MKDWELL Tech Inc.

Summary quantitative data

The Company is exposed to credit risk on financial assets, mainly attributable to trade receivables. It sets credit limited on each individual customer and prior approval is required for any transaction exceeding the limit. The customer with sound payment history would accumulated a higher credit limit. In Addition, the overseas customers would normally be required to transact with the Company by letter of credit in order to minimise the Company’s credit risk exposure.

Summary quantitative data

While cash and cash equivalents are also subject to impairment assessment required by IFRS 9, the Company makes periodic assessments on their recoverability based on historical settlement records and past experience, and considered relevant expected credit losses are immaterial.

The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer rather than the industry or country in which the customers operate and therefore significant concentrations of credit risk primarily arise when the Company has significant exposure to individual customers. Individual credit evaluations are performed on all customers requiring credit over a certain amount. These evaluations focus on the customer’s past history of making payments when due and current ability to pay, and take into account information specific to the customer as well as pertaining to the economic environment in which the customer operates.

The Company measures loss allowances for trade receivables at an amount equal to lifetime expected credit losses, which is calculated using a provision matrix. As the Company’s historical credit loss experience does not indicate significantly different loss patterns for different customer segments, the loss allowance based on past due status is not further distinguished between the Company’s different customer bases.

At 31 December 2025, the Company has no concentration of risk and maximum exposure to credit risk is represented by the carrying amount of each financial asset.

Based on the Company’s assessment, the calculated lifetime expected credit loss on trade receivables as of 31 December 2025 and 2024 is insignificant. Consequently, no loss allowance has been recognised in the financial statements, as any such amount is immaterial to the financial position and performance of the Company.

Ultimate responsibilities for liquidity risk management rest with the sole director, which has built an appropriate liquidity risk management framework for the management of the Company’s short, medium and long-term funding and liquidity management requirements. The Company manages liquidity risk by maintaining adequate reserves and borrowing facilities by continuously monitoring forecast and actual cash flows.

As at 31 December 2025, the financial liabilities of US$1,051,994 (2024: US$2,073,915) such as trade payables at the end of the reporting period, mature as follows: -

Property, plant and equipment are stated at cost less accumulated depreciation and any impairment loss, if any.

Depreciation is calculated to write off the cost of items of property, plant and equipment, less their estimated residual value, if any, on a straight-line basis over their estimated useful lives as follow:

The residual value and the useful life of an asset are reviewed at least at each financial year-end.

The Company assesses at the end of each reporting period whether there is any indication that any items of property, plant and equipment may be impaired and that an impairment loss recognised in the prior periods for an item may have decreased. If any such indication exists, the Company estimates the recoverable amount of that item. An impairment loss, being the amount by which the carrying amount of an asset or a cash-generating unit exceeds its recoverable amount, or a reversal of impairment loss is recognised immediately in profit or loss.

Gain or loss arising from the derecognition of an item of property, plant and equipment is included in profit or loss when the item is derecognised and is determined as the difference between net disposal proceeds, if any, and the carrying amount of the item.

The Company makes use of a simplified approach in accounting for trade receivables as well as contract assets and records the loss allowance as lifetime expected credit losses. These are the expected shortfalls in contractual cash flows, considering the potential for default at any point during the life of the financial instrument. In calculating, the Company uses its historical experience, external indicators and forward-looking information to calculate the expected credit losses using a provision matrix.

The Company assesses impairment of trade receivables on a collective basis as they possess shared credit risk characteristics they have been grouped based on the days past due. Refer to note 7(i) to the financial statements for a detailed analysis of how the impairment requirements of IFRS 9 are applied.

Where consistent with the provisioning horizon, the possible impact of climate risks on the determination of expected credit losses has been integrated.

Cash and cash equivalents comprise cash on hand and cash at banks.

Inventories are carried at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business less the estimated cost of completion and applicable selling expenses. Cost is determined using the weighted average basis, and in the case of work in progress and finished goods, comprise direct materials, direct labour and an appropriate proportion of overheads. It excludes borrowing costs.

Tax expense recognised in profit or loss comprises the sum of deferred tax and current tax not recognised in equity. The calculation of current and deferred tax is based on tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period. Deferred income taxes are calculated using the liability method. The carrying amount of deferred tax are reviewed at the end of each reporting period on the basis of its most likely amount and adjusted if needed. Assessing the most likely amount of current and deferred tax in case of uncertainties (e.g. as a result of the need to interpreting the requirements of the applicable tax law), requires the Company to apply judgments in considering whether it is probable that the taxation authority will accept the tax treatment retained.

Deferred tax assets are recognised to the extent it is probable that the underlying tax loss or deductible temporary difference will be utilised against future taxable income. This is assessed based on the Company’s forecast of future operating results, adjusted for significant non-taxable income and expenses and specific limits on the use of any unused tax loss or credit.

Deferred tax liabilities are generally recognised in full, although IAS 12 specifies limited exemptions. As a result of these exemptions the Company does not recognise deferred tax on temporary differences relating to goodwill, or to its investments in subsidiaries (only to the extent that the Company control the timing of the reversal of the taxable temporary difference and that reversal is not likely to occur in the foreseeable future). The Company does not offset deferred tax assets and liabilities unless it has a legally enforceable right to do so and intends to settle on a net basis.