statements	Our Company	All the Companies in the Financial Statements
								Amount of Cash Bonus	Amount of Stock Bonus	Amount of Stock Bonus
General Manager of Jinjiang Chandra	Chuang, Hui-Huang	-	1,608,588	-	-	-	-	-	-	-	-	-	-	-	-	-	1,608,588 (0.40%)	None

Remuneration Grading Table

Remuneration grading of general manager and vice general manager paid by our company	Name of general manager and vice general manager
	Our Company	All the Companies in the Financial Statements
Less than 1,000,000	-	-
1,000,000 (incl.) ~2,000,000 (not incl.)	-	Chuang, Hui-Huang
2,000,000 (incl.) ~3,500,000 (not incl.)	-	-
3,500,000(incl.) ~5,000,000 (not incl.)	-	-
5,000,000 (incl.) ~10,000,000 (not incl.)	-	-
10,000,000 (incl.) ~15,000,000 (not incl.)	-	-
15,000,000 (incl.) ~30,000,000 (not incl.)	-	-
30,000,000 (incl.) ~50,000,000 (not incl.)	-	-
50,000,000 (incl.) ~100,000,000 (not incl.)	-	-
100,000,000 or more	-	-
Total	-	1 person

(2) Remuneration of the top five highest-paid executives:

Unit: NT$

Position	Name	Salaries(A)		"Pensions and retirement benefits"(B)		Bonuses and special allowances, etc. (C)		Employee compensation (D)				The total of A, B, C, and D, as well as their proportion to the net profit after tax. (%)		Salaries received from subsidiaries outside the group, investments in associated enterprises, or the parent company.
		Our company.	All companies within the financial report.	Our company.	All companies within the financial report.	Our company.	All companies within the financial report.	Our company.		All companies within the financial report.		Our company.	All companies within the financial report.
								Amount of cash dividends	Amount of stock dividends	Amount of cash dividends	Amount of stock dividends
Chairman of the Board	Chuang, Hui-Huang	-	3,217,176	-	-	-	-	-	-	-	-	-	3,217,176 (0.81%)	None
Chief Financial Officer	Chen, Tu-Yen	-	2,680,980	-	-	-	-	-	-	-	-	-	2,680,980 (0.67%)	None
General Manager	Chuang, Hui-Huang		1,608,588										1,608,588 (0.40%)
Audit Manager	Wu Chia-Hsun		536,196										536,196 (0.13%)

Note 1: The term "top five highest-paid executives" refers to the company's managers. The standards for identifying managers are based on the Ministry of Finance, Securities, and Futures Commission letter No. 0920001301 dated March 27, 1993, which defines the applicable scope of "managers." The calculation principles for determining the "top five highest-paid" are based on the total amount of salary, retirement pension, bonuses, and special allowances received from all companies within the consolidated financial report, as well as employee compensation (i.e., the total of A+B+C+D). These amounts are then sorted to identify the top five highest-paid executives.

(3) Names of managers obtained the distribution of employee bonus and the status of the distribution

Unit: NT$ 1,000

Items	Position	Name	Amount of stock bonus	Amount of cash bonus	Total	Ratio of total accounted for net profit (%)
Managers	Chairman of the Board	Chuang, Kuo-Ching	-	-	-	-
	General Manager	Chuang, Hui-Huang
	Chief Financial Officer	Chen, Tu-Yen
	Audit Manager	Wu, Chia-Hsun

D. Compare the ratio of total amount paid to the directors, supervisors, general managers and vice general managers of our company accounted for the net profit in the analysis of individuals or individual financial statement for our company and all companies in the consolidated statements in the past two years, separately and explain the policies, standards and combination for the paid remuneration and the program for the establishment of remuneration and business performance and their relationship with future risks:

Unit: NT$ 1,000

	2024		2025
	Our company	All companies	Our company	All companies
Directors	1,270	3,915	1,287	3,968
Chairman of the Board / General Manager	-	4,762	-	4,826

Note: The payment amounts for the fiscal years 2024 and 2025 represent 1.07% and 2.21% of the net losses after tax, respectively.

Policies, Standards, and Composition of Remuneration:

(1) Remuneration for directors of the company is determined in accordance with Article 32 of the Company's Articles of Association, authorizing the Board of Directors to set director remuneration based on recommendations from the company's Compensation Committee and considering industry norms. Additionally, if the company is profitable for the fiscal year, director remuneration is allocated in accordance with Article 34 of the Company's Articles of Association, not exceeding one percent of the annual profit. The company evaluates director remuneration periodically according to the "Board of Directors Performance Evaluation Method." The evaluation criteria for directors' performance include:

Grasp of company goals and missions.
Recognition of director responsibilities.
Participation in company operations.
Management of internal relationships and communication.
Professionalism and ongoing education of directors.
Internal control.

The performance assessment and reasonableness of compensation are reviewed by the Compensation Committee and the Board of Directors.

(2) Remuneration for company executives is determined according to the company's salary regulations, which specify various allowances and bonuses to recognize and reward employee efforts in their work. Relevant bonuses are also based on the company's annual operational performance, financial status, operational conditions, and individual job performance. The performance evaluation criteria for executives include:

Financial indicators: Achievement of annual revenue and operating profit goals.
Non-financial indicators: Achievement of goals and key results related to job responsibilities, operational management capabilities, and the practice of company core values. The compensation for operational performance is calculated accordingly and the remuneration system is reviewed as needed based on actual operational conditions and relevant regulations.

The performance assessment and reasonableness of compensation are reviewed by the Compensation Committee and the Board of Directors.

(3) The composition of remuneration provided by the company includes cash compensation, stock options, stock dividends, retirement benefits or severance pay, various allowances, and other substantial incentive measures. This falls within the scope of matters to be disclosed in the company's annual report regarding director and executive remuneration, in accordance with guidelines for public companies.

Procedures for Determining Remuneration:

(1) To assess the remuneration of directors and executives regularly, the evaluation results based on the "Board of Directors Performance Evaluation Method" for directors and the "Employee Performance Evaluation Method" for executives and employees are respectively used as a basis, along with the establishment of business performance indicators linked to company operations, and submitted to the Board of Directors for approval.

(2) To effectively demonstrate the achievement of business performance indicators, the performance measurement criteria for executives are based on financial indicators related to the company's annual revenue and operating profit results. The assessment scope includes core responsibilities such as revenue and operating profit, as well as non-financial indicators such as operational safety management, supervision of financial plan execution, revenue management, promotion of digital transformation optimization, enhancement of internal controls, and implementation of quality assurance and management. The performance assessment and reasonableness of compensation are reviewed by the Compensation Committee and the Board of Directors.

(3) The performance assessment and reasonableness of remuneration for directors and executives are evaluated and reviewed annually by the Compensation Committee and the Board of Directors. In addition to considering individual performance achievement rates and contributions to the company, the overall operational performance of the company, industry future risks and development trends are also taken into account. Furthermore, the remuneration system is reviewed as needed based on actual operational conditions and relevant regulations, taking into account current trends in corporate governance, to provide reasonable compensation for the continued operation and risk management of the company. The actual remuneration for directors and executives in the 111th fiscal year was determined after deliberation by the Compensation Committee and approval by the Board of Directors.

Relationship with Business Performance and Future Risks:

(1) The review of relevant remuneration policy standards and systems of the company is mainly based on the overall operating conditions of the company, considering performance achievement rates and contribution levels to enhance the overall organizational team effectiveness of the Board of Directors and management departments. Industry salary standards are also considered to ensure the competitive nature of the company's management-level remuneration and to retain outstanding management talent.

(2) The performance objectives of the company's executives are combined with "risk management" to ensure that risks within their scope of responsibility are managed and prevented. Remuneration is determined based on actual performance results, linking various relevant human resources and salary policies. Important decisions made by the company's management are made after balancing various risk factors. The performance of such decisions is reflected in the company's profitability, thereby correlating the management's remuneration with the effectiveness of risk management.

(III) Circumstances of company governance operation

A. Circumstances of the operation of the board of directors

We had held 6 board meetings from 2024 till the printing date. The attendances of the directors are as follows:

Position	Name	Number of actual attendances	Actual attendance rate (%)	Remark
President	Chuang, Kuo-Ching	7	100
Director	Chuang, Hui-Huang	7	100
Director	Hsu, Jui-Hsia	7	100
Director	Chen, Tu-Yen	7	100
Independent Director	Lin Jian-huang	2	100	term ended in June 2025
Independent Director	Lin, Shih-Hsun	2	100	term ended in June 2025
Independent Director	Lin, Chen-Hsiang	2	100	term ended in June 2025
Independent Director	Ou Ming-Tai	5	100	elected in June 2025
Independent Director	Huang Hui-Chan	5	100	elected in June 2025
Independent Director	Chen You-Huan	5	100	elected in June 2025

Other matters which should be noted

(1) According to Article 14-3 of the Securities and Exchange Act and other matters on which the independent directors expressed opposition or reservation with recorded or written statements, the board meeting resolutions should specify the date and session of the board meeting, the content of the proposal, the opinions of all independent directors, and the company's handling of the opinions of independent directors: None.

(2) The execution status of directors abstaining from interested party transactions should state the director's name, the content of the proposal, the reasons for abstaining from the interest, and their participation in the voting: None.

(3) Assessment of the objectives and execution of strengthening the functions of the board in the current and previous years: The Group established the Audit Committee and the Remuneration Committee on January 24, 2013, to achieve the goal of strengthening the functions of the board. In the future, the company will disclose relevant information on the designated website of the competent authority to enhance information transparency.

B. Board Evaluation Implementation Status

Evaluation Cycle	Evaluation Period	Evaluation Scope	Evaluation Method	Evaluation Content
Conducted annually	The performance evaluation of the Board of Directors for the period from January 1, 2025 to December 31, 2025 is conducted annually.	The scope of the evaluation includes the performance of the Board of Directors as a whole, individual directors, and functional committees.	The evaluation methods include internal self-assessment by the Board, self-assessment by individual directors, peer evaluation, engagement of external professional institutions, experts, or other appropriate methods to conduct performance assessments.	Note1

Note 1: The evaluation criteria, based on the scope of assessment, shall at a minimum include the following items: Board performance evaluation: the level of participation in the Company's operations, quality of Board decision-making, composition and structure of the Board, selection and continuing education of directors, and internal control, etc. Individual director performance evaluation: understanding of the Company's goals and tasks, awareness of directors' duties, level of participation in the Company's operations, internal relationship management and

communication, directors' professional expertise and continuing education, and internal control, etc.

2025 Independent and Qualification Assessment Form for Signing Auditors

Assessing Unit: Board of Directors

Assessment Year: 2026

Assessment Date: 2026.04.27

Engaged Audit Firm and Auditors for Assessment: Ernst & Young Zhonghe Joint Accountants

Firm / Ms. Chen Guanghui, Mr. Guo Zhenyu

Assessment Content: In accordance with Article 47 of the Accountants Act and Bulletin No. 10 of the Code of Professional Ethics for Accountants of the Republic of China, the following criteria were considered: honesty, fairness, objectivity, and independence.

Evaluation Items	Evaluation Results
The engagement auditor does not have any direct or significant indirect financial interests with the company.	☑YES ☐NO
There is no significant close business relationship between the engagement auditor and the company.	☑YES ☐NO
The engagement auditor does not have any potential employment relationship when auditing the company.	☑YES ☐NO
There is no money lending or borrowing between the engagement auditor and the company.	☑YES ☐NO
The engagement auditor has not received significant gifts or presents of value (beyond normal social etiquette standards) from the company, its directors, or executives.	☑YES ☐NO
The engagement auditor has not provided audit services to the company continuously for the past seven years.	☑YES ☐NO
The engagement auditor does not hold any shares of the company.	☑YES ☐NO
The engagement auditor, their spouse, dependents, and the audit team have not held any positions as directors, executives, or positions with significant influence over audit matters of the company during the audit period or in the past two years. It is	☑YES ☐NO

also confirmed that they will not hold such positions in the future audit period.

Evaluation Result: The assessment confirms that both Chen Guanghui, CPA, and Guo Zhenyu, CPA, from Ernst & Young Hua Ming LLP, who were engaged to sign the financial statements for the current year, demonstrate independence and suitability without any concerns.

E. If a company has installed Compensation Committee, its composition, duties and operations should be exposed.

The composition of Compensation Committee

Our company has installed Compensation Committee by the resolution of the board meeting on Jan. 24, 2013 in accordance with “Regulations Governing the Appointment and Exercise of Powers by the Remuneration Committee of a Company Whose Stock is Listed on the Stock Exchange or Traded Over the Counter” of ROC to complete corporate governance and complete the compensation system of the directors and managers of our company and established the Regulations of Compensation Committee for the benefit of compliance. The members of the Compensation Committee include Wang, Liang-En, Lin, Shih-Hsun, Lin, Chen-Hsiang, which are all independent directors.

Duties of the Compensation Committee

Compensation Committee should focus on being a kind manager and fulfill the following duties loyally and submit the proposed suggestions to the board of directors meeting for discussion:

(1) Establish and review the performance assessment of the directors and managers periodically and the policies, systems, standards and structures of the remuneration.
(2) Assess and establish the remuneration of the directors and managers periodically. The convenor should hold the meeting at least once a year and can hold the meeting at any time based on needs.

Information of the members of the Compensation Committee

Identity / Name/ Conditions	Professional Qualifications and Experience	Independence Status	The number of independent directors concurrently serving on the boards of other publicly listed companies can vary.

Independent Director/Ou Ming-Tai	National Taipei University, Master's Degree in Accounting; CPA, Cheng-Hsing CPA Firm	Please refer to pages 10-11 for information on the independence of independent directors.	0
Independent Director/Huang Hui-Chan	Audit Senior Manager, Deloitte Taiwan; Senior Accounting Manager, Semiconductor Manufacturing International Corporation; CPA, Kaibo CPA Firm	Please refer to pages 10-11 for information on the independence of independent directors.	0
Independent Director/Chen You-Huan	Audit Assistant Manager, Tiao-He CPA Firm; Finance Assistant Manager, Marketech International Corp.; Finance Vice President, ASE Group Dingwei Real Estate Development Co., Ltd.	Please refer to pages 10-11 for information on the independence of independent directors.	0

4. Circumstances of the Compensation Committee

(1) The Compensation Committee of our company has 3 members.
(2) Period of the members in this term: Jul. 11, 2022 to Jun. 29, 2025. The Compensation Committee has held a meeting in recent years. The qualification and attendance of the members are listed as follows:

Position	Name	Number of actual attendances	Number of entrusted attendances	Actual attendance rate (%)	Remark
Coordinator	Ou Ming-Tai	2	0	100	-
Member	Huang Hui-Chan	2	0	100	-
Member	Chen You-Huan	2	0	100	-
Other matters which should be noted: (1) If the board of directors do not adopt or revise the suggestions from the Compensation Committee, these things should be stated clearly, such as date of the board meeting, type of period, content of the resolution, results of the resolution from the board meeting and how the company handled the suggestions from the Compensation Committee (e.g the compensation passed by the board of directors meeting is higher than the suggestions from the Compensation Committee, the differences and reasons should be stated clearly): none. (2) If the members have opposed or retained and have records or written statements on some resolutions of the Compensation Committee, then these things should be stated clearly, such as the date of the compensation committee meeting, type of period, content of the resolutions, the opinions from all the members and how the opinions from the members being handled: none.

F. The execution of sustainable development initiatives and the differences with the Sustainable Development Practices Guidelines for Listed and OTC Companies are as follows

Item	Operational status
	Yes	No	Summarized explanation
i. Has the company established a governance framework to promote sustainable development, including the establishment of a dedicated department/unit responsible for driving sustainable development initiatives, authorized by the Board of Directors and supervised by senior management appointed by the Board of Directors?	✓		1. The Company's "Management Procedures for Sustainability Information" were approved by the Board of Directors on November 11, 2024.
2. The Company has established a dedicated sustainability unit. The President serves as the convener and has formed the "Sustainability Development Task Force," which functions as the Company's highest-level internal decision-making body for sustainability. Together with senior executives from various functions, the Task Force reviews the Company's core operational capabilities and formulates mid- to long-term sustainability development plans.	The company will report to the Board of Directors regarding its handling of matters as required by laws and regulations or when deemed necessary based on actual operations.

		3. The “Sustainability Development Task Force” serves as a cross-functional communication platform integrating vertical and horizontal coordination. It is responsible for proposing and implementing sustainability policies, systems, and related management guidelines and action plans. Through semi-annual meetings and issue-based task groups, the Task Force identifies sustainability topics relevant to the Company’s operations and stakeholders, formulates corresponding strategies and action plans, allocates budgets related to sustainability initiatives, plans and executes annual programs, and monitors implementation effectiveness to ensure sustainability strategies are fully embedded in daily operations.
		4. The convener of the “Sustainability Development Task Force” is expected to report semi-annually to the Board of Directors on sustainability implementation

| | | results and future work plans. The report includes: (1) identification of material sustainability issues and corresponding strategies and action plans; (2) objectives and policy revisions related to sustainability topics; and (3) supervision of the implementation of sustainability initiatives and evaluation of execution performance.

The Board of Directors receives regular semi-annual reports from the management team (including ESG reports). The management is required to propose corporate strategies to the Board, which evaluates the likelihood of success of such strategies and, when necessary, directs the management team to make adjustments. | |
| --- | --- | --- | --- |
| ii. Does the company conduct risk assessments related to environmental, social, and corporate governance (ESG) issues that are relevant to its business operations based on materiality principles? And does it establish related risk management policies or strategies? | ✓ | The responsible unit for promoting sustainable development will follow the Global Reporting Initiative (GRI) Standards for conducting risk assessments related to environmental, social, and corporate governance (ESG) issues relevant to the company's business operations. Based on these assessments, they will develop relevant risk management strategies. | The relevant matters are currently being planned and implemented. |
| iii. Environmental Issues: (i) Has the company established an appropriate environmental | ✓ | (i) The company emphasizes environmental protection and energy conservation. In | No major differences. |

management system based on its industry characteristics?		order to fulfill its responsibility towards environmental preservation, the company has installed pollution prevention equipment in compliance with regulations. It has implemented environmental management plans, pollution prevention measures, waste reduction initiatives, and other environmental protection practices to contribute to global environmental efforts. Each factory has dedicated personnel responsible for air pollution, wastewater, and waste management, ensuring compliance with environmental regulations and requirements.
(ii) Is the company committed to improving energy efficiency and utilizing renewable materials with low environmental impact?
(iii) Has the company assessed the potential risks and opportunities of climate change on its business, both present and future, and implemented measures to address climate-related issues?
(iv) Has the company measured its greenhouse gas emissions, water usage, and total waste weight over the past two years, and developed policies for greenhouse gas reduction, water conservation, or other waste management?		(ii) The company has a dedicated management department responsible for overall environmental resource planning. It aims to allocate and utilize energy and resources efficiently, improve resource utilization rates, minimize waste, reduce product costs, and promote the use of recyclable packaging materials.
		(iii) The company upholds a balanced approach to environmental protection and manufacturing. It has established an environmental health and safety policy to address the environmental impacts of its production operations. The company implements and maintains an environmental management system to ensure effective

		environmental management, reduce environmental burdens, comply with relevant environmental regulations, and meet the demands of green consumers. It also strives to create a comfortable, safe, and aesthetically pleasing working environment.
		(iv) The company has established an independent environmental management unit that develops strategies for energy conservation, carbon reduction, greenhouse gas emissions reduction, water conservation, and other waste management initiatives.
iv. Social Issues
(i) The company has established relevant management policies and procedures in accordance with applicable regulations and international human rights conventions.

(ii) The company has developed and implemented reasonable employee welfare measures, including compensation, leave, and other benefits. It also appropriately reflects business performance or achievements in employee compensation.

(iii) The company provides a safe and healthy working environment for its employees and conducts regular safety and health education programs for them.

(iv) The company has implemented an effective career development and training program for its | ✓ | (i)The company complies with the Labor Standards Act and relevant labor laws to safeguard the legitimate rights and interests of employees. It has also signed collective agreements with labor unions and established employee codes of conduct. Regular employee forums are held, providing channels for employees to express their opinions and gain a comprehensive understanding of the company's operations.

(ii)The company has established "regulations and systems" that cover labor employment, employee attendance, leave policies, employee benefits, employee care, labor protection, confidentiality, and non-competition. These measures aim to reasonably safeguard the rights and | No major differences. |

employees.		interests of employees.
(v) The company adheres to relevant laws and international standards regarding customer health and safety, customer privacy, marketing, and labeling issues related to its products and services. It has formulated policies and complaint procedures to protect consumer or customer rights.		(iii)The company provides government-mandated insurance, including hospitalization and workplace accident insurance, for all employees. It also ensures a safe working environment and conducts regular safety and health education and training to protect labor health and safety.
(vi) The company has established a supplier management policy that requires its suppliers to comply with relevant standards in environmental protection, occupational health and safety, and labor rights. The implementation of these requirements is monitored.		(iv)The company has a comprehensive training policy that includes pre-employment training for new employees, professional and general skills development, managerial competency enhancement, and international talent cultivation systems. These measures provide appropriate education and training for employees at different stages and establish effective career development and training plans.
		(v) The company is committed to developing critical core technologies, and all products comply with international safety standards and environmental regulations. It provides customers with the best quality and satisfactory services. To protect customer privacy, besides signing relevant technology and research confidentiality agreements, the company provides multiple channels for customer feedback. Customers can directly

| | | | communicate through email with dedicated sales representatives or access information such as order shipment details and relevant shipping documents through the online business platform.

(vi)The company has a supplier management policy that requires suppliers to comply with occupational safety and health regulations and protect labor rights. The supplier's past records concerning their impact on the environment and society are important evaluation criteria for the company. | |
| --- | --- | --- | --- | --- |
| v. Does the company refer to internationally recognized reporting standards or guidelines when preparing non-financial information disclosure reports such as sustainability reports? Has the aforementioned report obtained an assurance or opinion from a third-party verification entity? | ✓ | | The company is committed to practicing transparency and disclosure of information to society, employees, and shareholders. Although a complete report has not been formally prepared and third-party certification has not been obtained, efforts have been made to adhere to the relevant provisions of internationally recognized reporting standards or guidelines such as the Global Reporting Initiative (GRI). | No major differences. |
| vi. If the company has its own sustainability guidelines based on the "Practical Guidelines for Sustainable Development of Listed and OTC Companies," please describe how they are implemented and any differences from the established guidelines: None. | | | | |
| VII. Other important information for understanding the implementation of sustainable development:
(1) The company's personnel regulations comply with the provisions of the Labor Standards Act, and dedicated personnel handle employee work matters to safeguard their employment rights.
(2) The company values its relationship with customers and has established written procedures for handling emergency situations, aiming to resolve customer issues as quickly as possible.
(3) The company believes that in promoting environmental protection, safety, and health, it is not only necessary to comply with domestic regulations but also align with internationally recognized | | | | |

standards.

(4) The company deeply believes in the impact of corporate social responsibility on the nation. It provides employees with a stable and high-quality working environment, seeks to maximize benefits for shareholders and stakeholders, and adheres to the spirit of "taking from society and giving back to society." In the future, the company will actively participate in charitable activities and sponsor vulnerable groups in society. While engaging in business operations, it will actively practice corporate social responsibility to align with the international trend of balanced environmental, social, and governance development.

Climate-Related Information for Listed and OTC Companies

1. Climate-Related Information Implementation Status

Item	Implementation Status
1. Describe the Board of Directors and management's oversight and governance of climate-related risks and opportunities.	The Company's Sustainable Development Task Force conducts an annual materiality assessment to identify significant sustainability issues, and establishes risk management policies and specific action plans for effective identification, measurement, assessment, monitoring, and control, including environmental impacts, in order to mitigate related risks. The Task Force reports sustainability progress and future work plans to the Board of Directors on a semi-annual basis. The Board oversees responsible units, provides improvement recommendations as appropriate, and reviews strategic progress based on these reports.
2. Describe how the identified climate risks and opportunities affect the company's business, strategy, and finances (short, medium, and long term).	As sustainable development becomes a critical corporate objective, the Company has effectively reduced pollution emissions and environmental impacts through process safety management and systematic management cycles, ensuring products comply with environmental regulations. The Company is committed to environmental protection and embraces green and clean production. In terms of processes, coal-fired boilers have been converted to natural gas boilers and dust collectors have been installed, effectively reducing pollution emissions and environmental impacts and achieving CO2 reduction for sustainable development. Annual environmental plans are

Item

Implementation Status

1. Describe the Board of Directors and management's oversight and governance of climate-related risks and opportunities.

The Company's Sustainable Development Task Force conducts an annual materiality assessment to identify significant sustainability issues, and establishes risk management policies and specific action plans for effective identification, measurement, assessment, monitoring, and control, including environmental impacts, in order to mitigate related risks. The Task Force reports sustainability progress and future work plans to the Board of Directors on a semi-annual basis. The Board oversees responsible units, provides improvement recommendations as appropriate, and reviews strategic progress based on these reports.

2. Describe how the identified climate risks and opportunities affect the company's business, strategy, and finances (short, medium, and long term).

As sustainable development becomes a critical corporate objective, the Company has effectively reduced pollution emissions and environmental impacts through process safety management and systematic management cycles, ensuring products comply with environmental regulations. The Company is committed to environmental protection and embraces green and clean production. In terms of processes, coal-fired boilers have been converted to natural gas boilers and dust collectors have been installed, effectively reducing pollution emissions and environmental impacts and achieving CO2 reduction for sustainable development. Annual environmental plans are

	established and tracked regularly to ensure target achievement. Going forward, the Company will formulate countermeasures addressing business, strategy, and financial impacts following the identification of climate risks and opportunities.
3. Describe the financial impacts of extreme weather events and transition actions.	Currently under identification and deliberation. To prevent business interruptions and property/equipment damage caused by extreme weather events, the Company has taken out property insurance to partially transfer potential risks. Financial impacts of transition actions may include costs related to improving energy efficiency, low-carbon product design, research and development, and manufacturing.
4. Describe how the process of identifying, assessing, and managing climate risks is integrated into the overall risk management system.	The Company has adopted corresponding risk management policies and strategies for environmental risk assessment (see pages 38-42 of the Annual Report). The process for integrating more detailed climate risk identification, assessment, and management into the overall risk management system is currently under identification and deliberation.
5. If scenario analysis is used to assess resilience against climate change risks, describe the scenarios, parameters, assumptions, analytical factors, and major financial impacts used.	Scenario analysis is not used for assessment; therefore, not applicable.
6. If there is a transition plan in response to managing climate-related risks, describe the plan content and the indicators and targets used to identify and manage physical risks and transition risks.	There is currently no transition plan in response to managing climate-related risks; therefore, not applicable.
7. If internal carbon pricing is	Internal carbon pricing is not used as a planning tool; therefore,
45

used as a planning tool, describe the basis for price determination.	not applicable.
8. If climate-related targets have been set, describe the activities covered, GHG emission scopes, planned timeframes, and annual progress. If carbon offsets or Renewable Energy Certificates (RECs) are used to achieve targets, describe the sources and quantities of carbon reduction credits or RECs.	No climate-related targets have been set at this time; therefore, not applicable.
9. Greenhouse gas inventory and assurance status, reduction targets, strategies, and specific action plans.	Pursuant to the Financial Supervisory Commission (FSC) order No. Jin-Guan-Zheng-Fa-Zi-11203852314 dated November 13, 2023, the Company is required to disclose greenhouse gas inventory information, carbon reduction targets, strategies, and specific action plans starting from 2027, and to disclose assured data starting from 2029; therefore, not currently applicable.

1-1 Greenhouse Gas Inventory and Assurance Status for the Most Recent Two Years

1-1-1 Greenhouse Gas Inventory Information

Describe the GHG emissions (metric tons CO2e), intensity (metric tons CO2e/million NTD), and data coverage scope for the most recent two fiscal years.
Pursuant to FSC order No. Jin-Guan-Zheng-Fa-Zi-11203852314 dated November 13, 2023, the Company is required to disclose greenhouse gas inventory information, carbon reduction targets, strategies, and specific action plans starting from 2027, and to disclose assured data starting from 2029; therefore, not currently applicable.

1-1-2 Greenhouse Gas Assurance Information

Describe the assurance status for the most recent two fiscal years as of the annual report publication date, including assurance scope, assurance institution, assurance standards, and assurance opinion.
Pursuant to FSC order No. Jin-Guan-Zheng-Fa-Zi-11203852314 dated November 13, 2023, the

Company is required to disclose greenhouse gas inventory information, carbon reduction targets, strategies, and specific action plans starting from 2027, and to disclose assured data starting from 2029; therefore, not currently applicable.

1-2 Greenhouse Gas Reduction Targets, Strategies, and Specific Action Plans

Describe the GHG reduction baseline year and its data, reduction targets, strategies, specific action plans, and progress toward achieving reduction targets.

Pursuant to FSC order No. Jin-Guan-Zheng-Fa-Zi-11203852314 dated November 13, 2023, the Company is required to disclose greenhouse gas inventory information, carbon reduction targets, strategies, and specific action plans starting from 2027, and to disclose assured data starting from 2029; therefore, not currently applicable.

G. Circumstances of a company fulfilling ethical operation and adopted measures

Items	Operational status
	Yes	No	Summary of Explanations
I. Establishment of ethical corporate management policies and plans
(i) Circumstances of a company implicating ethical corporate management policies in its regulations and public documents and the directors and management fulfilling the promises positively
(ii) Circumstances of a company establishing methods against dishonest actions and the operational status of the operation programs,	✓		(i) Our company has established “Ethical corporate management principles”, which stated clearly that the directors, managers, employees of our company or others with substantial control power cannot provide or receive any improper benefits directly or indirectly to avoid the loss of company’s rights and interests due to personal benefits by employees
(ii) Our company has clearly	No major differences.
No major

action guidelines and educational trainings within the plans		established regulations on actions in “Ethical corporate management principles”. In addition, our company holds meetings for communications and announcements to employees in order for the stakeholders such as customers, suppliers, other external human resources to understand the ethical principles of the company to set up the corporate culture with integrity and announce it in public occasions and relevant places	differences.
(iii) Circumstances of a company establishing plans against dishonest actions and adopting protection measures against offering or taking bribery or providing illegal political party funding to business activities involving high risks of dishonest actions within the business scope		(iii) Our company has established internal control and internal audit system. The relevant audit activities are performed by audit unit. If major fraud or improper actions were found, they will be handled by internal regulations of the company.	No major differences.
ii. Implementation of ethical corporate management
(i) Circumstances of a company avoid having business activities involving transactions with people who has dishonest records and state the regulations on ethical actions in business contract clearly
(ii) Circumstances of a company establishing specialized or adjunct units to promote corporate ethical corporate management and the supervising situations from the board of directors
(iii) Operational status of a company establishing policies against conflict of interests and providing	✓	(i) Our company will perform credit investigation before having transactions with important customers to avoid having transactions with people who has dishonest records.
(ii) Our company has not established specialized unit for the promotion of corporate ethical corporate management. We will assess the needs for establishment.
(iii) If the employees have found actions against the regulations or ethical action principles, anyone can hand this matter to the specialists	No major differences.
No major differences.

| channels for appropriate statements
(iv) Circumstances of a company fulfilling ethical corporate management to create effective accounting system, internal control system and the circumstances of internal audit personnel to perform auditing | | | by appealing methods.
(iv) Our company has established accounting system for the accounting personnel to comply with, built an internal control mechanism in accordance with the law and the actual status of the company and performed audit operations. The results will be reported to Audit Committee and the Board of Directors Meeting periodically. | No major differences. |
| --- | --- | --- | --- | --- |
| iii. Circumstances of a company setting up channels for reporting and appealing systems for disciplinary of violating ethical corporate management regulations. | ✓ | | (iii) If the employees have found actions against the regulations or ethical action principles, anyone can hand this matter to the specialists by appealing methods. | No major differences. |
| iv. Promote information disclosure
(i) Circumstances of a company setting up websites to disclose information related to ethical corporate management.
(ii) Methods adopted by a company to disclose information (such as setting up English website, designating specialized person responsible for the collection and disclosure of company information and put it on the company website) | ✓ | | (i) Our company already have our own website. We will set up specialized zone in the company website to disclose the business status of the company for the reference of the investors.
(ii) Our company has established specialized personnel responsible for the collection of company information and disclose it in Market Observation Post System. | No major differences.
No major differences. |
| v. If a company has established ethical corporate management principles in accordance with “Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies”, please state its operation and the differences between them clearly.
Our company has established “Ethical corporate management principles” and operated and regulated all kinds of business activities in accordance with ethical corporate management principles. We also established three independent directors and an internal audit unit and installed Audit Committee. There has no major incidents occurred with the violation of ethical corporate management. | | | | |
| vi. Other important information which is helpful for understanding the operational status of ethical | | | | |

corporate management (for example, a company is determined to promote ethical corporate management and policies to its business correspondents, invited them to participate in education training and reviewed and revised the established ethical corporate management principles):

Be determined to promote ethical corporate management and policies to its business correspondents and invited them to participate in education training:
(1) Our company reviews the quality of sales and supplies with sales customers and suppliers and promotes the corporate management idea of our company.
(2) Our company will perform audit on new sales customers and procurement suppliers in accordance with “Regulations on management of customers’ credit” and “Regulations on management of suppliers”. Also, we will interview with the personnel in charge to understand the corporate management idea of that company and whether they conduct ethical corporate management.
Circumstances of reviewing and revising the established ethical corporate management principles:

Our company has clearly established regulations on actions in “Ethical corporate management principles”. In addition, our company holds meetings for communications and announcements to employees in order for the stakeholders such as customers, suppliers, other external human resources to understand the ethical principles of the company to set up the corporate culture with integrity and announce it in public occasions and relevant places.

H. If a company has established corporate governance principle and relevant regulations, the inquiry method should be disclosed:

Inquiry webpage:
http://www.vnm.com.tw/index.php?option=module⟨=cht&task=pageinfo&id=245&index=1

Our company has established corporate governance system and formulated complete internal control system and all kinds of management regulations in accordance with “Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies”. The relevant regulations as follows:

Rules of Procedure for Board Meetings
Rules of Procedure for Shareholders' Meetings
Regulations for the Election of Directors and Supervisors
Procedures for Acquisition or Disposal of Assets
Procedures for Derivatives Trading
Procedures for Endorsements and Guarantees
Procedures for Lending of Funds to Others
Procedures for Prevention of Insider Trading
Internal Control System and Audit Implementation Rules for Procedures for Acquisition or Disposal of Assets
Internal Control System and Audit Implementation Rules for Procedures for Derivatives Trading
Internal Control System and Audit Implementation Rules for Procedures for Lending of Funds to Others

Internal Control System and Audit Implementation Rules for Procedures for Endorsements and Guarantees
Internal Control System and Audit Implementation Rules for Supervision of Subsidiaries
Internal Control System and Audit Implementation Rules for Seal Management

I. Other important information which is sufficient to promote the understanding of the operational status of corporate governance

The directors of our company took advanced studies in accordance with regulations, participated in the discussion on corporate governance and relevant courses held by Securities & Futures Institute and implemented corporate governance operations.
The responsible unit for the resolutions of the board meeting sends personnel to attend relevant courses about corporate governance on an irregular basis and provide the newest legal information to the directors and managers at all times.
Our company has established “Programs for the Management Operations against Inside Trading” to create good mechanism for the treatment and disclosure of major internal information, avoid improper disclosure of the information and ensure the consistency and correctness of the information announced to the public.

J. The following matters should be disclosed for the operational status of the internal control system:

Statements for internal control system
Victory New Materials Limited Company
Statements for internal control system

Date: Mar. 12, 2026

(1) The Company acknowledges that establishing, implementing, and maintaining the internal control system is the responsibility of the Company's Board of Directors and management. The Company has established such a system, which aims to provide reasonable assurance of achieving the following objectives: effectiveness and efficiency of operations (including profitability, performance, and safeguarding of assets), reliability, timeliness, transparency, and compliance of reporting, and adherence to applicable laws and regulations.

(2) Internal control systems have inherent limitations. Regardless of how well-designed, an effective internal control system can only provide reasonable assurance of achieving the three objectives stated above. Furthermore, the effectiveness of an internal control system may change due to shifts in environment or circumstances. Nevertheless, the Company's internal control system incorporates a self-monitoring mechanism, and corrective actions are taken promptly upon identification of any deficiencies.

(3) The Company has assessed the design and operational effectiveness of its internal control system based on the criteria set forth in the "Regulations Governing the Establishment of Internal Control Systems by Public Companies" (the "Regulations"). The criteria adopted in the Regulations classify internal control systems into five components following the management control process: (1) Control Environment, (2) Risk Assessment, (3) Control Activities, (4) Information and Communication, and (5) Monitoring Activities. Each component further comprises a number of items. Please refer to the Regulations for details on the aforementioned items.

(4) The Company has applied the internal control assessment criteria described above to evaluate the design and operational effectiveness of its internal control system.

(5) Based on the evaluation results described in the preceding paragraph, the Company concludes that its internal control system as of December 31, 2025 — including the supervision and management of subsidiaries — covering the design and operation of controls related to understanding the extent of achievement of operational effectiveness and efficiency objectives, reliability, timeliness, and transparency of reporting, compliance with relevant norms and applicable laws and regulations, is effective and provides reasonable assurance of achieving the aforementioned objectives.

(6) This Statement shall constitute a principal part of the Company's annual report and prospectus and shall be made available to the public. Should the disclosed content contain any misrepresentation, concealment, or other unlawful conduct, legal liability may arise under Articles 20, 32, 171, and 174 of the Securities and Exchange Act.

(7) This Statement was approved at the Company's Board of Directors meeting held on March 12, 2026. Of the 7 directors in attendance, none expressed any objection, and all were in agreement with the content of this Statement.

Victory New Materials Limited Company
Chairman of the Board & General Manager: Chuang, Kuo-Ching

K. If there are circumstances such that company or its internal personnel is disciplined by law or the company has disciplined its internal personnel on violations against internal control system regulations, or main faults and improvements in recent years and till the printing date of the annual report: none

L. Important resolutions in shareholders' meetings and board meetings in recent years and till the printing date of the annual report:

Important resolutions in shareholders' meetings and temporal meetings in 2017 and their enforcements

(1) Important resolutions

Dates	Type of the meeting	Important resolutions
2025/6/16	Regular shareholders' meeting	1. 2024 Annual Business Report and Financial Statements.
2. 2024 Earnings Distribution Proposal.
3. Amendments to the Company's Articles of Incorporation.
4. Amendments to the Company's "Procedures for Loaning Funds to Others."
5. Election of the 6th-term Directors and Independent Directors.
6. Proposal to Release Directors from Non-Compete Restrictions.

(2) Enforcements

Dates	Type of the meeting	Important resolutions
2025/6/16	Regular shareholders' meeting	1. 2024 Annual Business Report and Financial Statements: Approved unanimously without

| | | objection.
2. 2024 Earnings Distribution Proposal: Approved unanimously without objection.
3. Amendments to the Company's Articles of Incorporation: Approved unanimously without objection.
4. Amendments to the Company's "Procedures for Loaning Funds to Others": Approved unanimously without objection.
5. Election of the 6th-term Directors and Independent Directors: Chuang Kuo-Ching, Chuang Hui-Huang, Chen Tu-Yen, Hsu Jui-Hsia, Ou Ming-Tai, Chen Yu-Huan, and Huang Hui-Chan were elected as the 6th-term Directors and Independent Directors.
6. Proposal to Release Directors from Non-Compete Restrictions: Approved unanimously without objection. |
| --- | --- | --- |

Important resolutions in board meetings

Dates	Type of the meeting	Important resolutions
2025/3/13	Board meeting	1. Approval of the Company's 2024 Internal Control Statement.
2. Approval of the Directors' Remuneration and Employee Profit Sharing Distribution Proposal.
3. The Company's 2024 Annual Business Report and Consolidated Financial Statements.
4. Approval of Amendments to the Company's Articles of Incorporation.
5. Amendments to the Company's "Corporate Governance Best-Practice Principles."
6. Approval of the Company's "Communication between Independent Directors, Chief Internal Auditor, and Certified Public Accountants."
7. Replacement of the Certified Public Accountants for Financial Statement Attestation.
8. Establishment of procedures for accepting shareholder proposals and nominations for the 2025 Annual General Meeting.
9. Determination of the date, time, and venue for the Company's 2025 Annual General Meeting.
2025/5/2	Board meeting	1. Approval of the Company's 2024 Earnings Distribution Proposal.
2. Approval of the Consolidated Financial Statements for Q1 2025.

Dates	Type of the meeting	Important resolutions
		3. Approval of the Company's "Communication between Independent Directors, Chief Internal Auditor, and Certified Public Accountants."
4. Approval of the Independence Assessment of the Company's Certified Public Accountants.
5. Continued Engagement of ShineWing as the Company's Certified Public Accountants for 2025.
6. Establishment of subsidiaries: Jinjiang Chengchang Investment Co., Ltd. and Fujian Chengyue Hotel Management Co., Ltd.
7. Fund Loan Proposal for subsidiary Hong Kong Chengchang Footwear Co., Ltd.
8. Full Re-election of the Company's Directors and Independent Directors, and Nomination of Director (including Independent Director) Candidates.
9. Proposal to Release Newly Elected Directors from Non-Compete Restrictions.
2025/6/16	Board meeting	1. Election of the Chairman of the Board.
2. Election of Members of the Audit Committee.
3. Election of Members of the Remuneration

Dates	Type of the meeting	Important resolutions
		Committee.
2025/8/25	Board meeting	1. Approval of the Consolidated Financial Statements for the First Half of 2025.
2. Approval of the Company's "Communication between Independent Directors, Chief Internal Auditor, and Certified Public Accountants."
3. Approval of the Company's 2024 Sustainability Report.
4. Investment Proposal for Fujian Chengyue Hotel Management Co., Ltd.
2025/11/10	Board meeting	1. Approval of the Consolidated Financial Statements for the First Three Quarters of 2025.
2. Approval of the Company's "Communication between Independent Directors, Chief Internal Auditor, and Certified Public Accountants."
3. Approval of the Company's 2026 Budget Proposal.
4. Approval of the Company's 2026 Audit Plan.
5. Establishment of the Company's "Sustainability Information Management Procedures."
6. Adjustment of Business Strategy Proposal.
2026/3/12	Board meeting	1. Approval of the Company's Internal Control Statement.
2. Approval of the Directors' and Supervisors' Remuneration and Employee Profit Sharing Distribution Proposal.
3. Approval of the Company's 2025 Annual Business Report and Consolidated Financial Statements.
4. Amendments to the Company's Articles of Incorporation.
5. Amendments to the

Dates	Type of the meeting	Important resolutions
		Company's "Rules of Procedure for Shareholders' Meetings."
6. Amendments to the Company's "Procedures for Acquisition or Disposal of Assets."
7. Amendments to the Company's "Sustainable Development Best-Practice Principles."
8. Approval of the Company's "Communication between Independent Directors, Chief Internal Auditor, and Certified Public Accountants."
9. Fund Loan Proposal for subsidiary Fujian Chengyue Hotel Management Co., Ltd.
10. Establishment of procedures for accepting shareholder proposals and nominations for the 2026 Annual General Meeting.
11. Determination of the date, time, and venue for the Company's 2026 Annual General Meeting.
2026/4/27	Board meeting	1. The Company's 2025 Earnings Distribution Proposal.
2. Approval of the Consolidated Financial Statements for Q1 2026.
3. Approval of the Company's "Communication between Independent Directors, Chief Internal Auditor, and Certified Public Accountants."
4. Approval of the Independence Assessment of the Company's Certified Public Accountants.
5. Continued Engagement of ShineWing as the Company's Certified Public Accountants for 2026.

Dates	Type of the meeting	Important resolutions
		6. Establishment of subsidiary Wanbo Hotel (Jinjiang) Co., Ltd.

M. If the directors or supervisors have different opinions with the important resolutions passed by board of directors and have record or written statements in recent years and till the printing date of the annual reports: none.

N. The resignation of personnel (including the chairman of the board, general manager, accounting manager and internal audit manager, etc.) related to the financial statements in recent years and till the printing date of the annual report

(IV) Information about professional fees of the certified public accountant

Accountant Public Expenditure Information Level Table

NTD in thousands

Name of Accounting Firms	Name of the Accountant	Period of audit by the accountant	Audit fees	Non-Audit fees	Total	Remark
ShineWing	Chen Guanghui	2025/01/01 ~ 2025/12/31	6,000	-	6,000
	Guo Zhenyu

(V) Information on change of accountant: None
(VI) Circumstances of changes in stockholders' equity transfer and pledge for the directors, supervisors, managers and shareholders with shareholding ratio over $10\%$ in recent years and till the printing date of the annual report. The relative person of the stockholders' equity transfer or pledge is a related person, then the name of the relative person, his/her relation with the company, directors, supervisors, shareholders with over $10\%$ shareholdings, the number of obtained or pledged stock should be disclosed.

Position	Name	2024		Till Apr. 10, 2026
		Increase or decrease in shareholdings	Increase or decrease in number of pledged stock	Increase or decrease in shareholdings	Increase or decrease in number of pledged stock
Director	Chuang, Kuo-Ching	-	-	-	-
Director and big shareholder	Chang Xing Investment Limited Representative: Chuang, Kuo-Ching	-	-	-	-

Director and big shareholder	Cheng Yue Investment Limited Representative: Chuang, Kuo-Ching	-	-	-	-
Director	Bai Cheng Investment Limited Representative: Chuang, Hui-Huang	-	-	-	-
Director	CHEN TUYAN	-	-	-	-
Independent director	Lin, Chen-Hsiang	-	-	-	-
Independent director	Lin, Shih-Hsun	-	-	-	-
Independent director	Lin Jian-huang	-	-	-	-
Independent director	Ou Ming-Tai	-	-	-	-
Independent director	Huang Hui-Chan	-	-	-	-
Independent director	Chen You-Huan	-	-	-	-
Audit Director	Wu, Chia-Hsun	-	-	-	-

(1) Information on stockholders' equity transfer:

There are no such circumstances that the relative person of stockholders' equity transfer for the directors, supervisors, managers and shareholders with over 10% shareholding ratio is a related person in the past two years and till the printing date of the annual report.

(2) Information on stockholders' equity pledge: none

(VII) Information on the shareholders who are the top 10 on shareholding ratio list and are related persons, spouse or second-degree relative between them

Apr. 10, 2026

Name	Own shareholding		Current shareholding of spouse, minor children		Shareholding in the name of others		If the shareholders who are the top 10 on shareholding ratio list and are related persons, spouse or second-degree relative between them, state their names and relationship		Remark
	Number of stocks	Shareholding ratio	Number of stocks	Shareholding ratio	Number of stocks	Shareholding ratio	Name of the company (or name of the person)	Relationship	-
Cheng Yue Investment Limited Representative: Chuang, Kuo-Ching	27,501,175	17.98%	-	-	-	-	Chang Xing Investment Limited	Same owner	-
Wang Wenling	7,775,097	5.08%	-	-	-	-	-	-	-
Chang Xing Investment Limited Representative: Chuang, Kuo-Ching	3,029,104	1.98%	-	-	-	-	Cheng Yue Investment Limited	Same owner	-
Cai Zhengzhe	1,899,000	1.24%	-	-	-	-	-	-	-
Lin Zhilong	1,600,000	1.05%	-	-	-	-	-	-	-
Liu Huijun	1,069,000	0.70%	-	-	-	-	-	-	-
Zhang Yuxiang	914,000	0.60%	-	-	-	-	-	-	-
Liu Ju-Mei	900,000	0.59%	-	-	-	-	-	-	-
Wu Jiande	830,000	0.54%	-	-	-	-	-	-	-
Cai Zhengxian	661,000	0.43%	-	-	-	-	-	-	-

(VIII) The number of shareholdings for the same re-investment business from the company, the directors, supervisors, managers and the direct or indirect control business of the company and the combination of the total shareholding ratio

Apr. 10, 2026

Re-investment business	Investment of our company		Investment of directors, supervisors, managers and the direct or indirect control business		Integrative investment
	Number of stocks	Shareholding ratio (%)	Number of stocks	Shareholding ratio (%)	Number of stocks	Shareholding ratio (%)
Super Light	100 stocks	100	-	-	100 stocks	100
Chandra Shoe Industry Ltd Company	Remark	100	-	-	Remark	100
Jinjiang Chandra Shoes Industry Ltd. Company	Remark	100	-	-	Remark	100
Victory New Materials Limited Company	Remark	100	-	-	Remark	100

Remark: It belongs to the type of limited company, so there are no classified stocks.

A. If there are circumstances such that the subsidiaries of listed companies holding or disposing the stocks of our company and its settings of pledge equity in recent years and till the printing date of the annual report, then the source of the funds and the impact on the business consequences and financial status of the company should be stated: none.
B. If there are cases mentioned in Article 185 of The Company Act or circumstances of transferring part of the business, research and development achievements to the subsidiaries in recent years and till the printing date of the annual report, then the circumstances of giving up the subscription of capital increase by cash of the subsidiaries, name of the subscribed relative person and its relationship with the company, directors, supervisors and the shareholders with over $10\%$ shareholding ratio and the number of subscribed stocks should be disclosed.

There are no cases mentioned in Article 185 of The Company Act occurred in our company during recent years and till the printing date of the annual report. In addition, there are no such circumstances of transferring part of the business, research and development achievements to the subsidiaries, so this is not applicable.

IV. Funding Situations

(I) Source of Capital Stock

Formation of Capital Stock

Year/Month	Distribution pricing	Authorized stock		Paid-up capital		Remark
		Number of shares	Amount	Number of shares	Amount	Source of Capital Stock	Share paid up by assets other than cash	Others
Aug., 2012	US$0.0001	100,000,000	US$ 10,000	1	US$0.0001	New establishment	-	-
Oct. 2012	US$0.0001	100,000,000	US$ 10,000	33,606,767	US$3,360.68	Shares paid by the shares of 8888 Acquisition	-	-
Nov., 2012	US$0.0001	100,000,000	US$ 10,000	33,966,667	US$3,396.67	Increase capital with 359,000 shares by cash	-	-
Dec., 2012	NT$10	200,000,000	NT$ 2,000,000,000	60,000,000	NT$600,000,000	Change the par value of the share	-	-
Mar., 2013	NT$10	200,000,000	NT$ 2,000,000,000	12,244,898	NT$722,448,980	Increase capital with 12,244,898 shares by cash	-	-
Jan., 2014	NT$136	200,000,000	NT$ 2,000,000,000	8,100,000	NT$803,448,980	Increase capital with 8,100,000 shares by cash	-	-
Aug., 2014	NT$10	200,000,000	NT$ 2,000,000,000	8,034,489	NT$883,793,870	Increase capital by earnings
Aug., 2015	NT$10	200,000,000	NT$ 2,000,000,000	26,513,816	NT$1,148,932,031	Increase capital by earnings
Aug., 2017	NT$10	200,000,000	NT$ 2,000,000,000	11,489,321	NT$1,263,825,241	Increase capital by earnings
Aug., 2018	NT$10	200,000,000	NT$ 2,000,000,000	12,638,253	NT$1,390,207,770	Increase capital by earnings
Aug., 2019	NT$10	200,000,000	NT$ 2,000,000,000	13,902,078	NT$1,529,228,550	Increase capital by earnings

Types of shares

Apr. 10, 2026

Types of shares	Authorized stock			R e m a r k
	Shares in circulation	Undistributed stocks	Total
Common stock	152,922,855	47,077,145	200,000,000	-

(II) List of main shareholders

Shares Name of main shareholders	Shareholding (shares)	Shareholding ratio (%)
Cheng Yue Investment Limited Representative: Chuang, Kuo-Ching	27,501,175	17.98%
Wang Wenling	7,775,097	5.08%
Chang Xing Investment Limited Representative: Chuang, Kuo-Ching	3,029,104	1.98%
Cai Zhengzhe	1,899,000	1.24%
Lin Zhilong	1,600,000	1.05%
Liu Huijun	1,069,000	0.70%
Zhang Yuxiang	914,000	0.60%
Liu Ju-Mei	900,000	0.59%
Wu Jiande	830,000	0.54%
Cai Zhengxian	661,000	0.43%

Nationality or domicile of directors, supervisors, managers and shareholders with over 10% shares

Type of identity	Name	Nationality or domicile
Board of Director and General Manager	Chuang, Kuo-Ching	Hong Kong
Director	Chuang, Hui-Huang	PRC
Director	Chen, Tu-Yen	Australia
Director	Hsu, Jui-Hsia	ROC
Independent Director	Lin, Chen-Hsiang	ROC
Independent Director	Lin, Shih-Hsun	ROC
Independent Director	Lin Jianhuang	ROC

Independent Director	Ou Ming-Tai	ROC
Independent Director	Huang Hui-Chan	ROC
Independent Director	Chen You-Huan	ROC
Auditing Director	Wu, Chia-Hsun	PRC
Big shareholders with over 10% shareholding	Cheng Yue Investment Limited	British Virgin Islands

(III) Dividend policy and enforcement of the company

Dividend policy established by The Company Law

According to Article 34 of The Company Law, the main regulations of the dividend policy are as follows:

Unless otherwise required by the Statute and the Applicable Public Company Rules, the Directors shall prepare a proposal for distribution of profits in accordance with the procedures and sequence set out below and submit such proposal for the Members’ approval by an Ordinary Resolution at any general meeting should there be profits upon a final annual accounting of the Company for a fiscal year:

(a) the proposal shall begin with the Company’s Annual Net Income after tax;
(b) offset its losses, if any, that have not been previously offset;
(c) set aside a statutory capital reserve of 10% in accordance with the Applicable Public Company Rules except where the statutory surplus reserve has already reach the Company’s paid-in capital;
(d) set aside a special capital reserve in accordance with the Applicable Public Company Rules or as requested by the authorities in charge; and
(e) after deducting the aforementioned amounts listed in subsection (a) to (d) from the profits of the current year, the distributable profits shall include the accumulated profits not distributed previously. A proposal for distribution of profits shall be submitted by the Directors for the Members’ approval at a general meeting pursuant to the Applicable Public Company Rules prior to distribution. Distribution of Dividends may be made by way of cash dividends and/or stock dividends and the total amount of Dividends shall not be lower than 10% of the profits of the then current year after deducting the aforementioned amounts listed in subsection (a) to (d), and the percentage of cash dividends to be distributed shall not be less than 10% of the total amount of Dividends.

Situations of the proposed distribution of the dividends in this year

The distribution of surplus of our company in 2023 is passed by the board of directors on May 10, 2024. The relevant information related to the passed resolution on the distribution is as follows:

(1) The total cash bonus for the shareholders is 0 dollars. The total stock dividend for the shareholders is 0 dollars.
(2) Distributed employee bonus is 0 dollars; the distributed remuneration for directors and supervisors is 0 dollars.

All of the above are passed in the regular shareholders’ meeting in 2024.

(IV) Impact on the business performance of our company and earning per share by the proposed stock grants during this shareholders’ meeting

During this shareholders’ meeting, we have proposed not to distribute stock grants, so this is not applicable.

(V) Employee bonus and the remuneration of directors and supervisors

The amount or scope of employee bonus and the remuneration of directors and supervisors mentioned in The Company Law:
Please refer to The Company Law mentioned above.
The base of the estimated employee bonus and the estimated remuneration of directors and supervisors in this period, stock calculation base of the distributed stock bonus and

the accounting treatment if the actual distributed amount is different from the estimated amount: none.

For the resolutions on the distribution of surplus is passed by the board of directors, which are not passed by the shareholders' meeting yet:

The board of directors of our company proposed the resolution with the distribution of 0 dollars for employee bonus and 0 dollars for the remuneration of directors and supervisors on Mar 27, 2023.

Employee remuneration from the distribution of stocks and its ratio accounted for the net profit after tax in the individuals or individual financial statement in this period and its ratio accounted for the total amount of employee bonus: not applicable (Our company did not distribute employee stock bonus).
If there is a difference between the actual distribution of employee bonus and the remuneration of directors and supervisors in the previous year (incl. the distributed number of stocks, amount and stock price) and the recognized employee bonus and the remuneration of directors and supervisors, then the difference, reasons and the treatments should be stated clearly: none

(VI) Stock bought back by our company: none
(VII) Situations of corporate bond (incl. overseas corporate bond): none
(VIII) Situations of preferred stock: none
(IX) Situations of participation in the issuance of overseas depository receipt: none
(X) Situations of employee stock option certificates: none
(XI) Situations of merger: none
(XII) Situations of the issuance of new stock by transferring other company's stock: none
(XIII) Enforcement of the application program for funds:
(XIV) Status of Fund Utilization Plan Execution: None

IV. Overview of Business Operations

(I) Content of the Business

A. Scope of the Business

(1) Main content of business operations

The Company successively closed its sole production workshop and granulation workshop during 2025, and transitioned into the hotel and industrial and commercial property leasing sectors.

(2) Percentage of sales revenue

Unit: NT$ 1,000

Main products	2025
	Net revenue	Percentage of sales revenue (%)
Rental Income	42,394	100%
Hotel Revenue	-	-
Total	42,394	100%

(3) Current Products (Services) and Planned New Products (Services) Under Development

Overview of Industrial and Commercial Properties and Hotel Operations

Cizao Town Production Center

The Cizao Town Production Center is located in Cizao Town, Jinjiang City, Fujian Province, covering an area of 87.2 mu with a total floor area of 34,814 square meters. Completed in 2023, this industrial facility enjoys a prime location adjacent to the Jinjiang Highway entrance and is well-served by surrounding infrastructure.

Jinyue Center

Jinyue Center is located in the heart of Jinjiang City, Fujian Province, in close proximity to Quanzhou Jinjiang International Airport. This commercial property covers an area of 17.7 mu with a total floor area of 45,911 square meters, and was completed in 2022.

Holiday Inn Quanzhou Jinjiang Airport

The Holiday Inn Quanzhou Jinjiang Airport is situated in Building No. 1 of Jinyue Center and operates under a franchise license from Holiday Inn, an internationally renowned hotel brand. The hotel enjoys an excellent location immediately adjacent to Quanzhou Jinjiang International Airport. With a total floor area of approximately 12,308 square meters, the hotel features 172 guest rooms, including executive suites and leisure rooms. The interior design draws on the distinctive Southern Fujian architectural style, incorporating the traditional red-brick building aesthetic to create a rich regional character.

B. Overview of the Industry

(1) Current status and development of the industry

① Current status of the industry

Following the COVID-19 pandemic, the economy of Mainland China has continued to develop, driven by consumption upgrades, growing tourism demand, and accelerating urbanization. Through the introduction of policy documents, optimization of the industry development environment, provision of financial support, and encouragement of innovation, the Chinese government has created favorable external conditions for the development and introduction of mid-to-high-end hotel brands. The hotel industry in Mainland China is embracing unprecedented development opportunities, with a rapidly expanding market size and increasingly diversified characteristics. From budget hotels to high-end luxury properties, and from traditional city-center hotels to rural guesthouses and culturally themed hotels, the variety of hotel formats continues to grow, catering to the needs of consumers across different segments. The hotel industry in China has not only achieved a qualitative leap in scale, but has also made significant strides in service quality, brand building, and technological innovation. In the post-pandemic era in particular, the industry has demonstrated remarkable resilience and innovative vitality through digital transformation, personalized services, and the adoption of sustainable development principles.

② Development of the Industry

The Chinese hotel industry is undergoing profound transformation, gradually shifting from expansionary growth to refined operations. The competitive landscape has moved from incremental development to optimization of existing assets, with corporate strategies correspondingly pivoting from scale expansion to quality improvement. According to data from the National Bureau of Statistics of China, the accommodation industry in China generated total revenue of RMB 531.4 billion in 2023, representing a year-on-year increase of 38.7%. As of the end of 2024, the total number of accommodation establishments in Mainland China stood at approximately 570,000, with a combined room inventory of 19.28 million rooms. Among these, the hotel sector accounted for nearly 350,000 establishments and 17.64 million rooms, with an average room count of approximately 51 rooms per property, representing 61% and 92% of the total accommodation industry in terms of establishments and rooms, respectively. By virtue of its scale and standardization, the hotel sector has become the core component of the accommodation industry. The Chinese hotel market is substantial in size and has shown an overall upward trend with fluctuations. In 2016, China's hotel industry comprised approximately 290,000 properties with 14.10 million rooms. Although the industry experienced a period of negative growth due to the impact of the pandemic in 2020 and 2021, it began to recover following the easing of the outbreak, with the number of properties growing significantly and room counts gradually recovering, both achieving double-digit growth and staging a strong rebound. In 2024, the total number of hotel properties

in China reached 349,000 and total room inventory reached 17.64 million rooms, both setting all-time highs.

Number of Hotel Properties in China from 2017 to 2024

Number of Hotel Rooms in China from 2017 to 2024

Source: China Hotel Association and PwC

(2) The relationship between upstream, midstream and downstream of the industry

The Company is principally engaged in hotel operations and the leasing of industrial and commercial properties. In terms of its position within the overall tourism and hotel industry value chain, the Company operates at the midstream level. The Company's primary sources of operating revenue are room revenue and rental income. With respect to accommodation, the Company accepts reservations from online platforms, individual guests, travel agencies, and corporate groups, and procures guest room supplies from upstream suppliers to provide travelers with comfortable and high-quality accommodation services.

(3) Various development trends of the products

① Business Travel

Following the end of the pandemic, China's business travel market entered a new phase of growth starting in 2024, bringing a stable base of business travelers to the broader Chinese hotel industry. According to data from the Global Business Travel Association (GBTA), China remains the world's largest business travel market, currently accounting for 25% of global business travel spending and 62% of the Asia-Pacific total. In 2024, China's business travel expenditure grew by 8.8% to USD 372.5 billion, recovering to 2019 levels and entering a phase of steady growth.

② Cultural Travel

Due to the impact of the pandemic, global tourist arrivals and travel spending declined sharply between 2020 and 2022, with hotel average occupancy rates and revenues also significantly affected. Following the end of the pandemic, domestic and international

tourist numbers and tourism spending have largely recovered to 2019 levels. According to data from the National Bureau of Statistics, China received 130 million inbound visitors in 2024, with international tourism foreign exchange earnings reaching USD 94.2 billion. Supported by China's visa-free policies, the tourism industry is expected to enjoy even broader development prospects in the coming years. In addition, emerging travel formats in recent years — including short-haul trips, local getaways, nighttime consumption, niche destinations, family travel, and self-drive tours — have injected new vitality into the overall tourism industry.

(4) Product Competition

The newly built Holiday Inn Quanzhou Jinjiang Airport enjoys an excellent location, situated immediately adjacent to Jinjiang International Airport and Jinjiang Bus Terminal, and approximately 1.8 kilometers from the local heritage attraction of Wudianshi Traditional Block. The hotel's target customer segments include business travelers, domestic and international leisure and holiday tourists, as well as families, cultural experience seekers, and overseas Chinese visiting relatives. The hotel is also able to provide airport check-in services for guests.

C. Technology and Research & Development Overview

The Company is principally engaged in hotel services, with a focus on providing guests with comfortable and high-quality accommodation. As the hotel commenced trial operations in early 2026, no research and development expenses were incurred during fiscal year 2025. The Company upholds a spirit of product innovation and will continue to upgrade the hotel's smart room systems in the future to deliver an enhanced guest experience.

(4) Short-term and Long-term Business Development Plans

(1) Short-term Development Plans
① Promote the Company's hotel through online platforms and social media channels.
② Expand cooperation with online travel agency (OTA) booking platforms.
③ Conduct hotel service training for employees to deliver higher-quality services.
④ Rapidly master the operational model and management practices of Holiday Inn to strengthen the hotel's competitiveness.

(2) Long-term Development Plans
① Develop staff training programs to improve the service quality of hotel employees and enhance guest satisfaction.
② Expand the business traveler segment and increase the utilization rate of higher-priced room categories to raise average room rates and maintain market leadership.

D. Long-term and short-term business development plans

(1) Short-term development plans

① Install new machinery equipment and expand production lines; enhance production capability by replacing some manual parts with automatic equipment to reduce labor cost.

② Perform tests and refinement on the production lines, strengthen management, enhance production efficiency maintain the yield and originality of products.

③ Enhance the sales in all areas and consolidate the market share of our products in accordance with the expansion of China’s domestic demand market.

④ Maintain good relationship with the existing customers and companies, maintain the stability of the sources of raw materials; continue the customization on product production to satisfy the needs of customers with product diversity.

(2) Long-term development plans

① Assess the future development trend of all areas, expand the factories of our company, expand business scales and continue the development of domestic customers in China and international customers, expand the business scope of our company, enhance the market shares of our products.

② Continue the research on developing new products, obtain the latest concepts and knowledge with the collaboration with the academia, combine theory and knowledge with the development and innovation of products, enhance the product value of our company.

③ Strengthen the financial structure and business organization of our company to enhance the competitiveness of our company.

(II) Overview of market and sales

A. Market analysis

(1) Primary Sales and Service Areas for Main Products and Services

The Company's principal business activities consist of hotel operations and rental income. As the hotel commenced trial operations in early 2026, revenues for the most recent two fiscal years consist entirely of rental income.

(2) Market Share

Within the four-star hotel market in Jinjiang City, the competitive set recognized among peers of the Holiday Inn Quanzhou Jinjiang Airport includes properties such as Ji Hotel, Atour Hotel, and Marco Polo Hotel. As the hotel opened in 2026, no market share data is currently available. The Holiday Inn Quanzhou Jinjiang Airport has entered into a franchise agreement with the internationally renowned Holiday Inn brand, and leveraging the brand's recognition and the hotel's prime location, the property is highly competitive within the area surrounding Jinjiang Airport.

(3) Future Market Supply, Demand, and Growth Prospects

With the end of the pandemic and the recovery of the Mainland Chinese economy, the tourism and hotel industries have embraced new opportunities. In recent years, the Chinese government has introduced a series of policies to support the development of the hotel

industry, including measures such as increasing the number of statutory public holidays, which will directly stimulate growth in tourism and hotel demand. Simultaneously, the Office of the Ministry of Culture and Tourism has encouraged local governments to introduce consumer-friendly initiatives such as consumption vouchers and spending discounts. These policies not only improve the operating environment for the hotel industry, but also effectively enhance consumers' willingness to travel and their spending capacity through increased holidays and consumption incentives, thereby generating greater demand for hotel services.

(4) Competitive Advantages

The Holiday Inn Quanzhou Jinjiang Airport enjoys an excellent location in the heart of Jinjiang City, immediately adjacent to Jinjiang International Airport and Jinjiang Bus Terminal, and only approximately ten minutes by car from local heritage attractions. Combined with its comprehensive facilities and full-service offerings, the hotel is well-positioned to earn recognition from both domestic and international travelers. Its convenient transport links also make it easy for guests to access well-known tourist attractions, making it an ideal choice for both business and cultural travel.

(5) Favorable and Unfavorable Factors Affecting Development Prospects, and Countermeasures

① Favorable Factors

a. Positive External Economic Environment

In recent years, the Chinese government has introduced multiple policies to support the development of the hotel industry. Both the tourism and hotel sectors have shown solid growth momentum, with market scale expanding year by year and significant untapped potential.

b. Holiday Inn Brand

The Company has entered into a franchise agreement with Holiday Inn, leveraging the brand's global influence to provide the hotel with a stable and consistent source of guests.

② Unfavorable Factors and Countermeasures

There are numerous hotels in and around the center of Jinjiang City, resulting in intense competition. With additional chain hotel brands continuing to enter the market, further pressure on the local hotel market's supply-demand balance is inevitable.

③ Countermeasures

a. Increase hotel promotional efforts across internet and social media platforms to enhance brand awareness and visibility.

b. Expand cooperation with online travel agencies (OTAs). As OTAs represent the primary sales channel for the hotel industry — accounting for approximately 70% or more of room

bookings for independent hotels — broadening partnerships with well-known OTA platforms in Mainland China is particularly important for the Company in securing a greater share of the guest market.

c. Leverage the reservation system of IHG Hotels & Resorts to develop direct booking channels and further grow the hotel's guest base.

B. The major usage and production process of the major products

The Company's primary business model consists of guest room rentals and industrial and commercial property leasing, with the overarching objective of achieving the highest level of customer satisfaction.

C. Supply Status of Key Raw Materials

The Company successively closed its sole production workshop and granulation workshop during 2025 and transitioned into the hotel and industrial and commercial property leasing sectors. Its principal operations consist of guest room rentals and food and beverage services, and the supply of key materials such as guest supplies and food ingredients remains stable.

D. List of major customers for procurement and sales

(1) The suppliers who accounted for over 10% of the total procurement amount in one of the two recent years and their procurement amount and ratio

Unit: NT$ 1,000; %

	2023				2024
Items	Name	Amount	Ratio accounted for the net procurement of the whole year (%)	Relationship with the issuer	Name	Amount	Ratio accounted for the net procurement of the whole year (%)	Relationship with the issuer
1	Qi Po Trading	151,649	39.54%	None	Qi Po Trading	57,449	46.00%	None
2	Yuanren Import and Export	133,976	34.93%	None	Yuanren Import and Export	49,470	39.61%	None
3	BuYuan Sports	62,983	16.42%	None	Fulin Import & Export	17,974	14.39%	None
	Subtotal	348,608	90.88%		Subtotal	124,893	100.00%

Note: The Company successively closed its sole production workshop and granulation workshop during 2025 and transitioned into the hotel and industrial and commercial property leasing sectors. The cost of purchases related to the footwear business has been reclassified under the after-tax profit or loss from discontinued operations.

(2) The suppliers who accounted for over 10% of the total sales amount in one of the two recent years and their sales amount and ratio

Unit: NT$ 1,000; %

	2023				2024
Items	Name	Amount	Ratio accounted for the net sales of the whole year (%)	Relationship with the issuer	Name	Amount	Ratio accounted for the net sales of the whole year (%)	Relationship with the issuer
1	Huiteng Footwear	110,147	29.27%	None	Zhida Commerce	42,394	26.94%	None
2	Fenghua Footwear & Apparel	81,871	21.75%	None	Huiteng Footwear	40,838	25.95%	None
	Subtotal	192,018	51.02%		Subtotal	83,232	52.90%
	Others	184,353	48.98%		Others	74,112	47.10%
	Net sales	376,371	100.00%		Net sales	157,344	100.00%

Note: The Company successively closed its sole production workshop and granulation workshop during 2025 and transitioned into the hotel and industrial and commercial property leasing sectors. Revenue from the footwear business has been reclassified under the after-tax profit or loss from discontinued operations. Revenue reported in the financial statements represents rental income.

(III) Number of working employees in the current year for the past two years and till the printing date of the annual report

Unit: people

Year		2023	2024	Till Mar. 31, 2026
Number of employees	Direct personnel	7	10	30
	Indirect employees	18	16	21
	Total	25	26	51
Average age		33	33	44
Average seniority		6.4	6.4	9.6
Distribution of educational background	Master's degree or above	1	1	1
	Bachelor's degree	8	12	30
	High school diploma (incl. below)	16	13	20
	Total	25	26	51

(IV) Information on eco-friendly expenditure

Permits, Fees, and Dedicated Environmental Personnel Required by Law

The Company's subsidiary, Jinjiang Chengchang Footwear Co., Ltd., has obtained a Pollutant Discharge Permit issued by the Jinjiang Municipal Bureau of Environmental Protection and pays pollutant discharge fees in accordance with applicable laws. There are no circumstances in which violations of environmental laws and regulations have had a material adverse effect on the Company's financial condition or business operations.

Environmental Remediation Activities for the Most Recent Two Fiscal Years and up to the Annual Report Publication Date; Pollution Disputes, if any, and their Resolution: None.
Losses (including Compensation) Incurred by the Company due to Environmental Pollution for the Most Recent Two Fiscal Years and up to the Annual Report Publication Date, Total Amount of Penalties, Future Response Measures (including Improvement Actions) and Potential Expenditures (including Estimated Losses, Penalties, and Compensation that may Arise if No Response Measures are Taken; if a Reasonable Estimate Cannot be Made, the Reason Should be Stated): None.
Current Pollution Status and its Impact on the Company's Earnings, Competitive Position, and Capital Expenditures, as well as Projected Significant Environmental Capital Expenditures for the Next Two Fiscal Years: None.

(V) Labor relations

List the employee welfare measures, advanced studies, trainings, pension system of the company and their implementation and the agreement between labor and management and the circumstances of the protection measures on employee rights:

(1) Employee welfare measures

Our countermeasures for legal welfare subject to local labor law are stated as follows:

① Insurance welfare measures: occupational medical insurance, occupational basic endowment insurance, unemployment insurance, occupational injury insurance, childbirth insurance and public housing funds

② Other welfare: The subsidiary of our company, Jinjiang Chandra Shoe Industry, has offered free dormitories for employees and held annual feasts to gather the coherence of the employees.

(2) Advanced studies and trainings for employees

The education training for our employees is focused on in-job training mainly. employees are taught and trained to familiarized with the internal operation of the company; for excellent or high-level employee, we encourage them to attend the advanced studies in universities and offer allowance for their tuition.

(3) Pension system

Our company has complied to the regulations of “Regulations on corporate occupational basic endowment insurance” stipulated by the country of our main business body, Jinjiang Chandra Shoe Industry Ltd. Company. Pension funds are withheld monthly to the specialized account of financial department of the local government.

(4) Agreement between the labor and management

Our company always emphasizes labor rights and the harmony in the relationship between labor and management. In addition, our company pays attention the opinions from the employees, employees can appropriately communicate with higher level manager or human resources department directly to maintain their good relationship. Therefore, there are no disputes between labor and management till now.

(5) Protection measures for all kinds of labor rights

Our company has established internal control system and all kinds of regulations, which includes labor rights, obligation and welfare. We review the content of welfare periodically to protect labor rights.

If there are losses from the disputes between labor and management in recent years and till the printing date of the annual report, then explain them and disclose the current and future potential amounts of losses and their countermeasures. If it cannot be estimated rationally, then explain the fact that it cannot be estimated rationally: none.

In addition, please refer to the aforementioned (II) Risk matters A. Risk factors (2) Main business location: China ii. Foreign exchange control, taxation, laws c. Description of risks on laws and policies regarding the social insurance and public housing funds paid by the subsidiary of our company, Jinjiang Chandra and explain.

(VI) Information and Communication Security Management

Describe the framework for managing information and communication security risks, the information and communication security policy, specific management plans, and resources allocated to information and communication security management.

(1) Information and Communication Security Risk Management Framework: The information and communication security of the company is managed by the Information Department under the guidance and supervision of the General Manager. The department formulates information and communication security policies, establishes a security system, and mitigates potential risks to ensure the company's information security.

(2) Information and Communication Security Policy:

Regulatory Standards: The company has established internal information and communication security management regulations to govern the information security behavior of its personnel. Regular internal audits and external audits by accountants are conducted annually. Periodic reviews are also conducted to ensure that the current regulations align with the operational environment, strengthening the operational management of the company's information and communication security.

Equipment Investment: The company utilizes advanced hardware equipment and antivirus software to manage the company's network and ensure information security.

Training and Awareness: The company continuously provides information and communication security training and raises awareness among its employees. Practical case studies are used to reinforce the internal personnel's awareness of information and communication security measures.

(3) Specific Management Plans: The company implements comprehensive network management systems, email protection systems, antivirus software, backup devices, and combines access control and information security management regulations to ensure the security of the internal network.

(4) Resources Allocated to Information and Communication Security Management: The company conducts regular testing of the current network security environment and strengthens information security. As of the latest report, the company's information infrastructure operates stably and reliably, providing sustainable services for the company's operations.

Provide details of any significant losses incurred, potential impacts, and response measures due to major information and communication security incidents in the most recent fiscal year up until the date of the annual report. If it is not possible to reasonably estimate, explain the fact that it cannot be reasonably estimated: None.

I. Important contracts

Contract Type	Parties	Contract Term	Main Content
Loan Agreement	Lender: Jinjiang Chengchang Footwear Co., Ltd.
Borrower: China Everbright Bank Co., Ltd., Quanzhou Jinjiang Branch	June 19, 2023 to June 18, 2028	China Everbright Bank Jinjiang Branch provides a RMB 65 million loan facility to Jinjiang Chengchang Footwear Co., Ltd. for the construction project at its Cizao plant. The loan term is 5 years. Interest rate: 1.8% in Year 1, 2.8% in Years 2–3, and 4.8% in Years 4–5.	-
Loan Agreement	Lender: Fujian Chengyue Hotel Operations Co., Ltd.
Borrower: Industrial and Commercial Bank of China Co., Ltd., Jinjiang Branch	Nov. 1, 2025 to Nov. 1, 2035	ICBC Jinjiang Branch provides a RMB 25.8 million loan facility for hotel renovation. Loan term: 10 years. Interest rate: LPR for loans over 5 years minus 0.01%.
Guarantee Agreement	Guarantor: Jinjiang Chengchang Footwear Co., Ltd.
Guaranteed Party: China Everbright Bank Co., Ltd., Quanzhou Jinjiang Branch	June 19, 2023 to June 18, 2028	A RMB 65 million loan facility is secured by a mortgage provided by Jinjiang Chengchang Footwear Co., Ltd., with collateral consisting of land and buildings under Property Certificate No. Min (2023) Jinjiang Real Estate Right 0083879.
Guarantee Agreement	Guarantor: Century Shengyue New Material Technology Co., Ltd.
Guaranteed Party: ICBC Jinjiang	Oct. 22, 2025 to Dec. 31, 2035	A RMB 25.8 million loan facility to Fujian Chengyue Hotel Operations Co., Ltd. is secured by a mortgage provided by Century Shengyue New Material Technology Co., Ltd., collateralized by land and

	Branch		buildings under Property Certificate No. Min (2023) Jinjiang Real Estate Right 0076188.
Franchise Agreement	Liuzhou Hotel Management (Shanghai) Co., Ltd.	2026/04/15 to 2041/04/14	Franchise fee calculation and collection: calculated monthly as a percentage of hotel revenue.
Lease Agreement	Lessor: Jinjiang Chengchang Footwear Co., Ltd. Lessee: Fujian Zhida Commercial Management Co., Ltd.	June 1, 2026 to May 31, 2034	Zhida leases property at Jinyue Center, Jinjiang City. Annual rent: RMB 4,196,899.
Lease Agreement	Lessor: Jinjiang Chengchang Footwear Co., Ltd. Lessee: Fujian Zhida Commercial Management Co., Ltd.	Oct. 1, 2023 to Sep. 30, 2033	Zhida leases a property in the Cizao plant area of Jinjiang City. Annual rent: RMB 2,029,968.
Lease Agreement	Lessor: Jinjiang Chengchang Footwear Co., Ltd. Lessee: Fujian Zhida Commercial Management Co., Ltd.	June 1, 2025 to May 31, 2034	Zhida leases a property in the Cizao plant area owned by Century Shengyue. Annual rent: RMB 2,340,280.
Insurance Agreement	Ping An Property & Casualty Insurance Co., Ltd.	Mar. 1, 2026 00:00 to May 31, 2026 24:00	Commercial General Liability Insurance for Fujian Chengyue Hotel Operations Co., Ltd., located at No.1 Lianxi Road, Jinjiang City. Total insured amount: USD 50,000,000.	-
Insurance Agreement	Ping An Property & Casualty Insurance Co., Ltd.	June 26, 2025 00:00 to	Public Liability Insurance for Qingyang building premises (57,000 sqm) in Qingyang Industrial Zone,	-
		May 31, 2026)	Lianxi Road, Jinjiang City. Total insured amount: USD 50,000,000.

		June 25, 2026 24:00	Jinjiang City. Total insured amount: RMB 6,000,000.
Insurance Agreement	Ping An Property & Casualty Insurance Co., Ltd.	June 26, 2025 00:00 to June 25, 2026 24:00	Employer Liability Insurance in Qingyang Industrial Zone, Jinjiang City. Total insured amount: RMB 9,350,000.	-
Insurance Agreement	China Pacific Property Insurance Co., Ltd.	June 26, 2025 00:00 to June 25, 2026 24:00	Insurance covering fixed assets (buildings, machinery, equipment, furniture, office supplies) and current assets (raw materials, semi-finished and finished goods) in Wuli Industrial Zone, Jinjiang City. Total insured amount: RMB 111,815,135.

V. Review and Analysis of Financial Status and Financial Performance and Other Important Matters

(I) Financial Status

Main reasons and their effects on the major changes of the assets, liabilities and stockholder’s equity in the past two years.

Unit: NT$ 1,000

Item	2024	2025	Differences
			Amount	Ratio(%)
Liquid assets	969,055	783,215	(185,840)	(19.18)%
Fixed assets	1,653,009	1,669,540	16,531	1.00%
Intangible assets	700,019	488,432	(211,587)	(30.23)%
Gross assets	3,322,083	2,941,187	(380,896)	(11.47)%
Liquid liabilities	137,200	99,407	(37,793)	(27.55)%
Long-term liabilities	175,175	229,639	54,464	31.09%
Other liabilities	4,916	4,916	-	-
Gross liabilities	317,291	333,962	16,671	5.25%
Capital stock	1,529,229	1,529,229	-	-
Capital surplus	2,540,814	2,540,814	-	-
Retained earnings	(534,714)	(933,124)	(398,410)	74.51%
Cumulative translation adjustment	(530,537)	(529,697)	840	(0.16)%
Minority interest	-	-	-	-
Total stockholder’s equity	3,004,792	2,607,225	(397,567)	(13.23)%

Items with period-over-period changes of 20% or more and a change amount of NTD 10 million or more, and the primary reasons and impacts thereof:

Decrease in Intangible Assets
Primarily attributable to the impairment provision recorded on land by the Company in 2025.
Decrease in Current Liabilities
Primarily attributable to a reduction in accounts payable resulting from the Company's closure of its production facilities and transition to hotel operations during 2025.
Increase in Long-term Liabilities
Primarily attributable to an increase in bank borrowings in 2025.
Decrease in Retained Earnings
Primarily attributable to the net loss incurred by the Company in 2025.

(II) Financial Performance

Table of Comparison and Analysis of Financial Performance

Unit: NT$ 1,000

Year Items	2024	2025	Differences
			Amount	Ratio (%)
Net operating revenue	48,146	42,394	(5,752)	(11.95)%
Operating cost	-	78,879	78,879)	-
Gross profit	48,146	(36,485)	(84,631)	(175.78)%
Operating expenses	126,070	105,153	(20,917)	(16.59)%
Operating profit	(77,924)	(141,638)	(63,714)	81.76%
Non-operating revenue	7,769	3,672	(4,097)	(52.74)%
Other profit and losses	(405,623)	(223,023)	182,600	(45.02)%
Income before tax	(475,778)	(360,989)	114,789	(24.13)%
Income tax expenses	(835)	-	835	(100.00)%
Net Loss from Continuing Operations	(474,943)	(360,989)	113,954	(23.99)%
After-tax Profit or Loss from Discontinued Operations	(333,087)	(37,421)	295,666	(88.77)%
Consolidated net income	(808,030)	(398,410)	409,620	(50.69)%
Items with period-over-period changes of 20% or more and a change amount of NTD 10 million or more, and the primary reasons thereof: 1. Decrease in Gross Profit and Operating Income Primarily due to the Company's closure of its sole production workshop during 2025 and transition into the hotel industry. Accordingly, the gross profit for 2024 does not include the sole production business. 2. Decrease in Other Gains and Losses Primarily attributable to a decrease in loss provisions recorded by the Company in 2025. 3. Decrease in Pre-tax Net Income and Net Loss from Continuing Operations Primarily attributable to a reduction in net loss incurred by the Company in 2025. 4. Decrease in After-tax Profit or Loss from Discontinued Operations and Consolidated After-tax Net Profit or Loss Primarily due to the Company's closure of its sole production workshop during 2025 and transition into the hotel industry, resulting in a reduction in profit or loss.

Expected Sales Volume and Basis Thereof, Potential Impact on the Company's Future Financial Condition and Business Operations, and Response Plans

The Company establishes its annual sales targets based on the annual budget and operating plan, supplemented by actual historical operating performance.

(III) Cash flow

The analysis of cash flow

Unit: NT$ 1,000

Time	2024	2025	Differences
			Amount	Ratio (%)
Cash inflow from business activities	(297,113)	(59,797)	237,316	(79.87)%
Cash outflow from investment activities	(315,954)	(133,208)	182,746	(57.84)%
Cash outflow from financing activities	(2,778)	65,457	68,235	(2,456.26)%
Variance Analysis:
1. Decrease in cash outflows from operating activities: Primarily attributable to a reduction in net loss incurred by the Company in 2025.
2. Decrease in cash outflows from investing activities: Primarily attributable to a decrease in capital expenditures in 2025.
3. Cash outflows from financing activities: Primarily attributable to the repayment of long-term borrowings by the Company in 2025.
1.

The improvement plan for insufficient liquidity and the change impact analysis of cash flow for the future year

The Company has certain working capital requirements and various capital expenditure plans for 2026. However, given its relatively high cash position, the Company should be able to fund cash outflows from investing activities over the coming year, and there are no foreseeable concerns regarding insufficient liquidity.

(IV) Impact on financial business by major capital expenditure in recent years

The Company acquired properties amounting to NTD 134,101 thousand during fiscal year 2025, as the Company converted its existing commercial and office premises into a hotel as part of its transition into the hotel industry. As indicated in the comparative table of fixed asset and total asset turnover ratios for the most recent three fiscal years, although the turnover ratios have fluctuated, there are no circumstances in which the increase in capital expenditures has had a material adverse effect on the Company's financial condition or business operations.

Turnover ratio	2023	2024	2025
Fixed-asset turnover ratio (times)	0.27	0.23	0.03
Total-asset turnover ratio (times)	0.14	0.11	0.01

(V) Re-investment policy and the major reasons and improvement plans for the profit or loss in recent years and the investment plan for the future year: None.

(VI) Analysis and assessment on risk matters in recent years and till the printing date of the annual report

A. Impact on company's income by interest rate fluctuations, exchange rate fluctuations and inflation and the countermeasures for future

Interest rate fluctuations

The Company and its major subsidiaries conduct periodic assessments of credit facilities and borrowings with banks, negotiate preferential interest rates with their banking counterparts, and monitor the inflow and outflow of funds from principal operating activities to service bank borrowings and support operations. As of the end of 2024 and 2025, total bank borrowings amounted to NTD 210,220 thousand and NTD 275,677 thousand, representing $6.33\%$ and $9.37\%$ of total assets, respectively. Interest expenses for fiscal years 2024 and 2025 were NTD 3,941 thousand and NTD 3,979 thousand, respectively. As loan interest rates have been fixed for the duration of the loan terms, there are currently no circumstances in which interest rate fluctuations have had a material adverse effect on the Company's financial condition or business operations.

Exchange rate fluctuations

The Company's primary operating entity is Jinjiang Chengchang, located in Fujian Province, Mainland China. As its principal customers are domestic Chinese clients, sales transactions are denominated in Renminbi (RMB). Key raw material purchases are likewise settled in RMB, and accordingly, all receipts and payments relating to day-to-day operations are conducted in RMB. The applicant entity, Shengyue New Materials Co., Ltd., maintains its accounts in RMB, and translation adjustments arise upon preparation of the consolidated financial statements. As such foreign exchange differences are attributable to translation rather than transactions, there are currently no circumstances in which exchange rate fluctuations have had a material adverse effect on the Company's financial condition or business operations.

Inflation

The Company has already incorporated inflation risk into its annual operating plan and continuously monitors market price movements. Selling prices are adjusted in response to market demand, and the Company maintains strong relationships with its suppliers. The procurement policy primarily involves periodic competitive bidding among vendors to reduce purchasing costs. The Company also maintains a pool of qualified alternative suppliers to choose from, thereby mitigating the impact of inflation on the Company's profitability.

B. Policies, main reasons and future countermeasures for profit or loss due to performing high-risk, high leverage investments, endorsements and guarantees and transactions in financial derivatives

In accordance with the principles of prudence and pragmatic management, the Company and its major subsidiaries do not engage in high-risk, high-leverage investments, endorsements and guarantees, or derivative financial instrument transactions. The Company has established its "Procedures for Endorsements and Guarantees" and "Procedures for Acquisition or Disposal of Assets" to govern the conduct of related business activities. All fund lending activities are carried out in accordance with the Company's "Procedures for Loaning Funds to Others." As a result, there are currently no circumstances in which such activities have had a material adverse effect on the Company's financial condition or business operations.

C. Future development plans and expected research and development expenses to be devoted

The Company is principally engaged in hotel operations and leasing services, with a focus on providing guests with comfortable and high-quality accommodation. Upholding a spirit of product innovation, the Company is committed to enhancing the level of room automation and improving overall hotel operational capabilities, and anticipates investing a certain level of funding in research and development over the coming years.

D. Impact on the financial business of our company by domestic and foreign important policies and changes in law and their countermeasures

The registration of our company is Cayman Islands, but there are no concrete economic activities performed there. The main operation location is China. Our company and its important subsidiaries have paid attention to the major policies, changes in law and changes in policies and orders of the competent agencies of the host countries at all times and made immediate responses. Therefore, there are no major impact on the financial business of our company and its important subsidiaries.

E. Impact on the financial business of our company by technology changes and industrial changes and their countermeasures

In response to the rapid growth and increasingly competitive landscape of the hotel industry, the Company actively pursues diversification and innovation in its marketing and business development efforts, and seeks to expand its operational scale in order to achieve the Group's sustainable development objectives. For the most recent fiscal year and up to the annual report publication date, no circumstances have arisen in which industry changes have had a material adverse effect on the Company's financial condition or business operations.

F. Impacts on corporate management crisis by the change of corporate image and their countermeasures

Our company and its important subsidiaries always value local corporate image. Our company has continued to strengthen internal management and quality management of our company positively since its establishment to build corporate image of our corporation. This can further increase the trust to the brands of our company from customers. Therefore, there are no crisis occurred yet.

G. Expected benefits, potential risks and countermeasures for merger

As of the annual report publication date, the Company has no merger or acquisition plans.

H. Expected benefits and potential risks for the expansion of factories and their countermeasures: Not applicable.

I. Risks from centralized purchasing or marketing and countermeasures

Procurement Concentration Risk

The major subsidiaries of the Company procure raw materials from multiple suppliers, thereby appropriately diversifying procurement risk, ensuring a stable supply of raw materials required for production, and complying with relevant procurement procedures.

Sales Concentration Risk

The Company is principally engaged in guest room rentals and leasing services. As the hotel was completed and commenced trial operations in early 2026, all revenue for fiscal year 2025 consists of rental income. It is anticipated that once the hotel enters full operation in 2026, the concentration risk of the Group's sales will be reduced.

J. Impacts and risks on the company by massive stock transfers or changes occurred, which are performed by directors, supervisors or big shareholders who have over 10% of shareholdings and their countermeasures

There are no massive stock transfers occurred, which are performed by directors, supervisors or big shareholders who have over 10% of shareholdings, in recent years and till the printing date of the annual report.

K. Impacts and risks on the company by the change in management right in recent years and till the printing date of the annual report and their countermeasures

There are no changes in the management right of our company in recent years and till the printing date of the annual report. Our company has enforced corporate governance system and introduced independent directors to promote the protection of stockholders' equity. The daily operation of our company relies on professional managers. The professional team of managers of our company have made contributions to business performance of our company to some extent. They can continue to obtain the support from shareholders in the future. Therefore, there are no major negative effects on the management and business advantages of our company if there are changes in management right.

L. For litigation or non-contentious cases, the company and the directors, supervisors, general manager, substantial responsible person of the company, big shareholders, who have over 10% of shareholdings, and the affiliated companies should be stated in detail; for cases with final verdict or major litigation, non-contentious or administrative cases at trial where its consequences can result in major impact on

stockholders' equity or security prices, the litigation facts, target amount, starting date of the litigation, main parties of the litigation and the status until the printing date of the annual report should be disclosed.

There are no such circumstances within our company.

M. Other important risks and their countermeasures

Management has faced the challenges of working in listed company for the first time

The business of shoe industry of our company has obtained significant scores. However, we need to face the wide range of investors, shareholders and professional investment institutes after the stock of the company is listed. Our company belongs to the category of foreign enterprise and we need to adapt and understand the relevant securities act. In the future, there will be specialized personnel responsible for maintaining the relationship with investors and performing operations to comply with relevant regulations in the securities act in Taiwan. Our company has recruited suitable talents and organized an excellent team for the demand from business operation successively since our company applied to be listed. Moreover, our company has recruited auditing managers with the working experience in accounting firms in Taiwan to enforce corporate governance in order to respond to the challenges faced after being listed.

Challenges from stockholders' equity

The Company Act of Cayman Islands and The Company Act of R.O.C. have many different regulations. Our company has amended our company law in accordance with "Checklist for important matters concerning the protection of shareholders' equity in foreign issuer's country of registration" announced by Taiwan Stock Exchange without against the law in Cayman Islands. However, the legal regulations for corporate operation in China and Taiwan have many different points, investors cannot ensure that their perspectives in the legal rights of investment on domestic companies in Taiwan can also be used when making investments on companies in Cayman Islands. Hence, investors should understand and inquire relevant risks from specialists.

(VIII) Other important matters: Please refer to the attached financial statements.

VIII. Special Notes

(I) Relevant information on affiliated company

Overview of Related Companies: Organizational Chart of Related Companies.

Basic information of each affiliated company

Unit: Unless otherwise specified amounts are in New Taiwan Dollars (NTD) thousand

Company Name	Date of Establishment	Address	Paid-in capital	Main Business
Super Light Shoe Soles Company Ltd	Oct. 2010	USA	USD$100	Investment Holding Business
Cheng Chang Shoe Co., Ltd.	Oct. 1999	HK	HKD 100,000	Investment Holding Business
Jinjiang Cheng Chang Shoe Co., Ltd.	Sep. 1997	China	545,220	Research, Manufacturing, and Trading of Various Types of Shoe Soles and Related Shoe Materials
Century Victory New Materials Technology Co., Ltd.	Jul. 2014	China	212,413	Leasing Business
Jinjiang Chengchang Investment Co., Ltd.	May. 2025	China	67,024	Investment Holding Business
Fujian Chengyue Hotel Management Co., Ltd.	Apr. 2025	China	67,024	Leasing and Hotel Business

Common Shareholder Information for Entities Presumed to Have Control and Subsidiary Relationship: None
The industries covered by the overall affiliated businesses' operations include:

(1) The Company's principal business activities are as follows:
The Company is a holding company. Subsidiaries with substantive operating functions include Super Light Shoe Soles Company Ltd, Chengchang Footwear Co., Ltd., Jinjiang Chengchang Footwear Co., Ltd., Shiji Shengyue New Materials Technology Co., Ltd., Jinjiang Chengchang Investment Co., Ltd., and Fujian Chengyue Hotel Management Co., Ltd. The Company is principally engaged in leasing and hotel operations.

(2) Super Light Shoe Soles Company Ltd: Investment holding business.

(3) Chengchang Footwear Co., Ltd.: Investment holding business.

(4) Jinjiang Chengchang Footwear Co., Ltd.: Research and development, manufacturing, trading, and leasing of various shoe soles and related footwear materials.

(5) Shiji Shengyue New Materials Technology Co., Ltd.: Leasing business.

(6) Jinjiang Chengchang Investment Co., Ltd.: Investment holding business.
(7) Fujian Chengyue Hotel Management Co., Ltd.: Leasing and hotel business.

Names of directors, supervisors, and general managers of each affiliated company, along with their shareholdings or contributions to the respective companies.

2023.12.31

Company Name	Title	Names or Representatives	持有股份
			Shares	Shareholding Percentage
Super Light Shoe Soles Company Ltd	Chairperson	Chuang, Kuo-Ching	-	-
Cheng Chang Shoe Co., Ltd.	Chairperson	Chuang, Kuo-Ching	-	-
Jinjiang Cheng Chang Shoe Co., Ltd.	Chairperson	Chuang, Kuo-Ching	-	-
	Vice President	Chuang, Hui-Huang	-	-
Century Victory New Materials Technology Co., Ltd.	Executive Director	Chuang, Hui-Huang	-	-
Jinjiang Chengchang Investment Co., Ltd.	Chairperson	Chuang, Kuo-Ching	-	-
Fujian Chengyue Hotel Management Co., Ltd.	Executive Director	Chuang Keng-Pin	-	1%

各關係企業營運概況

Unit: Thousand New Taiwan Dollars per earnings per share in New Taiwan Dollars.

2024.12.31

Company Name	Capital amount	Total assets	Total liabilities	Total equity	Operating revenue	Operating profit (loss)	Net income (after tax)	Earnings per share (attributable to the shareholders of the company)
Victory New Materials Limited Company	1,529,229	2,941,187	333,962	2,607,225	-	(15,459)	(398,410)	(2.61)
Super Light Shoe Soles Company Ltd	-	2,566,345	-	2,566,345	-	-	(301,129)	-
Cheng Chang Shoe Co., Ltd.	401	2,566,345	-	2,566,345	-	(9)	(301,129)	-

Jinjiang Cheng Chang Shoe Co., Ltd.	545,220	2,753,640	185,003	2,568,637	154,170	(141,705)	(292,287)	-
Century Victory New Materials Technology Co., Ltd.	212,413	416,355	423,518	(7,163)	8,322	(13,169)	(80,975)	-
Jinjiang Chengchang Investment Co., Ltd.	67,024	59,273	-	59,273	-	-	(7,751)	-
Fujian Chengyue Hotel Management Co., Ltd.	67,024	169,317	110,044	59,273	-	(7,756)	(7,751)	-

Consolidated financial statements of affiliated companies:

Please refer to the financial statements in the appendix.

Related report: None.

(II) Circumstances of private offering of securities in recent years: None
(III) Circumstances of the stock of our company held by or disposed of by the subsidiary in recent years and till the printing date of the annual report: None
(IV) Other necessary matters for supplementary: None
(V) If there are matters that caused major effects on the stockholder’s equity or securities price stated in Subparagraph 2 of Paragraph 2 of Article 36 of the Act in recent years and till the printing date of the annual report, they should be stated in detail: None

(VI) Whether specific contents for protecting stockholder's equity has been stipulated in company law or the documents of the organization

The applied company has stipulated concrete contents in the Law for the protection of stockholders' equity in accordance with the requirement in the checklist for the protection of stockholders' equity after reviewing The Company Law of the applied company except for the differences listed in the following table:

Matters for protecting stockholders' equity Items in the checklist	Content stipulated in Company Law	Reasons for the differences and explanations
A company shall not cancel its shares, unless a resolution on capital reduction has been adopted by its shareholders meeting; and capital reduction shall be effected based on the percentage of shareholding of the shareholders pro rata.	Article 10.7 of The Company Law: “Notwithstanding anything to the contrary contained in Article 10.1 to 10.6, and subject to the Statute, the Memorandum and Articles and the Applicable Public Company Rules, the Company may, with the approval of an Ordinary Resolution, compulsorily redeem or repurchase Shares, provided that such Shares shall be cancelled upon redemption or repurchase and such redemption or repurchase will be effected pro rata based on the percentage of shareholdings of the Members. Payments in respect of any such redemption or repurchase, if any, may be made either in cash or by distribution of specific assets of the Company, as specified in the Ordinary Resolution approving the redemption or repurchase, provided that (a) the relevant Shares will be cancelled upon such redemption or repurchase and will not be held by the Company as Treasury Shares, and (b) where assets other than cash are distributed to the Members.	According to the explanations from the lawyers of Cayman Islands: 1. Article 14 of Cayman Islands Company Law allows the company to reduce issued capital, however, this requires the approval of board meeting by Special Resolution and can be performed after the confirmation of Cayman court. 2. Other than Article 14 of Cayman Islands Company Law, the issued capital of the company can be removed only when buying, returning or taking back in accordance with the regulations in Article 37 or 37B of Cayman Islands Company Law. 3. Based on Article 37 of Cayman Islands Company Law, a company can buy back its stocks in accordance with The Company Law with the approval of board meeting. Other than the regulations in Article 37, Cayman Islands Company Law has not stipulated: (1) the buy-back should be in accordance with the shareholding ratio of the shareholders; (2) approval is required when the stock payment is returned by properties other than cash; or (3) assessment should be performed for the returned property value. However, these can be stipulated in The Company Law. Because of this, Article 14.1 and Article 10.7 of The Company Law stipulate that the procedure of reducing capital of our company should be performed through the buy-back of stocks. The difference comes from the regulation of Cayman Islands Company Law. However, The

Matters for protecting stockholders’ equity Items in the checklist	Content stipulated in Company Law	Reasons for the differences and explanations
	the type of assets, the value of the assets and the corresponding amount of such substitutive distribution shall be (i) assessed by an R.O.C. certified public account before being submitted to the Members for approval and (ii) agreed to by the Member who will receive such assets. After the Company has acquired public company status, the foregoing matter shall be made in accordance with the Applicable Public Company Rules as applied to the Company.”	Company Law did not further limit the procedure of reducing capital of our company.
The remuneration of directors, if not prescribed in the Articles of Incorporation, shall be determined by a meeting of shareholders and cannot be ratified by a meeting of shareholders.	Article 30.2 of The Company Law: “The Directors may be paid remuneration only in cash. The amount of such remuneration shall be recommended by the remuneration committee and determined by the board of Directors, and take into account the extent and value of the services provided for the management of the Company and the standards of the industry in the R.O.C. and overseas. The Directors shall also be entitled to be paid all travelling, hotel and other expenses properly incurred by them in connection with their attendance at meetings of the board of Directors or committees of Directors, or general meetings of the Company, or separate meetings of the holders of	Our company did not state clearly about the remuneration of the directors in company law nor stipulate for the board meeting to establish it. However, by referencing the contents in Business No. 09302030870 Explanation given by Ministry of Economic Affairs on Mar. 8, 2004 and “Regulations Governing the Appointment and Exercise of Powers by the Remuneration Committee of a Company Whose Stock is Listed on the Stock Exchange or Traded Over the Counter”, the regulations listed on the left has no negative impact on shareholders’ equity.

Matters for protecting stockholders’ equity Items in the checklist	Content stipulated in Company Law	Reasons for the differences and explanations
	any class of Shares or debentures of the Company, or otherwise in connection with the business of the Company, or to receive salaries in respect of their service as Directors as may be recommended by the compensation committee and determined by the board of Directors, or a combination partly of one such method and partly another, provided that any such determination shall be in accordance with the Applicable Public Company Rules.”
Any or a plural number of shareholder(s) of a company who has (have) continuously held 3% or more of the total number of outstanding shares for a period of one year or a longer time may, by filing a written proposal setting forth therein the subjects for discussion and the reasons request the board of directors to call a special meeting of shareholders. If the board of directors fails to give a notice for convening a special meeting of shareholders within 15 days after the filing of the request under the preceding Paragraph, the proposing shareholder(s) may, after obtaining an approval from the competent authority, convene a special meeting of shareholders on his/their own.	Article 16.8 of The Company Law: “If the board of Directors do not within fifteen days from the date of the deposit of the requisition dispatch the notice of an extraordinary general meeting, the requisitionists may themselves convene an extraordinary general meeting in accordance with the Applicable Public Company Rules.”	According to Taiwan Certificate No. 0991701319 Letter given by Taiwan Stock Exchange on Apr. 13, 2010: “Explanation: II. (III) Foreign issuer should stipulate the rights for minority shareholders to ask for the gather of temporal board meetings in the company law without the confliction of the laws in registration. The part of which competent agency for the approval of the gathering should be omitted.” Hence, Article 16.8 of The Company Law stipulates that: “If the board of Directors do not within fifteen days from the date of the deposit of the requisition dispatch the notice of an extraordinary general meeting, the requisitionists may themselves convene an extraordinary general meeting in accordance with the Applicable Public Company Rules.”
A company whose shareholders may exercise their voting power in writing	Article 19.6 of The Company Law: “A Member exercising voting power by	According to the explanations from the lawyers of Cayman Islands, shareholders cannot exercise their voting rights by

Matters for protecting stockholders’ equity Items in the checklist	Content stipulated in Company Law	Reasons for the differences and explanations
or by way of electronic transmission shall describe in the shareholders’ meeting notice the method of exercising their voting power.
A shareholder who exercises his/her/its voting power at shareholders meeting in writing or by way of electronic transmission shall be deemed to have attended the said shareholders’ meeting in person, but shall be deemed to have waived his/her/its voting power in respective of any extemporary motion(s) and/or the amendment(s) to the contents of the original proposal(s) at the said shareholders’ meeting.	way of a written ballot or by way of an electronic transmission shall be deemed to have appointed the chairman of the general meeting as his proxy to exercise his or her voting right at such general meeting in accordance with the instructions stipulated in the written or electronic document.”	written or electronic form in the board meeting. However, if The Company Law has clear statements about it, then the shareholders can entrust proxies to exercise their voting rights in the meeting by written or electronic form. Still, if the shareholders exercise their voting rights through proxies, this will not be considered as the attendance of board meeting in person.
It is determined in Cayman law that shareholders exercised their voting rights by this method will not be considered as attendance of board meeting in person, however, these shareholders enjoy all the rights of exercising their voting rights in written or electronic forms in accordance with ROC laws substantially. Hence, this shall not result in impact on shareholders’ equity.
For the following acts involved with major stockholders’ equity, a company should have a resolution adopted by a majority of the shareholders present who represent two-thirds or more of the total number of its outstanding shares. If the total number of shares represented by the shareholders present at shareholders’ meeting is not sufficient to meet the criteria specified in the preceding paragraph, the resolution to be made thereto may be adopted by two-thirds or more of the attending shareholders who represent a majority of the total number of its outstanding shares.
1. A company enter into, amend, or terminate any	Stipulated in Article 14.2(f)(g)(h), 14.1(b), 12.1, 14.2(d), 14.2(e) and 14.3 of The Company Law	According to the explanations from the lawyers of Cayman Islands:
1. According to Article 60 of Cayman Islands Company Law, special resolutions refer to the voting methods in the board meeting, where the consent from over two-thirds of the shareholders attended the board meeting in person or entrusted proxies (if the board meeting allows letter of authorization) with voting rights (Follow the regulations in the company law if it has voting methods with higher thresholds) is required for the approval of the resolution. In general Cayman company law, it is often stipulated that the special resolutions should be stated clearly on the notice for board meetings. The written resolution signed by all the shareholders can be considered as special resolution if authorized by company law. When calculating whether a case is considered as majority rule of special resolution with

Matters for protecting stockholders’ equity Items in the checklist	Content stipulated in Company Law	Reasons for the differences and explanations
2. Modification or Alteration of the Articles of Incorporation		the requirement of bullet counting method as the voting method, The Company Law can stipulate the number of voting rights enjoyed by each shareholder.
3. Any modification or alteration in the Articles of Incorporation prejudicial to the privileges of special shareholders shall also be adopted by a meeting of special shareholders.		2. According to the regulations in Cayman Islands Company Law, matters which requires the approval of Special Resolution include:
(i) The change in company name (Article 31);
(ii) Amend or add regulations in The Company Law (Article 24);
(iii) Amend or add purposes, rights or other specially stated matters related to the outlines of the company law (Article 10);
(iv) Capital reduction and redemption of preparation money by capital (Article 14 and Article 37(4)(d));
(v) Volunteer dismissal due to reasons other than the incapability to pay off when the debt is due (Article 90(b)(i) and Article 116(c))
(vi) Merger or consolidation with other company
4. Distribute the surplus profit distributable as dividends and bonuses in whole or in part in the form of new shares to be issued by the company		According to Cayman Islands Company Law, the matters, which requires the approval of Special Resolution, cannot be passed by the method with lower threshold, majority rule.
5. A resolution for dissolution, consolidation or merger, or split-up		3. Regarding matters other than the ones listed above, Cayman Islands Company Law did not ask for the requirement of a certain majority, however, The Company Law can further stipulate this.
		The differences between some regulations in The Company Law and the important matters which protects stockholders’ equity listed on the left are described as follows, separately:
1. Article 1.1 of The Company Law
(1) Regulations in The Company Law: According to Article 1.1 of the

Matters for protecting stockholders’ equity Items in the checklist	Content stipulated in Company Law	Reasons for the differences and explanations
		Company Law, "Special Resolution means a resolution passed by a majority of not less than two-thirds of votes cast by such Members as, being entitled so to do, vote in person or, where proxies are allowed, by proxy at a general meeting of which notice specifying the intention to propose the resolution as special resolution has been duly given." According to the explanations from the lawyers of Cayman Islands: matters which requires the approval by special resolution should include but not limit to: (i) The change in company name; (ii) Amend or add regulations in The Company Law; (iii) Amend or add purposes, rights or other specially stated matters related to the outlines of the company law; (iv) Capital reduction and redemption of preparation money by capital and (v) Volunteer dismissal due to reasons other than the incapability to pay off when the debt is due; (vi) Merger or consolidation with other company. In addition, according to Article 18.1 of The Company Law, "No business shall be transacted at any general meeting unless a quorum is present. Unless otherwise provided in the Statute, the Articles and the Applicable Public Company Rules, Members present in person or by proxy, representing more than one-half of the total outstanding Shares, shall constitute a quorum for any general meeting." In addition, if the company wish to make it as a special resolution, then at least the shareholders who holds over half of the issued stocks of our company should attend in person or entrust proxies and it can be approved by the consent of over two thirds of the votes with voting rights exercised by the attended shareholders (include the ones attended by the entrusted proxy

Matters for protecting stockholders’ equity Items in the checklist	Content stipulated in Company Law	Reasons for the differences and explanations
		with letter of authorization).
(2) Reasons for the differences
According to the explanations of Cayman lawyers, special resolution is the regulation in Cayman Islands Company Law; the matters which requires special resolution should require the approval by board meeting in accordance with the company law based on the regulations in Cayman Islands Company Law; and if any such matters are approved by thresholds lower than special resolution in Cayman Islands Company Law, it is considered as invalid based on the regulations in Cayman Islands Company Law. Hence, The Company Law has stipulated that for the matters regarding the protection of shareholders’ equity which requires Supermajority Resolution, if special resolutions are required according to Cayman Islands Company Law, then they will be retained as “special resolution” in the company law; as for the other matters regarding the protection of shareholders’ equity which requires supermajority resolution, they will be listed as matters required supermajority resolution in The Company Law.

Article 14.3 of The Company Law
(1) Regulations in The Company Law:
According to Article 14.3 of The Company Law: “Subject to the provisions of the Statute, the Articles, and the Applicable Public Company Rules, with regard to the dissolution procedures of the Company, the Company shall pass (a) a Supermajority Resolution, if the Company resolves that it be wound up voluntarily because it is unable to pay its debts as they fall due; or (b) a Special Resolution, if the Company resolves that it be wound up |

Matters for protecting stockholders’ equity Items in the checklist	Content stipulated in Company Law	Reasons for the differences and explanations
		voluntarily for reasons other than the reason stated in Article 14.3(a) above.” The differences with the important matters, which protects shareholders’ rights, listed on the left are: In The Company Law, the resolution regarding dismissal is based on the reasons for the resolution of dismissal and hence, there are different requirements for “Supermajority Resolution” and “Special resolution”; comparing to this, the important matters, which protects stockholders’ rights, listed on the left, have required that all should be done by “Supermajority Resolution”.

(2) Reasons for the differences:
According to the opinions of Cayman lawyers, if there is a resolution involving voluntary dismissal of the company for other reasons except the incapability of paying off debts when it is due, then it should be passed as a special resolution, which is in accordance with Cayman Islands Company Laws. From the above, we can know that the differences come from Cayman laws. |
| 1. Shareholders, who have been holding three per cent or more of the total number of issued shares continuously for a period of one year or more, may request in writing the supervisors of the company to institute, for the company, an action against a director of the company. And Taiwan Taipei District Court will be served as the first tribunal for jurisdiction.
2. In case the supervisors fails to institute an | Article 25.6 of The Company Law: “Any Member(s) holding 3% or more of the Company’s issued Shares for at least one year may in writing request the Independent Directors of the Audit Committee to bring action against the Directors on behalf of the Company in a court of competent jurisdiction as the court of first instance. If the Independent Directors fail to bring such action within thirty days after the request by the Member, such Member may bring the | According to the explanations from the lawyers of Cayman Islands:
1. Cayman Islands Company Laws does not have the concept corresponding to “supervisors”. Hence, the effect of the establishment of supervisors in The Company Law is unclear.
2. Regarding on the regulations of shareholders’ relief, according to the Case Law, the appropriate accuser should be the company itself formally rather than the shareholder himself/herself or minority shareholders in a lawsuit alleging the directors performed damagers to the company. Only in a very few exceptions, for example, if the action of the directors causes fraud to minority shareholders and the person that |

Matters for protecting stockholders’ equity Items in the checklist	Content stipulated in Company Law	Reasons for the differences and explanations
action within 30 days after having received the request, then the shareholders filing such request may institute the action for the company. And Taiwan Taipei District Court will be served as the first tribunal for jurisdiction.	action in a court of competent jurisdiction as the court of first instance in the name of the Company.”	performed the fraud actions is the controller of the company, then the minority shareholder who bears the fraud can ask for a litigation to the court.
3. The regulation that Taipei local court in Taiwan will be the first instance court has been added to The Company Law, which may not be performed under Cayman laws. This is because that Cayman court cannot recognize and perform a foreign judgement which are not about money payment before reviewing the basis of law for the disputes.
According to the front subparagraph of Paragraph 2 of Article 28-4 of Taiwan Stock Exchange Corporation Rules Governing Review of Securities Listings: “A foreign issuer shall either install an audit committee or a supervisor.” Our company has established an audit committee comprised of all of the Independent Directors, hence, there is no need to establish a supervisor additionally. The differences should not have major negative impact on the shareholders’ equity.
1. A company may enter into a share subscription right agreement with its employees or the procedure for the issuance of share subscription warrant.
2. The share subscription warrant obtained by any employee of the issuing company shall be non-assignment, except to the heir(s) of the said employee.	Article 11.1 of The Company Law: “Notwithstanding the provision of Article 8.7 Restricted Shares, the Company may, upon approval by a majority of the Directors at a meeting attended by two-thirds or more of the total number of the Directors, adopt incentive programmes and may issue Shares or options, warrants or other similar instruments, to employees of the Company and its Subsidiaries. The rules and procedures governing such incentive	According to the explanations from the lawyers of Cayman Islands, Cayman Islands Company Laws did not stipulate special regulations on employee stock option certificates or the procedure for the issuance of employee stock option certificates. The issuance of employee stock option certificates and whether the certificate can be transferred, etc. should be stipulated in the contracts for employee stock options or on the stock option certificates.
Hence, according to the regulations in Cayman laws, if the company wish to limit the transfer of employee stock option certificates, relevant regulations should be stipulated in contracts for employee stock option or the stock option

Matters for protecting stockholders’ equity Items in the checklist	Content stipulated in Company Law	Reasons for the differences and explanations
	programme(s) shall be in accordance with policies established by the board of Directors from time to time in accordance with the Statute, the Memorandum and the Articles. After the Company has acquired public company status, the foregoing matter shall be made in accordance with the Applicable Public Company Rules as applied to the Company.
Article 11.2: “Options, warrants or other similar instruments issued in accordance with Article 11.1 above are not transferable save by inheritance.”
Article 11.3: “The Company may enter into relevant agreements with employees of the Company and the employees of its Subsidiaries in relation to the incentive programme approved pursuant to Article 11.1 above, whereby employees may subscribe, within a specific period of time, a specific number of the Shares. The terms and conditions of such agreements shall be no less restrictive on the relevant employee than the terms specified in the applicable incentive programme.”
Article 11.4: “Directors of the Company and its Subsidiaries shall not be eligible for the employee incentive programmes under Article 8.7 or Article	certificates although Article 11 of The Company Law has been amended in accordance with the important matters which protects the shareholders’ rights listed on the right.

Matters for protecting stockholders’ equity Items in the checklist	Content stipulated in Company Law	Reasons for the differences and explanations
	11.1, provided that directors who are also employees of the Company or its Subsidiaries may participate in an employee incentive programme in their capacity as an employee (and not as a director of the Company or its Subsidiaries).”
In case the procedure for convening a shareholders meeting or the method of adopting resolutions thereat is in contrary to any law, ordinance or the company’s Articles of Incorporation, a shareholder may enter a petition in the court for annulment of such resolution. And Taiwan Taipei District Court will be served as the first tribunal for jurisdiction.	Article 18.7 of The Company Law: “Nothing in the Articles shall prevent any Member from issuing proceedings in a court of competent jurisdiction for an appropriate remedy in connection with the improper convening of any general meeting or the improper passage of any resolution. The Taipei District Court, R.O.C., shall be the court of the first instance for adjudicating any disputes arising out of the foregoing.”	According to the explanations from the lawyers of Cayman Islands, the regulations in The Company Law listed on the left may not be performed under Cayman laws. This is because that Cayman court cannot recognize and perform a foreign judgement which are not about money payment before reviewing the basis of law for the disputes.

The important matters which protects shareholders’ equity listed on the right are actually the regulation for the legal rights for the revocation of the appeal of the shareholders. Its legal effect cannot be achieved by the regulations on the law. It requires legal regulations to give the rights to the shareholders in order to abolish an appeal. The regulations in The Company Law listed on the left has a slight difference with the important matters which protects shareholders’ equity, however, if the gather procedure of board meetings or its resolution method violates orders or laws, then The Company Law did not limit the rights of the shareholders to ask for a lawsuit or relief to the court. Regarding whether the court which accepted the case will abolish the resolution of the board meeting because of the violation of gather procedure or resolution method with the laws or The Company Laws, it will be reviewed by that court (no matter the court is in ROC or Cayman Islands or other courts in the country with |

Matters for protecting stockholders’ equity Items in the checklist	Content stipulated in Company Law	Reasons for the differences and explanations
		jurisdiction on its applicable laws to determine whether the shareholders can have the rights to abolish an appeal in accordance with its position. This difference is because of the nature of the rights to abolish an appeal of the shareholders and The Company Law did not limit shareholders to ask for a lawsuit or relief to the court.
In case a director has, in the course of performing his/her duties, committed any act resulting in material damages to the company or in serious violation of applicable laws and/or regulations, but not discharged by a resolution of the shareholders' meeting, the shareholder(s) holding 3% or more of the total number of outstanding shares of the company may, within 30 days after that shareholders meeting, institute a lawsuit in the court for a judgment in respect of such matter. And Taiwan Taipei District Court will be served as the first tribunal for jurisdiction.	Subparagraph (j) of Paragraph 1 of Article 28.2 of The Company Law: “Subject to the provisions of the Statue, and the Articles or the Applicable Public Company Rules, in the event that he has, in the course of performing his duties, committed any act resulting in material damage to the Company or in serious violation of applicable laws and/or regulations or the Memorandum and the Articles, but has not been removed by the Company pursuant to a Supermajority Resolution vote, then any Member(s) holding 3% or more of the total number of outstanding Shares shall have the right, within thirty days after that general meeting, to petition any competent court for the removal of such Director, at the Company’s expense and such Director shall be removed upon the final judgement by such court. For clarification, if a relevant court has competent jurisdiction to adjudicate all of the foregoing matters in a single or a series of	According to the explanations from the lawyers of Cayman Islands:
1. Cayman Islands Company Law did not stipulate the minority shareholders can apply for the dismissal of directors to Cayman court specifically.
2. Normally, the procedure for the dismissal of directors is stipulated in The Company Law. It usually stipulates that this resolution should be passed in a board meeting for it to take effect.
3. Regarding on the regulations of shareholders’ relief, according to the Case Law, the appropriate accuser should be the company itself formally rather than the shareholder himself/herself or minority shareholders in a lawsuit alleging the directors performed damages to the company. Only in a very few exceptions, for example, if the action of the directors causes fraud to minority shareholders and the person that performed the fraud actions is the controller of the company, then the minority shareholder who bears the fraud can ask for a litigation to the court.
4. These regulations in the Company Law may not be performed under Cayman laws. This is because that Cayman court cannot recognize and perform a foreign judgement which are not about money payment before reviewing the basis of law for the disputes. However, the directors can be dismissed by the procedure stated in The Company Law.

Matters for protecting stockholders’ equity Items in the checklist	Content stipulated in Company Law	Reasons for the differences and explanations
	proceedings, then, for the purpose of this paragraph (i), final judgement shall be given by such competent court.”	The reasons for the differences between The Company Law listed on the left and the important matters which protects shareholders’ equity are that Cayman court cannot recognize and perform foreign judgements other than monetary judgements before the substantial trial of the dispute. Hence, they cannot be recognized and performed by Cayman court even if the important matters which protects shareholders’ equity are stipulated in The Company Law where Taipei local court in Taiwan may recognize it as the judgement or ruling of the dismissal of directors. Because of this, it has been stipulated in The Company Law that the shareholders should ask for a lawsuit to a court with jurisdiction. This difference is resulted from the regulations in Cayman law regarding the recognition and enforcement of foreign judgement. Hence, the shareholders can still dismiss the directors in accordance with The Company Law.
1. Supervisors of a company shall be elected by the meeting of shareholders if exist, among them at least one supervisor shall have a domicile within the territory of the Republic of China.
2. The term of office of a supervisor shall not exceed three years, but he may be eligible for re-election.
3. In case all supervisors of a company are discharged, the special meeting of shareholders for election of supervisors shall be convened by the board of directors within 60 day.
4. Supervisors shall		According to the front subparagraph of Paragraph 2 of Article 28-4 of Taiwan Stock Exchange Corporation Rules Governing Review of Securities Listings: “A foreign issuer shall either install an audit committee or a supervisor.” Our company has established an audit committee comprised of all of the Independent Directors (Article 32.6), hence, there is no need to establish a supervisor additionally.

Matters for protecting stockholders' equity Items in the checklist	Content stipulated in Company Law	Reasons for the differences and explanations
supervise the execution of business operations of the company, and may at any time or from time to time investigate the business and financial conditions of the company, inspect the accounting books and documents, and request the board of directors or managerial personnel to make reports thereon.
5. Supervisors shall audit the various statements and records prepared for submission to the shareholders' meeting by the board of directors, and shall make a report of their findings and opinions at the meeting of shareholders.
6. In performing audit matters, the supervisors may appoint a certified public accountant or lawyer to conduct the auditing in their behalf.
7. Supervisors of a company may attend the meeting of the board of directors to their opinions. In case the board of directors or any director commits any act, in carrying out the business operations of the company, in a manner in violation of the laws, regulations, the Articles of Incorporation or the resolutions of the shareholders' meeting, the supervisors shall forthwith advise, by a notice, to the board of

Matters for protecting stockholders’ equity Items in the checklist	Content stipulated in Company Law	Reasons for the differences and explanations
directors or the director, as the case may be, to cease such act.
8. Supervisor may each exercise the supervision power individually.
9. A supervisor shall not be concurrently a director, a managerial officer or other staff/employee of the company.
In case a director or supervisor (applicable when a company has supervisors) of a company has created a pledge on the company’s shares more than half of the company’s shares being held by him/her/it at the time he/she/it is elected, the voting power of the excessive portion of shares shall not be exercised and the excessive portion of shares shall not be counted in the number of votes of shareholders present at the meeting.	Article 24.3 of The Company Law: “If a Director creates or has created security over any Shares held by such Director, such Director shall notify the Company of such security. If at any time the number of the pledged Shares held by a Director exceeds half of the Shares held by such Director at the time of his appointment, then the voting rights attached to the Shares held by such Director at such time shall be reduced, such that the Shares over which security has been created which are in excess of half of the Shares held by such Director at the date of his appointment shall not carry voting rights and shall not be counted in the number of votes casted by the Member at a general meeting.”	Article 24.3 of The Company Law stipulates the regulations regarding directors. According to the front subparagraph of Paragraph 2 of Article 28-4 of Taiwan Stock Exchange Corporation Rules Governing Review of Securities Listings: “A foreign issuer shall either install an audit committee or a supervisor.” Our company has established an audit committee comprised of all of the Independent Directors, hence, there is no need to establish a supervisor additionally. Hence, the article did not have regulations regarding supervisors.
1. The directors of a company shall have the loyalty and shall exercise the due care of a good administrator in conducting the business operation of the company; and if he/she has acted contrary to this	Article 26.5 of The Company Law: “The Directors shall faithfully carry out their duties with care, and may be held liable for the damages suffered by the Company for any violation of such duty. The Company may by Ordinary	According to the explanations from the lawyers of Cayman Islands:
1. Cayman Islands Company Law did not stipulate the substantial regulations on the duties of directors specifically. According to Case Law applicable in Cayman Islands, directors should take on (1) fiduciary duties and (2) duty of care as a kind manager from the

Matters for protecting stockholders’ equity Items in the checklist	Content stipulated in Company Law	Reasons for the differences and explanations
2. provision, shall be liable for the damages to be sustained by the company there-from. In case the behavior is done for himself/herself or on behalf of another person, the meeting of shareholders may, by a resolution, consider the earnings in such an act as earnings of the company. If the directors of a company have, in the course of conducting the business operations, violated any provision of the applicable laws and/or regulations and thus caused damage to any other person, he/she shall be liable, jointly and severally, for the damage to such other person.	Resolution of any general meeting demand the Directors to disgorge any profit realised from such violation and regard the profits realised as the profits of the Company as if such violation was made for the benefit of the Company. The Directors shall indemnify the Company for any losses or damages incurred by the Company if such loss or damage is incurred as a result of a Director’s breach of laws or regulations in the course of performing his duties. The Directors and the Company shall jointly and severally indemnify the third party for any losses or damages incurred by such third party if such loss or damage is incurred as a result of a Director’s breach of laws or regulations in the course of performing his duties. The aforementioned duties of the Directors shall also apply to the managers of the Company.”	company. A company can ask for compensation if a director violates the aforementioned duties. In addition, if a director violates his/her duties and has obtained benefits from the violation, then the benefits shall belong to the company. According to the principle of Case Law, an action performed by a director act on behalf of the company will be considered as the action of the company itself during the process of managing company business. If its action resulted in any damages to the third parties, then it should be the company rather than that director who had responsibilities to the third parties for its action. The third parties asked for compensation were not able to ask upon in accordance with the regulations in The Company Law and add the duties upon the shareholders. The third parties who are not shareholders cannot perform actions based on The Company Law. If the company has to take on responsibilities to third parties for damage compensation because the violation of duties by a director, then the company can ask for compensation from the director that caused the damages. Managers normally do not have fiduciary duties from the company. There is no enforcement power even if there are regulations in company law since the managers are not the party in the company law. Agreement with the managers on the aforementioned duties should be made by the method of contract. According to the explanations above, although the important matters, which protects stockholders’ equity, has been stipulated in Article 26.5 of The Company Law, if a director performs business operations which violates loyal duties and results in damages to others,
3. Managers or supervisors of a company should be liable to compensation as the directors of a company within the scope of their duties.

Matters for protecting stockholders’ equity Items in the checklist	Content stipulated in Company Law	Reasons for the differences and explanations
		then the others may not have the basis of the asking rights to that director with Cayman laws, however, they may ask for compensation directly. Also, the basis of the asking rights cannot be created even if there are regulations in The Company Law stipulated that a director should take on joint responsibility for compensation to others as the company.

In addition, although Article 26.5 of The Company Law has stipulated that the duties in that article is also applicable to the managers, still, agreement with the managers should be made by the method of contract in accordance with Cayman laws. Hence, if the matters regarding the responsibility of the managers stated here, which protects stockholders’ equity, are to be implemented, special agreements should be made between the company and the managers by contracts. |
| Where a juristic person acts as a shareholder of a company, its authorized representative may also be elected as a director or supervisor of the company. If there is a plural number of such authorized representatives, each of them may be so elected, but such authorized representatives may not concurrently be selected or serve as the director or supervisor of the company. | Article 27.4 of The Company Law: “If a Member is judicial person, the authorised representative of such Member may be elected as Director. If such Member has more than one authorised representative, each of the authorised representatives of such Member may be elected as Directors respectively.” | Article 27.4 of The Company Law stipulates the correspondence of shareholders as juridical person.

According to the front subparagraph of Paragraph 2 of Article 28-4 of Taiwan Stock Exchange Corporation Rules Governing Review of Securities Listings: “A foreign issuer shall either install an audit committee or a supervisor.” Our company has established an audit committee comprised of all of the Independent Directors, hence, there is no need to establish a supervisor additionally. Hence, the regulations in the aforementioned law do not include supervisors. The difference should not cause major negative impact on stockholders’ equity rights. |

(VII) Others

The registration of our company and relevant information for explanations of general differences in China and Taiwan stipulated in the regulations for protection of R.O.C. stockholders' equity can be inquired from Market Operation Post System (http://mops.twse.com.tw/mops/web/t132sb02)

AI assistant

Victory New Materials Co., Ltd. Annual Report 2025

51784_rns_2026-05-22_29b755a8-5de9-4119-901b-afeb512f99ef.pdf

IV. OVERVIEW OF BUSINESS OPERATIONS 69

I. IMPORTANT CONTRACTS 82

V. REVIEW AND ANALYSIS OF FINANCIAL STATUS AND FINANCIAL PERFORMANCE AND OTHER IMPORTANT MATTERS 85

VIII. SPECIAL NOTES 93

I. Letters to Shareholders

1. Operating Results for 2025

(1) Business Report

(2) Financial Report

1. Assets, Liabilities, and Equity

2. Profit and Loss

(3) Budget Execution Status

4. Circumstances of the Compensation Committee

Climate-Related Information for Listed and OTC Companies

1. Climate-Related Information Implementation Status

1-2 Greenhouse Gas Reduction Targets, Strategies, and Specific Action Plans

G. Circumstances of a company fulfilling ethical operation and adopted measures

IV. Overview of Business Operations

(I) Content of the Business

A. Scope of the Business

Overview of Industrial and Commercial Properties and Hotel Operations

Cizao Town Production Center

Jinyue Center

Holiday Inn Quanzhou Jinjiang Airport

(4) Product Competition

C. Technology and Research & Development Overview

(4) Short-term and Long-term Business Development Plans

(4) Competitive Advantages

(5) Favorable and Unfavorable Factors Affecting Development Prospects, and Countermeasures

① Favorable Factors

a. Positive External Economic Environment

b. Holiday Inn Brand

② Unfavorable Factors and Countermeasures

③ Countermeasures

a. Increase hotel promotional efforts across internet and social media platforms to enhance brand awareness and visibility.

b. Expand cooperation with online travel agencies (OTAs). As OTAs represent the primary sales channel for the hotel industry — accounting for approximately 70% or more of room

(II) Financial Performance

VIII. Special Notes

AI assistant

Victory New Materials Co., Ltd. — Annual Report 2025

51784_rns_2026-05-22_29b755a8-5de9-4119-901b-afeb512f99ef.pdf

IV. OVERVIEW OF BUSINESS OPERATIONS 69

I. IMPORTANT CONTRACTS 82

V. REVIEW AND ANALYSIS OF FINANCIAL STATUS AND FINANCIAL PERFORMANCE AND OTHER IMPORTANT MATTERS 85

VIII. SPECIAL NOTES 93

I. Letters to Shareholders

1. Operating Results for 2025

(1) Business Report

(2) Financial Report

1. Assets, Liabilities, and Equity

2. Profit and Loss

(3) Budget Execution Status

4. Circumstances of the Compensation Committee

Climate-Related Information for Listed and OTC Companies

1. Climate-Related Information Implementation Status

1-2 Greenhouse Gas Reduction Targets, Strategies, and Specific Action Plans

G. Circumstances of a company fulfilling ethical operation and adopted measures

IV. Overview of Business Operations

(I) Content of the Business

A. Scope of the Business

Overview of Industrial and Commercial Properties and Hotel Operations

Cizao Town Production Center

Jinyue Center

Holiday Inn Quanzhou Jinjiang Airport

(4) Product Competition

C. Technology and Research & Development Overview

(4) Short-term and Long-term Business Development Plans

(4) Competitive Advantages

(5) Favorable and Unfavorable Factors Affecting Development Prospects, and Countermeasures

① Favorable Factors

a. Positive External Economic Environment

b. Holiday Inn Brand

② Unfavorable Factors and Countermeasures

③ Countermeasures

a. Increase hotel promotional efforts across internet and social media platforms to enhance brand awareness and visibility.

b. Expand cooperation with online travel agencies (OTAs). As OTAs represent the primary sales channel for the hotel industry — accounting for approximately 70% or more of room

(II) Financial Performance

VIII. Special Notes

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Victory New Materials Co., Ltd. Annual Report 2025