Common Stock Code: 1718

China Man-Made Fiber Corporation

2025 Annual Report

Published in March 2026

Inquiry of annual reports available at:

Market Observation Post System of the Taiwan Stock Exchange Corporation at http://mops.twse.com.tw

The Company’s website: www.cmfc.com.tw

(I) Company Spokesman
Name: Hung-Yang Wu
Job Title: Executive Vice President
TEL: (02)2393-7111
E-mail address: [email protected]

Company acting spokesman
Name: Li-Wen Wu
Title: Manager
TEL: (02)2393-7111
E-mail: [email protected]

(II) Address and telephone number of the company and factory
Company: No. 8, Jingjian Rd., Dashe Dist., Kaohsiung City 815
Tel: (07) 351-2161
Taipei office: 10F., No. 50, Sec. 1, Xinsheng S. Rd., Zhongzheng Dist., Taipei City 100
Tel: (02) 2393-7111
Kaohsiung Plant: No. 8, Jingjian Rd., Dashe Dist., Kaohsiung City 815
Tel: (07) 351-2161

(III) Institution handling the stock transfer
Name: Shareholder Services Section of China Man-Made Fiber
Address: 11F., No. 50, Sec. 1, Xinsheng S. Rd., Zhongzheng Dist., Taipei City
TEL: (02)2393-7111
http://www.cmfc.com.tw

(IV) Name of CPAs, accounting firm, address and TEL for the financial reports of the most recent year
Firm Name: Deloitte and Touche
Name of CPA: Shu-Lin Liu, Pan-Fa Wang
Address: 20F., No. 100, Songren Rd., Xinyi Dist., Taipei City
TEL: (02)2725-9988
http://www.deloitte.com.tw

(V) Name of overseas exchange where securities are listed, and inquiring the foreign-listed securities:
Method of information: None

(VI) Company Website
http://www.cmfc.com.tw

One. Report to Shareholders ... - 2 -
I. The 2025 Business results ... - 2 -
II. Summary of the 2026 business plan ... - 4 -
III. Development strategy of the Company in the future ... - 7 -
IV. Subject to competition of external environment ... - 8 -
V. Regulatory and macroeconomic environment impacts ... - 9 -

Two. Corporate Governance Report ... - 12 -
I. Background information of the Director, President, Vice Presidents, Assistant Vice Presidents and heads of various departments and branches ... - 12 -
II. Remuneration paid to Directors, President and Vice President in the most recent ... - 21 -
III. Corporate governance operations ... - 25 -
IV. Disclosure of CPAs’ remuneration ... - 153
V. Change of CPA ... - 153
VI. Where the Company's Chairman, President, or any manager in charge of finance or accounting matters has held a position at the CPA’s firm of its CPAs or at an affiliated company of the CPA’s firm in the most recent year: None. ... - 153
VII. Transfer of equity and changes in equity pledges of Directors, supervisors, managers, and shareholders with a shareholding of 10% and above in the most recent year and up to the date of publication of the annual report: ... - 153
VIII. Information shareholders holding over 10% of the shares who are related to each other or are spouses or second degree relatives ... - 154
IX. Investments jointly held by the Company, the Company’s Directors, supervisors, managers, and enterprises directly or indirectly controlled by the Company, and the shareholdings in aggregate of the above parties: ... - 156

Three. Fundraising Status ... - 157
I. Capital and shares ... - 157
II. Any offering of corporate bonds (including offshore bonds): None. ... - 159
III. Disclosure relating to preference shares: None. ... - 159
IV. Disclosure relating to global depository receipts: None. ... - 159
V. Disclosure related to employee stock warrants: None. ... - 159
VI. Restricted stock awards: None. ... - 159
VII. Disclosure on new shares issued for the acquisition or transfer of shares of other companies: None. ... - 159
VIII. Progress on the use of funds: None. ... - 159

Four. Operational Overview ... - 160
I. Content of business ... - 160
II. Market and sales overview ... - 168

III. Employees ... 174
IV. Environmental Protection Expenditure ... 177
V. Labor-capital Relationships ... 179
VI. Cybersecurity Management ... 185
VII. Major contracts ... 191

Five. Review of financial position and financial performance, and risk disclosure ... 194
I. Financing status (extra-industry combined information) ... 194
II. Financial performance (extra-industry combined information) ... 195
III. Cash flows (consolidated information from different industries) ... 195
IV. The material effects of significant capital expenditures on finance and business in the most recent year: Capital expenditures of the Company amounting to approximately NT$53 million in 2025 had no significant impact on financial operations of the Company. Expenditures were mainly generated by equipment improvement and replacement. ... 196
V. Direct investment policy, the main reasons for profit or loss and corrective action plan in the most recent year and investment plan in the next year: ... 196
VI. Risk disclosure ... 196
VII. Other important matters: None ... 198

Six. Special remarks ... 199
I. Affiliated companies ... 199
II. Status of private placement of securities and progress of plan execution for the most recent year and up to the date of annual report publication: None ... 199
III. Other supplementary information: None ... 199
IV. Occurrences of events defined under Article 36-3-2 of the Act in the latest year up till the publishing date of this annual report that significantly impacted shareholders' equity or security prices: None ... 199

One. Report to Shareholders

I. The 2025 Business results

(I) Business plan execution and achievement

The Company

For 2025, individual operating revenue amounted to NT$4,927,284 thousand, non-operating income amounted to NT$2,171,335 thousand, unrealized gains with subsidiaries and affiliates amounted to NT$13,776 thousand, realized gains with subsidiaries and affiliates amounted to NT$27 thousand, operating costs and expenses amounted to NT$6,384,160 thousand, non-operating expenses amounted to NT$606,343 thousand, and profit before tax amounted to NT$121,919 thousand. Net profit for the period in 2025 amounted to NT$118,827 thousand.

Consolidated company

For 2025, consolidated revenue amounted to NT$45,272,858 thousand, expenses amounted to NT$36,565,179 thousand, and profit before tax amounted to NT$8,707,679 thousand. Consolidated net profit for the period in 2025 amounted to NT$6,893,310 thousand.

(II) Budget implementation situation

The Company

According to the Regulations Governing the Publication of Financial Forecasts of Public Companies, the Company does not need to disclose the financial forecast of 2025, so there is no analysis of budgeting.

Consolidated company
Pan Asia Chemical Corporation (PACC): For the 2025 budgets, the financial forecast is not required to be announced according to the requirements.
Taichung Commercial Bank: Budget implementation in 2025:

(1) The average balance of NTD and foreign currency deposits in 2025 was NT$836.8 billion, representing an increase of NT$41.7 billion compared to the previous year.
(2) The average balance of NTD and foreign currency loans in 2025 was NT$637.5 billion, representing an increase of NT$31.5 billion compared to the previous year.
(3) Net profit after tax for the year amounted to NT$9.057 billion, representing an increase of NT$765 million or 9.23% compared to the previous year, achieving another record high in profitability.

(III) Financial income and expense and profitability analysis (individual information)

The Company

Item		2025	2024
Financial structure (%)	Debt to assets ratio	45.08	45.13
	Ratio of long-term capital to property, plant and equipment	477.78	425.32
Solvency analysis	Current ratio (%)	31.79	37.45
	Quick ratio (%)	19.37	21.64
	Interest coverage ratio	1.34	1.08
Profitability analysis	Return on assets (%)	1.03	0.77
	Return on equity (%)	0.55	0.13
	As a percentage of paid up capital (%)	Operating profit	(8.56)
		Net profit before tax	0.72
	Net profit rate (%)	2.41	0.48
	Earnings per share (NT$)	0.09	0.02

Consolidated company

Financial income and expense and profitability analysis (consolidated information)

Item		2025	2024
Financial structure (%)	Debt to assets ratio	91.14	91.57
Profitability analysis	Return on assets (%)	1.82	1.79
	Return on equity (%)	7.83	7.71
	Pre-tax profits to paid-up capital ratio (%)	51.65	47.06
	Net profit rate (%)	70.92	60.34
	Earnings per share (NT$)	0.09	0.02

(IV) Research and development

The Company
Completed mass produce of eco-friendly pellets derived from recycled PET bottle chips, which can be provided to the spinning section and false twist section to manufacture eco-friendly yarns to boost the added values. By this, we virtually minimized waste, saved on energy and reduced carbon emission to be friendly toward the global environment.
Total implementation of our efforts toward refurbishment of double-suction pumps for cooling water circulation and the ceramic coating projects that would significantly save on power, boost efficiency and minimize power consumption.
The motor for the supply of dry compressed air system for spinning manufacturing was changed to the variable-frequency drive type to benefit the increase in operating rate, raising the quality and energy-saving performance.
The QAC-1N and 3N windmill motor for spinning manufacturing was changed to the variable-frequency drive type to stabilize wind pressure, improve quality, and achieve power-saving performance.
In the false twisting process, the pipeline GA air system is added to the IA air system to reduce the frequency of turning on machines of the IA system and save electricity and energy consumption.
The addition of an inverter to the bottom pump motor of the EO stripper in the EG3 Plant to reduce speed, save power, reduce equipment noise, prolong bearing life, reduce the wear and tear of mechanical pump blades, and extend equipment's useful life.
Activate the application of polyester scrap and waste. A waste recycling machine is added to process the scrap into polyester pellets for recycling and reuse, which is not only environmentally friendly but also reduces production costs.
Consolidated company
Pan Asia Chemical Corporation:

(1) Development of POY/SDY spinning oil agent
(2) Development of esterified non-ionic surfactants
(3) Development of anionic and cat-ionic surfactants
(4) Development of nonionic surfactants for special products
(5) Development of esterified products and surfactants for cosmetics and personal cleansing products
(6) Development of esterified products for a variety of purposes

Taichung Commercial Bank:

The Bank continues to promote digital transformation and actively introduce fintech and AI application development. Focusing on the three major directions of "AI and Digital Innovation," "Fair Customer Treatment," and "Sustainable Development," the Bank optimizes its digital financial service platforms, promotes AI smart finance, deepens digital customer segment management, strengthens digital fraud prevention and monitoring, promotes industrial ecosystem collaboration and diversified payment services, and upholds corporate social responsibility and sustainable development by implementing friendly financial services and reducing the digital divide.

II. Summary of the 2026 business plan

(I) Operating strategies

The Company
Reduce costs and inventory and improve operating efficiency.
Research and develop value-added products, accelerate the vertical integration of products and improve competitiveness.
Computerize the operations management, inspect various operating procedures, strengthen internal control and improve efficiency.
Strengthen marketing efforts and market development, and improve service quality and customer satisfaction.
Actively and prudently assess various investments and adjust the portfolios in a timely manner.
Control customers' credit line to reduce the occurrence of bad debts.
In line with global trends, the move toward net-zero emissions, low carbon and plastic reduction, and sustainability and environmental protection goals.
Pay attention to employee welfare, promote labor-management coordination, emphasize occupational safety and fulfill social responsibilities.
Consolidated company
Pan Asia Chemical Corporation
(1) Focus on core businesses, improve quality and enhance customer service.
(2) Improve operational performance, integrate resources, study value-added products and improve competitiveness in the market.
(3) Strengthen organizational operations, promote labor-management coordination and improve advantages for the Company's sustainability.
Taichung Commercial Bank: Please see page 4 for key production and sales policies.

(II) 2026 operational objectives and prospects

The Company
In the previous year (2025), the global economy was significantly affected by trade frictions and policy uncertainties, including heightened international trade tensions and retaliatory tariffs triggered by the United States raising reciprocal tariffs. This led to a slowdown in global trade activities, increased supply chain costs, and industrial dispersion, weakening import and export momentum, constraining corporate expectations and investment, and impairing global supply chain efficiency. Global economic growth was approximately 2.3% to 3.2% (depending on different institutional forecasts), slightly lower than the previous year (2.9% to 3.2%) and below the long-term average prior to the pandemic. The global economy experienced a slower recovery amid multiple challenges, with growth momentum remaining insufficient. As Taiwan is located in a geopolitically sensitive position, the effects of supply chain and order shifts have been particularly evident, resulting in the petrochemical and textile industries among traditional sectors performing below expectations.

The current global economic uncertainty has further intensified fluctuations in market demand. Compared with other international competitors, our progress in negotiating free trade agreements remains relatively slow. The current tariff rate imposed by the United States at 15% is comparable to that of competitors such as Japan and South Korea, which has also increased operating costs for enterprises. In addition, the global trend toward sustainable development requires greater efforts in environmental protection and carbon reduction. At the same time, challenges such as a declining birthrate and competition for talent from other high-tech industries have led to a talent gap, while rising electricity costs have further increased pressure on manufacturing costs, adding to the difficulties of business operations. In response to this situation, the Company has adopted prudent and pragmatic strategies. On the one hand, it enhances production efficiency and product value-added through digital transformation, improves energy use efficiency through energy-saving measures, reduces inventories of raw materials and finished goods, effectively lowers capital occupancy and operational risks, and optimizes its workforce by conducting timely reviews and restructuring to strengthen its overall business structure. On the other hand, it leverages the integration of the industry chain to deepen upstream, midstream, and downstream collaboration in order to respond to international market

demand.

Looking ahead to 2026, as the policies of the Trump administration in the United States are fully implemented, high tariff barriers and trade frictions are expected to become the norm, forcing global supply chains to shift from an "efficiency-first" approach to a "security-first" approach. The effects of order relocation and reshoring among U.S.-based customers are expected to become more pronounced. As certain geopolitical conflicts ease and de-escalate, global shipping and the supply of raw materials are expected to normalize. Benefiting from increased production policies of major oil-producing countries and the Trump administration's active development of crude oil, global energy costs are likely to remain stable, reducing inflationary pressures across countries and helping to ease manufacturing-side pressures on industries. In response to the complex international political and economic environment, we will uphold the core values of "flexibility and adaptability, and deep cultivation of green energy" to optimize supply chain resilience. Based on expectations of order reshoring and growth in demand for new technologies, we maintain a cautiously optimistic outlook for operations in 2026.

In the ethylene glycol segment, in the previous year (2025), continued commissioning of new production capacity in China further intensified the supply-demand imbalance. The United States' tariff policies created market uncertainty and persistent inflationary concerns, resulting in weak demand. The addition of new domestic capacity in China reduced its reliance on imports, making the international market more competitive, and prices were unable to effectively reflect costs. Fortunately, in the second half of last year, China implemented anti-involution policies targeting excess capacity. In 2026, coal-based ethylene glycol plants that fail to meet certain performance standards will be required to exit the market. This is expected to help balance or alleviate the oversupply of ethylene glycol and stabilize market prices. This year, the Company will continue to focus on domestic sales, adjust production plans, and procure ethylene glycol at reasonable market prices to supply customers when production is insufficient, thereby balancing production and sales. However, attention must be paid to market changes arising from competition from imported downstream products, which may reduce domestic downstream operating rates.

In the polyester filament segment, terminal demand last year was affected by high tariffs, appreciation of the NT$, and significant capacity expansion in China's chemical fiber industry, resulting in prolonged pressure on product prices. As the impact of tariffs on the economic environment gradually subsides, international sporting events are expected to drive demand for functional fabrics, including this year's FIFA World Cup and the 2028 Olympic Games, which are likely to boost related orders. The Company will continue to focus on expanding high value-added product lines, flexibly adjust production and sales strategies, improve product mix, and move toward greater refinement, higher value-added innovation, and increased production of environmentally friendly recycled products to enhance profitability. It will also form strategic alliances with peers in the polyester industry and pursue diversified transformation to keep pace with changing times and enable the Company to recover from the downturn. Looking ahead to this year, as numerous unfavorable factors gradually diminish and with the establishment of tariff policies by the Trump administration in the United States targeting specific regions, particularly China, a more pronounced order reshoring effect is expected, and the polyester industry is anticipated to gradually improve.

In 2026, the Company expects to sell 86,291 metric tons of ethylene glycol (EG), 15,750 metric tons of ethylene oxide (EO), 13,800 metric tons of nonylphenol (NP), 24,125 metric tons of partially oriented yarn (POY), 7,954 metric tons of fully drawn yarn (SDY), 13,880 metric tons of draw textured yarn (DTY), and 18,250 metric tons of polyester chips (CHIP), totaling 180,050 metric tons.

Consolidated company
Pan Asia Chemical Corporation
EOD plant makes petrochemical EOD, esterification plant transforms them into new products, and the total expected sales is about 3.0192 tons.
Taichung Commercial Bank

Item	2026 objectives
Deposits (including foreign currencies)	NT$860.2 billion
Lending (including foreign currencies)	NT$655.2 billion
Foreign Exchanges Operations	Annual transaction amount of US$23.61 billion

(III) Important production and marketing policy

The Company
Ethylene Glycol: Market supply exceeds demand. Product price fluctuations are closely monitored, and production is adjusted in coordination with sales conditions.
Ethylene oxide: Maintain quality and steady production supply.
Nonylphenol: Due to increasing environmental awareness, restrictions on the use of this product persist. Market expansion remains challenging, and demand from existing users continues to decline. The Company focuses on maintaining stable sales.
Polyester yarns:
(1) The polyester polymerization process aims to extend operating hours, with adjustments planned for the summer electricity demand season. As for polyester filament, sales are being managed flexibly in accordance with the downsized internal workforce allocation. Full-scale sales will resume when the peak season for polyester filament demand arrives in the second half of the year, with timely and flexible price strategy adjustments to achieve a balance between production and sales.
(2) Strict control of inventories, production, sales and receiving purchase order.
(3) The Company continues to adjust its product mix flexibly, making every effort to expand the eco-friendly yarn market. Selling prices for eco-yarn will be increased at appropriate times to boost profitability and respond quickly to market demand.
Consolidated company
Pan Asia Chemical Corporation
(1) Retain old customers, explore potential customers to co-develop new products and expand sales volume.
(2) Esterification plant continues to develop and transform to develop products and markets which offer better return to improve the overall efficiency.
(3) Continue to develop the market for spinning oil agents.
(4) Coordinate the bargaining of purchase price of raw materials to reduce cost.
Taichung Commercial Bank
(1) To strengthen profit momentum and reinforce long-term competitiveness, the Bank continues to strengthen its deposit base by expanding its customer base and enhancing foreign currency funding momentum through differentiated interest rates and optimized high-net-worth asset program structures. In lending operations, the Bank focuses on supply chain transformation and net-zero trends by deepening its presence in the semiconductor, AI, and green energy industries, while simultaneously expanding international syndicated loan and trade finance businesses to strengthen asset quality and profit resilience and build long-term competitiveness.
(2) Through comprehensive financial planning and in-depth customer segment management, the Bank provides overseas and customized solutions based on different customer tiers to help customers achieve diversified financial goals. By implementing a VIP wealth management program, the Bank enhances premium customer experiences and customer loyalty, while integrating smart wealth management and upgraded digital platforms to precisely expand into new-generation customer segments, thereby strengthening differentiated competitive advantages and asset growth momentum.
(3) Strengthen the deployment of digital finance and build a cross-industry ecosystem by optimizing the mobile banking experience for both individual and corporate customers, while enhancing customer loyalty through membership programs and digital vouchers. The Bank also promotes cross-industry collaboration and integrates subsidiary

resources, strengthens cooperation with electronic payment service providers, and embeds financial services into everyday consumer scenarios to develop embedded finance and create a cross-industry digital financial ecosystem.

(4) Enhance operational efficiency and strengthen the legal compliance framework by integrating over-the-counter and online service processes, optimizing intelligent form-filling and customer diversion mechanisms, and improving operational efficiency and customer experience. At the same time, strengthen Hawkeye fraud detection and AI transaction monitoring, and enhance anti-money laundering measures and transaction security. In terms of corporate governance, the Bank strengthens its internal control and legal compliance systems, enhances its intellectual property portfolio, and deepens fintech R&D and brand influence.

(5) Leverage financial influence to create sustainable value by strengthening climate risk management and incorporating ESG into investment evaluations to deepen responsible investment. The Bank also promotes green lending and sustainable finance projects to guide industries toward low-carbon transformation. At the same time, the Bank continues to improve friendly financial services by inviting disability advocacy groups to experience accessible facilities, creating an inclusive and caring environment and fulfilling its corporate social responsibility.

III. Development strategy of the Company in the future

The Company
Investment in the manufacturing of products related to the upstream and downstream industries.
Improve the integration of upstream, midstream and downstream products.
Consolidated company
Pan Asia Chemical Corporation

(1) EOD plant continues to promote value-added products.
(2) Strengthen long-term collaboration with foreign customers to retain partners and expand sales channels to increase product sales.
(3) Increase domestic market share by boosting sales of specialty products and newly developed products tailored to customer needs, thereby indirectly tapping into customers' export markets; also, collaborate with downstream customers to develop new products.
(4) Vertical industry development. Continue to develop markets for esterification products, spinning oil agents and cleaning agents to improve revenue and standards and image of the industry and technologies.
(5) Cooperate with customers to import related products for sales in order to increase profits, sales, and sales volume.
(6) Collaborate with customers to develop electronic-grade products or products related to the electronics industry.

Taichung Commercial Bank

Looking ahead to the international economic landscape, global economic activity continues to demonstrate resilience amid policy adjustments and changes in supply and demand. Nevertheless, the global economic outlook remains subject to numerous uncertainties, including evolving geopolitical risks, the new U.S.-China economic and trade landscape, fluctuations in monetary policy trends, challenges arising from climate change, and technological transformation across industries. These factors may increase financial market vulnerability, intensify geoeconomic fragmentation, and drive the restructuring of global supply chains.

In response to industrial transformation and rapid technological development, the Bank will promote corporate transformation plans while maintaining sound risk control and stable operations. Centered on the core strategies of "strengthening profit momentum," "innovating customer experience," "enhancing operational efficiency," and "creating sustainable value together," the Bank will also accelerate core system upgrades and the implementation of AI applications to improve operational efficiency and digital service capabilities. In addition, the Bank will appropriately adjust organizational structures and functional allocations to strengthen transformation momentum.

IV. Subject to competition of external environment

The Company
Intensified structural supply-demand imbalance: Although the petrochemical and chemical fiber industries in China have entered a "qualitative transformation phase", the substantial base of previously commissioned capacity such as PX and PTA continues to keep the market in an oversupply condition. In the 2026 environment, global market growth momentum is below expectations, leading to a further extension of the cycle for absorbing excess capacity and compressing industry profits to historically low levels.
Trade barriers and geopolitics: As products from China are exported globally at low prices, countries in Europe, the United States, and Southeast Asia have strengthened trade protection measures, such as the Carbon Border Adjustment Mechanism (CBAM) and anti-dumping duties, thereby limiting the previous model of absorbing excess capacity through low-priced exports.
Industry differentiation and excessive competition: The market has evolved from simple price competition into a contest between "low-carbon green premium" and "cost control". Conventional products have fallen into prolonged losses amid weak domestic demand and excessive competition, while enterprises that have failed to timely undertake digitalization or carbon reduction transformation are facing the risk of accelerated elimination by the market.
As Regional Comprehensive Economic Partnership (RECP) enters the stage of full implementation, the effects of cumulative rules of origin within the agreement have become evident, significantly reducing trade costs within the Southeast Asian region. Under the dual considerations of tariff incentives and geopolitical risks, international brand customers have shifted from "requiring relocation" to "substantive deployment."
ASEAN supply chains are becoming increasingly complete: The textile industry chains in countries such as Vietnam, Cambodia, and Indonesia have evolved from simple garment processing to upstream integration into weaving and dyeing and finishing, with accelerated vertical integration and significant advantages in labor and energy costs. This has made Southeast Asia not only a tariff-avoidance hub but also the "primary core base" for brand sourcing.
Taiwan's position is being compressed: The strategy of prioritizing ASEAN for brand orders, with overflow orders returning to Taiwan, has become the norm. The challenge faced by Taiwan's textile industry is no longer merely temporary order shifting, but structural loss of orders. Particularly for conventional products, domestic production lines in Taiwan face significantly increased operating pressure due to the lack of tariff advantages and high operating costs such as rising electricity prices and carbon fees.
Industry response to the new normal: Taiwan's textile industry, from upstream fiber R&D to downstream garment processing, is accelerating its transformation toward "high-end functional products", "circular economy (recycle)", and "overseas base deployment". The key to future competition will no longer be the scale of production capacity, but whether technological barriers can be established beyond the RCEP framework through digital management and green premiums.
Consolidated company
Pan Asia Chemical Corporation

Faced with the continuing expansion of production capacity by both the foreign and domestic competitors, we will continue to develop new products and maintain quality to remain competitive and offer product diversification.

Taichung Commercial Bank

In recent years, generative artificial intelligence, cloud computing, and data analytics technologies have continued to drive fintech innovation. Financial institutions have accelerated the application of AI in customer service, marketing analysis, risk forecasting, and operational process optimization, using data-driven approaches to enhance operational efficiency and service quality. As technological applications continue to deepen, the FSC has continued to promote the implementation of AI governance and lifecycle management by financial institutions, while strengthening internal control, audit mechanisms, and personal data protection requirements in order to safeguard financial market stability and

consumer rights and interests. In the future, financial institutions must not only actively seize opportunities arising from technological innovation, but also prudently promote digital transformation within the regulatory framework to ensure a balance between innovative applications and risk management, thereby enhancing overall competitiveness.

Taiwan will officially enter the inaugural year of carbon fee implementation in 2026, with the carbon pricing mechanism becoming an important economic incentive guiding industrial transformation and significantly affecting corporate operating cost structures and capital allocation. To support the national “2050 Net Zero Emissions Pathway,” the FSC has promoted the “Green and Transition Finance Action Plan” to guide the financial system in supporting enterprises with “autonomous reduction plans” in carrying out low-carbon transformation and driving the development of a sustainable ecosystem. The financial regulatory environment is accelerating alignment with the IFRS Sustainability Disclosure Standards, strengthening the measurement and management of Scope 3 financed emissions, and incorporating the Taskforce on Nature-related Financial Disclosures (TNFD) framework to reflect the global emphasis on biodiversity and climate resilience. Through sustainable talent development and standardized disclosures, the financial system will jointly build a climate-resilient ecosystem with industries and enhance Taiwan’s international influence in the field of sustainable finance.

As the government continues to regulate the housing market through relevant policies, growth momentum in the real estate market has become more stable and prudent. Although preferential home purchase measures help support rigid demand, overall lending momentum still requires prudent assessment of the extent of policy adjustments, the interest rate environment, and changes in public willingness to purchase homes in order to address potential risks. Nevertheless, as major national infrastructure projects continue to advance and the development of artificial intelligence (AI), semiconductors, high-performance computing, and digital transformation accelerates, corporate demand for funding related to advanced process investment, smart manufacturing upgrades, and green transformation continues to increase, creating new growth momentum for bank lending and financial services.

With the implementation of net-zero transformation and carbon pricing mechanisms, financing demand in the areas of low-carbon technologies, energy transition, and sustainable investment has increased, helping to drive the development of green and transition finance businesses. However, the overall operating environment remains uncertain. Certain high-carbon-emission or traditional industries face transformation costs and capital expenditure pressures, requiring the banking industry to strengthen risk identification and industry-specific management in order to maintain asset quality and operational stability amid economic fluctuations and industrial transformation.

V. Regulatory and macroeconomic environment impacts

The Company
Wage hikes will increase labor costs for enterprises. At the same time, a labor shortage persists, and fewer talents are willing to engage in traditional industries such as petrochemicals and textiles, creating new pressures and challenges for business operations.
The continuous rise in domestic electricity prices and raw material costs, coupled with the impending implementation of a carbon fee, will make operations even more difficult for traditional industries, which already operate on thin profit margins.
Domestic environmental awareness and the related regulations still have many restrictions on enterprises investing in new equipment. Communication with the neighboring residents often faces great resistance.
In recent years, the output of chemical fiber upstream raw materials, e.g., PX and PTA, has rapidly increased in China, leading to the highly suppressed prices of downstream processed products. The personnel engaged in chemical fiber operations technology and management are aging. We are facing increasing tariffs and anti-dumping factors, which puts us at a disadvantage amidst mounting challenges.
After the implementation of RCEP, the petrochemical industry has been one of the most directly impacted sectors. This is mainly because the petrochemical supply chains among
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China, Japan, and South Korea have achieved tariff reductions under RCEP. China is the largest export market for Taiwan’s petrochemical products; however, following RCEP’s implementation, tariffs on petrochemical raw materials exported from Japan and South Korea to China are being reduced year by year, while Taiwan continues to bear tariffs ranging from 2% to 10%. In recent years, China’s petrochemical capacity has expanded significantly, leading to intensified price competition within the region. Without tariff advantages, Taiwan’s petrochemical industry will find it difficult to maintain profit margins. Although tariff reductions are available under CPTPP for the petrochemical industry, most CPTPP member countries are primarily consumption-oriented markets such as Canada and Mexico, and their demand for basic chemical raw materials is lower than that of RCEP countries. The textile industry is subject to relatively complex "rules of origin". Although many Taiwanese businesses have established operations in Vietnam, which is a member of both RCEP and CPTPP, the challenges are significant for fabric and fiber manufacturers based in Taiwan. The "Yarn Forward" rule under CPTPP poses the greatest threat to Taiwan’s textile industry. The rule requires that garments must be produced from the "yarn" stage within CPTPP member countries in order to qualify for zero tariffs. Taiwan currently possesses advanced technology in high-end fibers and fabrics. If Taiwan does not join CPTPP, garment factories in Vietnam, in order to obtain zero tariffs, will be forced to forgo Taiwan’s high-quality fabrics and instead source yarn from Japan or Mexico. The "cumulation of origin" rules under RCEP allow value accumulation among member countries, enabling ASEAN, China, Japan, and South Korea to form a closed-loop supply chain. As a result, functional fabrics produced in Taiwan face significantly higher costs when entering these markets compared to regional competitors.

In recent years, China has continued to expand the suspension of preferential tariff rates on petrochemical products under ECFA, coupled with frequent anti-dumping measures, placing Taiwan’s petrochemical industry in a dual predicament. As tariffs revert to general rates of 2% to 10%, and with the full rollout of China’s domestic capacity such as large integrated refining and petrochemical complexes, Taiwan’s petrochemical exports to China have sharply declined from over 40% at their peak to below 20%. In contrast, RCEP member countries such as Japan and South Korea enjoy zero tariffs, and Taiwan’s products face severe tariff discrimination in the China market, resulting in profit margins falling below the breakeven point and pushing industry operating pressure to a historical high. China’s chemical fiber products, such as polyester and nylon, are exerting strong pressure on the Taiwan market due to economies of scale and low energy costs. Products from China, leveraging price advantages, are being dumped into global markets, not only affecting Taiwan’s export markets but also directly impacting the domestic market. If Taiwan’s chemical fiber manufacturers reduce production or even shut down due to prolonged losses, it will trigger supply chain disruptions in downstream weaving and dyeing and finishing sectors, severely undermining the foundation of the overall textile industry.
Competitors in those emerging countries that have always taken advantage of economies of scale in the competition. Notably, the competitors in Mainland China have, as well, begun to differentiate their products. The companies in Taiwan should continually develop high-end specific products, in a small number of diverse, environmentally-friendly and functional products with high-level functionality to deal with the challenges. Under such policies, we should be able to continually maintain the advantages in the global polyester filament industry supply chains.
(1) In 2019, the European Union issued the "European Green Deal", establishing a legislated target of achieving carbon neutrality by 2050. Among these, the "Carbon Border Adjustment Mechanism" (CBAM) entered a transitional phase in October 2023 and will formally commence reporting and certificate surrender from 2026, transforming "net-zero emissions" from a slogan into a substantive international trade cost. To align with international practices, the government is using carbon fees, such as Taiwan’s planned implementation in 2026, as a policy tool to internalize the social cost of carbon emissions and drive the transition to low-carbon energy. The non-profit organization Textile Exchange has proposed a clear pathway for the textile industry,
10 -

aiming to reduce greenhouse gas emissions by 45% by 2030, using 2020 as the baseline.

(2) With the rise of global environmental consciousness, the EU announced the Ecodesign for Sustainable Products Regulation (ESPR) on June 28, 2024. The regulation aims to make sustainable products the norm in the EU market—designing products to be more durable, energy- and resource-efficient, easier to repair and recycle, and made with more recyclable content. Businesses will face more sustainability requirements from international brand clients, including demands for bio-based materials, 100% single-material products, and 100% recycled content.

As the Trump administration returned to the White House in 2025 and promoted a series of protectionist policies, including the "Liberation Day Tariffs", the global trade landscape has entered a period of intense volatility. Data from early 2026 shows that the effective tariff rate imposed by the United States on Chinese goods has surged significantly, reaching as high as 60% for certain categories, creating a substantial tariff differential advantage compared to regions with relatively lower tariff rates for exports to the United States, such as Southeast Asia and Taiwan. Leading international apparel brands such as Nike, Lululemon, and Gap have accelerated the shift of orders from China to Southeast Asia and Taiwan supply chains to avoid high tariffs and supply chain uncertainties. This is not only an "order shifting effect", but also a "de-risking" restructuring of the supply chain. Taiwan's textile industry, with its comprehensive R&D capabilities in functional fabrics and diversified production bases already established in Vietnam, India, and Indonesia, has become a major beneficiary of this wave of order shifting. As the United States intensifies scrutiny of origin laundering, Taiwanese manufacturers with substantive local production transformation capabilities and digital traceability systems are better positioned to gain the trust of brand customers and secure long-term orders.
Consolidated company
Pan Asia Chemical Corporation

Taichung Commercial Bank: Please see pages 5-6 for external competitive environment.

Chairman Kuei-Hsien Wang

Two. Corporate Governance Report

I. Background information of the Director, President, Vice Presidents, Assistant Vice Presidents and heads of various departments and branches

(I) Information on the directors

February 28, 2026 Unit: Shares / %

Title	Nationality or place of registration	Name	Gender Age	Date elected	Duration	Date of initial election	Shareholding as of elected date		Current number of shares held		Current number of shares held by spouse and minors		Shareholding under the title of a third party		Major career (academic) achievements	Current duties in The Company and in other companies	Spouse or relatives of second degree or closer acting as Directors, Supervisors, or other department heads			Remark
							Quantity	Shareholding ratio	Quantity	Shareholding ratio	Quantity	Shareholding ratio	Quantity	Shareholding ratio			Title	Name	Affiliation
Institutional Director	Taiwan R.O.C.	China Man-Made Fiber Investment Co., Ltd.	N/A	2025.6.11	3 years	2007.06.21	43,929,431	2.61%	43,929,431	2.61%	0	0	0	0	Director of PACC	Director of PACC	N/A	N/A	N/A	N/A
Institutional Director	Taiwan R.O.C.	Pan Asia Investment Co., Ltd.	N/A	2025.6.11	3 years	2007.06.21	52,393,736	3.11%	52,393,736	3.11%	0	0	0	0	Director of PACC	N/A	N/A	N/A	N/A	N/A
Chairman	Taiwan R.O.C.	Pan Asia Investment Corporation Representative: Kuei-Hsien Wang	Male 51 - 60 years old	2025.6.11	3 years	2004.06.25	0	0	0	0	0	0	0	0	Chairman of Taichung Securities Investment Trust and CMFC, vice chairman of Taichung Commercial Bank. Department of Finance at Boston University and Department of Finance at New York University.	Chairman of PACC, Chou Chin Industrial, Pan Asia Investment, Yu Hui, Bang Yu, Feng Chi Investment, Pan Xu Investment Co., Ltd., General Pride Enterprise, Dah Fa Investment, Greenworld, Chou Chang, Sheen Ren Knitting Factory Co., Ltd., Formosa Imperial Wineseller, De Xing Investment Company, and Chuang Chien Investment Co., Ltd., Chairman of Han Hua, and director of Nan-Chung Petrochemical.	N/A	N/A	N/A	N/A
Vice Chairman	Taiwan R.O.C.	Chuang Chien Investment Co., Ltd. Co., Ltd. Representative: Ming-Shan Chuang (Note 1)	Male More than 80 years old	2022.6.16	3 years	2011.5.6	0	0%	0	0	789	0.00%	0	0	Vice Chairman of PACC, ITOCHU Taiwan Corporation, National Taiwan University.	N/A	N/A	N/A	N/A	N/A

12 -

Title	Nationality or place of registration	Name or corporate name	Gender Age	Date elected	Duration	Date of initial election	Shareholding as of elected date		Current number of shares held		Current number of shares held by spouse and minors		Shareholding under the title of a third party		Major career (academic) achievements	Current duties in The Company and in other companies	Other executives or directors with a spousal relationship or within the second degree of kinship			Remark
							Quantity	Shareholding ratio	Quantity	Shareholding ratio	Quantity	Shareholding ratio	Quantity	Shareholding ratio			Title	Name	Affiliation
Vice Chairman	Taiwan R.O.C.	Chuang Chien Investment Co., Ltd. Co., Ltd. Representative: Te-Wei Li	Male 51 - 60 years old	2025.6.11	3 years	2013.6.19	0	0	0	0	0	0	0	0	Legislator, The Department of Political Science at the University of Northern Iowa	Chairman of Weichi Investment Co., Ltd.; director of Seaker Dellago Inc. and Seaker & Sons Hospitality Inc.; and supervisor of Kali Fores inc.	N/A	N/A	N/A	N/A
Managing Director (Independent director)	Taiwan R.O.C.	Chih-Ming Shih	Male 61 - 70 years old	2025.6.11	3 years	2020.6.2	0	0	0	0	0	0	0	0	The KGI Commercial Bank Co., Ltd. Audit Office and branch manager; Aletheia University Department of Accounting and Statistics.	Committee member of the Company's Remuneration Committee.	N/A	N/A	N/A	N/A
Independent director	Taiwan R.O.C.	Ya-Wei Chang	Female 51 - 60 years old	2025.6.11	3 years	2025.6.11	0	0	0	0	0	0	0	0	President of the Taiwan Region of HelloAsia.com; Master's degree in Mass Communication from Boston University.	Member of the Company's Remuneration Committee and Chairman of Storm - Consulting Inc.	N/A	N/A	N/A	N/A
Independent director	Taiwan R.O.C.	Yu-Wei Cheng	Male, 51-60 years old	2025.6.11	3 years	2025.6.11	0	0	0	0	0	0	0	0	Vice Dean of the College of Management of National Central University; Juris Doctor from the University of Pennsylvania Law School	Member of the Company's Remuneration Committee, Chairman of ruleiv inc., and independent director of Kwong Fong Industries Corporation.	N/A	N/A	N/A	N/A
Director	Taiwan R.O.C.	Li-Yeh Hsu	Male, 41-50 years old	2025.6.11	3 years	2016.6.8	0	0	0	0	0	0	0	0	Researcher of J.P. Morgan Chase's Hong Kong branch Bachelor's degree from the Department of Business Management, Tatung University	chairman of ching hsing capital investment, and chinyi investment; director of north american exercise co., ltd., limax international inc., and kali fores inc.; supervisor of light hostel, glotex international co., ltd., seaker dellago	N/A	N/A	N/A

Title	Nationality or place of registration	Name or corporate name	Gender Age	Date elected	Duration	Date of initial election	Shareholding as of elected date		Current number of shares held		Current number of shares held by spouse and minors		Shareholding under the title of a third party		Major career (academic) achievements	Current duties in The Company and in other companies	Other executives or directors with a spousal relationship or within the second degree of kinship			Remark
							Quantity	Shareholding ratio	Quantity	Shareholding ratio	Quantity	Shareholding ratio	Quantity	Shareholding ratio			Title	Name	Affiliation
																inc., seaker & sons real estate investment inc., seaker & sons youth hostels inc., fajen investment, and hotel sun-moon lake co., ltd.
Director	Taiwan R.O.C.	Pan Asia Investment Corporation Representative: Ming-Hsiung Huang	Male, over 80 years old	2025.6.11	3 years	2011.5.6	0	0	38,394	0.00%	0	0	0	0	Assistant general manager of Cosmos Bank. Department of International Trade at Tamkang University.	Director of Chou Chin Industrial and supervisor of Greenworld and Chou Chang.	N/A	N/A	N/A	N/A
Director And President	Taiwan R.O.C.	Chuang Chien Investment Co., Ltd. Co., Ltd. Representative: Jeh-Yi Wang	Male, 41-50 years old	2025.6.11	3 years	2022.6.16	0	0	15,983	0.00%	0	0	0	0	Project manager of the Production Services Department of this Company; Department of Business Administration, Fu Jen Catholic University.	President of the Company, director and president of PACC, and supervisor of Nan-Chung Petrochemical and De Xing Investment Company.	N/A	N/A	N/A	N/A
Director	Taiwan R.O.C.	Chuang Chien Investment Co., Ltd. Co., Ltd. Representative: Hung-Yang Wu	Male, 51-60 years old	2025.6.11	3 years	2019.11.19	0	0	0	0	0	0	0	0	Assistant VP of China Man-Made Fiber Corporation; Department of Agricultural Machinery Engineering at National Chung Hsing University	Vice President of the Company and director of PACC, Nan-Chung Petrochemical, Taiwan Filament Weaving Development, and De Xing Investment Company.	N/A	N/A	N/A	N/A

Note 1: Following the re-election of Director Ming-Shan Chuang, representative of the corporate director Chuang Chien Investment Co., Ltd., on June 11, 2025, he was discharged from his duties.
Remarks: Where the chairperson of the board of directors and the general manager or person of an equivalent post of a company are the same person, spouses, or relatives within the first degree of kinship, an explanation shall be given of the reason for, reasonableness, necessity thereof, and the measures adopted in response thereto in the remarks column: N/A.

Major shareholders of legal person directors and supervisors

February 28, 2026

Corporate shareholder Name	Major shareholder of corporate shareholder and shareholding Ratio of Shareholding thereof
Chuang Chien Investment Co., Ltd.	Dah Fa Investment Co.,Ltd. (28.08%); Pan Asia Chemical Corporation (17.67%); General Pride Enterprise co., Ltd. (15.64%); Chin-Yuan Huang (14.72%); Yu Hui Co.,Ltd (10.52%); Syuten Investment Co., Ltd. (9.57%); Kuei-Hsien Wang (1.75%); Kuei-Fong Wang (1.81%); Sheen Ren Knitting Factory Co., Ltd. (0.44%).
Pan Asia Investment Corporation	Pan Xu Investment Co., Ltd. (47.42%), Dah Fa Investment Co.,Ltd (42.63%), General Pride Enterprise Co., Ltd. (9.44%), and Kuei-Hsien Wang (0.51%).

Major Shareholders of Major Corporate Shareholder:

February 28, 2026

Corporate shareholder Name	Major shareholder of corporate shareholder and shareholding Ratio of Shareholding thereof
Dah Fa Investment Co.,Ltd	Yu Hui Co.,Ltd (99.25%) and Kuei-Hsien Wang (0.75%).
Pan Asia Chemical Corporation	China Man-Made Fiber Corporation (44.40%), Sheen Ren Knitting Factory Co., Ltd. (6.20%), Chuang Chien Investment Co., Ltd. (5.12%), Yu Hui Co.,Ltd (1.76%), Pan Asia Chemical Corporation Employee Welfare Committee (0.60%), Hsiu-Cheng Wu (0.49%), Yi Cheng Investment Co., Ltd. (0.26%), Zhao-Ru Chen (0.23%), Teng-Fang Tseng (0.23%), and Kun-Hsiang Chen (0.22%).
Yu Hui Co.,Ltd	Kuei-Hsien Wang (99.99%), Chia-Ying Chen (0.01%).
General Pride Enterprise Co., Ltd.	Pan Xu Investment Co., Ltd. (44.44%), Chuang Chien Investment Co., Ltd. (31.46%), Pan Asia Investment Corporation (17.30%), Chao-Chang Wang (5.16%), Kuei-Hsien Wang (1.12%), and Ku-Yeh Wang (0.51%).
Pan Xu Investment Co., Ltd.	Yu Hui Co.,Ltd (99.93%) and Kuei-Hsien Wang (0.07%).
Syuten Investment Co., Ltd.	Chia-Chun Chiang (50%), Kuei-Fong Wang (50%).
Sheen Ren Knitting Factory Co., Ltd.	Chuang Chien Investment Co., Ltd. (53.47%), Yu Hui Co.,Ltd (40.40%), Chao-Chang Wang (5.57%), Kuei-Hsien Wang (0.3%), Shang-Jr Chiang (0.15%), Shi-Yi Chiang (0.10%).

15 -

I. Information on the directors

(1) Information disclosure on the professional qualifications of the Directors and status of independence of the Independent Directors

Condition Name	Professional Qualifications and Experience	Status of Independence	Number of public companies where the person holds the title as independent director
Chairman, Kuei-Hsien Wang	Acts as the Company's Chairman for many years, specializes in leadership decision-making, operational judgements, management, crisis handling, petrochemical industry knowledge, risk management and international market perspectives and so on experiences and capabilities. None of the circumstances stated in subparagraphs of Article 30 of the Company Act has occurred.	Not applicable	None
Vice Chairman, Te-Wei Li	Possesses work experiences in business and politics, specializes in leadership decision-making, crisis handling, and risk management knowledge and capability. None of the circumstances stated in subparagraphs of Article 30 of the Company Act has occurred.	Not applicable	None
Director, Ming-Hsiung Huang	Possesses background in financial industry, specializes in financial analysis capability and risk management knowledge and capability. Does not meet any descriptions stated in Article 30 of the Company Act has occurred.	Not applicable	None
Independent Director, Li-Yeh Hsu	Possesses work experiences in business, specializes in operational judgement, management administration, and risk management knowledge and capability. None of the circumstances stated in subparagraphs of Article 30 of the Company Act has occurred.	Not applicable	None
Director Jeh-Yi Wang	The director is the president of the Company and the subsidiary, and possesses petrochemical industry knowledge, risk management capability, and other practical experiences. None of the circumstances stated in subparagraphs of Article 30 of the Company Act has occurred.	Not applicable	None
Director, Hung-Yang Wu	Acts as the Executive Vice President of the Company, possesses petrochemical industry knowledge, risk management capability and so on practical experiences. None of the circumstances stated in subparagraphs of Article 30 of the Company Act has occurred.	Not applicable	None
Managing Director, Chih-Ming Shih	Possesses experiences in bank industry, specializes in accounting analysis capability and risk management knowledge and capability, is an Audit Committee member and possesses educational background in accounting related degree. None of the circumstances stated in subparagraphs of Article 30 of the Company Act has occurred.	1. Does not have spouse or relatives within second degree of kinship holding position as the director, supervisor or employee of the Company or its affiliates.	None

| Condition
Name | Professional Qualifications and Experience | Status of Independence | Number of public companies where the person holds the title as independent director |
| --- | --- | --- | --- |
| Independent Director, Ya-Wei Chang | Possesses experience in business operations and expertise in industry analysis, operational management knowledge, and management capabilities. None of the circumstances stated in subparagraphs of Article 30 of the Company Act has occurred. | 2. Does not hold the Company’s shares by self, spouse, relatives within second degree of kinship, or in the name of others.
3. Does not hold position as a director, supervisor or employee of a designated company that has specified relationship with the Company.
4. Has not obtained compensation from providing business, legal, finance, or accounting services to the Company or its affiliates in the most recent two years. | None |
| Independent Director, Yu-Wei Cheng | Possesses professional expertise in industrial economics and concurrently serves as an independent director of other listed companies. Demonstrates strong capabilities in industry analysis, operational management knowledge, and managerial competence. None of the circumstances stated in subparagraphs of Article 30 of the Company Act has occurred. | | None |

17 -

(2) Diversity and independence of the Board of Directors

A. The implementation of the diversity policy for the Board members is as follows:

Name	Nationality	Gender	Age					Ablity
			Age			Term of office and seniority of Independent Directors		Business judgment ability	Accounting and financial analysis ability	Business management ability	Risk management ability	Crisis management ability	Industry knowledge	International market viewpoint	Leadership	Decision-making ability
			40 - 49 years old	50 - 59 years old	More than 60 years old	Less than 3 years	3-9 years
Kuei-Hsien Wang	Taiwan R.O.C.	Male		✓				✓	✓	✓	✓	✓	✓	✓	✓	✓
Te-Wei Li	Taiwan R.O.C.	Male		✓			✓	✓		✓	✓	✓		✓	✓	✓
Ming-Hsiung Huang	Taiwan R.O.C.	Male			✓			✓	✓	✓	✓	✓		✓	✓	✓
Li-Yeh Hsu	Taiwan R.O.C.	Male	✓				✓	✓		✓	✓	✓		✓	✓	✓
Jeh-Yi Wang	Taiwan R.O.C.	Male	✓					✓	✓	✓	✓	✓	✓	✓	✓	✓
Hung-Yang Wu	Taiwan R.O.C.	Male		✓				✓	✓	✓	✓	✓	✓	✓	✓	✓
Chih-Ming Shih	Taiwan R.O.C.	Male			✓		✓	✓	✓	✓	✓	✓		✓	✓	✓
Ya-Wei Chang	Taiwan R.O.C.	Female		✓				✓		✓	✓	✓		✓	✓	✓
Yu-Wei Cheng	Taiwan R.O.C.	Male		✓				✓	✓	✓	✓	✓		✓	✓	✓

Explanation of reason and measures adopted to improve board gender diversity when the number of directors of either gender does not reach one-third:

(A) Reason:

Pursuant to the Articles of Incorporation, the Company has established nine director seats, and the current directors were elected at the shareholders' meeting held on June 11, 2025. There is currently only one female director, which has not yet reached the one-third target promoted under the policy. This is attributable to the characteristics of the Company's industry, in which it is relatively difficult to recruit female talent; however, the current composition remains in compliance with relevant laws and regulations.

(B) Measures taken:

Prior to the expiration of the current board term and the next re-election, the Company will actively seek candidate recommendations through various channels, including from industry and academia, to enhance corporate governance effectiveness and implement the board diversity policy.

B. Independence of the Board of Directors

The Company has three Independent Directors which account for one-third of the Board. Board members are not spouses or relatives within the second degree of kinship as regulated under paragraphs 3 and 4, Article 26-3 of the Securities and Exchange Act.

(II) Information of the President, Vice President, assistant vice presidents, and supervisor of the various units and branches

February 28, 2026 Unit: Shares / %

Title	Nationality	Name	Gender	Date elected (assumed the position)	Quantity of Shares		Number of shares held by spouse and minors		Shareholding under the title of a third party		Major career (academic) achievements	Positions with other companies	Spouse or kin within the second pillar under the Civil Code and who is a manager			Remark
					Quantity	Shareholding ratio	Quantity	Shareholding ratio	Quantity	Shareholding ratio			Title	Name	Affiliation
President	Taiwan R.O.C.	Jeh-Yi Wang	Male	2020.1.13	15,983	0.00%	0	0	0	0	Project manager of the Production Services Department of this Company Department of Business Administration, Fu Jen Catholic University	President of the Company, director and president of PACC, and supervisor of Nan-Chung Petrochemical and De Xing Investment Company.	N/A	N/A	N/A	N/A
Executive Vice President	Taiwan R.O.C.	Hung-Yang Wu	Male	2025.8.11	0	0	0	0	0	0	Department of Agricultural Machinery Engineering at National Chung Hsing University	Vice President of the Company and director of PACC, Nan-Chung Petrochemical, Taiwan Filament Weaving Development, and De Xing Investment Company.	N/A	N/A	N/A	N/A
Chief financial officer	Taiwan R.O.C.	Po-Nien Lin	Male	2005.04.01	20,928	0.00%	0	0	0	0	Department of Economics, National Taiwan University	The Taichung Bank Securities Inv. Trust Co., Ltd. directors and Nan Chung Petrochemical Corporation supervisors.	N/A	N/A	N/A	N/A
Chief accountant	Taiwan R.O.C.	Yun-Yun Hsu	Female	2025.8.14	0	0	0	0	0	0	Chief Internal Auditor, Juic International Corporation Minor in the Department of Accounting, Department of Ethnology, National	N/A	N/A	N/A	N/A	N/A

										Chengchi University
Corporate Governance Officer	Taiwan R.O.C.	Lai-Hsiang, Tsai	Female	2024.8.13	197	0.00%	0	0	0	0	Cosmos Bank auditor Department of Business Administration, National Taiwan University	Manager of the Company’s Construction Division and the Company-appointed corporate governance officer of PACC.	N/A	N/A	N/A

20 -

II. Remuneration paid to Directors, President and Vice President in the most recent year

1. Remuneration of directors and independent directors

Unit: NT$ thousand/ thousand shares

Title	Name	Remuneration to Directors							The sum of A, B, C, and D and as a percentage of net profit after tax	Remuneration in the capacity as employees								The sum of A, B, C, D, E, F and G and as a percentage of net profit after tax (%)	Remuneration received from the invested companies other than the subsidiaries and the parent company
		Director fees (A)		Pension (B)		Remuneration to directors (C)		For services (D)			Salaries, bonus and special subsidies (E)		Pension (F)		Remuneration to employees (G)
		The Company	All companies mentioned in the financial statements	The Company	All companies mentioned in the financial statements	The Company	All companies mentioned in the financial statements	The Company	All companies mentioned in the financial statements	The Company	All companies mentioned in the financial statements	The Company	All companies mentioned in the financial statements	The Company	All companies mentioned in the financial statements	The Company		All companies mentioned in the financial statements		The Company	All companies mentioned in the financial statements
																Cash	Stock	Cash				Stock
Institutional Director	Chuang Chien Investment Co., Ltd. Co., Ltd.	0	0	0	0	193	734	0	0	193 0.16	734 0.62	0	0	0	0	0	0	0	0	193 0.16	734 0.62	0
	Pan Asia Investment Corporation	0	0	0	0	193	193	0	0	193 0.16	193 0.16	0	0	0	0	0	0	0	0	193 0.16	193 0.16	0
	Kuei-Hsien Wang	3,324	3,324	0	0	0	0	0	0	3,324 2.80	3,324 2.80	0	0	0	0	0	0	0	0	3,324 2.80	3,324 2.80	0
	Ming-Shan Chuang (Note 3)	802	802	0	0	0	0	0	0	802 0.67	802 0.67	0	0	0	0	0	0	0	0	802 0.67	802 0.67	0
Ta-Wei Li	221	221	0	0	0	0	0	0	221 0.19	221 0.19	0	0	0	0	0	0	0	0	221 0.19	221 0.19	0
Ming-Hsiang Huang	0	1,120	0	0	0	0	0	0	0 0	1,120 0.94	0	0	0	0	0	0	0	0	0 0	1,120 0.94	0
Hang-Yang Wu	0	0	0	0	0	0	0	0	0 0	0 0	1,190	1594	42	75	0	0	48	0	1,232 1.04	1,717 1.45	0
Jeb-Yi Wang	0	0	0	0	0	0	0	0	0 0	0 0	0	2,531	0	0	0	0	183	0	0 0	2,714 2.29	0
Li-Yeh Hsu	221	221	0	0	0	0	0	0	221 0.19	221 0.19	0	0	0	0	0	0	0	0	221 0.19	221 0.19
Yu-Chi Lin (Note 3)	0	0	0	0	0	0	0	0	0 0	0 0	603	603	25	25	9	0	9	0	637 0.54	637 0.54
Independent director	Yu-Wei Cheng (Note 3)	190	190	0	0	0	0	0	0	190 0.16	190 0.16	0	0	0	0	0	0	0	0	190 0.16	190 0.16	0
	Yu-Wei Chang (Note 3)	210	210	0	0	0	0	0	0	210 0.18	210 0.18	0	0	0	0	0	0	0	0	210 0.18	210 0.18	0
	Chih-Ming Shih	430	430	0	0	0	0	0	0	430 0.36	430 0.36	0	0	0	0	0	0	0	0	430 0.36	430 0.36	0

Please describe the policy, systems, standards and structure of remuneration of independent directors; also, describe the relationship with the amount of remuneration according to the responsibilities, risks and invested time.
Pursuant to the provisions set forth in Article 40 of the Articles of Incorporation, the Company shall appropriate 1% to 5% of its profits of the respective year as employee compensations. The board of directors shall determine the distribution ratios and methods (stocks or cash) and may appropriate a sum not exceeding 0.03% of the aforementioned profits as director compensations. The amount of director compensations shall be adjusted in line with variations in pre-tax income. No director compensations were paid out due to a recorded loss this year. Directors therefore only received their fixed salaries, which is deemed reasonable.
Pay for services (such as non-employee consultant for the parent company/all of the companies in the financial statements/non-consolidated affiliates) specified in the financial statements provided by directors in the most recent year not specified above: none.
Yu-Chi Lin and Ming-Shan Chuang (from January 1, 2025 to June 16, 2025) retired upon expiration of their terms; Yu-Wei Cheng and Yu-Wei Chang were newly appointed as independent directors on June 16, 2025.

2. Remuneration to the President and Vice President

Unit: NT$ thousand/ thousand shares

Title	Name	Salary (A)		Pension (B)		Bonuses and allowances etc (C)		Remuneration to the employees (D)				The sum of A, B, C, and D as a percentage of after-tax net profit (%)		Remuneration received from the invested companies other than the subsidiaries and the parent company
		The Company	All companies mentioned in the financial statements	The Company	All companies mentioned in the financial statements	The Company	All companies mentioned in the financial statements	The Company		All companies mentioned in the financial statements		The Company	All companies mentioned in the financial statements
								Cash	Stock	Cash	Stock
President	Jeh-Yi Wang (Note 1)	0	2,531	0	0	0	0	0	0	183	0	0	2,714 2.28	0

Note 1: Jeh-Yi Wang is the President of the Company and only receives the remuneration as the President of the consolidated companies.

3. Individual remuneration paid to each of the top five management personnel

Unit: NT$ thousand/ thousand shares

Title	Name	Salary (A)		Pension (B)		Bonuses and allowances etc (C)		Remuneration to the employees (D)				The sum of A, B, C, and D as a percentage of after-tax net profit (%)		Remuneration received from the invested companies other than the subsidiaries and the parent company
		The Company	All companies mentioned in the financial statements	The Company	All companies mentioned in the financial statements	The Company	All companies mentioned in the financial statements	The Company		All companies mentioned in the financial statements		The Company	All companies mentioned in the financial statements
								Cash	Stock	Cash	Stock
President	Jeh-Yi Wang (Note 1)	0	2,531	0	0	0	0	0	0	183	0	0	2,714 2.28	0
Executive Vice President	Hung-Yang Wu (Note 2)	1190	1,594	42	75	0	0	0	0	48	0	1,232 1.04	1,717 1.44	0
Vice Chairman	Ming-Shan Chuang	802	802	0	0	0	0	0	0	0	0	802 0.67	802 0.67	0
Chief financial officer	Po-Nien Lin	838	838	56	56	161	161	18	0	18	0	1,073 0.90	1,073 0.90	0
Chief Plant Manager	Ming-Hsien Tsai	1,210	1,210	25	25	415	415	18	0	18	0	1,668 1.40	1,668 1.40	0

Note 1: Jeh-Yi Wang is the President of the Company and only receives the remuneration as the President of the consolidated companies.
Note 2: Hung-Yang Wu has served as Vice President of the Company since August 11, 2025, and only receives remuneration as Vice President of the consolidated company.

Name of the managers received remuneration and the distribution of remuneration

Unit: NT$ thousand/ thousand shares

	Title	Name	Stock	Cash	Total	As a percentage of net profit after tax (%)
Manager	Executive Vice President	Hung-Yang Wu	0	50	50	0.42
	Chief accountant	Yun-Yun Hsu (Note 1)
	Chief accountant	Tzu-Wei Huang (Note 1)
	Chief financial officer	Po-Nien Lin
	Corporate Governance Officer	Lai-Hsiang, Tsai

Note 1: Ms. Yun-Yun Hsu was appointed as the new Chief accountant pursuant to the resolution of the 1st meeting of the 28th Board of Directors held on August 14, 2025. The former accounting officer, Tzu-Wei Huang, resigned voluntarily due to personal career planning.

Analysis of remunerations paid in the most recent two years by the Company and all companies included in the consolidated financial statements to the Company's Directors, supervisors, President and Vice Presidents as a percentage of net profit after tax and describe the remuneration policy, standards and packages, the procedures for determining remuneration and their link to business performance and future risks.

(1) Analysis of remunerations paid in the most recent two years by the Company and all companies included in the consolidated financial statements to the Company's Directors, supervisors, President and Vice Presidents as a percentage of net profit after tax:

A. Total remuneration for all directors of the Company in 2025 amounted to NT$7,653 thousand, representing 6.44% of net profit after tax for 2025; total remuneration in 2024 amounted to NT$8,348 thousand, representing 30.33% of net profit after tax for 2024.

B. Total remuneration for all Presidents and Vice Presidents of the Company in 2025 amounted to NT$1,232 thousand, representing 1.03% of net profit after tax for 2025; total remuneration in 2024 amounted to NT$0, representing 0% of net profit after tax for 2024.

C. Total remuneration for all directors of all companies included in the consolidated financial statements in 2024 amounted to NT$15,059 thousand, representing 0.054% of net profit after tax for 2024; remuneration for General Presidents and Vice Presidents in 2024 amounted to NT$0 thousand, representing 0% of net profit after tax for 2024.

D. Please refer to page 14 for the 2025 information.

(2) The remuneration policy, standards and packages, the procedures for determining remuneration and their link to business performance and future risks.

A. Remuneration policy, standards and packages

a. According to Article 22 of the Articles of Incorporation, the Board is authorized to determine the remuneration of Independent Directors in accordance with the level of participation of Independent Directors in the Company's operations and the value of their contributions with reference to the level commonly paid in the same industry. In addition, the remuneration of the Company's Directors and managers is reported to the Remuneration Committee, then proposed to the Board for discussion, and the distribution shall be made after it is approved by the Board.

b. In accordance with Article 40 of the Articles of Incorporation, if the Company has a profit for the year, the Company may allocate no more than 0.3% as the remuneration of Directors and supervisors based on a resolution of the Board, and the distribution proposal shall be proposed to the shareholders' meeting for approval before distribution.

c. Except for receiving transportation allowances based on the actual attendance for Audit Committee meetings and Remuneration Committee meetings, Directors do not receive transportation allowances for attending Board meetings.

B. Procedures for determining remuneration

a. The Company's Remuneration Committee regularly evaluates the remuneration policy and system for Directors, President and Vice Presidents, and reviews and evaluates long-term bonuses, year-end bonuses, annual salary adjustments, evaluation ratio, and other material issues with reference to the standards within the industry. The measurement basis and scope of evaluation include net profit before tax, business management performance, implementation results of internal control, customer satisfaction, corporate governance evaluation, and other indicators in the standards.

b. The measurement basis and scope of evaluation of the President include net profit before tax, business management performance, implementation results of internal control, customer satisfaction, corporate governance evaluation as the achievement rate indicators. In addition, the individual "annual work targets" include the achievement status of financial indicators and non-financial indicators. After comprehensive considerations and evaluations, the remuneration amount will be proposed to the Remuneration Committee and reported to the Board for a resolution.

C. Link to business performance and future risks

a. The examination of the payment standards and systems of the Company's remuneration adopts the overall operating status as the main consideration to approve the payment

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standards based on the performance achievement rates and the level of contribution apart from the regular Remuneration Committee meetings so as to improve the overall organizational/team functions of the Board and management departments. In addition, the Company refers to the remuneration standards within the industry to ensure the remuneration of the management of the Company is competitive to retain outstanding management talents.

b. The performance targets of the President and Vice Presidents are linked to “risk control” to ensure risks within their scope of duties may be managed and prevented, and are linked to relevant human resources and relevant remuneration policies with the evaluation results based on the actual performance. Material decisions of the management are made after measuring various risk factors, and the performance of relevant decisions is reflected in the profit of the Company; therefore, the remuneration of the management is related to the risk control performance.

c. The remuneration paid to by the Company and its subsidiaries to the President and Vice Presidents includes the fixed salary. In addition, according to the Article 40 of the Articles of Incorporation, if the Company records profit of the year, it shall appropriate 1% to 5% as the employees’ remuneration, and the Board shall resolve the distribution ratio and the distribution method (in shares or in cash), which includes the remuneration paid to the President and Vice Presidents. Their business management performance and collectible cash are correlated, or the shares distributed are related to the future stock prices; that is, they jointly assume the future operating risks with the Company.

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III. Corporate governance operations

(I) Board of Directors' operations:

6 Board meetings were held in 2025, and the attendance of Directors is as follows:

Title	Name	Actual number of attendance	Attend through proxy	Actual attendance rate (%)	Remark
Chairman	Kuei-Hsien Wang	6	0	100	N/A
Vice Chairman	Te-Wei Li	6	0	100	Served as an independent director prior to June 11, 2025. Please see the following page for the details of attendance at each Board meeting in 2025.
Managing Director (Independent director)	Chih-Ming Shih	6	0	100	Please see the following page for the details of attendance at each Board meeting in 2025.
Independent director	Ya-Wei Chang	3	0	100	Assumed office on June 11, 2025 and was required to attend 3 meetings. Please see the following page for the details of attendance at each Board meeting in 2025.
Independent director	Yu-Wei Cheng	2	1	66.67	Assumed office on June 11, 2025 and was required to attend 3 meetings. Please see the following page for the details of attendance at each Board meeting in 2025.
Director	Li-Yeh Hsu	6	0	100	Served as an independent director prior to June 11, 2025. Please see the following page for the details of attendance at each Board meeting in 2025.
Director	Ming-Hsiung Huang	5	1	83.33	N/A
Director	Jeh-Yi Wang	6	0	100	N/A
Director	Hung-Yang Wu	6	0	100	N/A
Vice Chairman	Ming-Shan Chuang	3	0	100	Dismissed on June 11, 2025 and was required to attend 3 meetings.
Director	Ya-Chi Lin	3	0	100	Dismissed on June 11, 2025 and was required to attend 3 meetings.
Other notes:
I. For the operation of the Board of Directors in any of the following circumstances, please specify the date, term, the contents of the proposals, the opinions of all independent directors, and the process of the opinions proposed by the independent directors:
(I) Matters set out in Article 14-3 of the Securities and Exchange Act:
March 3, 2025 (16th Meeting of the 27th Term): Discussion of the 2024 internal control system statement, 2024 parent company only financial statements, consolidated financial statements and business report, 2024 earnings distribution proposal, recognition of asset impairment by the cogeneration plant in accordance with IAS 36, and amendments to certain provisions of the Articles of Incorporation. All attending independent directors had no objection and approved the proposals as presented.
May 12, 2025 (17th Meeting of the 27th Term): Discussion of the consolidated financial statements for Q1 2025, the proposed loan of funds to Nan Chung Petrochemical Industrial Corporation, and amendments to certain provisions of the “Internal Control System for Shareholder Services Operations.” All attending independent directors had no objection and approved the proposals as presented.
August 11, 2025 (1st Meeting of the 28th Term)
Discussion on the consolidated financial statements for Q2 2025; partial amendments to the Procedures for Preparation and Assurance of Sustainability Reports; partial amendments to the Procedures for Acquisition or Disposal of Assets; revisions to the internal control system and internal audit regulations for payroll operations; revisions to the internal control

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system for the procurement and payment cycle, including the procurement operations and engineering contract award procedures and related internal audit regulations; revisions to the approval authority matrix for materials, engineering, and financial accounting categories; definition of entry-level employees; proposal regarding the change and salary determination of the accounting officer; proposal to enter into a building lease agreement with Han Hua Co., Ltd.; and proposal to enter into an industry-academia collaboration and academic feedback mechanism agreement with National Central University. All attending independent directors raised no objections, and all proposals were approved as proposed.

November 10, 2025 (2nd Meeting of the 28th Term): Discussion of the proposed subscription to the 2025 cash capital increase of Taichung Commercial Bank, the consolidated financial statements for Q3 2025, the 2025 service fees for the appointment of Deloitte & Touche, the 2026 internal audit plan, amendments to certain provisions of the "Sustainable Development Best Practice Principles," amendments to certain provisions of the "Internal Control System for Shareholder Services Operations," and the proposed execution of property lease agreements with Chuang Chien Investment Co., Ltd. and Formosa Imperial Wineseller Corp. All attending independent directors had no objection and approved the proposals as presented.

(II) Except for the aforementioned matters, any other resolutions of the Board to which Independent Directors objected or had reservations that were recorded or stated in a written statement: None.

II. With respect to the avoidance of conflicting interest agendas, describe the names of directors, details of the relevant agendas, reasons for avoiding conflicting interest, and the voting decisions:

On May 12, 2025, when discussing the proposal to lend funds to Nan Chung Petrochemical Corporation, Chairperson Kuei-Hsien Wang, Director Hung-Yang Wu, and Director Chieh-I Wang recused themselves due to conflicts of interest.

August 11, 2025

During the discussion of the proposal regarding the distribution of 2024 employee remuneration to insiders and personnel matters, Director Hung-Yang Wu voluntarily recused himself due to involvement of his own interests. Regarding the Company's proposed building lease agreement with Han Hua, Chairman Kuei-Hsien Wang voluntarily recused himself due to a conflict of interest. Regarding the Company's proposal to enter into an industry-academia collaboration and academic feedback mechanism agreement with National Central University, Independent Director Yu-Wei Cheng voluntarily recused himself due to involvement of his own interests.

On November 10, 2025, the discussion of the Company's execution of property lease agreements with Chuang Chien Investment and Formosa Imperial Wineseller Corp.; Chairman Kuei-Hsien Wang voluntarily recused himself due to involvement of personal interests. Discussion of the 2025 year-end bonus proposal for insiders; Chairman Kuei-Hsien Wang and Director Hung-Yang Wu voluntarily recused themselves due to involvement of personal interests.

III. TWSE/TPEx-Listed Companies shall disclose the evaluation cycles, periods, scope, methods, and contents for self (or peer) evaluation of the Board and fill out the implementation status of the Board evaluation in table 2(2):

Evaluation cycle	Evaluation period	Evaluation scope	Evaluation method	Evaluation content
2025	2025.1.1 - 2025.12.31	Board of directors	The board meeting units carried out evaluations based on the actual board operation status	There are five aspects, which are described as follows:
1) Level of participation in company operations
2) Enhancement of the board decision quality
3) Board composition and structure
4) Director election and continuing education
5) Internal control	The total score is 4.62 points, and the evaluation results are excellent. The evaluation results show that Board’s overall operations are quite comprehensive, which is in line with the corporate governance.
2025	2025.1.1 - 2025.12.31	Individual board of directors	Self-assessment by respective boards of directors.	They are divided into six aspects, as described below:
1) Firm grasp of company goals and missions
2) Clear understanding of director responsibilities	The overall average score is 4.73, and the evaluation results are excellent. The evaluation results show that the company directors have positive evaluations of the various assessment

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| | | | | 3) Level of participation in company operations
4) Management of internal relations and communication
5) Professionalism and continuing education of directors
6) Internal control | indicators’ operational efficiency and effectiveness. |
| --- | --- | --- | --- | --- | --- |

Note: The evaluation results have been submitted to the Board for approval and archiving on March 9, 2026.

IV. The objective of enhancing the occupational function of the Board of Directors in current year and the most recent year, and assessing its implementation: Not evaluated.

Supplementary notes: Details of attendance at each Board meeting in 2025

2025	1st meeting	2nd meeting	3rd meeting	4th meeting	5th meeting	6th meeting
Te-Wei Li	◎	◎	◎	Dismissed	Dismissed	Dismissed
Li-Yeh Hsu	◎	◎	◎	Dismissed	Dismissed	Dismissed
Chih-Ming Shih	◎	◎	◎	◎	◎	◎
Ya-Wei Chang	Not yet assumed office	Not yet assumed office	Not yet assumed office	◎	◎	◎
Yu-Wei Cheng	Not yet assumed office	Not yet assumed office1	Not yet assumed office1	◎	◎	☆

◎: Attended in person ☆: Attended by proxy

(II) The operation of the Auditing Committee

The Auditing Committee convened for 4 times (A) in 2025 The attendance of the independent directors is shown below:

Title	Name	Actual number of attendance	Attend through proxy	Attendance rate (%)	Remark
Independent director	Chih-Ming Shih	4	0	100	N/A
Independent director	Ya-Wei Chang	2	0	100	Assumed office on June 11, 2025 and was required to attend 2 meetings
Independent director	Yu-Wei Cheng	1	1	50	Assumed office on June 11, 2025 and was required to attend 2 meetings
Independent director	Te-Wei Li	2	0	100	Dismissed on June 11, 2025 and was required to attend 2 meetings
Independent director	Li-Yeh Hsu	2	0	100	Dismissed on June 11, 2025 and was required to attend 2 meetings
Other notes: I. If the operation of the Audit Committee is under any of the following circumstances, the date, term, proposal content, independent directors' dissenting opinions, reserved opinions or significant recommendations, resolution of the Audit Committee and the Company's handling of the Audit Committee's opinions should be described: (I) Matters set out in Article14-5 of the Securities and Exchange Act: March 3, 2025 (19th Meeting of the 3rd Term): Discussion of the 2024 internal control system statement, 2024 parent company only financial statements, consolidated financial statements, earnings distribution proposal, and amendments to the “Articles of Incorporation of the Company,” all of which were agreed to be submitted to the Board of Directors for discussion. May 12, 2025 (20th Meeting of the 3rd Term): Discussion of the consolidated financial statements for Q1 2025, the Company's proposed loan of funds to Nan Chung Petrochemical Industrial Corporation, and amendments to the “Internal Control System for Shareholder Services Operations,” all of which were agreed to be submitted to the Board of Directors for discussion. August 11, 2025 (1st Meeting of the 4th Term) Discussion on the consolidated financial statements for Q2 2025; revisions to the Procedures for Preparation and Assurance of Sustainability Reports; the Procedures for Acquisition or Disposal of Assets; revisions to the internal control system and internal audit regulations for payroll operations; the internal control system for the procurement and payment cycle, including the procurement operations and engineering contract award procedures and related internal audit regulations; revisions to the approval authority matrix for materials, engineering, and financial accounting categories; change of the accounting officer; proposed building lease agreement with Han Hua; and proposed industry-academia collaboration and academic feedback mechanism agreement with National Central University. It was agreed to submit the above matters to the Board of Directors for discussion.

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November 10, 2025 (2nd Meeting of the 4th Term): Discussion of the 2026 internal audit plan, the proposed subscription to the 2025 cash capital increase of Taichung Commercial Bank, the consolidated financial statements for Q3 2025, the 2025 service fees for the appointment of Deloitte & Touche, amendments to certain provisions of the “Sustainable Development Best Practice Principles,” amendments to certain provisions of the “Internal Control System for Shareholder Services Operations,” and the proposed execution of property lease agreements with Chuang Chien Investment and Formosa Imperial Wineseller, all of which were agreed to be submitted to the Board of Directors for discussion.

(II) In addition to the aforementioned proposals, other proposals without approval of the Auditing Committee but passed by the Board with 2/3 of the Directors: None.

II. With respect to the recusal for the conflicts of interest from proposals, the names of Independent Directors, details of the relevant proposals, reasons for the recusal due to conflicts of interest, and the participation in voting shall be specified: None.

III. The Annual Work Focus of the Audit Committee:

The operations of the Audit Committee adheres by the main objectives of supervising the appropriate expression of the Company’s financial statements, the independence and performance of CPAs’ appointment (dismissal), the effective implementation of the Company’s internal control, the Company’s legal compliance, and the Company’s risk control.

(I) Review of Financial Statements

The Board have prepared the 2025 Business Report, financial statement, and the proposal for earning distribution. The financial statements have been audited by Deloitte & Touche with the independent auditor’s report issued. The above business reports, financial statements, surplus distribution cases have been deemed compliant upon inspection by the Audit Committee.

(II) CPA Appointment (Dismissal) and Independence and Performance Evaluation

Supervise the election (dismissal) of CPAs and evaluate their independence on a yearly basis. The evaluation report, together with the statement issued by CPAs, have been discussed by the Audit Committee on March 3, 2025 and submitted to and approved by the Board on March 3, 2025.

(III) Evaluation of Internal Control System Effectiveness

The bank’s Board of Directors Audit Office shall review the respective departments’ internal control system self-inspection reports. They along with the internal control deficiencies and abnormal mater improvement situations found by the Audit Office shall serve as references for the management level to evaluate the overall internal control system effectiveness and the Statement of Internal Control presented. In addition, the Audit Committee shall evaluate the policies and procedures of the company’s internal control system.

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IV. Performance of communications by and between independent directors, internal audit head and Certified Public Accountant(s) (should include the Company's financial, business operation affairs, issued, methods and outcomes of communications among them):

(I) Communication policies between Independent Directors and the Chief Internal Auditor and CPAs

There are direct communication channels between the independent directors and internal auditors, and the CPAs. Communications are in good status. The Chief Internal Auditor, based on the annual audit plan and implementation status, convenes the Audit Committee report meeting for interactions with the independent directors; The internal audit plan for the subsequent year will be proposed to the Audit Committee for review. Besides attending the Shareholders' meeting, the CPA will attend the meetings of Audit Committee, Board of directors or through other methods of meeting depending on the situation. The CPA will communicate and interact with the independent directors on the financial statements review or audit situation, or finance, taxation or internal control and related topics.

The Audit Office will send the audit report to the independent directors on a monthly basis based on the annual audit plan.
For the deficiencies discovered in the audit reports, the internal deficiencies and the improvement situations of the unusual matters need to be follow-up. Create the follow-up report for sending to Independent Directors on a quarterly basis.
If it is discovered of major violations situations or when it is suspected that the company may suffer from major damages, shall create a report immediately for submission for review and notify the independent directors.
When there are questions or instructions by the independent directors after reviewing the audit report, they will make a phone call to the Chief Internal Auditor to inquire or inform of handling.

In summary, the independent directors can understand the company's operation situations (including finance and business situations) and audit situations through the audit reports provided to them on a regular basis by the Audit Committee or Board of directors and audit unit. They can also make sufficient communications on the audit execution situation and performance, and maintain good communications with the CPAs through meetings and other channels (such as: telephone, fax, emails and so on).

(II) Summary of previous communications between independent directors and internal audit managers as following:

Date	Methods of communications	Targets in communications	Communication matters	Communicate results
2025/3/3	Roundtable Discussion	CPA	The CPAs conducted communication and discussions regarding significant matters in the 2024 consolidated financial statements, including the audit scope and conclusions, group structure and audit matters, key audit matters, and corrected and uncorrected adjustments.	The independent directors have no comments on the current meeting.
2025/3/3	Audit Committee	Chief Internal Auditor	Audit operations report for 2024 Q4 and internal control system declaration for 2024.	The independent directors have no comments on the current meeting.
2025/5/12	Audit Committee	Chief Internal Auditor	The 2025 Q1 audit report.	The independent directors have no comments on the current meeting.
2025/8/11	Audit Committee	Chief Internal Auditor	The 2025 Q2 audit report.	The independent directors have no comments on the current meeting.
2025/11/10	Audit Committee	Chief Internal Auditor	1. 2025 Q3 audit report and follow-up improvement report.
2. The 2026 internal audit plan.	The independent directors have no comments on the current meeting.
2025/11/10	Roundtable Discussion	CPA	The CPAs conducted communication and discussions regarding significant matters in the 2025 consolidated financial statements, including the responsibilities of governance units, group audit matters, audit scope and methods, significant accounting policies, significant accounting estimates and significant events or transactions, significant risks and key	The independent directors have no comments on the current meeting.

audit matters, and updates to relevant laws and regulations.

V. The Annual Work Focus of the Audit Committee

(I) Review of Financial Statements

(II) CPA Appointment (Dismissal) and Independence and Performance Evaluation

Supervision of the appointment (dismissal) of CPAs and annual evaluation of their independence. The evaluation report, together with the declarations issued by the CPAs and Audit Quality Indicators (AQIs) information, was submitted to the Audit Committee on March 9, 2026 and reported to the Board of Directors on March 9, 2026, and was found to be in compliance with relevant internal and external independence regulations.

(III) Evaluation of Internal Control System Effectiveness

Implementation status of the Audit Committee’s internal performance evaluation in 2025

Evaluation cycle	Evaluation period	Evaluation scope	Evaluation method	Evaluation content
2025	2025.1.1 - 2025.12.31	Audit Committee members	Self-evaluation of the respective Audit Committee members	There are five aspects, which are described as follows:
1) Level of participation in company operations
2) Clear understanding of the responsibilities of functional committees
3) Improvement of the decision-making quality of the functional committee
4) Improvement of the quality of the functional committee’s decision-making
5) 5) Internal control.	The overall average score is 4.60, and the evaluation results are excellent. The evaluation results show that the Audit Committee members have positive evaluations of the various assessment indicators’ operational efficiency and effectiveness.

The evaluation results have been submitted to the Board for approval and archiving on March 9, 2026.

Audit Committee members are as follows:

Title	Name	Gender	Major career (academic) achievements
Independent director	Chih-Ming Shih	Male	The KGI Commercial Bank Co., Ltd. Audit Office and branch manager. Accounting and Statistics, Tamsui Institute of Business Administration
Independent director	Yu-Wei Cheng	Male	Vice Dean of the College of Management, National Central University; Full-time Professor at the Graduate Institute of Industrial Economics, National Central University. Juris Doctor from the University of Pennsylvania Law School
Independent director	Ya-Wei Chang	Female	Chief Consultant and Executive Director of Storm - Consulting Inc., President of the Taiwan Region of HelloAsia.com. Master’s degree in Mass Communication from Boston University.

The responsibilities of the Audit Committee are as follows:

I. Establish or amend the internal control system in accordance with Article 14-1 of the Securities and Exchange Act.
II. Assessment of the effectiveness of the internal control system.
III. Establish or amend the procedures for major financial and business activities, including acquisition or disposal of assets, trading of derivatives, lending of funds to others, and endorsements or guarantees for others, in accordance with Article 36-1 of the Securities and Exchange Act.
IV. Matters involving the personal interests of directors.
V. Material assets or derivative transactions.
VI. Material lending of funds, endorsements, or provision of guarantees.
VII. Public offering, issuance, or private placement of equity-related securities.
VIII. Appointment, dismissal, or remuneration of the CPA.
IX. The appointment and dismissal of the Finance Officer, Accounting Officer, or Internal Chief Auditor.
X. The annual financial statement and second quarter financial statement subject to verification by a certified public accountant(s).
XI. Other material matters as required by the Company or the competent authorities.

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(III) How The Company’s actual governance differs from The Corporate Governance Best-Practice Principles for TSEC/GTSM Listed Companies and why:
* The Company

Items for evaluation	Implementation Status			Deviation and causes of deviation from the Corporate Governance Best-Practice Principles for TSEC/GTSM Listed Companies
	Yes	No	Summary
I. Will the Company based on the “Corporate Governance Best-Practice Principles for TWSE/GTSM Listed Companies” set up and disclose the Company’s corporate governance best-practice principles?		V	The Company has not yet developed the plan.	If there are regulatory or necessary considerations, the provisions of the relevant laws and other regulations shall apply.
II. Shareholding structure and shareholders’ equity
(I) Will the Company have the internal procedures regulated to handle shareholders’ proposals, doubts, disputes, and litigation matters; also, have the procedures implemented accordingly?		V	(I) The Company has not established any procedures. However, it has a spokesperson, an acting spokesperson and full-time shareholder services personnel responsible for handling recommendations or questions from shareholders and the official website also has an "Investor Relations" section to handle recommendations, suspicions, or disputes.	Insignificant difference.
(II) Does the Company possess a list of principal shareholders and beneficial owners of these principal shareholders?	V		(II) The Company constantly monitors the shareholdings of Directors, supervisors, managers or major shareholders with over 10% of shareholdings.	Meet the requirements.
(III) Will the Company establish and implement the risk control and firewall mechanisms with the related parties?	V		(III) Transaction management of interested parties, endorsement and guarantee and capital loans between the Company and its affiliates are governed by rules, and there are internal control and audit measures developed in accordance with the Regulations Governing Establishment of Internal Control Systems by Public Companies, to monitor subsidiaries.	Meet the requirements.
(IV) Has the Company established internal rules prohibiting insider trading on undisclosed information?	V		(IV) The Company has established internal rules prohibiting insider trading on undisclosed information.	Meet the requirements.
III. The organization of the Board and their duties
(I) Has the Board of Directors formulated and implemented a diversity policy on membership?	V		(I) The Board is composed of senior executives, each with different professional expertise and meeting the goals for diversification.	Meet the requirements.

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Items for evaluation	Implementation Status			Deviation and causes of deviation from the Corporate Governance Best-Practice Principles for TSEC/GTSM Listed Companies
	Yes	No	Summary
(II) Will the Company, in addition to setting the Remuneration Committee and Audit Committee lawfully, have other functional committee set up voluntarily?		V	(II) Will discuss the possibility of establishment based on the Company's actual business needs.	Insignificant difference.
(III) Has the Company established its Regulations for Performance Evaluation of the Board and the evaluation methods and conducted regular performance evaluations each year? Has the Company reported the results to the Board as the reference for individual Directors' remuneration and nomination for re-appointment?	V		(III) The Company has established a Board performance evaluation system, under which it conducts an internal self-assessment of the Board and individual directors once a year. The Board performance evaluation covers five key aspects: (1) the level of participation in the Company’s operations, (2) the quality of Board decision-making, (3) Board composition and structure, (4) director selection and ongoing training, and (5) internal control. Individual director self-assessments cover six aspects: (1) understanding of the Company’s goals and missions, (2) awareness of director responsibilities, (3) level of participation in the Company’s operations, (4) management of internal relationships and communication, (5) professional expertise and ongoing training, and (6) internal control. The results of the aforementioned evaluations are reported to the Board and disclosed in the Company’s annual report. In addition, relevant information has been disclosed through the Company’s annual report, official website, or the Market Observation Post System (MOPS), including: (1) attendance of Board members at meetings, (2) Board meeting agenda items and resolutions, (3) director training records, and (4) changes in directors’ shareholdings (including shareholding ratios, share transfers, and the establishment of pledges) (please refer to MOPS). The evaluation results were reported to the Board on March 9, 2026, and disclosed publicly. They serve as a reference for determining individual directors’ remuneration and renomination.	Meet the requirements.
(IV) Will the Company have the independence of the public accountant evaluated regularly?	V		(IV) The Audit Committee evaluates the independence and adequacy of CPAs each year, requests CPAs to provide the “Statement of Independence” and “audit quality indicators (AQIs),” and carries out the evaluation based on the	Meet the requirements.

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Items for evaluation	Implementation Status
	Yes	No	Summary
			standards in (Note 1) and the 13 AQIs. It has been confirmed that, apart from attestation and tax-related service fees, the non-audit services provided by the CPA do not impair their independence. The CPA’s family members are also in compliance with independence requirements. In addition, based on the AQI (Audit Quality Indicators) information, the CPA and the accounting firm demonstrate a lower turnover rate among senior personnel and superior quality control compared to the industry average. The firm has also continued to adopt digital auditing tools to enhance audit quality. The evaluation results of the most recent year have been discussed by the Audit Committee and resolved by the Board on March 9, 2026 to approve that CPAs Shu-Lin Liu and Pan-Fa Wang from Deloitte and Touche comply with the independence evaluation standards of the Company.
IV. Has the Company designated an adequate number of corporate governance personnel with appropriate qualifications and appointed a Corporate Governance Officer as the most senior officer in charge of corporate governance affairs (including, but not limited to, provision of data required for the execution of relevant operations by the Directors, assistance in legal compliance by Directors, handling of matters pertaining to Board meetings and shareholders meetings pursuant to relevant laws and preparation of minutes for Board meetings and shareholders’ meetings)?	V		The Company set up the Corporate Governance Officer in 2019, and the Board resolved to approve to appoint manager Lai-Hsiang Tsai as the Corporate Governance Officer on August 12, 2024. The manager has more than three years of experience as an audit department supervisor in public companies.
Corporate governance-related matters include, but are not limited to, the following:
1. Conduct board of directors meeting and shareholders’ meeting related matters by law.
2. Produce minutes of board meetings and shareholder meetings.
3. Assist directors in taking office and continuing education.
4. Provide the board of directors with information needed for implementing businesses.
5. Assist the board of directors in legal compliance.
6. Report to the Board on whether the qualification of Independent Directors complies with the examination results based on relevant laws and regulations at the time of nomination, election, and during the term of office.
7. Matters with regard to the change in Directors.
8. Other matters set in accordance with laws and regulation, company regulations, or contracts.	Meet the requirements.

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Items for evaluation	Implementation Status
	Yes	No	Summary
			Corporate governance business implementation situations:
1. Assist in board of directors meeting and shareholders’ meeting procedures and resolved legal compliance matters:
(1) Report the corporate governance operation situations to the board of directors, independent directors, or the Audit Committee. Confirm if shareholders’ meetings and board of directors’ meetings convened are in line with relevant laws and norms in the Code for Corporate Governance.
(2) Assist in and remind directors in legal compliance at the time of implementing businesses or upon official resolution by the board of directors. Suggestions shall be proposed upon board resolution of violations.
(3) Responsible for reviewing the release of major information on important Board resolutions after the meeting. This is to ensure the compliance and correctness of important information contents and protect the equivalence of investors’ transaction information.
2. Pursuant to the legally prescribed time limits, advance registration of the date of the shareholders meeting, uploading of the meeting notice and handbook 30 days in advance, and provision of meeting minutes within 20 days after the meeting.
3. Board of directors and Audit Committee related matters:
(1) Agenda for the board and audit committee and other meeting information are submitted to the directors 7 days before the meeting, and the meeting minutes are completed within 20 days after the meeting.
(2) The meeting standards have specified terms on recusal. Directors are reminded of recusal whenever topics presented have any conflict of interests.
(3) Compile the resolutions and statements from the proceedings of each meeting, and monitor the follow-up responsive measures taken by the relevant unit and report them.
4. Support directors:

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Items for evaluation	Implementation Status			Deviation and causes of deviation from the Corporate Governance Best-Practice Principles for TSEC/GTSM Listed Companies
	Yes	No	Summary
			(1) All directors have completed the required hours of continuing professional education pursuant to the Directions for the Implementation of Continuing Education for Directors and Supervisors of TWSE and TPEx Listed Companies and receive constant assistance in continuing education.
(2) Continue to advocate compliance with the laws and regulation by the Board.
(3) In July 2025 and January 2026, regulatory briefings were held for directors, managers, and other insiders to relay announcements from the Taipei Exchange regarding common deficiencies observed in insider shareholding changes.
5. In order to establish sound corporate governance, assist the board of directors in performing duties and enhance the effectiveness of the board of directors, the company has set up the “Standard Operating Procedures for Handling Demands by Directors” in order to ensure the board procedures, all applicable laws and regulations, and rules are complied with and ensure sound information exchange among board members and between directors and the management department.
Continuing education of the Corporate Governance Officer: Please refer to the description of the continuing education of the Corporate Governance Officer in the annual report. (Note 2)
V. Has the Company established a communication channel with the stakeholders (including but not limited to the shareholders, employees, customers, and suppliers), set up a stakeholder section on the Company’s website, and responded appropriately to the important corporate social responsibilities concerned by the stakeholders?	V		The Company offers communication channels for various entities (including interested parties) based on different circumstances, and they can be found on the Company's website at http://www.cmfc.com.tw.	Meet the requirements.
VI. Has the Company commissioned a professional stock service agent to handle shareholders affairs?		V	The shareholder services of the Company are handled by specialized personnel, and the services are regularly audited by both the internal and external organizations and meet all requirements.	For the purpose of saving on operating cost, outsourcing is currently not considered.
VII. Disclosures

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Items for evaluation	Implementation Status			Deviation and causes of deviation from the Corporate Governance Best-Practice Principles for TSEC/GTSM Listed Companies
	Yes	No	Summary
(I) Does the Company have a website setup and the financial business and corporate governance information disclosed?	V		(I) The Company's financials and disclosures are disclosed on the Exchange's website in accordance with the regulations, and the annual reports are also published on the Company's official website. (Website: http://www.cmfc.com.tw , and may link to MOPS).	Meet the requirements.
(II) Has the Company adopted other methods of information disclosure (e.g., setting up an English website, designating a dedicated personnel to be responsible for gathering and disclosing Company information, setting up a spokesperson system, uploading recordings of investor conferences onto the Company website)?	V		(II) The Company has assigned personnel responsible for the collection of disclosed information and implemented the spokesperson practice.	Meet the requirements.
(III) Has the Company announced and declared its financial report within 2 months after the end of the fiscal year, and announced and declared the quarterly financial report of Q1, Q2, and Q3 and the monthly business report before the deadline?		V	(III) As the Company’s paid-in capital exceeds NT$10 billion, it is required to file its unaudited financial information electronically within 75 days after the end of each fiscal year. In accordance with Article 36 of the Securities and Exchange Act, the Company must also announce and file its financial reports within 45 days after the end of the first, second, and third quarters of each fiscal year, and by the 10th of each month, it must announce and file its operating results for the preceding month.	In conformity with relevant laws and regulations; currently not planned due to manpower allocation considerations.
VIII. Are there any other important information (including but not limited to the interests of employees, employee care, investor relations, supplier relations, the rights of stakeholders, the advanced study of Directors and supervisors, the implementation of risk management policies and risk measurement standards, the execution of customer policy, the purchase of liability insurance for the Company’s Directors and supervisors) that are helpful in a better understanding of the corporate governance operation of the Company?	V		Employees' rights and welfare: To achieve sustainable operations and growth, the Company protects employees' welfare in accordance with the Labor Standards Act and other related measures and also establishes a Staff Welfare Committee to be responsible for various welfare measures to improve its overall care of employees. Examples include: employee travel subsidies, birthday gift vouchers, holiday bonuses, wedding allowances, funeral allowances, and other welfare subsidies.
Investor Relations: The Company treats all its investors with fairness and openness. Shareholders meetings are held annually in accordance with the requirements of the Company Act and the relevant laws and regulations. Investors are notified of attendance to shareholders meetings and encouraged to participate in the resolutions of all proposals of the meetings. In order to ensure that shareholders have full rights to know, participate and decide on key	Meet the requirements.

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Items for evaluation	Implementation Status
	Yes	No	Summary
			issues of the Company, a spokesperson and an acting spokesperson are assigned to properly handle all recommendations, questions and disputes.
Supplier relationship: maintain a good relationship based on the principle of good faith.
Rights of interested parties: they can contact us through the mailbox on the official homepage or directly contact us.
Note: Continuing education of Directors and supervisors: (Note 3) Implementation of risk management policies and measurement criteria: the Company has established various internal management regulations in accordance with the law and conducted various risk management and assessment to effectively control the risks of the Company's operations.
Implementation status of customer policies: To implement a diversified customer service mechanism, the Company not only conducts regular customer visits to strengthen partnership relationships, but also carries out annual customer satisfaction surveys covering marketing, logistics, and technical services. Customer feedback is further incorporated as an important indicator in the Company’s operational risk assessment, thereby improving service quality to enhance customer loyalty and ensuring that all business operations accurately align with market demands and are adjusted in a timely manner.
Purchase of liability insurance for directors and supervisors: the Company has purchased insurance policies in accordance with the Corporate Governance Best Practice Principles for TWSE/TPEx-Listed Companies and disclosed them on the Market Observation Post System.
IX. State of corrective action taken for responding to the results of the corporate governance assessment announced by Taiwan Stock Exchange Corporation in the Corporate Governance Center the most recent fiscal year, and the priority for improvement on issues pending further corrective action and related measures.
1. According to the 2024 (11th) Corporate Governance Evaluation results released by the Corporate Governance Center of the Taiwan Stock Exchange Corporation, the Company ranked in the 61%-100% bracket among non-financial electronics companies with a market capitalization of over NT$10 billion, consistent with the 2023 results. The Company complied with 43 indicator items and has designated the unmet indicator item, “whether the Chairman, a majority of directors, and the convener of the Audit Committee personally attend the shareholders’ meeting and disclose the attendance list in the meeting minutes,” as a priority improvement item.
2. After the release of the 2025 (12th) evaluation results, items failing to meet the indicators will be listed as priority areas for strengthening corporate governance. The Company will continue to enhance corporate governance and focus on sustainable development in the future.

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Note 1: The table of comprehensive evaluation for the independence of CPAs:

Items for evaluation	Evaluation results	Compliance with independence
Evaluate whether the appointed CPAs have direct or indirect significant financial interest with the Company.	None	Yes
Evaluate whether the appointed CPAs have significant abnormal borrowings from the Company.	None	Yes
Evaluate whether there are business relationships between the appointed CPAs and the Company, Directors, supervisors, or managers that may affect the independence.	None	Yes
Evaluate whether the appointed CPAs have served as the Directors, supervisors, managers, or positions that have direct and significant influence on the audit work of the Company, and whether their family members have served as the Directors, supervisors, managers, or positions that have direct and significant influence on the audit work of the Company in the most recent two years.	None	Yes
Evaluate whether the appointed CPAs are spouses, direct blood relatives, direct in-laws, or blood relatives within the second degree of kinship with the Company's Directors, supervisors, or managers.	None	Yes
Evaluate whether the appointed CPAs accept the appointment with contingent fees.	None	Yes
Evaluate whether the appointed CPAs accept presents or gifts with significant value from the Directors, supervisors, managers, or major shareholders of the Company.	None	Yes
Evaluate whether the appointed CPAs are involved in litigation with the Company.	None	Yes
Evaluate the impact of the concurrent provision of audit services and non-audit services by the CPA’s firm on its independence.	Deloitte and Touche mainly provides services such as financial statement audit, income tax certification, and project review of the Company without affecting its independence.	In 2025, the Company did not engage Deloitte for any non-audit fee-based services that would affect the CPAs’ independence.

The table of evaluation for the adequacy of CPAs:

Evaluation indicators	Specific indicators	Evaluation standards	Remark
Compliance with relevant laws and regulations and requirements	Audits of financial statements (including consolidated financial statements)	Issuance of the independent auditor’s report within three months after the end of the year according to Article 36 of the "Securities and Exchange Act"	The audit and certification of the 2024 financial statements were completed on March 3, 2025.
	Assessment of profit-seeking enterprise income tax returns	Issuance of tax certification reports in accordance with the "Regulations Governing the Review and Certification of Income Tax Returns by CPA Engaged by Profit-seeking Enterprises," the "Regulations Governing Assessment of Profit-seeking Enterprise Income Tax," and other relevant laws and regulations	The tax certification for 2024 was completed on May 30, 2025.
	Review of interim financial statements	Issuance of the review reports within 45 days after the end of Q1, Q2, and Q3 according to Article 36 of the “Securities and Exchange Act”	Completed within the deadline for each quarter in 2025: The Q1 report was issued on May 12,

Note 2: Corporate governance supervisor continuing education situation

Title	Name	Organizer	Course name	Training hours	Whether the training had complied with policies
Corporate Governance Officer	Lai-Hsiang, Tsai	Taiwan Securities Exchange Corporation	Enhancing Climate Information Disclosure to Strengthen Corporate Climate Resilience	3	Yes

Note 3: Continuing education of directors

Title	Name	Organizer	Course name	Training hours	Whether the training had complied with policies
Chairman	Kuei-Hsien Wang	Corporate Governance Association in Taiwan	Corporate Governance Officer and Board of Directors Evaluation Development	3	Yes
Vice Chairman	Te-Wei Li	Corporate Governance Association in Taiwan	How the Board of Directors Responds to the 12 ESG Risk Issues	3	Yes
		Corporate Governance Association in Taiwan	How the Audit Committee Implements Financial Statement Review	3	Yes
		Corporate Governance Association in Taiwan	Analysis of Directors' Stewardship and the Effectiveness of the Internal Control System	3	Yes
Managing Director (Independent director)	Chih-Ming Shih	Corporate Governance Association in Taiwan	Operation of the Remuneration Committee and the Performance and Remuneration System for Directors and Managers	3	Yes
		Corporate Governance Association in Taiwan	Sustainability Disclosure and Investment Value from an Investor Perspective: Explaining ESG disclosure frameworks and risk monitoring in connection with capital market trust.	3	Yes
Independent director	Yu-Wei Cheng	Corporate Governance Association in Taiwan	Circular Economic Benefits and Sustainable Finance Business Opportunities	3	Yes
		Corporate Governance Association in Taiwan	Case Analysis of Corporate Control Disputes	3	Yes
Independent director	Ya-Wei Chang	Corporate Governance Association in Taiwan	Corporate Governance Officer and Board Members	3	Yes

Title	Name	Organizer	Course name	Training hours	Whether the training had complied with policies
		Corporate Governance Association in Taiwan	Global Trend Analysis - Risks and Opportunities	3	Yes
		Corporate Governance Association in Taiwan	International Trends and Experience Sharing on Ethical Corporate Management and Senior Management Accountability Systems	3	Yes
Director	Li-Yeh Hsu	Corporate Governance Association in Taiwan	How the Board of Directors Responds to the 12 ESG Risk Issues	3	Yes
		Corporate Governance Association in Taiwan	How the Audit Committee Implements Financial Statement Review	3	Yes
		Corporate Governance Association in Taiwan	Analysis of Directors’ Stewardship and the Effectiveness of the Internal Control System	3	Yes
Director	Jeh-Yi Wang	Corporate Governance Association in Taiwan	Corporate Governance Officer and Board of Directors Evaluation Development	3	Yes
Director	Ming-Hsiung Huang	Corporate Governance Association in Taiwan	Corporate Governance Officer and Board of Directors Evaluation Development	3	Yes
Director	Hung-Yang Wu	Taiwan Securities Exchange Corporation and Taipei Exchange	2025 Taiwan Week IR & Engagement New Trends: ESG and Sustainable Investment Forum	3	Yes

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Consolidated company
Pan Asia Chemical Corporation

(III) How The Company’s actual governance differs from The Corporate Governance Best-Practice Principles for TSEC/GTSM Listed Companies and why:

Items for evaluation	Implementation Status			Differences from the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies and reasons therefor
		Yes	No		Summary
I.	Will the Company based on the “Corporate Governance Best-Practice Principles for TWSE/GTSM Listed Companies” set up and disclose the Company’s corporate governance best-practice principles?		V	The Company has not yet developed its own "Corporate Governance Best Practice Principles."	If there are regulatory or necessary considerations, the provisions of the relevant laws and other regulations shall apply.
II.	Shareholding structure and shareholders’ equity
(I) Will the Company have the internal procedures regulated to handle shareholders’ proposals, doubts, disputes, and litigation matters; also, have the procedures implemented accordingly?		V	(I) The Company has a spokesperson, an acting spokesperson and full-time shareholder services personnel responsible for handling recommendations or questions from shareholders and the official website also has an "Investor Relations" section to handle recommendations or disputes.
(II) The Company constantly monitors the shareholdings of Directors, managers or major shareholders with over 10% of shareholdings.
(III) Transaction management of interested parties, endorsement and guarantee and capital loans between the Company and its affiliates are governed by rules, and there are internal control and audit measures developed in accordance with the Regulations Governing Establishment of Internal Control Systems by Public Companies, to monitor subsidiaries.
(IV) In order to maintain the fairness in the securities trading market, the Company has established the "Procedures to Prevent Insider Trading" and the "Procedures for Handling Material Inside Information."	The difference is as stated in the summary, and the practice is mostly compliant.
Meet the requirements.
Meet the requirements.
	(II) Does the Company possess a list of principal shareholders and beneficial owners of these principal shareholders?	V
	(III) Will the Company establish and implement the risk control and firewall mechanisms with the related parties?	V
	(IV) Has the Company established internal rules prohibiting insider trading on undisclosed information?	V
III.	The organization of the Board and their duties
(I) Has the Board of Directors formulated and implemented a diversity policy on membership?			(I) The Company values diversification of the board composition, and members are generally equipped with knowledge, skills and competencies necessary to perform their duties.	Meet the requirements.

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Items for evaluation	Implementation Status			Differences from the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies and reasons therefor
	Yes	No	Summary
(II) Will the Company, in addition to setting the Remuneration Committee and Audit Committee lawfully, have other functional committee set up voluntarily?			(II) Will discuss the possibility of establishment based on the Company's actual business needs.	The difference is as stated in the summary, and the practice is compliant.
(III) Has the Company established its Regulations for Performance Evaluation of the Board and the evaluation methods and conducted regular performance evaluations each year? Has the Company reported the results to the Board as the reference for individual Directors’ remuneration and nomination for re-appointment?			(III) The Company has established a Board performance evaluation system, under which it conducts an internal self-assessment of the Board and individual directors once a year. The Board performance evaluation covers five key aspects: (1) the level of participation in the Company’s operations, (2) the quality of Board decision-making, (3) Board composition and structure, (4) director selection and ongoing training, and (5) internal control. Individual director self-assessments cover six aspects: (1) understanding of the Company’s goals and missions, (2) awareness of director responsibilities, (3) level of participation in the Company’s operations, (4) management of internal relationships and communication, (5) professional expertise and ongoing training, and (6) internal control. The results of the aforementioned evaluations are reported to the Board and disclosed in the Company’s annual report. In addition, relevant information has been disclosed through the Company’s annual report, official website, or the Market Observation Post System (MOPS), including: (1) attendance of Board members at meetings, (2) Board meeting agenda items and resolutions, (3) director training records, and (4) changes in directors’ shareholdings (including shareholding ratios, share transfers, and the establishment of pledges) (please refer to MOPS). The evaluation results were reported to the Board on March 9, 2026, and disclosed publicly. They serve as a reference for determining individual directors’ remuneration and renomination.	Meet the requirements.
(IV) Will the Company have the independence of the public accountant evaluated regularly?			(IV) The Audit Committee evaluates the independence and adequacy of CPAs each year, requests CPAs to provide the “Statement of Independence” and “audit quality indicators (AQIs),” and carries out the evaluation based	Meet the requirements.

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Items for evaluation	Implementation Status
	Yes	No	Summary
			on the standards in (Note 1) and the 13 AQIs. In addition to the fees for certification and taxation matters, as confirmed, there was no other financial benefits or business relationships, and family members of CPAs also comply with the independence requirements. With reference to AQIs, it is confirmed that CPAs and their firm have equivalent audit experience with their peers and are more favorable than the average level within the industry in terms of quality control. In addition, digital audit tools are continued to be introduced to improve the audit quality. The evaluation results of the most recent year have been discussed by the Audit Committee and resolved by the Board to approve the evaluation of the CPAs’ independence and adequacy on March 9, 2026.
IV. Has the listed company designated an adequate number of corporate governance personnel with appropriate qualifications and appointed a Corporate Governance Officer as the most senior officer in charge of corporate governance affairs (including but not limited to the provision of data required for the execution of relevant operations by the Directors and supervisors, assistance in legal compliance of Directors, handling matters pertaining to Board meetings and shareholders’ meetings pursuant to relevant laws, and preparation of minutes for Board meetings and shareholders’ meetings)?	V		The Company has designated representatives from each department to handle corporate governance matters. On March 15, 2021, the Board of Directors resolved to appoint a Corporate Governance Officer, a role concurrently held by Accounting Manager Yu-Tao Wen. Effective August 13, 2024, the position has been reassigned to Lai-Hsiang Tsai, as designated by the parent company.
Corporate governance-related matters include, but are not limited to, the following:
1. Conduct board of directors meeting and shareholders’ meeting related matters by law.
2. Produce minutes of board meetings and shareholder meetings.
3. Assist directors in taking office and continuing education.
4. Provide the board of directors with information needed for implementing businesses.
5. Assist the board of directors in legal compliance.
6. Report to the Board on whether the qualification of Independent Directors complies with the examination results based on relevant laws and regulations at the time of nomination, election, and during the term of office.	Meet the requirements.

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Items for evaluation	Implementation Status
	Yes	No	Summary
			7. Matters with regard to the change in Directors.
8. Other matters set according to company regulations or contracts.
Corporate governance operation implementation situation:
1. Assist in board of directors meeting and shareholders’ meeting procedures and resolved legal compliance matters:
(1) Report the corporate governance operation situations to the Board, Independent Directors, or the Audit Committee. Confirm if shareholders’ meetings and Board meetings convened are in line with relevant laws and norms in the Code for Corporate Governance.
(2) Assist in and remind directors in legal compliance at the time of implementing businesses or upon official resolution by the board of directors. Suggestions shall be proposed upon board resolution of violations.
(3) Responsible for reviewing the release of major information on important Board resolutions after the meeting. This is to ensure the compliance and correctness of important information contents and protect the equivalence of investors’ transaction information.
(4) Report to the Board on whether the qualification of Independent Directors complies with the examination results based on relevant laws and regulations at the time of nomination, election, and during the term of office.
2. Pursuant to the legally prescribed time limits, advance registration of the date of the shareholders meeting, uploading of the meeting notice and handbook 30 days in advance, and provision of meeting minutes within 20 days after the meeting.
3. Board of directors and Audit Committee related matters:

46 -

Items for evaluation	Implementation Status
	Yes	No	Summary
			(1) Agenda for the board and audit committee and other meeting information are submitted to the directors 7 days before the meeting, and the meeting minutes are completed within 20 days after the meeting.
(2) The meeting standards have specified terms on recusal. Directors are reminded of recusal whenever topics presented have any conflict of interests.
(3) Compile the resolutions and statements from the proceedings of each meeting, and monitor the follow-up responsive measures taken by the relevant unit and report them.
4. Support directors:
(1) Continue assisting the board of directors in completing continuing education hours in accordance with the “Directions for the Implementation of Continuing Education for Directors and Supervisors of TWSE Listed and TPEx Listed Companies.”
(2) Continue to advocate compliance with the laws and regulation by the Board.
(3) In July and October 2025, regulatory briefings were held for directors, managers, and other insiders to relay announcements from the Taipei Exchange regarding common deficiencies observed in insider shareholding changes.
5. In order to establish sound corporate governance, assist the board of directors in performing duties and enhance the effectiveness of the board of directors, the company has set up the “Standard Operating Procedures for Handling Demands by Directors” in order to ensure the board procedures, all applicable laws and regulations, and rules are complied with and ensure sound information exchange among board members and between directors and the management department.
Corporate governance officers continuing education

47 -

Items for evaluation	Implementation Status			Differences from the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies and reasons therefor
	Yes	No	Summary
			situation: Please refer to the annual report on the explanation of the situation of continuing education of corporate governance officers. (Note 2)
V. Has the Company established a communication channel with the stakeholders (including but not limited to the shareholders, employees, customers, and suppliers), set up a stakeholder section on the Company’s website, and responded appropriately to the important corporate social responsibilities concerned by the stakeholders?	V		The Company offers communication channels for various entities (including interested parties) based on different circumstances, and they can be found in the "Stakeholders" section on the Company's website at https://www.pacc.com.tw.	Meet the requirements.
VI. Has the Company commissioned a professional stock service agent to handle shareholders affairs?		V	The shareholder services of the Company are handled by specialized personnel, and the services are regularly audited by both the internal and external organizations and meet all requirements.	For the purpose of saving on operating cost, outsourcing is currently not considered.
VII. Disclosures
(I) Does the Company have a website setup and the financial business and corporate governance information disclosed?	V		(I) The Company's finance, business, and relevant disclosures are disclosed on the OTC website in accordance with the regulations, and the annual reports are also published on the Company's website. The Company's website is www.pacc.com.tw, with available links connecting to the MOPS.	Meet the requirements.
(II) Has the Company adopted other methods of information disclosure (e.g., setting up an English website, designating a dedicated personnel to be responsible for gathering and disclosing Company information, setting up a spokesperson system, uploading recordings of investor conferences onto the Company website)?	V		(II) The Company has assigned personnel responsible for the collection of disclosed information and implemented the spokesperson practice.	Meet the requirements.
(III) Has the Company announced and declared its financial report within 2 months after the end of the fiscal year, and announced and declared the quarterly financial report of Q1, Q2, and Q3 and the monthly business report before the deadline?		V	(III) Pursuant to the provisions set forth in Article 36 of the Securities and Exchange Act, annual financial statements are publicly announced and filed within three months after the close of the given fiscal year. Financial statements for Q1, Q2, and Q3 are publicly announced and filed within 45 days after the end of the respective quarters of each fiscal year, and operational status reports for the previous month are publicly	In conformity with relevant laws and regulations; currently not planned due to manpower allocation considerations.

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Items for evaluation	Implementation Status
	Yes	No	Summary
			announced and filed within the first ten days of each calendar month.
VIII. Are there any other important information (including but not limited to the interests of employees, employee care, investor relations, supplier relations, the rights of stakeholders, the advanced study of Directors and supervisors, the implementation of risk management policies and risk measurement standards, the execution of customer policy, the purchase of liability insurance for the Company’s Directors and supervisors) that are helpful in a better understanding of the corporate governance operation of the Company?	V		Employee rights and interests: The Company regards employees as partners in sustainable operations. In addition to fully complying with the "Labor Standards Act" and related labor laws and regulations, the Company actively builds a transparent and two-way participation environment to ensure that employees’ voices are incorporated into operational decision-making.
Employee care: The Company takes respect for human rights as a core value and is committed to creating a safe, healthy, and respectful workplace environment, implementing the "Labor Standards Act" and safeguarding the lawful rights and interests of employees.
Investor relations: In operating its normal business and maximizing the shareholder interest, the Company respect and maintain investor's interests, conduct business operations with good faith, pay attention to the trading order on the securities market and have a high regard for the social responsibility of the Company.
Supplier relationship: Maintain a good relationship based on the principle of good faith.
Rights of interested parties: they can contact us through the mailbox on the official homepage or directly contact us.
Continuing education of Directors and supervisors: Please refer to the continuing education of Directors in the annual report (Note 3).
Implementation of risk management policies and measurement criteria: the Company has established various internal management regulations in accordance with the law and conducted various risk management and assessment to effectively control the risks of the Company's operations.
Implementation of customer policies: in addition to regular visits to customers and convening distributor meetings, the Company conducts annual customer satisfaction surveys to understand customers' actual responses to marketing, logistics management and technical support. Customers are invited to	Meet the requirements.

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50 -

Items for evaluation	Implementation Status
	Yes	No	Summary
			provide their recommendations to ensure that their needs are understood and met.
Purchase of liability insurance for directors and supervisors: the Company and its parent (China Man-Made Fiber Corporation) jointly take out professional liability insurance for directors, supervisors and key employees and disclose relevant information on the Market Observation Post System (MOPS).
IX. State of corrective action taken for responding to the results of the corporate governance assessment announced by Taiwan Stock Exchange Corporation in the Corporate Governance Center the most recent fiscal year, and the priority for improvement on issues pending further corrective action and related measures:
1. According to the results of the 11th Corporate Governance Evaluation for 2024 released by the Taiwan Stock Exchange Corporation Corporate Governance Center, the Company was ranked within the 36% to 50% tier among TPEx listed companies. The Company has designated the indicator item "the Chairman personally attends the annual general shareholders' meeting" as a priority improvement item.
2. As of the publication date, the results of the 12th Corporate Governance Evaluation for 2025 have not yet been released. The Company has designated the unmet indicators as priority improvement items for corporate governance enhancement based on their importance and the assessed feasibility of achievement.

Note 1: The independence and adequacy evaluation standards of CPAs:

Independence:

The CPAs have no direct or significant indirect financial interest with the Company.
The CPAs have no loans with the Company.
The CPAs have no significant and close business relationships with the Company or its Directors, supervisors, or managers.
The CPAs, their spouses or dependents, or their audit team have not held any positions as the Directors, managers, or positions that have significant influence on the audits of the Company during the audit period or in the most recent two years, and are also determined not to hold the aforementioned positions during future audit periods.
The CPAs are not spouses, direct blood relatives, direct in-laws, or blood relatives within the second degree of kinship with the Company's responsible person or managers.
The CPAs did not accept the appointment with contingent fees.
The CPAs have no litigation with the Company.
As of today, the CPAs have not been punished or harmed the independence principle.
Whether the CPAs have complied with the requirements of independence as stated in The Norm of Professional Ethics for Certified Public Accountant of the Republic of China No. 10, and whether the "Statement of Independence" issued by the CPAs is obtained.
The CPAs have not provided audit services to the Company for seven consecutive years.

Competence:

Evaluation indicators	Specific indicators	Evaluation standards
Compliance with relevant laws and regulations and requirements	Audit of Financial Statements	Issuance of the independent auditor's report within three months after the end of the year according to Article 36 of the "Securities and Exchange Act".
	Review of interim financial statements	Issuance of the review reports within 45 days after the end of Q1, Q2, and Q3 according to Article 36 of the "Securities and Exchange Act".
	Review of documents related to affiliated companies	Issuance of review report based on Letter Tai-Cai-Zheng No. 04449 and the "Guidelines for the Review of Consolidated Financial Statements of Affiliated Companies".
	Review of annual reports	The Company prepares its annual report in accordance with the Regulations Governing Information to be Published in Annual Reports of Public Companies and the report has been reviewed by a certified public accountant.
	Assessment of profit-seeking enterprise income tax returns	Issuance of tax certification reports in accordance with the "Regulations Governing the Review and Certification of Income Tax Returns by CPA Engaged by Profit-seeking Enterprises," the "Regulations Governing Assessment of Profit-seeking Enterprise Income Tax," and other relevant laws and regulations.
	Audit of Value-Added Tax (VAT) Direct Deduction Method	Pursuant to Article 8-2, Subparagraph 6 of the Regulations Governing the Calculation of Business Tax Amounts by Dual-Status Taxpayers, Tax Agentthe Company must engage a CPA for audit and attestation.
	Issue a verification form for full-time employees who do not hold managerial positions	Pursuant to Article 3 of the Taipei Exchange Rules Governing the Information Reporting of Companies with Listed Securities, a CPA must issue the verification form to ensure the reliability and comparability of information disclosure.

The CPAs completed the certification of financial statements of each period for the Company as scheduled and provided the Company with financial and taxation consulting services from time to time.
Based on the evaluation results of the aforementioned assessment forms, the appointed CPA complies with the independence requirements and suitability standards outlined therein.

Note 2: Corporate governance officer continuing education situation

Title	Name	Organizer	Course name	Training hours	Whether the training had complied with policies
Corporate Governance Officer	Lai-Hsiang, Tsai	Taiwan Securities Exchange Corporation	Enhancing Climate Information Disclosure to Strengthen Corporate Climate Resilience	3	Yes

Note 3: Continuing education of directors:

Title	Name	Organizer	Course name	Training hours	Whether the training had complied with policies
Chairman	Kuei-Hsien Wang	Corporate Governance Association in Taiwan	Corporate Governance Officer and Board of Directors Evaluation Development	3	Yes
Independent director	Lung-Teng Chen	Corporate Governance Association in Taiwan	Strategic Analysis of Sustainable Enterprises - Taking Renewable Energy as an Example	3	Yes
		Corporate Governance Association in Taiwan	Sustainability Disclosure and Investment Value from an Investor Perspective: Explaining ESG disclosure frameworks and risk monitoring in connection with capital market trust.	3	Yes
Independent director	Kuo-Ming Chang	Corporate Governance Association in Taiwan	Strategic Analysis of Sustainable Enterprises - Taking Renewable Energy as an Example	3	Yes
		Corporate Governance Association in Taiwan	Sustainability Disclosure and Investment Value from an Investor Perspective: Explaining ESG disclosure frameworks and risk monitoring in connection with capital market trust.	3	Yes
Independent director	Kuo-Fu Hsiao	Corporate Governance Association in Taiwan	Strategic Analysis of Sustainable Enterprises - Taking Renewable Energy as an Example	3	Yes
		Corporate Governance Association in Taiwan	Sustainability Disclosure and Investment Value from an Investor Perspective: Explaining ESG disclosure frameworks and risk monitoring in connection with capital market trust.	3	Yes
Director	Jeh-Yi Wang	Corporate Governance Association in Taiwan	Corporate Governance Officer and Board of Directors Evaluation Development	3	Yes
Director	Hung-Yang Wu	Taiwan Securities Exchange Corporation and Taipei Exchange	2025 Taiwan Week IR & Engagement New Trends: ESG and Sustainable Investment Forum	3	Yes

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Taichung Commercial Bank

Items for evaluation	Implementation Status			Deviation from the Corporate Governance Best-Practice Principles for the Banking Industry and reasons
	Yes	No	Summary
I. Equity structure and shareholders’ equity
(I) Has the Bank instituted an internal procedure for handling recommendations, queries, disputes of the shareholders and legal actions, and comply with the procedure properly?	☑		1. The Bank has established its "Corporate Governance Best Practice Principles," which has a chapter dedicated to the topic of "Protect Shareholders Rights."
2. The Company has assigned a spokesperson and an acting spokesperson to properly handle all recommendations from shareholders and a designated shareholder service organization responsible for handling questions and disputes. The contact information is listed on the Company's official website.	no difference
(II) Has the bank secured the list of main shareholders of the actual bank of control and the final controller of the main shareholders?	☑		Equity increase/decrease or changes in mortgage of shareholders with more than 5% shareholding and shareholders serving as directors shall be monitored at all times; the said information shall be entered into the "Market Observation Post System" and publicly disclosed in accordance with the provisions.	no difference
(III) Has the Bank established and implemented the risk control mechanism and firewall between the corporate headquarters and the affiliates?	☑		1. The Company has formulated the "Information Management of Interested Parties and Credit Policies," "Management Standards of Non-credit Transactions with Interested Party," "Regulations for Deposits and Remittance of NTD and Foreign Currencies with Stakeholders," and co-developed a database on interests with the affiliated companies to comply with the requirements of Article 32 and 33 of the Banking Act and other related regulations.
2. Establish "Guidelines for Supervision of Subsidiaries" to regulate the operation, finances, sales and audit management and reported to the board quarterly.	no difference
II. The organization of the Board and their duties
(I) Has the Board of Directors formulated a diversity policy on membership?	☑		1. The bank’s "Code or Banking Industry Corporate Governance Practice" in Chapter 4 "Strengthen Board Function," stipulates the policy of board of directors diversification; the "Regulations for Board of Directors Election and Appointment" has also been set up. The board makeup shall take diversification into consideration. An appropriate chairman candidate shall also be elected and appointed based on company operations, business type, and development needs. The standards for the chairman’s election and appointment in two aspects include: basic condition and value (gender, age, etc.) and professional knowledge and skills (professional background).
2. The concrete management goals and implementation of the Company’s	no difference

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Items for evaluation	Implementation Status			Deviation from the Corporate Governance Best-Practice Principles for the Banking Industry and reasons
	Yes	No	Summary
			diversity policy:
(1) Not more than one-third of the directors are concurrently managers of the company: achieved.
(2) Not less than one (inclusive) of female Director: Achieved, the Bank has one female Director.
(3) At least one-third of the members of the Board of Directors must be of either gender: Not yet achieved. The term of office for the 25th Board will expire on May 14, 2026, and the new board members will be elected at the 2026 shareholders’ meeting.
For the implementation status of the Board of directors’ diversity policy, please refer to annual report of the “Diversity and independence of the Board of Directors .” The information has been disclosed on the Company's official website under About us/Corporate Governance Area.
(II) Further to the establishment of the Remuneration Committee and the Auditing Committee, has the Bank voluntarily established other functional committees?	☑		1. The Company has set up the Remuneration Committee, Audit Committee and Risk Management Committee according to the laws and regulations.
2. To strengthen the mechanism for the election of Directors, the Board approved the establishment of the "Corporate Governance and Nomination Committee" on January 14, 2021 (renamed "Nomination Committee" on August 10, 2023).
3. To implement consumer protection policies, the Board passed a resolution on January 13, 2022 to establish a "Treat Customers Fairly Committee" to refine and implement the Bank's "Treat Customers Fairly Policy" and "Treat Customers Fairly Strategy."
4. To enhance the functions of the Board and implement the Bank's sustainable development, the Bank approved the establishment of the Sustainable Development Committee on July 13, 2023, and stipulated its organizational charter.	no difference
(III) Has the TWSE/TPEx-listed Bank had the rules governing the performance evaluation of the board of directors and evaluation methods stipulated, the performance evaluation performed annually and regularly, the results of the performance evaluations reported to the board of directors, and the evaluation result applied	☑		1. The Regulations for Board Performance Evaluation were established on December 13, 2018 to facilitate implementation of corporate governance and strengthen the functions of the Board of directors. Evaluations are conducted internally once a year. External evaluations are conducted by an independent professional institution or a team of scholars and experts at least every three years. Performance evaluations must be completed prior to the end of Q1 of the following year. A report must be delivered to the Nomination Committee and the Board, and the implementation conditions and evaluation results shall	no difference

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Items for evaluation	Implementation Status
	Yes	No	Summary
as a reference for individual director’s remuneration and nomination for re-election?			be disclosed on the Bank’s official website and in the annual report.
2. The performance evaluation results of the Board and functional committees in 2025 were reported to the Nomination Committee and the Board on March 5, 2026, respectively. The Bank continues to improve the functions of the Board and the implementation of corporate governance based on the evaluation and use it as a reference for the remuneration and nomination for re-appointment of individual directors.
(IV) Has the Bank assessed the independence of the CPAs regularly?	☑		1. According to paragraph 6, Article 40 of the Corporate Governance Best Practice Principles: “The appointment, dismissal or remuneration of CPAs shall be approved by the Board.” The independence of the appointed CPAs shall be periodically evaluated (at least once a year).
2. In accordance with Article 38 of the "Corporate Governance Best Practice Principles for Banks" and supervisory matters under Article 3 of the Bank's "Audit Committee Charter," and with reference to the Certified Public Accountant Act, the Bank formulated evaluation items to perform the independence evaluation. The evaluation contents include:
(1) Whether there are direct or significant indirect financial interests.
(2) Whether there are material abnormal loans with the Company or financing or guarantees obtained under abnormal commercial activities with the Company.
(3) Whether there are business relationships with the Company, Directors, supervisors, or managers that may affect the independence.
(4) Whether they have served as the Directors, supervisors, managers, or positions that have direct and significant influence on the audit work of the Company in the most recent two years.
(5) Whether they are spouses, direct blood relatives, direct in-laws, or blood relatives within the second degree of kinship with the Company's responsible person or managers.
(6) Whether the appointment is accepted with contingent fees
(7) Whether they are involved in litigation with the Company.
(8) Whether there are impacts of the concurrent provision of audit services and non-audit services by the CPA’s firm on its independence.
The Bank also referred to the AQIs provided by CPAs’ firm, which covered five major aspects of professionalism, quality control, independence,	no difference

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Items for evaluation	Implementation Status
	Yes	No	Summary
			supervision, and innovation ability, and 13 indicators (including the firm’s level and audit case level) to evaluate the audit quality of the CPAs’ firm and the audit team.
3. The aforementioned evaluation report, along with the declaration issued by the CPA, was submitted to the 32nd Meeting of the 4th Audit Committee on March 5, 2026, and the 35th Meeting of the 25th Board of Directors on March 5, 2026, in compliance with both internal and external independence regulations.
III. Has the Bank designated an adequate number of corporate governance personnel with appropriate qualifications and appointed a Corporate Governance Officer as the most senior officer in charge of corporate governance affairs (including but not limited to the provision of data required for the execution of relevant operations by the Directors and supervisors, assistance in legal compliance of Directors, handling matters pertaining to Board meetings and shareholders’ meetings pursuant to relevant laws, and preparation of minutes for Board meetings and shareholders’ meetings)?	✓		1. The Corporate Governance Division under the Board of Directors Office serves as a dedicated unit. The Company has established dedicated (or concurrently assigned) corporate governance units and personnel responsible for corporate governance-related affairs. Pursuant to the resolution of the Board of Directors on February 27, 2025, Mr. Shih-Chieh Chang, Chief Secretary of the Bank, was designated as the senior executive officer for corporate governance (in compliance with Article 3-1 of the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies, having served for more than three years in managerial positions related to legal affairs, legal compliance, internal audit, finance, shareholder services, or corporate governance at securities, financial, or futures-related institutions or public companies). His primary responsibilities include:
(1) Handle matters relating to board meetings and shareholders meetings according to law.
(2) Produce minutes of board meetings and shareholder meetings.
(3) Assist directors in taking office and continuing education.
(4) Provide directors with data needed to implement businesses.
(5) Assist in the legal compliance of directors.
(6) Report to the Board on whether the qualification of Independent Directors complies with the examination results based on relevant laws and regulations at the time of nomination, election, and during the term of office.
(7) Matters with regard to the change in Directors.
(8) Other matters set according to company regulations or contracts.
2. The business implementation in 2025 is as follows:
(1) Drafting and amendment of corporate governance related rules and regulations.	no difference

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Items for evaluation	Implementation Status
	Yes	No	Summary
			(2) Assistance to independent directors in the communication with the chief audit executive or CPA.
(3) Conduct continuing education-related matters for the Board and assist the Directors in implementing the continuing education mechanism. The continuing education hours in 2025 are in compliance with the laws and regulations.
(4) Assist the board of directors in performing duties and in regulatory compliance. Based on requirements proposed by the board of directors, appropriate and timely replies shall be given in accordance with the bank’s “Standard Guidelines for Handling Requirements of Board of Directors.”
(5) Handling matters and procedures pertaining to shareholders’ meetings, Board meetings, managing Director meetings and Audit Committee meetings in accordance with relevant procedures; reminders to Directors to recuse themselves in case of conflicts of interest associated with proposal contents.
IV. Has the Bank established a communication channel with the stakeholders (including but not limited to the shareholders, employees, customers, and suppliers), set up a stakeholder section on the Company’s website, and responded appropriately to the important corporate social responsibilities concerned by the stakeholders?	☑		1. The Bank has made disclosures on its intranet based on the Banking Act and requirements related to the restrictions on credit loans to stakeholders and organized regulation courses for handling personnel for their compliance and understanding from time to time. Meanwhile, the Bank also requests stakeholders to fill out the stakeholder data sheet upon their job transfer.
2. The bank not only published information on the MOPS as provisioned; information is also published on the external official website for search by investors; an open and transparent contact channel is available on the external website (About Us/Stakeholders sections). Different responsible units shall engage in exchanges with various stakeholders, actively respond to issues of concern to stakeholders and the main sources of issues of varying concern levels. The situation of communication with stakeholders is periodically reported to the Board every year.
3. The communication performance with stakeholders is reported to the Sustainability Committee and the Board and disclosed on the Stakeholders section on its website.	no difference

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Items for evaluation	Implementation Status			Deviation from the Corporate Governance Best-Practice Principles for the Banking Industry and reasons
	Yes	No	Summary
V. Disclosures
(I) Does the Bank have a website setup and the financial business and corporate governance information disclosed?	☑		The bank’s financial businesses and corporate governance information have been disclosed on the external official website.	no difference
(II) Has the Bank adopted other methods of information disclosure (e.g., setting up an English website, designating a dedicated personnel to be responsible for gathering and disclosing Company information, setting up a spokesperson system, uploading recordings of investor conferences onto the Company website)?	☑		1. For the proper handling of materiality and disclosure, the Bank has established the “Criteria for Handling Materiality” whereby relevant departments shall appoint designated personnel to handle materiality.
2. The Bank held four institutional investor conferences on March 17, 2025, May 19, 2025, August 18, 2025, and December 22, 2025, respectively. Relevant information was disclosed on the official website under About Us/Public Information and on MOPS. In addition, an English website has been established to disclose information related to finance, business operations, and corporate governance.
3. The Bank has established the spokesman system for release of information to ensure investors accessible to accurate information.	no difference
(III) Does the bank publish and declare annual financial statements within given deadlines at the end of an accounting year in accordance with relevant provisions in the Banking Act and Securities Trading Act? Are financial statements for the first quarter, second quarter, and third quarter and monthly operation situations published and declared in advance before given deadlines?	☑		The Bank announced the 2025 financial statements on March 10, 2025, and announced the Q1, Q2, and Q3 financial statements and the operating status of each month within the prescribed time limit.	no difference
VI. Any other vital information that helps to understand the status of corporate governance at the Bank (including but not limiting to the rights of employees, concern for the employees, investor relation, the rights of the stakeholders, continuing education of the directors and the supervisors, risk management policy and the implementation of risk assessment, the pursuit of customer policy, the liability insurance taken by the Bank for the protection of the Directors and Supervisors,	☑		1. For information on the rights and interest of the employees, refer to important rights and interest of the employees, labor-capital agreements, and implementation on the annual report.
2. For the protection of rights and obligations, stakeholders are regulated on files in accordance with the Banking Act. In addition, there is also the provision for the avoidance of the conflict of interest for Board meetings.
3. The Bank has set up the stakeholders section on the external official website. Financial business and corporate governance related information has also been established to facilitate supplier relationships and an unobstructed communication channel with stakeholders. In reference to the needs of	no difference

58 -

Items for evaluation	Implementation Status
	Yes	No	Summary
donations to political parties, stakeholders, and social charity groups)?			foreign investor, the English version of corporate governance related information is also available, which will aid in protecting the rights and interests of stakeholders.
4. For the status of further education and board meetings attendance of directors, please refer to the MOPS and the annual report under “Continuing education of directors.”
5. According to the Bank’s “Procedures for Handling Material Internal Information,” at least one educational session per year is conducted for directors, managerial officers, and employees on regulations related to the “Self-Regulatory Guidelines for Mergers and Acquisitions Information Disclosure” and the “Procedures for Handling Material Internal Information,” which are aimed at preventing insider trading. In 2025, such sessions were held in May and November for directors, managerial officers, and employees. These sessions covered the obligation to keep financial and business information confidential in accordance with the above guidelines, the prohibition on unauthorized disclosure of information, and explanations of the scope of material internal information, confidentiality practices, and handling of violations. The relevant regulations were also posted on the internal system. All employees are required to complete annual online training courses on “Insider Shareholding Regulations and Practices” and “Procedures for Handling Material Internal Information,” which cover the Securities and Exchange Act, material internal information and insider trading, and case studies. In 2025, a total of 3,186 employees completed the training, with a combined total of 2,177 training hours.
6. The Bank attaches great importance to customer service quality and provides customer complaint channels on its official website, while implementing consumer rights protection throughout its operational procedures.
7. The Bank has set up the “risk management policy” resolved and passed by the Board. The dedicated departments and offices shall compile, gain an insight into, and analyze the departments’ risk management and risk exposure situations. Monitoring and necessary measures shall be adopted to cope with different types of risks, periodically compile and analyze bank-wide risk management situations and report to the Risk Management Committee and the Board.
8. The Bank continued the Directors and managers’ liability insurance policy,

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Items for evaluation	Implementation Status
	Yes	No	Summary
			with the issued amount totaling US$20 million (insured period: May 1, 2025 to May 1, 2026).
9. December 24, 2020 Signed "Institutional Investors' Due Diligence and Compliance Statement" on October 21, 2020 to continue monitoring investee companies and adopting shareholder activism to fulfill the responsibility of institutional investors.
10. The Bank has established the "Guidelines for External Donations" to regulate donations made to political parties, stakeholders, and public welfare organizations. Please refer to the "Implementation of Sustainable Development/Corporate Responsibility and Ethical Conduct" section of the annual report or the Bank’s sustainability report.

VII. State of corrective action taken for responding to the results of the corporate governance assessment announced by Taiwan Stock Exchange Corporation in the Corporate Governance Center the most recent fiscal year, and the priority for improvement on issues pending further corrective action and related measures:

(I) Taiwan Stock Exchange 2024 (11th) corporate governance evaluation results showed that the Bank is listed as 21% to 35% TWSE listed companies.

(II) The Bank has adopted the following measures to strengthen corporate governance:

On January 14th, 2021, the Board passed the resolution to set up the “Corporate Governance and Nomination Committee” (the “Corporate Governance and Nomination Committee” was renamed “Nomination Committee” on August 10, 2023) and disclosed its formation, responsibilities and operations.
The "Sustainable Development Committee" was established on July 13, 2023. There are six workforces of corporate governance, sustainable finance, human rights maintenance, environmental sustainability, climate change, and social welfare under the Committee that are responsible for establishing annual plans and coordinating the implementation of tasks related to sustainable development.
The Bank has established an intellectual property management plan linked to its operational goals. In 2021, it implemented the Taiwan Intellectual Property Management System (TIPS) and obtained A-level certification. On December 30, 2022, it passed the TIPS (A-level) re-certification review, with the certification valid through December 31, 2024. On December 31, 2024, the Industrial Development Administration of the Ministry of Economic Affairs officially announced that the Bank had passed the TIPS certification, with the certificate valid through December 31, 2026.
The Bank held four institutional investor conferences on March 17, 2025, May 19, 2025, August 18, 2025, and December 22, 2025, providing investors with opportunities to express their opinions and engage in two-way communication with the Company, thereby enhancing the quality of corporate governance.
The Bank continues to allocate funds to socially sustainable investment initiatives. As of the end of December 2025, it had invested in 3 green bonds and 1 sustainability bond.
Obtained ISO 14001 Environmental Management System certification on October 31, 2022, with certification validity through October 30, 2025. An external certification audit was conducted on August 25, 2025, and the certification statement was obtained on October 13, 2025, with validity from October 31, 2025 to October 30, 2028.
Since becoming a supporter of the Task Force on Climate-related Financial Disclosures (TCFD) in 2022, the Company has incorporated the four core elements of governance, strategy, risk management, and metrics and targets into its organizational operations. The Company published its first TCFD report in 2023 and, in 2024, underwent its first TCFD conformity assessment conducted by the British Standards Institution (BSI), receiving the highest recognition of “Level 5+: Excellence.”
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Video-assisted shareholders' meetings were held in 2024 and 2025 to provide shareholders with diversified methods of participating in shareholders' meetings and to implement shareholder activism.

VIII. Others

(I) Directors' Continuing Education in 2025

Title	Name	Training date	Organizer	Course name	Hours
Chairman	Jui-Tsang Li	2025.3.10	Securities and Futures Institute	Friendly Finance - Corporate Integrity, Fair Customer Treatment, and Empowerment of Financial Consumers	3.0
		2025.6.25	Taiwan, Taiwan Academy of Banking and Finance (TABF)	Strengthening Corporate Sustainability: ESG Practices and Resource Circulation	3.0
		2025.10.1	Taiwan, Taiwan Academy of Banking and Finance (TABF)	Legal Compliance: Information Governance Risk Management, Anti-Money Laundering, and Counter-Terrorism Financing	3.0
		2025.12.23	Taiwan, Taiwan Academy of Banking and Finance (TABF)	Corporate Governance Seminar: Analysis of the Semiconductor and AI Markets Under the Macroeconomic Structure, Operational Risk Management, Prevention of Workplace Sexual Harassment, and Workplace Equality	3.5
Managing Director	Kuei-Fong Wang	2025.3.10	Securities and Futures Institute	Friendly Finance - Corporate Integrity, Fair Customer Treatment, and Empowerment of Financial Consumers	3.0
		2025.6.25	Taiwan, Taiwan Academy of Banking and Finance (TABF)	Strengthening Corporate Sustainability: ESG Practices and Resource Circulation	3.0
		2025.10.1	Taiwan, Taiwan Academy of Banking and Finance (TABF)	Legal Compliance: Information Governance Risk Management, Anti-Money Laundering, and Counter-Terrorism Financing	3.0
		2025.12.23	Taiwan, Taiwan Academy of Banking and Finance (TABF)	Corporate Governance Seminar: Analysis of the Semiconductor and AI Markets Under the Macroeconomic Structure, Operational Risk Management, Prevention of Workplace Sexual Harassment, and Workplace Equality	3.5
Independent Executive Director	Jin-Yi Lee	2025.3.10	Securities and Futures Institute	Friendly Finance - Corporate Integrity, Fair Customer Treatment, and Empowerment of Financial Consumers	3.0
		2025.6.25	Taiwan, Taiwan Academy of Banking and Finance (TABF)	Strengthening Corporate Sustainability: ESG Practices and Resource Circulation	3.0
		2025.10.1	Taiwan, Taiwan Academy of Banking and Finance (TABF)	Legal Compliance: Information Governance Risk Management, Anti-Money Laundering, and Counter-Terrorism Financing	3.0
		2025.12.23	Taiwan, Taiwan Academy of Banking and Finance (TABF)	Corporate Governance Seminar: Analysis of the Semiconductor and AI Markets Under the Macroeconomic Structure, Operational Risk Management, Prevention of Workplace Sexual Harassment, and Workplace Equality	3.5
Independent director	Li-Wen Lin	2025.3.10	Securities and Futures Institute	Friendly Finance - Corporate Integrity, Fair Customer Treatment, and Empowerment of Financial Consumers	3.0
		2025.6.25	Taiwan, Taiwan Academy of Banking and Finance (TABF)	Strengthening Corporate Sustainability: ESG Practices and Resource Circulation	3.0

Title	Name	Training date	Organizer	Course name	Hours
		2025.10.1	Taiwan, Taiwan Academy of Banking and Finance (TABF)	Legal Compliance: Information Governance Risk Management, Anti-Money Laundering, and Counter-Terrorism Financing	3.0
		2025.12.23	Taiwan, Taiwan Academy of Banking and Finance (TABF)	Corporate Governance Seminar: Analysis of the Semiconductor and AI Markets Under the Macroeconomic Structure, Operational Risk Management, Prevention of Workplace Sexual Harassment, and Workplace Equality	3.5
Independent director	Hsin-Chang Tsai	2025.3.10	Securities and Futures Institute	Friendly Finance - Corporate Integrity, Fair Customer Treatment, and Empowerment of Financial Consumers	3.0
		2025.6.25	Taiwan, Taiwan Academy of Banking and Finance (TABF)	Strengthening Corporate Sustainability: ESG Practices and Resource Circulation	3.0
		2025.10.1	Taiwan, Taiwan Academy of Banking and Finance (TABF)	Legal Compliance: Information Governance Risk Management, Anti-Money Laundering, and Counter-Terrorism Financing	3.0
		2025.12.23	Taiwan, Taiwan Academy of Banking and Finance (TABF)	Corporate Governance Seminar: Analysis of the Semiconductor and AI Markets Under the Macroeconomic Structure, Operational Risk Management, Prevention of Workplace Sexual Harassment, and Workplace Equality	3.5
Independent director	Pi-Ta Chen	2025.3.10	Securities and Futures Institute	Friendly Finance - Corporate Integrity, Fair Customer Treatment, and Empowerment of Financial Consumers	3.0
		2025.6.25	Taiwan, Taiwan Academy of Banking and Finance (TABF)	Strengthening Corporate Sustainability: ESG Practices and Resource Circulation	3.0
		2025.10.1	Taiwan, Taiwan Academy of Banking and Finance (TABF)	Legal Compliance: Information Governance Risk Management, Anti-Money Laundering, and Counter-Terrorism Financing	3.0
		2025.12.23	Taiwan, Taiwan Academy of Banking and Finance (TABF)	Corporate Governance Seminar: Analysis of the Semiconductor and AI Markets Under the Macroeconomic Structure, Operational Risk Management, Prevention of Workplace Sexual Harassment, and Workplace Equality	3.5
Director	Hsueh-Hsuan Liao	2025.3.10	Securities and Futures Institute	Friendly Finance - Corporate Integrity, Fair Customer Treatment, and Empowerment of Financial Consumers	3.0
		2025.6.25	Taiwan, Taiwan Academy of Banking and Finance (TABF)	Strengthening Corporate Sustainability: ESG Practices and Resource Circulation	3.0
		2025.10.1	Taiwan, Taiwan Academy of Banking and Finance (TABF)	Legal Compliance: Information Governance Risk Management, Anti-Money Laundering, and Counter-Terrorism Financing	3.0
		2025.12.23	Taiwan, Taiwan Academy of Banking and Finance (TABF)	Corporate Governance Seminar: Analysis of the Semiconductor and AI Markets Under the Macroeconomic Structure, Operational Risk Management, Prevention of Workplace Sexual Harassment, and Workplace Equality	3.5
Director	Shi-Yi Chiang	2025.3.10	Securities and Futures Institute	Friendly Finance - Corporate Integrity, Fair Customer Treatment, and Empowerment of Financial Consumers	3.0
		2025.6.25	Taiwan, Taiwan Academy of	Strengthening Corporate Sustainability: ESG Practices and Resource	3.0
			Banking and Finance Institute	Cumulative Risk Management, Anti-Money
				Corporate Governance Seminar: Analysis of the Semiconductor and AI Markets Under the Macroeconomic Structure, Operational Risk Management, Prevention of Workplace Sexual Harassment, and Workplace Equality	3.5

Title	Name	Training date	Organizer	Course name	Hours
			Banking and Finance (TABF)	Circulation
		2025.10.1	Taiwan, Taiwan Academy of Banking and Finance (TABF)	Legal Compliance: Information Governance Risk Management, Anti-Money Laundering, and Counter-Terrorism Financing	3.0
		2025.12.23	Taiwan, Taiwan Academy of Banking and Finance (TABF)	Corporate Governance Seminar: Analysis of the Semiconductor and AI Markets Under the Macroeconomic Structure, Operational Risk Management, Prevention of Workplace Sexual Harassment, and Workplace Equality	3.5
Director	Ying-Hui Wu	2025.3.10	Securities and Futures Institute	Friendly Finance - Corporate Integrity, Fair Customer Treatment, and Empowerment of Financial Consumers	3.0
		2025.6.25	Taiwan, Taiwan Academy of Banking and Finance (TABF)	Strengthening Corporate Sustainability: ESG Practices and Resource Circulation	3.0
		2025.10.1	Taiwan, Taiwan Academy of Banking and Finance (TABF)	Legal Compliance: Information Governance Risk Management, Anti-Money Laundering, and Counter-Terrorism Financing	3.0
		2025.12.23	Taiwan, Taiwan Academy of Banking and Finance (TABF)	Corporate Governance Seminar: Analysis of the Semiconductor and AI Markets Under the Macroeconomic Structure, Operational Risk Management, Prevention of Workplace Sexual Harassment, and Workplace Equality	3.5

Note: Pursuant to Article 4 of the "Directions for the Implementation of Continuing Education for Directors of TWSE/TPEx Listed Companies," new Directors shall participate in continuing education for at least 12 hours during the year in which they took office, and re-appointed Directors shall participate in at least six hours each year during the term of office. The continuing education hours are accumulated from January 1 to December 31 of the year, in principle. If the hours are required to be accumulated over the years due to special circumstances or course designs, the reasons shall be specified when disclosing the implementation of continuing education.

(II) Continuing education and training of corporate governance senior supervisors (period: January 1, 2025 to December 31, 2025)

Training date	Organizer	Course name	Hours
2025.3.10	Securities and Futures Institute	Friendly Finance - Corporate Integrity, Fair Customer Treatment, and Empowerment of Financial Consumers	3.0
2025.6.25	Taiwan, Taiwan Academy of Banking and Finance (TABF)	Strengthening Corporate Sustainability: ESG Practices and Resource Circulation	3.0
2025.7.9	Taiwan Securities Exchange Corporation	2025 Cathay Sustainable Finance and Climate Change Summit	6.0
2025.7.29	Taipei Bar Association	Corporate Governance and Risk Management	3.0
2025.8.1	Taiwan Corporate Governance Association	Corporate Governance Officer and Board of Directors Management	3.0
2025.9.12	Taipei Bar Association	Roles and Responsibilities of the Corporate Governance Officer in the Establishment and Operation of Functional Committees	3.0
2025.10.1	Taiwan, Taiwan Academy of Banking and Finance (TABF)	Legal Compliance: Information Governance Risk Management, Anti-Money Laundering, and Counter-Terrorism Financing	3.0
2025.10.17	Taiwan Corporate Governance Association	Corporate Governance Officer and Sustainable Governance	3.0
2025.11.7	Taiwan Corporate Governance Association	Corporate Governance Officer and Board of Directors Evaluation Development	3.0
2025.12.23	Taiwan, Taiwan Academy of Banking and Finance (TABF)	Corporate Governance Seminar: Analysis of the Semiconductor and AI Markets Under the Macroeconomic Structure, Operational Risk Management, Prevention of Workplace Sexual Harassment, and Workplace Equality	3.5

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(IV) The operation of the Remuneration Committee or Nomination Committee

Information on the members of the Remuneration Committee

February 28, 2026

Condition		Professional Qualifications and Experience	Status of Independence	Number of public companies where the members of the Remuneration Committee are also the members of the remuneration committees of these companies
By identity	Name
Independent director (Convener)	Te-Wei Li Note 1	Has experience in both business and politics, with proven capabilities in leadership, decision-making, crisis management, and risk control. Also possesses the ability to conduct actionable evaluations of the Company's overall compensation system. Relevant professional qualifications and experience can be found on page 8.	1. Neither the individual, their spouse, nor any relatives within the second degree of kinship serve as a director, supervisor, or employee of the Company or any of its affiliated enterprises. 2. Neither the individual, their spouse, nor any relatives within the second degree of kinship, whether directly or through a third party, hold any shares in the Company. 3. Is not a director, supervisor, or employee of any corporate shareholder that directly holds 5% or more of the total issued shares of the Company, ranks among the top five shareholders, or appoints a director or supervisor of the Company in accordance with Article 27, Paragraph 1 or 2 of the Company Act. 4. Is not a director, supervisor, or employee of any other company where the same person controls more than half of the voting shares or board seats in both companies. 5. None of the directors serve concurrently as the same person or spouse of the Chairman, President, or equivalent position of another company or institution, nor as directors (or supervisors), supervisors (or auditors), or employees of such other company or institution. 6. Not a director, supervisor, manager, or shareholder with more than 5% ownership interest in any company or institution that has financial or business relationship with the Company. 7. Does not receive remuneration from the Company or its affiliated enterprises for providing commercial, legal, financial, or accounting services.	None
	Chih-Ming Shih	Possesses experiences in the banking industry, specializes in accounting analysis capability and risk management knowledge and capability, is an Audit Committee member and possesses educational background in accounting related degree. Able to provide reasonable suggestions on the company's overall remuneration system. Relevant professional qualifications and experience can be found on page 9.		None
Independent director	Li-Yeh Hsu Note 1	Possesses work experiences in business, specializes in operational judgement, management administration and risk management knowledge and capability. Able to conduct effective assessment and suggestions on the company's overall remuneration system. Relevant professional qualifications and experience can be found on page 8.		None
Independent director	Yu-Wei Cheng Note 1	Possesses professional expertise in industrial economics and concurrently serves as an independent director of other listed companies. Demonstrates strong capabilities in industry analysis, operational management knowledge, and managerial competence, and is able to effectively evaluate and provide recommendations on the Company's overall remuneration system. Please refer to page 8 for relevant professional qualifications and experience.		None
Independent director	Ya-Wei Chang Note 1	Possesses experience in business operations and demonstrates strong capabilities in industry analysis, operational management knowledge, and managerial competence, and is able to effectively evaluate and provide recommendations on the Company's overall remuneration system. Please refer to page 8 for relevant professional qualifications and experience.		None

Note 1: Te-Wei Li and Li-Yeh Hsu were relieved of their positions as independent directors due to the expiration of their terms and reelection on June 11, 2025, and thereafter served only as general directors; Yu-Wei Cheng and Ya-Wei Chang were appointed as new independent directors effective June 11, 2025.

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Responsibilities of the Renumeration Committee

The Committee shall exercise the due care of a good administrator and faithfully perform the following duties and powers, and shall submit its recommendations to the Board of Directors for discussion. However, recommendations regarding the remuneration of supervisors submitted to the Board of Directors for discussion shall be limited to cases where the remuneration of supervisors is expressly stipulated in the Company’s Articles of Incorporation or where the shareholders’ meeting has resolved to authorize the Board of Directors to handle such matters.

(1) Establish and periodically review the policies, systems, standards, and structure for the performance evaluation and remuneration of the Company’s directors, supervisors, and managers.
(2) Regularly evaluate and determine the remuneration of the Company’s directors, supervisors, and managers.

In performing the duties and powers set forth in the preceding paragraph, the Committee shall act in accordance with the following principles:

(1) The performance evaluation and remuneration of directors, supervisors, and managers shall be determined with reference to the prevailing standards adopted by industry peers and with consideration given to the reasonableness of the correlation with individual performance, the Company’s operating performance, and future risks.
(2) Directors and managers shall not be encouraged to engage in conduct exceeding the Company’s risk appetite for the purpose of pursuing remuneration.
(3) The proportion of bonuses distributed based on the short-term performance of directors and senior managers, as well as the timing of payment for a portion of variable remuneration, shall be determined with consideration given to industry characteristics and the nature of the Company’s business.
(4) Members of the Committee shall not participate in the discussion or voting on decisions regarding their individual remuneration.

Information on the operations of the Remuneration Committee

(1) The Company’s Remuneration Committee consists of 3 members.
(2) The Remuneration Committee shall convene at least twice each year and may hold meetings at any time as necessary. Members of the Committee shall exercise the due care of a good administrator and faithfully perform the following duties and powers, and shall submit their recommendations to the Board of Directors for discussion.

A. Regularly evaluate and determine the remuneration of directors and managers.
B. The remuneration of the Chairman, Vice Chairman, and independent directors is determined with reference to industry standards, while also taking into consideration individual director performance, the Company’s operating performance, and the results of Board of Directors performance evaluations. Such remuneration is reviewed by the Remuneration Committee and approved by the Board of Directors.
C. The remuneration of the President and Vice Presidents is determined based on their respective professional qualifications and with reference to industry salary standards, reviewed by the Remuneration Committee, and approved by the Board of Directors.

(3) Term of the current committee members: June 16, 2025 to June 15, 2028. The Remuneration Committee convened three meetings (A) during the most recent year. The qualifications and attendance of the committee members are as follows:

Title	Name	Actual number of attendance (B)	Attendance rate (%) (B/A)	Remark
Independent director	Te-Wei Li	1	100	N/A
Independent director	Li-Yeh Hsu	1	100	N/A
Independent director	Chih-Ming Shih	3	100	N/A
Independent director	Yu-Wei Cheng	1	50	N/A
Independent director	Ya-Wei Chang	2	100	N/A

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Other notes:

I. If the Board of declines to adopt or modifies a recommendation of the Remuneration Committee, it should specify the date of the meeting, session, the content of the proposal, the resolution of the Board of directors, and the Company’s response to the Remuneration Committee’s opinion (e.g., the remuneration passed by the Board exceeds the recommendation of the Remuneration Committee, the circumstances and cause for the difference shall be specified): None.

II. For any objections or qualified opinions raised by a member of the Remuneration Committee against a resolution with records or written statements, the date of the Remuneration Committee meeting, session, the content of the proposals, opinions of all members, and the Company’s response to the opinions of members shall be described: None.

(I) March 3, 2025 (8th Meeting of the 5th Term)

Discussion on the proposed appropriation ratio for directors’ and employees’ remuneration from the Company’s 2024 earnings. The attending members unanimously agreed to submit the proposal to the Board of Directors for discussion.

(II) August 11, 2025 (1st Meeting of the 6th Term)

Discussion on the 2025 salary adjustment proposal for the Company’s insiders. 2. Discussion on the proposed appropriation ratio for directors’ and employees’ remuneration from the Company’s 2024 earnings. 3. Personnel reassignment and salary determination proposal of the Company. 4. Salary determination proposal for the Company’s accounting supervisor.

(III) November 10, 2025 (2nd Meeting of the 6th Term)

Discussion on the 2025 year-end bonus proposal for the Company’s insiders. 2. Discussion of the proposal for the 2026 remuneration policy of Directors and insiders of the Company.

III. Implementation status of the Remuneration Committee’s internal performance evaluation in 2025:

Evaluation cycle	Evaluation period	Evaluation scope	Evaluation method	Evaluation content
2025	2025.1.1 - 2025.12.31	Remuneration Committee members	Self-evaluation of the respective Remuneration Committee members	There are five aspects, which are described as follows:
1) Level of participation in company operations
2) Clear understanding of the responsibilities of functional committees
3) Improvement of the decision-making quality of the functional committee
4) Improvement of the quality of the functional committee’s decision-making
5) Internal control	The overall average score is 4.70, and the evaluation results are excellent. The evaluation results show that the Remuneration Committee have positive evaluations of the various assessment indicators’ operational efficiency and effectiveness.

Note: The evaluation results have been submitted to the Board for approval and archiving on March 9, 2026.

Information on the members of the Nomination Committee and the operation: Not applicable

(V) Implementation of promoting sustainable development and the differences from the Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies and the reasons therefor

The Company

Items for evaluation	Implementation Status			Deviation and causes of deviation from the Corporate Sustainable Development Best-Practice Principles for TSEC/GTSM Listed Companies
	Yes	No	Summary
I. Has the Company established a governance framework for promoting sustainable development and established an exclusively (or concurrently) dedicated unit to be in charge of promoting sustainable development? Has the Board authorized the senior management to handle related matters under the supervision of the Board?	V		Based on the importance of corporate governance, economic, environmental, and social issues as key factors for future business trends, the Company has designated the Finance Department as the part-time unit responsible for promoting sustainable development since 2015. In addition to the “China Man-Made Fiber Sustainable Development Task Force,” the “China Man-Made Fiber IFRS Sustainability Disclosure Standards Task Force” was established in 2024. The Audit Committee is responsible for overseeing the implementation of the Company’s sustainability policies, systems, and related management approaches. The President serves as the head of the task force and oversees related matters. Under the task force, several working groups have been established, including the Sustainability Governance Group, Employee Care Group, Financial TCFD Group, Environmental Sustainability Group, Sustainable Supply Chain Group, Sustainable Products Group, and Internal Audit Group. These groups are staffed by personnel from relevant departments to jointly implement initiatives related to sustainable development, ensuring that the sustainability strategy is effectively integrated into daily operations. To establish a sound mechanism for preparing sustainability reports, the Company has formulated the “Sustainability Report Preparation and Assurance Procedure” and the “Sustainability Information Management Guidelines,” both of which have been approved by the Audit Committee and the Board of Directors and incorporated into the internal control system. In 2025, the reporting and verification schedule for consolidated subsidiaries’ sustainability disclosures will be presented to the Board of Directors on a quarterly basis. In August 2025, the 2024 sustainability performance results were reported to the Board of Directors through the Sustainability Report. The Board reviewed the progress of the strategy and, when necessary, urged the management team to make adjustments.	Not distinctive
II. Does the Company conduct risk assessments of environmental, social and corporate governance issues related to the company’s operations in	V		(I) The disclosure covers the material ESG aspects and performance of the Company’s main business locations from	Not distinctive

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Items for evaluation	Implementation Status			Deviation and causes of deviation from the Corporate Sustainable Development Best-Practice Principles for TSEC/GTSM Listed Companies
	Yes	No	Summary
accordance with the materiality principle and formulate relevant risk management policies or strategies?			January to December 2025. The boundary of risk assessment is mainly based on the Company, including CMFC Taipei and Kaohsiung.

(II) The Company carried out analysis based on the principle of materiality, communicated with internal and external stakeholders, and examined and compiled the assessment data of different departments to establish the material issues and propose corresponding strategies for relevant risks.

(III) Risk management policies and strategies are established based on the evaluation and analysis results. Please refer to table for details: Material issues and management measures for the risks of the Company. | |
| III. Environmental issues
(I) Does the Company have an appropriate environmental management system established in accordance with its industrial character?

(II) Is the Company committed to enhance the energy efficiency and use renewable materials that are with low impact on the environmental?

(III) Does the Company assess the potential risks and opportunities of climate change for companies now and in the future, and take measures to address related issues? | V | | (I) The environmental impact mainly comes from the Company's manufacturing processes, and the chimney of the cogeneration plant has a 24-hour exhaust gas monitoring device which is connected to the Department of Environmental Protection in order to jointly monitor the emissions quality. An environmental quality monitoring system (DAS) has been installed within the plant facility to scan for potential sources of leakage from manufacturing processes that have hazardous gases.

(II) 1. The Company has adopted the use of recycled paper and online signing of internal work procedures to reduce paper use.
2. Employees are required to bring their own cups or mugs.
3. The wastewater treatment plant performs the purification treatment, and part of the wastewater can be recycled and reused.

(III) The Company identified relevant potential risk factors and improvement opportunities and measures. Due to the risks of climate change, the operations have been adjusted accordingly. For instance, the coal-fired boilers are installed with electrostatic precipitators and sulfur and nitrate removers, so the emissions quality can reach the national standards. The air inlet of boiler furnaces are installed with air preheaters to recover waste heat for re-use. The wastewater plant has a wastewater re-treatment and recovery system to save on huge water consumption. A reactive afterburner has been installed within the manufacturing processes to reduce odor dissipation | Not distinctive |

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Items for evaluation	Implementation Status				Deviation and causes of deviation from the Corporate Sustainable Development Best-Practice Principles for TSEC/GTSM Listed Companies
	Yes	No	Summary
(IV) Has the Company prepared statistics on GHG emissions, water consumption, and the total weight of waste for the most recent two years and formulated policies for GHG emissions reduction, water consumption reduction, or other waste management?	V		of VOC (volatile organic matter) and the impact on the environment.
(IV) The Company’s annual greenhouse gas emissions for the past two years and its greenhouse gas reduction policies are detailed on pages 54–55 of this Annual Report.
Energy policy of the Company: Continuing improvement of energy performance, enhancement of energy usage efficiency, compliance with relevant laws and regulations, preferential procurement of energy-saving equipment, guarantee of organizational resource acquisition, review of energy goals and targets, staff participation in energy conservation and carbon reduction, reinforcement of energy conservation concepts of staff members, building of a green corporate culture and pursuit of sustainability.
Water consumption and wastewater recovery amounts in the two-year period:
Unit: m3
			Year	2025	2024
			Total water consumption	1,923,710	1,975,529
			Total amount of recovered water	138,238	135,304
			Recovery rate (%)	7.1	6.85
			Wastewater across the entire plant area of the Company is treated and purified at the wastewater treatment plant to increase recycling and reuse rates. Additionally, condensate water from air conditioning systems is collected and reused to conserve valuable water resources.
Weight of solid waste over the two-year period:
Unit: metric tons
			Item	2025	2024
			Total amount of process waste	14,108.95	14,735.63
			Total amount of	84.80	98.02

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Items for evaluation	Implementation Status
	Yes	No	Summary
			domestic waste
			Total amount of hazardous industrial waste	20.64	0.12
			Total amount of solid waste	14,214.39	14,833.77
			The Company’s production units sell valuable waste through the procurement department to external vendors for recycling and reuse. “Zero waste” is the ultimate goal of the Company’s waste management. To achieve sustainable resource reutilization, the Company’s production units conduct proper waste sorting and management. Priority is given to internal recycling and reuse to reduce consumption of raw materials and packaging. Next, valuable waste is sold through the procurement department to external vendors for further recycling and reuse. Finally, waste that cannot be reused is handed over to qualified contractors for removal and treatment.
IV. Social issues
(I) Does the Company have the relevant management policies and procedures stipulated in accordance with the relevant laws and regulations and international conventions on human rights?	V		(I) The Company support the compliance with the "United Nations Universal Declaration of Human Rights," "ICCPR & ICESCR," "The United Nations Global Compact," and the ILO’s "Declaration on Fundamental Principles and Rights at Work." The Company has established employees work rules and complied with relevant labor regulations to protect the legal rights and interests of employees and established appropriate management approaches and procedures for implementation.

The Company’s human rights management and concrete plan summary as follows: | | | | Not distinctive |
| | | | Human rights management policies | Concrete plan | | | |
| | | | Provide a safe and healthy working environment | 1. Established safety and health policies to protect the safety and health of employees and relevant operators.
2. One hour lunch break is implemented to provide sufficient | | | |
| | | | Assist employees to maintain | | | | |

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Items for evaluation	Implementation Status
	Yes	No	Summary
(II) Has the Company established and implemented reasonable employee welfare measures (include salary/remuneration, leave, and other benefits), and are business performance or results appropriately reflected in employee salary/remuneration?	V		physical and mental health and work efficiency	resting time for employees.
3. Regular and non-regular health examinations are arranged for employees to maintain employees' physical and mental health.
			Prohibit forced labor, abiding with the government’s labor act.	Implement the leave system, encourage employees to value work life balance.
			Formulate a “Supplier Commitment Letter,” which suppliers are required to sign.	From the human rights, legal compliance, and environment aspects, and under the principles of timely, appropriate value, appropriate volume, and appropriate price, prioritize suppliers who adopt TOSHMS, CNS-45001, ISO-45001 and so forth occupational safety, energy and environmental management systems. We hope to work with partners in committing to the duties of corporate social responsibilities together.
			(II) Employees’ remuneration
The Company's salary policy complies with labor regulations and has a performance evaluation system in place. Individual performance is evaluated annually based on work targets and personal performance. Provide employees with a reasonable salary and bonus structure. If there is profit for the year, 1% to 5% of the profit shall be appropriated as employees’ remuneration, and pension funds are appropriated pursuant to laws.
Staff fringe benefits
The Company has established the Employee Welfare Committee on December 15, 1976 and allocates 0.05% of the operating revenue for the Committee’s use on a monthly basis to plan various welfare for employees (i.e., employee travel subsidies, birthday gift vouchers, bonuses for three major Chinese

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Items for evaluation	Implementation Status
	Yes	No	Summary
(III) Does the Company provide employees with a safe and healthy work environment and provide safety and health education to employees regularly?	V		festivals, marriage allowance, funeral condolences, and other welfare subsidies).
On the leave system, on the basis of the fixed two-day weekend, employees are entitled to special leaves after they assume office for a specific period of time according to the Labor Standards Act. In giving employees a peace of mind in raising children below three years old, depending on one’s circumstances, employees can apply for unpaid parental leave in writing after assuming post for six months. This enables them to take care of the young child and guarantees their work rights after the reinstatement.
Workplace diversity and equality
The Company aims to realize the remuneration conditions with equal pay for equal jobs and equal promotion opportunities for men and women. The average percentage of female employees in 2025 was 16.03%, and the average percentage of female executives was 2.35%.
Operating performance is reflected in employees’ compensation
Article 40 of the Articles of Incorporation: Based on the Company’s annual profitability (pre-tax earnings before the distribution of employee and director remuneration), and after reserving an amount to offset accumulated losses, if any balance remains, 1% to 5% shall be allocated as employee remuneration (of which no less than 35% shall be distributed to grassroots employees), and no more than 0.3% may be allocated as director remuneration.
(III) Occupational Safety and Health Policy
The Company has established an occupational safety and health management system in accordance with the OHSAS 18001 international standard and listed the safety and health of employees as an important matter to the Company in order to reduce risks to the health and safety of employees. There are occupational safety and health policies in place to protect the safety and health of employees and relevant operators and to demonstrate the Company's determination for continuous improvement and sustainable operation.
In 2025, there were 5 cases of employee injuries involving 5 individuals, accounting for 0.96% of the Company’s average

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Items for evaluation	Implementation Status
	Yes	No	Summary
			total number of employees as of the end of the year.
Relevant improvement measures
1. In terms of workplace equipment deficiencies: Improve and implement on-site inspection points of operating environments.
2. The occupational safety incident unit proposes concrete improvement measures and formulates hazard identification and risk assessment for different operations in accordance with ISO-45001.
3. Work safety promotion and SOP education and training for the operations involving dangerous machinery and equipment.

Work safety audit
The Company has established the annual work safety internal audit work plan. The factory manager acts as the chief convener. The work safety audit team will compile the audit suggestions and improvement matters and specific improvement situations of the various audit reports and enter them into the “internal audit system.” Each unit will have to conduct the follow-up and improvements. Every quarter, the unit will review deficiencies at the Safety and Health Management Meetings based on the audit suggestions and improvement matters.

Work safety audit process
Daily irregular patrol inspection
Firefighting equipment practice and drills every quarter

Equipment safety management
The Company conducts equipment classification to list and control dangerous machinery and equipment in accordance with the law and conducts detailed inspections to ensure that the equipment can be operated safely. We have work safety protective equipment rules in place for laborers to wear the equipment correctly to improve operating safety, and we implement regular work safety education and training for employees.
Work safety education and training and advocacy in the most | |

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Items for evaluation	Implementation Status	Deviation and causes of deviation from the Corporate Sustainable Development Best-Practice Principles for TSEC/GTSM Listed Companies
Yes	No	Summary
(IV) Does the Company have an effective career capacity development training program established for the employees?	V
Year	Number of persons for education and training	Hours of education and training
2023	561	2,838
2024	425	2,813
(V) Has the Company complied with the relevant laws and international standards with regards to customer health and safety, customer privacy, and marketing and labeling of products and services, and implemented consumer protection and complaint policies?	V
The Company’s plant area has obtained ISO 45001 certifications.

(IV) The Company provide related internal and external function education and training, including new employee education and training, continuing education for employees, and executive talent training, to all levels of executives and employees. It also encourages employees to evaluate their interest, skills, value, and targets so as to communicate with the managers regarding their individual career prospect and formulate their future career plans For the number of persons and total hours participating in the 2025 career development and education and training, please refer to the “2025 CMTC Sustainability Report.”

(V) The Company attaches great importance to customers’ health and safety at all stages from raw material procurement to product sales and continues to improve production processes. In response to market trends and the needs of downstream customers, the Company focuses on the development trend of producing non-toxic and environmentally friendly products with the use of green energy.
All products of the Company are labeled pursuant to relevant norms and specifications to ensure conformity with national and international regulations. Customer complaints are handled by relevant personnel to safeguard consumer rights and interests.
To protect the security and use of customer data, the Company has established its cybersecurity inspection control, established a safety control system for computer network systems, installed internal anti-virus software, set up external network firewalls to control the access to data. Non-related operators are not able to access customer data. We ensure that customer privacy is protected. | |

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Items for evaluation	Implementation Status			Deviation and causes of deviation from the Corporate Sustainable Development Best-Practice Principles for TSEC/GTSM Listed Companies
					Yes	No	Summary
(VI) Has the Company formulated supplier management policies requiring suppliers to comply with relevant regulations on issues such as environmental protection, occupational safety and health, or labor rights, and what is the status of their implementation?				V		(VI) The Company established its “Supplier Commitment Letter” and required suppliers to sign the commitment. From the human rights, legal compliance, and environment aspects, and under the principles of timely, appropriate value, appropriate volume, and appropriate price, prioritize suppliers who adopt TOSHMS, CNS-45001, ISO-45001 and other occupational safety, energy and environmental management systems. We hope to work with partners in committing to the duties of corporate social responsibilities together. In case the Company discovers specific contractor or contractor has negative social image, it shall notify the contractor to give explanation and take corrective action. If the situation is critical, terminate the purchase or proceed to return of sales. If the situation is critical, terminate the purchase or proceed to return of sales depending on the contract terms.
V. Does the Company refer to international criteria or guidelines for the preparation of reports and compile reports on corporate non-financial information, such as, sustainable reports? Did the aforementioned reports obtain the assurance or guarantee opinion of a third-party verification institute?				V		The Company prepares the "2025 CMFC Sustainability Report" in accordance with the internationally accepted GRI Standards. For the Sustainability Report, an opinion with limited assurance issued by the CPAs' firm based on the assurance standards promulgated by the Accounting Research and Development Foundation shall be obtained; however, as of the publication date of the annual report, the preparation of the 2025 Sustainability Report is not completed. The "CPAs' opinion with limited assurance for the 2024 CMFC Sustainability Report" has been disclosed on the Company's website. (https://www.cmfc.com.tw/social_tw.php?id=3)	Not distinctive
VI. If the Company has adopted its own Sustainable Development Best Practice Principles based on the "Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies," please describe any differences from the principles in the Company's operations: The Company has established its Sustainable Development Best Practice Principles on May 8, 2023 to implement sustainable development, and its operation has no difference from the Principles. The Principles are disclosed on the Company's website. (http://www.cmfc.com.tw)
VII. Other important information for facilitating the understanding of Sustainable Development and its implementation: Please refer to the key information on the implementation of corporate governance and the Sustainability Report. (I) Amount committed to the community-friendly policy in 2025: Local give-back rewards and subsidies to the local groups and schools of NT$4,304 thousand. (II) Employment opportunities to local residents in 2025:
	Dashe	Nanzih	Renwu	Total	% of the whole plant
	70	96	36	202	42.80%

Note 1: If a check is made for "yes" for the implementation, please explain the adopted important policies, strategies, measures and implementation; If a check is made for "no," please explain the deviation and causes in the column for "Deviation and causes of deviation from the Corporate Sustainable Development Best Practice

Principles for TWSE/TPEx Listed Companies," and explain future adopted related policies, strategies and measures plan. However, for the promotion items 1 and 2, the listed company shall describe the governance and supervision structure for sustainable development, including but not limited to management guidelines, strategy and target setting, and review measures. In addition, the Company shall specify its risk management policies or strategies on environmental, social and corporate governance issues related to its operations, and its evaluation status.

Note 2: (Materiality refers to environmental, social and corporate governance issues that have a significant impact on the Company's investors and other stakeholders.)

Note 3: For disclosure method, please refer to the best practice reference on the Corporate Governance Center website of the Taiwan Stock Exchange Corporation.

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Table: Material issues and management measures of the Company's risks

Aspect	Material issues	Relevant risk management policies and strategies
Environment	Energy management	1. Extreme climate conditions and geopolitical factors causing shortages of raw materials, rising prices, and increased international environmental awareness.
2. CMFC continuously monitors the usage of electricity, thermal energy, and overall energy consumption at each plant, complies with domestic regulations, and closely follows international environmental and energy trends in a timely manner.
3. The Company obtained ISO 50001 environmental and energy management certification in 2018 and has continued to renew the certification on a regular basis thereafter. The Company has implemented effective energy monitoring, procured products bearing energy-saving labels, and reduced corporate energy consumption in an effort to conserve energy, reduce carbon emissions, and minimize environmental pollution.
	Water resource management	1. Extreme climate conditions causing rising temperatures, droughts, fires, and other incidents.
2. CMFC places great importance on water resource issues and is committed to increasing water resource reuse through wastewater recycling.
3. Wastewater across the entire plant area is treated and purified at the wastewater treatment plant to increase recycling and reuse rates. Additionally, condensate water from air conditioning systems is collected and reused to conserve valuable water resources.
	GHG emissions	1. Increasingly stringent domestic and international environmental awareness and regulations.
2. In line with its commitment to corporate social responsibility, the Company strives to protect the environment by implementing eco-friendly management practices and complying with environmental regulations and other applicable requirements set forth by competent authorities to reduce its environmental footprint.
3. Pollution control measures are adopted, including the installation of continuous monitoring systems and emissions testing, to actively mitigate air pollution.
4. Conduct testing for the water quality of the wastewater for release, to ensure the release water quality complies with the competent authorities regulations.
5. “Zero waste” is the ultimate goal of the Company’s waste management. To achieve sustainable resource reutilization, the Company’s production units conduct proper waste sorting and management. Priority is given to internal recycling and reuse to reduce consumption of raw materials and packaging. Next, valuable waste is sold through the procurement department to external vendors for further recycling and reuse. Finally, waste that cannot be reused is handed over to qualified contractors for removal and treatment.
	Air pollution control
	Wastewater and waste management	1. Transportation by vehicles involves high risks, and once a transportation accident occurs, it may endanger the lives and property of the public.
2. Transportation management of major raw materials and products is an important aspect of the operations of the Company. To reduce unit transportation costs and alleviate the burden of land transportation, the domestic transportation of major chemical raw materials primarily relies on long-distance pipelines in order to reduce carbon dioxide and particulate matter emissions. To effectively maintain the safety of the plant’s long-distance underground pipeline facilities located outside the plant area and prevent pipeline perforation or rupture caused by corrosion, road excavation works, or other factors that may lead to gas leakage and even serious incidents such as fires or explosions affecting the lives and property of people in neighboring areas, the Company has established the “Underground Pipeline Maintenance and Management Plan” and faithfully implements safety management measures to reduce environmental impacts.
	Transport safety management

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Aspect	Material issues	Relevant risk management policies and strategies
		3. All products manufactured by the Kaohsiung Plant of CMFC are transported by qualified contracted carriers. The qualifications required for transportation contractors are as follows:
(1) Transportation companies duly registered with the competent authorities.
(2) Certified under ISO 9001 and staffed with qualified occupational safety and health management specialists who have completed relevant training.
(3) Transportation vehicles of contracted carriers are subject to regular inspections in accordance with applicable regulations.
(4) Annual evaluations are conducted based on operational efficiency, level of cooperation, and quality of work performance.
Society	Labor relations	1. Non-compliance with labor laws and regulations.
2. China Man-Made Fiber is committed to creating a high-quality work environment, prioritizing employee welfare, protecting labor rights, providing on-the-job training, establishing promotion systems, and recruiting talent to enhance productivity and competitiveness. Based on principles of labor-management harmony, the Company seeks to achieve win-win outcomes.
3. Labor regulations issued by competent authorities are strictly followed.
4. Provide employees with effective communication channels and listen to employees’ opinions.
5. Provide employees with regular health examinations.
6. Employee work rules.
	Occupational safety and health	1. Non-compliance with occupational safety and health laws and regulations. Occurrence of occupational safety or environmental protection incidents.
2. CMFC has established an occupational safety and health management system in accordance with applicable regulations, clearly defining the management procedures for occupational safety and health objectives and programs to facilitate implementation and achievement of such objectives.
3. An occupational safety and health policy has been established to protect the safety and health of employees and relevant operational personnel, and to demonstrate the Company’s determination for continuous improvement and sustainable operations. The Company commits to the following in its safety and health activities:
(1) Compliance with laws and regulations.
(2) Implementation of risk management.
(3) Continuous equipment improvement.
(4) Education and training promotion.
(5) Strengthening consultation and communication.
(6) Ongoing performance improvement.
(7) Health promotion and overwork prevention.
	Customer service management	1. CMFC upholds the principle of integrity and provides customers with high-quality and competitive products by adhering to the strictest quality requirements, the most reasonable prices, and the fastest delivery schedules.
2. For customer complaints and suggestions regarding either product quality or services, CMFC handles them in accordance with standard customer complaint procedures and uses them as a basis for internal improvement, with the aim of providing customers with the most satisfactory responses, gradually building customer confidence, gaining customer trust, and establishing the Company’s excellent corporate image and reputation among customers and within the industry, thereby creating a win-win situation for both the Company and its customers.
3. Customer health and safety are key priorities in the operations of CMFC. Only by safeguarding customer health and safety and ensuring product quality can the Company maintain sustainable cooperation with its customers. Accordingly, the Company will

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Aspect	Material issues	Relevant risk management policies and strategies
		comprehensively review and improve its production processes and, in response to the needs of downstream brand customers, develop products that are low-pollution and environmentally friendly.
4. The Company attaches great importance to customer privacy. To protect the security and use of customer information, the Company strictly fulfills its responsibility to safeguard customer privacy rights. Internal controls for cybersecurity inspections have been established, together with security control mechanisms for computer network systems, to ensure that customer privacy is properly protected.
5. Primarily based on international environmental regulations such as REACH and OEKO-TEX.
6. "Personal Data Protection Act" and compliance with business ethics standards.
Corporate Governance:	Corporate Governance:	1. Insufficient oversight by the Board of Directors, deficiencies in corporate business ethics, improper information security management, and failures in regulatory compliance may result in lower corporate governance evaluation ratings, reputational damage, significant penalties, and even adversely affect sustainable operations and investor confidence.
2. Strengthen the functions of the Board of Directors and enhance decision-making quality.
3. Implement and enforce a risk management system to effectively control risks.
4. Maintain harmonious labor-management relations to achieve win-win outcomes.
5. Fulfill corporate social responsibility and strive to create a friendly business environment.
6. Purchase liability insurance for directors and key personnel to mitigate financial losses resulting from decision-making errors.
7. Uphold the principles of ethical business conduct to ensure the Company’s sustainable development.
	Financial performance	1. The Company has incurred increased operating costs as a result of complying with government policies promoting sustainability-related initiatives.
2. Track and review financial performance through annual policy budgets and operating performance reports.
3. Create greater economic value to give back to shareholders, investors, and other stakeholders.
	Climate change risks and response	1. GHG emissions resulting in extreme climate change.
2. To address global climate change, CFMC has formulated climate change adaptation strategies to reduce and manage GHG emissions, implement environmental justice, and fulfill its responsibility to jointly protect the global environment.
3. Continuously improve energy performance and enhance energy efficiency.
4. Comply with relevant laws and regulations, giving priority to the procurement of energy-saving equipment.
5. Ensure the availability of organizational resources to achieve energy-related goals and targets.
6. Encourage full employee participation in energy conservation and carbon reduction, and strengthen awareness of energy-saving practices.
7. Foster a green corporate culture and pursue long-term sustainable operations.
	Legal Compliance Level (Environmental Protection and Socioeconomic Legal Compliance)	1. Increasingly stringent domestic and international environmental awareness and regulations mean that serious violations of environmental protection laws and regulations may result in substantial fines and penalties.
2. Comply with environmental protection laws and regulations and other requirements imposed by the competent authorities to reduce environmental impact.
3. Dedicated personnel or units are assigned to supervise and manage the implementation of environmental protection-related laws and regulations.

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Implementation of climate-related information:

Item	Implementation Status
I. Describe the supervision and governance of climate-related risks and opportunities by the Board and the management.	(I) In accordance with the Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies, climate assessment and response measures have been incorporated into the Company’s Sustainable Development Best Practice Principles and implemented upon approval by the Board of Directors.
(II) In response to climate-related risks and opportunities, the Company’s Board the highest decision-making body in terms of governance, and climate change and the management structure are directly supervised by the Board. In terms of climate change and the promotion of sustainable management strategies, the Board supervises and guides the sustainable corporate development. In 2025, the reporting and verification schedule for consolidated subsidiaries’ sustainability disclosures will be presented to the Board of Directors on a quarterly basis. In August 2025, the 2024 sustainability performance results (including climate-related risks and opportunities) were reported to the Board of Directors through the Sustainability Report. The Board reviewed the progress of the strategy and, when necessary, urged the management team to make adjustments.
II. Describe the effects of climate risks and opportunities identified on the Company’s business, strategy, and finance (short-, mid-, and long-term).	(I) Explanation of short-, medium-, and long-term risks and opportunities — climate risk and opportunity identification results: Based on the likelihood of occurrence and potential impact of each risk, the risks are categorized into short-, medium-, and long-term types.
1. Short-term (1 to 3 years)
(1) Physical risk - immediate risk: The increased severity of extreme weather events.
(2) Transformation risk - policy risk: Control of existing products and services.
(3) Transformation risk - market risk: The increase in raw material costs.
2. Mid-term (4 to 10 years)
(1) Transformation risk - market risk: The increase in carbon management costs.
(2) Transformation risk - reputation risk: Changes in consumer preferences.
(3) Transformation risk - technology risk: Failure to replace existing products and services with lower emissions.
(4) Transformation risk - market risk: Changes in customer demands and the requirements to launch low-carbon products to meet market demand.
3. Long-term (10 years or above)
(1) Physical risk: Changes in lifestyle and consumption patterns due to the increase in average temperature.
(2) Physical risk: Rising sea level affecting the operation of plants.
(II) Based on the risk identification process, the Sustainable Development Workforce has identified four main transformation risks, including:
1. The use of renewable energy requires the increase costs.
2. Carbon tax/carbon fee.
3. Costs increase due to the shortage of raw materials caused by climate change.
4. The market/consumers turn to low-carbon products.

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Item	Implementation Status
III. Describe the effects of extreme weather events and transformation actions on finance.	Regarding the response to physical risks of extreme weather events (i.e., heavy rainfall, hurricanes, and floods), production plants have long been strengthening the drainage capacity of the plants and improving the response capacity for material operating mistakes; therefore, there are limited effects on finance.
	Risks and opportunities	Description of relevant impacts	Effects on finance before action	Action taken	Type of financial impact
	Increase in cost due to renewable energy	The slow development of green energy may cause the price to rise due to the shortage in supply.	The impact will generate mid-to-high level of negative effects.	Introduce the ISO50001 system to improve energy efficiency.Replacement of energy-saving equipment.	Capital expenditure; increase in operating cost
	Carbon tax/carbon fee	The expansion of control under the CBAM effect in the EU and the follow-up of countries may affect the competitiveness of high-carbon products.	The impact will generate mid-to-high level of negative effects.	Introduce energy management.Evaluate and introduce carbon footprint and carbon risk management.	Increase in operating costs
	Rising raw material costs	Raw material prices rise due to the stringent requirements and standards and various restrictions caused by climate change.	The impact will generate mid-level of negative effects.	Evaluate and introduce carbon footprint and carbon risk management.	Increase in operating costs
	The market/consumers turn to low-carbon products	As a result of the carbon pricing, consumers are more stringently reviewing the carbon emissions of products or services, resulting in a decrease in the competitiveness of high-carbon products.	The impact will generate mid-level of negative effects.	Development low-carbon and sustainable products and the development blueprint.	Increase in operating costs
	The necessity of developing low-carbon products	The market/consumers will turn to low-carbon products, and low-carbon products at the process end are required to be developed.	The impact will generate mid-to-high level of negative effects.	Develop green chemical production technology and promote a circular economy.	Revenue from green products
	Develop carbon reduction sustainable products to users	The market/consumers will turn to low-carbon products, and low-carbon products at the process end are required to be developed.	The impact will generate mid-to-high level of negative effects.	Development sustainable products and the development blueprint.	Revenue from green products

Item	Implementation Status
IV. Describe the incorporation method of the identification, evaluation, and management procedures of climate risks in the overall risk management system.	The Company's climate risk management is as follows
	Management system	Function
	Board of directors
Those charged with governance of climate-related risks and opportunities	Approve the risk management policy and framework.
Supervise the effective operation of the risk management system.
	Sustainable Development Promotion Taskforce
Management of climate-related risks and opportunities	Review the management reports on material risk issues.
Report the implementation of risk management to the Board in a timely manner.
	Energy Management System Committee Workforce
Identification, assessment and recommendation of climate-related risks and opportunities	Specialize in identifying, accessing, and processing climate change-related risks and opportunities and report the improvement recommendations via administrative channels.
	Responsible units
Operating level of climate-related risks and opportunities	Identify daily climate risk assessment, management, and reporting and adopt necessary countermeasures.
V. If scenario analysis is used to assess resilience in the face of climate change risks, the scenarios, parameters, assumptions, analysis factors used, and major financial impacts shall be specified.	The Company will evaluate the implementation of scenario analysis in the following years.
VI. If there is a transformation plan in response to the management of climate-related risks, the content of the plan and the indicators and targets used to identify and manage physical risks and transformation risks shall be specified.	The Company will discuss the transformation plan in response to the management of climate-related risks in the following years.
VII. If internal carbon pricing is used as a planning tool, the basis for setting the price shall be specified.	Beginning in 2025, the Company established an Internal Carbon Pricing (ICP) system at NT$300 per metric ton of carbon dioxide equivalent by reference to the Ministry of Environment’s Carbon Fee Collection Regulations and announced carbon fee rates. An internal carbon fee mechanism has been introduced as a reference basis for capital investment strategies and major decision-making. The Company has established a target of reducing carbon emissions by at least 1% annually from the base year onward. Based on the assessment under the internal carbon pricing mechanism, achieving the carbon reduction target is expected to reduce potential external carbon costs by at least approximately NT$1.05 million.
VIII. If climate-related goals are set, the	Information regarding the established schedule for GHG reduction targets is detailed in the explanation under GHG Inventory Information

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Item	Implementation Status
activities covered, the scope of GHG emissions, the planned period, and the progress of each year shall specified; if carbon offsets or renewable energy certificates (RECs) were used to achieve the goals, the source and quantity of carbon reduction credits or quantity of RECs used for exchange shall be specified.	1-2.
IX. GHG inventory and assurance, and reduction targets, strategies, and substantial action plans (fill in 1-1 and 1-2 separately).	Please refer to pages 54 to 55 of the Company’s annual report for information on the Company's GHG inventory and assurance.

1-1 GHG inventory and assurance of the Company in the most recent two years
1-1-1 GHG inventory information

Disclosure of GHG emissions (metric tons $\mathrm{CO}{2}\mathrm{e}$), emission intensity (metric tons $\mathrm{CO}{2}\mathrm{e}$ per NT$ million), and data coverage for the most recent two years:

Year of data	2025 Emissions (metric tons of CO2e)	2024 Emissions (metric tons of CO2e)	Data Coverage Scope
Scope 1: Direct greenhouse gas emissions	340248.5185	338952.5008	The Company
Scope 2: Indirect greenhouse gas emissions	15075.5237	10704.5068
Total emissions	355324.042	349657.008
Intensity (tCO2e/NT$ million)	72.114	61.5435
Scope 1: Total direct GHG emissions	349932.8738	349717.3590	Parent Company and Subsidiaries Included in the Consolidated Financial Statements
Scope 2: Total indirect greenhouse gas emissions	29295.9456	26257.4760	Parent Company and Subsidiaries Included in the Consolidated Financial Statements
Total emissions within the consolidated financial reporting boundary	379228.8194	375974.8350	Parent Company and Subsidiaries Included in the Consolidated Financial Statements
Emission intensity within the consolidated financial reporting boundary (tCO2e/NT$ million)	8.377	8.2850

Note 1: The emissions data for 2025 are estimated figures. For complete inventory information, please refer to the Bank’s sustainability report.

1-1-2 GHG assurance information

Year of data	2025	2024
Assurance Coverage	Not yet completed as of the date of annual report publication	The Company	Taichung Commercial Bank	Taichung Bank Securities Investment Trust Co., Ltd.	Taichung Bank Venture Capital Co., Ltd.
Assurance institution		Crowe Taiwan	Taiwan Testing and Certification Center	Legendary & Steadfast Accountancy	Legendary & Steadfast Accountancy
Assurance standards		Assurance standards No. 3410	ISO 14064-3:2019	Assurance standards No. 3410	Assurance standards No. 3410
Verification/Assurance Opinion		Limited Assurance	Reasonable assurance level	Limited Assurance	Limited Assurance

Note 1: The emissions data for 2025 are estimated figures and had not yet completed assurance as of the annual report publication date. For complete information on the Company's GHG inventory, please refer to the Bank's sustainability report.
Note 2: Subsidiaries shall complete the disclosure of assured inventory information starting from 2027 in accordance with the timeline prescribed under the regulations set forth pursuant to Paragraph 2, Article 10 of these Regulations.

1-2 GHG Emission Reduction Targets, Strategies, and Action Plans

GHG Emission Reduction Baseline Year and Targets

To formulate GHG reduction strategies, the Company's current reduction targets are primarily based on the Company's operational boundaries. In accordance with the timeline prescribed under the regulations set forth pursuant to Paragraph 2, Article 10 of these Regulations, disclosure of inventory information for the consolidated financial statements shall commence in 2025. Accordingly, 2024 has been designated as the base year, with a target of achieving an annual reduction of at least 1% from the base year onward in order to attain a cumulative reduction target of 6% by 2030. The Company's total Scope 1 and Scope 2 emissions in 2024 amounted to 349,657.008 metric tons of CO2e. The estimated total Scope 1 and Scope 2 emissions for 2025 are 355,324.042 metric tons of CO2e, representing an increase of 5,667.034 metric tons of CO2e compared with the base year. The Company is currently carrying out boiler burner retrofit work, and upon completion of the retrofit, carbon emissions are expected to be effectively reduced.

GHG emission reduction strategies and specific action plans.

To enhance energy efficiency and align with global GHG reduction trends, the Company has implemented the following energy-saving and carbon-reduction measures:

Replace high-energy--consumption equipment with low-energy consumption equipment, including process facilities, electrical facilities, LED lighting, and others.
Reduce electricity consumption by downsizing motor pumps and consolidating modified loop transformers for shared use.
During the period of non-production, the Company voluntarily stops operation of the heating system of the process to reduce the consumption of energy and fuel.
Improvement projects are being carried out progressively, including installing variable frequency drives on motors, applying ceramic coatings to cooling water circulation pumps, and replacing lighting equipment with LED lights, in order to improve energy efficiency and reduce electricity consumption.
Continue to promote waste sorting and reduction and recycling strategies to lower indirect greenhouse gas emissions volume.
Continue to perform the statistics analysis on the correlation of energy, output capacity, and GHG emissions to analyze energy utilization rate and reduce the direct GHG emissions.
Purchase and use low-pollution heat and clean fuel natural gas as the source of the Company's heat source.
Undertake boiler burner retrofitting projects.

Consolidated company
Pan Asia Chemical Corporation

Promotion item	Implementation Status
	Yes	No	Summary
I. Has the Company established a governance framework for promoting sustainable development and established an exclusively (or concurrently) dedicated unit to be in charge of promoting sustainable development? Has the Board authorized the senior management to handle related matters under the supervision of the Board?	V		The Company complies with the vision and mission of the ESG policy. Starting in 2015, the Finance Department has been appointed as the part-time unit for the promotion of sustainable development of the Company. In 2023, the “PACC Sustainable Development Promotion Taskforce” became the sustainable development decision-making center of the Company. The Chairman is the convener, and the Sustainable Development Taskforce serves as the cross-department communication platform for vertical integration and horizontal connection. The Taskforce is responsible for regularly discussing relevant matters with the designated personnel for sustainable development of different units to identify sustainable issues related to the Company’s operations and of concern by stakeholders, formulate countermeasures and work guidelines, and report to the Board (at least once a year) after the preparation of the Sustainability Report; the Board will urge the Taskforce to make adjustments when necessary.
To establish a sound mechanism for preparing sustainability reports, the Company has formulated the “Sustainability Report Preparation and Assurance Procedure” and the “Sustainability Information Management Guidelines,” both of which have been approved by the Audit Committee and the Board of Directors and incorporated into the internal control system. In 2025, the reporting and verification schedule for the company’s sustainability disclosures will be presented to the Board of Directors on a quarterly basis. In August 2025, the 2024 sustainability performance results were reported to the Board of Directors through the Sustainability Report. The Board reviewed the progress of the strategy and, when necessary, urged the management team to make adjustments.	Not distinctive

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Promotion item	Implementation Status
	Yes	No	Summary
II. Does the Company conduct risk assessments of environmental, social and corporate governance issues related to the company’s operations in accordance with the materiality principle and formulate relevant risk management policies or strategies? (Materiality refers to environmental, social and corporate governance issues that have a significant impact on the Company's investors and other stakeholders.)	V		(I) The disclosed covers the Company’s sustainable development performance from January to December 2025. The risk assessment boundary is based on the Company, including Kaohsiung Plant.
(II) Analysis is conducted based on the materiality principles of the Sustainability Report, communicated with internal and external stakeholders. Through review and integrate the assessment information of various departments, assess ESG topics with materiality. Corresponding risk strategies are also proposed.
(III) Relevant risk management policies or strategies have been formulated based on the assessed risks, as shown in the attached table (pages 65-66):	Not distinctive
III. Environmental issues
(I) Does the Company have an appropriate environmental management system established in accordance with its industrial character?

(II) Is the Company committed to enhance the energy efficiency and use renewable materials that are with low impact on the environmental? | | | (I) The Company will comply with the government's environmental protection regulations and policies, adopt countermeasures in advance, and reduce GHG emissions step by step to achieve sustainable operations in line with international standards. At present, the self-inventory of the Company has not been verified by external party; Although it has not been assured by external third party, we assure the accuracy of the information data in the report through rigorous internal control and audit mechanism.
At this stage, the Company will follow the government's laws and regulations and the schedule of the FSC, and refer to the ISO-14064-1 specifications to conduct its GHG inventory and third-party verification. The GHG inventory and verification schedule are planned to be completed in 2025, and the verification in 2027.
(II) Policies to improve energy efficiency:
1. Replace high-energy--consumption equipment with low-energy consumption-equipment, including process facilities, electrical facilities, LED lighting, and others.
2. Replace old insulation packaging materials and use high-efficiency insulation packaging materials to reduce the need for re-heating or refrigeration due to temperature loss | Not distinctive |

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Promotion item	Implementation Status
	Yes	No	Summary
(III) Does the Company assess the potential risks and opportunities of climate change for companies now and in the future, and take measures to address related issues?			of equipment so as to reduce unnecessary energy consumption.
3. During the period of non-production, the Company voluntarily stops operation of the heating system of the process to reduce the consumption of energy and fuel. Policy on the use of recycled materials:
1. Strengthen the recycling rate of secondary finished product packaging.
2. Strengthen the transfer of recyclable waste to recycling companies as raw materials or materials to implement a circular economy.

(III) The Sustainable Development Promotion Taskforce is the highest level of organization responsible for the management of potential risk factors related to climate change and relevant improvement opportunities and measures. The Chairman is the convener. The Taskforce formulates relevant improvement opportunities and measures based on the potential risk factors identified (i.e., GHG emission cost, low-carbon operating cost, and extreme weather risks), adopts the overall GHG emission reduction, air pollutant reduction, water conservation and energy conservation, waste reduction, and recycling and reuse as the indicators of opportunities, and actively makes implementation for the target value and examinations on a rolling basis.

It also regularly compiles the Sustainability Reports to report to the Board and make disclosures to stakeholders.
1. Continue to purchase and use low-pollution heat and clean fuel natural gas as the source of the Company's heat source.
2. Continue to promote waste sorting and reduction and recycling strategies to lower indirect greenhouse gas emissions volume.
3. Continue to perform the statistics analysis on the correlation of energy, output capacity, and GHG emissions to analyze energy utilization rate and reduce the direct GHG emissions. | |

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Promotion item	Implementation Status
	Yes	No	Summary
(IV) Has the Company prepared statistics on GHG emissions, water consumption, and the total weight of waste for the most recent two years and formulated policies for GHG emissions reduction, water consumption reduction, or other waste management?			(IV) The Company’s annual greenhouse gas emissions for the past two years and its greenhouse gas reduction policies are detailed on page 68 of this Annual Report.
Implement factory site pollution and emissions control in accordance with regional environment changes and policies from the authority.
Set temperature control policies for indoor air-conditioning to prevent waste of electricity.
Carry out inspection of greenhouse gas emissions from the manufacturing processes and conduct energy-saving and carbon-reduction measures based on policies from the authority.
Use automatic detection devices to change the time of using supplementary lightning depending on the season.
Garbage sorting is promoted and implemented to reduce the amount of generated waste. Processes are improved to decrease the amount of process waste. A constant pursuit of technical feasibility of waste re-use in Taiwan serves the purpose of minimizing environmental burdens.
To ensure the sustainable management of the Earth’s environmental resources, environmental protection has become one of the most pressing global issues. Reducing energy and resource consumption and greenhouse gas emissions while enhancing the Company’s production efficiency and competitiveness is essential—even during economic downturns. At this stage, the plant has set a target of reducing emissions by at least 1% annually starting from the base year 2024, aiming for a 6% reduction by 2030, along with a 5% reduction in waste. These goals reflect the Company’s commitment to energy conservation, carbon reduction, and waste recycling, and to fulfilling its responsibility as a global citizen.
The Company has not yet use renewable energy. Other efforts in response to climate change and driving the Company’s sustainable management are eliminating equipment with high energy consumption and replacing with equipment with low energy consumption, including manufacturing equipment,	Not distinctive

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Implementation Status				Deviation and causes of deviation from the Corporate Sustainable Development Best-Practice Principles for TSEC/GTSM Listed Companies
Yes	No	Summary
		electronic equipment, and lightings, eliminating old temperature insulating packaging materials and using high efficiency insulating packaging materials. Such measures can lower the times the equipment renew the heating or cooling due to temperature loss, which increases unnecessary energy consumption. By doing so, the Company can improve the energy usage efficiency. On using recycled materials, enhance the recycling rate of recycled secondary product packaging, and enhance the recycling of recyclable wastes for re-manufacturing transferring them to recycling vendors for use as raw materials in implementing the circular economy. The Company’s water consumption in the two-year period: Unit: metric tons
		Year	2025	2024
		Running water amount	92,583	86,063
		Water intensity (water consumption/product)	3.4618	2.9740
		Wastewater amount	82,055	45,827
		The Company has continuously implemented various improvement measures, including upgrading and replacing process equipment to reduce operational water consumption and consolidating the production of products of the same nature to reduce the use of system cleaning water, thereby lowering wastewater generation. However, in 2025, due to an increased proportion of high-value-added products, additional water was used for cleaning purposes to ensure product quality, resulting in an approximately 16.4% increase in water intensity compared with 2024. The Company’s total weight of waste in the two-year period: Unit: metric tons

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Promotion item	Implementation Status					Deviation and causes of deviation from the Corporate Sustainable Development Best-Practice Principles for TSEC/GTSM Listed Companies
	Yes	No	Summary
				2025	2024
			General domestic waste	29.98	38.16
			General industrial waste	225.65	188.58
			Special industrial waste (hazardous)	0	0
			Recycled and reused waste	0	0
			Waste intensity (ton/ton)	0.0096	0.0078
			The Company’s ultimate goal for waste management is “Zero Waste.” To achieve sustainable resource and recycling, the Company adopts the strategy of reduction in overall waste volume and turning waste into resource as its strategy, prioritize recycling and reuse for use within the plant, and reduce the consumption volume of raw materials and packaging; followed by engaging external vendors for recycling and re-use. Lastly, the wastes that cannot be recycled and re-used are sent for burning at an incinerator or for landfill. The various paths as major policies. In addition, through continuous process optimization and manufacturing improvements, the Company has worked to reduce waste generation at the source. Although overall production capacity in 2025 decreased by approximately 7.6% compared with 2024, the increased proportion of high-value-added products resulted in greater overall waste generation, with waste intensity reaching 0.0096 (metric tons/metric ton), representing an increase of approximately 23% compared with the 2024 waste intensity of 0.0078 (metric tons/metric ton). The above information are based on self-inventory and has not been verified by external party; Although it has not been assured by external third party, we assure the accuracy of the information data in the report through rigorous internal control and audit mechanism.
IV. Social issues
(I) Does the Company have the relevant management policies and procedures stipulated in accordance with the relevant laws and regulations and international conventions on human rights?	V		(I) The Company regards employees as the core of sustainable development. In addition to fully complying with the "Labor Standards Act,” the Company has formulated human rights			Not distinctive

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Promotion item	Implementation Status	Deviation and causes of deviation from the Corporate Sustainable Development Best-Practice Principles for TSEC/GTSM Listed Companies
Yes	No	Summary

Human rights management policies
1. Diversity, inclusion, and non-discrimination: In recruitment, employment, and career development, the Company does not engage in differential treatment based on gender, race, age, marital status, religion, or other factors, and upholds a zero-tolerance policy.
2. Prohibition of child labor and forced labor: Strictly comply with local labor laws and regulations, prohibit forced labor, and ensure that labor contracts are entered into based on mutual consent.
3. Healthy and Safe Working Environment: Provide occupational safety and health facilities, implement ISO	Concrete plan
1. Human rights due diligenceInvestigation and Risk Assessment: Conduct annual human rights risk identification regarding labor conditions, occupational safety, workplace harassment, and related matters, and adopt mitigation and corrective measures based on the results of risk assessments.
2. Employees: Incorporate human rights policies into new employee training programs and regularly provide all employees with education and training related to workplace legal compliance, prevention of sexual harassment, occupational safety, and health.

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Promotion item	Implementation Status
	Yes	No	Summary
			45001, and ensure a safe working environment.
4. Freedom of association and labor conditions: Respect employees’ rights to freedom of association and provide salaries and benefits that meet or exceed statutory minimum standards.	3. ComplaintsWhistleblowing mechanisms: Establish diversified and accessible grievance channels, including hotlines, mailboxes, and email, while ensuring confidentiality throughout the grievance investigation process and prohibiting retaliation against complainants.
4. Work and lifeBalance and wellbeing: Conduct employee health examinations, stress relief activities, and club activities, and provide flexible working hours to assist employees in balancing work and personal life.
			Formulate a “Supplier Commitment Letter,” which suppliers are required to sign.	From the human rights, legal compliance, and environment aspects, and under the principles of timely, appropriate value, appropriate volume, and appropriate price, prioritize suppliers who adopt TOSHMS, CNS-45001, ISO-45001 and so forth occupational safety, energy and environmental management systems. We hope to work with partners in committing to the duties of

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Promotion item	Implementation Status
	Yes	No	Summary
(II) Has the Company established and implemented reasonable employee welfare measures (include salary/remuneration, leave, and other benefits), and are business performance or results appropriately reflected in employee salary/remuneration?	V			corporate social responsibilities together.
			To implement the above policies, the Company will adopt substantive management measures:
1. Education and training: Regularly conduct human rights advocacy and training programs covering topics such as prevention of sexual harassment, prevention of workplace violence, and legal compliance.
2. Grievance mechanism: Establish diversified channels, whether anonymous or identified, such as employee suggestion boxes, grievance email addresses, and dedicated HR contact personnel, while safeguarding complainants from retaliation.
3. Due diligence: Conduct human rights risk identification and assessment (HRDD), and carry out audits and monitoring of suppliers and operational sites.
4. Health management: Regularly conduct employee health examinations, arrange on-site medical and nursing consultations, and promote maternal health protection and psychological stress relief programs.

(II) Employees’ remuneration
1. Profit sharing: As expressly stipulated in the Company’s Articles of Incorporation, 1% to 5% of annual profits shall be appropriated as employee remuneration. In 2025, the Company continued to translate operating performance into substantive remuneration and rewards to strengthen profit sharing between labor and management.
2. Salary transparency: Annually disclose the average and median salaries of full-time employees not serving in managerial positions to ensure that compensation remains competitive in the market.

Diverse Employee Benefits and Leave Policies
1. Comprehensive leave system: Strictly implement the special leave system under the "Labor Standards Act" and provide paternity leave for prenatal checkups and childbirth, as well as menstrual leave. In 2025, the Company promoted a flexible working hours mechanism to support work-life balance. | | |

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Promotion item	Implementation Status
	Yes	No	Summary
			2. Allowances and subsidies: Provide childbirth subsidies, scholarships and grants for employees’ children, and bonuses for the three major festivals.
3. Retirement protection: Fully appropriate pension reserves under the old pension system; for employees under the new pension system, contribute 6% monthly to individual accounts maintained by the Bureau of Labor Insurance.
Employee Care and Comprehensive Occupational Safety Protection
1. On-site occupational health services: Engage contracted occupational medicine physicians and professional nursing personnel to regularly provide on-site health services. Conduct health risk assessments and one-on-one consultations for senior employees and employees with high workloads to prevent occupational diseases.
2. Occupational safety (ISO 45001): Maintain international occupational safety and health certification. In consideration of the characteristics of chemical plants, the Company achieved the target of “zero major occupational accidents” in 2025.
3. Communication and participation mechanism: Encourage employees to engage in direct dialogue with management, including directors and supervisors, regarding operating strategies, financial conditions, or major decisions involving employee interests, in order to ensure that frontline perspectives are incorporated into major decision-making.
(III) Does the Company provide employees with a safe and healthy work environment and provide safety and health education to employees regularly?	V		(III) Occupational Safety and Health Policy
1. International certification (ISO 45001): Continue to maintain international occupational safety and health management system certification. Achieved the targets of “zero major occupational accidents” and “zero occupational diseases” in 2025.
2. Working environment monitoring: Regularly monitor air quality, chemical substance concentrations, noise levels, and lighting conditions within plant areas. In 2025, process automation improvements effectively reduced the likelihood of employees being exposed to high-risk environments.

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Promotion item	Implementation Status
	Yes	No	Summary
			Regularly Conduct Safety and Health Education and Training
1. Professional safety training: In 2025, the Company regularly conducted chemical leakage emergency response drills, joint firefighting exercises, and training on the proper use of personal protective equipment. Provide occupational safety education with 100% coverage for both new hires and current employees.
2. Enhancement of health awareness: In conjunction with on-site occupational health services, conduct health seminars on topics such as “Cardiovascular Disease Prevention,” “Musculoskeletal Disorder Prevention,” and “Workplace Stress Management.”
On-site Occupational Health Services and Tiered Management
A contracted occupational medicine physician is retained to regularly provide on-site health services. Risk assessments and one-on-one consultations are conducted for senior and high-workload employees, and follow-up management is implemented for employees with abnormal health examination results.
Work safety audit
The Company has established the annual work safety internal audit work plan. The factory manager will act as the chief convenor. The work safety audit team will compile the audit suggestions and improvement matters and specific improvement situations of the various audit reports and enter them into the “internal audit system.” Each unit will have to conduct the follow-up and improvements. Every quarter, the unit will review deficiencies at the Safety and Health Management Meetings based on the audit suggestions and improvement matters.
			Work safety audit process
			Daily irregular patrol inspection
			Firefighting equipment practice and drills every quarter
			General inspection of large size public hazardous materials from time to time
			Annual follow-up and audit by external experts on the health and safety management system

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Promotion item	Implementation Status	Deviation and causes of deviation from the Corporate Sustainable Development Best-Practice Principles for TSEC/GTSM Listed Companies
Yes	No	Summary

Conduct comprehensive safety check and testing once a year for high-risk machinery and equipment.
We have work safety protective equipment rules in place for laborers to wear the equipment correctly, and we implement regular in-service work safety education and training for employees.

In-service work safety education and training and advocacy in the most recent three years | |
| Year | Number of persons for education and training | Hours of education and training |
| 2023 | 232 | 704 |
| 2024 | 219 | 658 |
| 2025 | 352 (34 females and 318 males) | 927 (86 hours for females and 841 hour for males) |
| Verification of the Company:
The Company’s plant area has obtained ISO 45001 certifications. |
| (IV) Does the Company have an effective career capacity development training program established for the employees? | V | | (IV) The Company is committed to building a learning organization and has established an effective career competency development system tailored to different positions and career stages:
1. New employee orientation program: Pre-employment training with a 100% coverage rate is provided, covering corporate culture, quality management (ISO 9001), and basic occupational safety training.
2. Advanced professional competency training: Training on chemical applications, automated production technologies, smart manufacturing, and digital transformation tool applications is provided to enhance core technological competitiveness.
3. Leadership and management development programs: Professional courses on “Business Management,” “ESG |

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Promotion item	Implementation Status
	Yes	No	Summary
			Sustainable Governance,” and “Crisis Response” are provided for mid-level and senior managers to strengthen decision-making and team leadership capabilities.
4. Subsidies for external education and training: Employees are encouraged to participate in external professional seminars or obtain national-level professional certifications, with tuition subsidies provided.
5. Job rotation and internal audit participation: Through cross-departmental job rotation and participation in internal audit mechanisms, employees are assisted in broadening their career development scope. Clear promotion pathways are also provided based on individual performance and aspirations to reduce the risk of talent and position mismatches.
(V) Has the Company complied with the relevant laws and international standards with regards to customer health and safety, customer privacy, and marketing and labeling of products and services, and implemented consumer protection and complaint policies?	V		(V) Every stage from the raw materials procurement to product sales, the Company values the importance of the customer’s health and safety. Continuous improvement of the production procedures and align with the market trends and demands of downstream customers, moving towards no toxic production, environmental friendly and green energy products, and development.
The Company’s products for production and sales, their function specifications and attention on use are listed in the physical properties and safety data sheet (SDS) to enable customers to understand safety use method. The inquiry hotline is listed. We put in all efforts in supporting customers in acquiring the required information. All products are labeled 100% in compliance of relevant laws and regulation.
The Company strives to achieve “Customer Satisfaction” and “Customer privacy” and values and immediately handles customer complaints to provide customer with comprehensive product quality.
The customers’ customized products or processed product information are kept confidential to avoid customer transaction related-information leaks. Strictly comply with the government’s relevant laws and regulations to manage and protect the customer’s privacy.

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Promotion item	Implementation Status
	Yes	No	Summary
			Before transaction, the Company must confirm the product specification. After production, there will be analysis for random samples. Business employees will handle customer’s appeal cases to better maintain the work for protecting customers’ rights.
(VI) Has the Company formulated supplier management policies requiring suppliers to comply with relevant regulations on issues such as environmental protection, occupational safety and health, or labor rights, and what is the status of their implementation?	V		(VI) The Company established its “Supplier Commitment Letter” and required suppliers to sign the commitment. From the human rights, legal compliance, and environment aspects, and under the principles of timely, appropriate value, appropriate volume, and appropriate price, prioritize suppliers who adopt TOSHMS, CNS-45001, ISO-45001 and other occupational safety, energy and environmental management systems. We hope to work with partners in committing to the duties of corporate social responsibilities together.
In case the Company discovers specific contractor or contractor has negative social image, it shall notify the contractor to give explanation and take corrective action. If the situation is critical, terminate the purchase or proceed to return of sales.
V. Does the Company refer to international criteria or guidelines for the preparation of reports and compile reports on corporate non-financial information, such as, sustainable reports? Did the aforementioned reports obtain the assurance or guarantee opinion of a third-party verification institute?	V		The Company prepared the "2025 PACC Sustainability Report" to disclose non-financial information by referencing the principles of the 2021 GRI Standards issued by the Global Sustainability Standards Board and incorporating industry-specific disclosure indicators under the standards of the SASB, as well as the content index corresponding to TCFD indicators. The 2025 sustainability report is required to obtain an assurance report issued by CPAs in accordance with the standards published by the Accounting Research and Development Foundation; however, as of the annual report publication date, the sustainability report had not yet been completed. The "CPAs' opinion with limited assurance for the 2024 CMFC Sustainability Report" has been disclosed on the Company's website.
(https://www.pacc.com.tw/_i/assets/upload/files/pacc_113_reportbooks_fix.pdf)	Not distinctive
VI. If the Company has established its own Sustainable Development Best Practice Principles in accordance with the "Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies," please describe any differences between its operations and the prescribed principles: There are no material differences between the Company’s "Sustainable Development Best Practice Principles" and the "Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies."

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Promotion item	Implementation Status			Deviation and causes of deviation from the Corporate Sustainable Development Best-Practice Principles for TSEC/GTSM Listed Companies
	Yes	No	Summary

VII. Other important information for facilitating the understanding of sustainable development and its implementation: Please refer to the sustainability report.
(I) Amount invested in community engagement and neighborhood relations in 2025: NT$1,062 thousand in local community feedback funds and NT$189 thousand in sponsorships for local organizations and schools.
(II) Employment opportunities to local residents in 2025:
Nanzih	Renwu	Dashe	Number of people in Kaohsiung.	% of the whole plant
14 persons	4 persons	3 persons	90 persons	23.33%

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Table: Material issues and management measures of the Company's risks

Aspect	Material issues	Relevant risk management policies and strategies
Environment	GHG Emissions, Air Pollution Control, and Waste Management	1. Environmental targets and programs are established, supported by dedicated environmental management units and personnel to ensure environmental protection and enforce pollution prevention strategies.
2. Dedicated departments and staff are assigned to oversee and manage the implementation of environmental policies and regulatory compliance.
3. Adopt pollution prevention measures, install Continuous Emission Monitoring Systems (CEMS), test the control value, committed to mitigate air pollution harm to the environment.
4. Conduct instant testing for the water quality of the wastewater for release, to ensure the release water quality complies with the competent authorities regulations.
5. Conduct proper waste sorting management. For waste that are recyclable for reuse or of value, they can be recycled and reused through internal contacts and recycling vendor’s survey, striving towards low emissions.
6. When there are no wastes of recycling value, commission qualified clearing and treatment vendor to carry out clearance and transportation and treatment of wastes, and list under management and file as follow-up item.
Society	Occupational safety and health	1. Prevent occupational hazards and diseases, strengthen the physical and mental health of workers, ensure a safe working environment, supply high-quality products, reduce production costs, and improve employee productivity.
2. A safety and health policy has been established to protect the safety and health of employees and relevant operational personnel, and to demonstrate the Company’s determination for continuous improvement and sustainable operations. The Company commits to the following in its safety and health activities:
(1) Compliance with laws and regulations.
(2) Implementation of risk management.
(3) Continuous equipment improvement.
(4) Education and training promotion.
(5) Strengthening consultation and communication.
(6) Ongoing performance improvement.
(7) Health promotion and overwork prevention.
	Labor relations and employee benefits and salaries	1. Provide comprehensive and high-quality compensation and benefits. Salaries comply with local labor laws and regulations.
2. Both male and female employees receive equal pay for equal work.
3. Regular and irregular health examinations for employees are arranged to maintain employees’ health.
4. Employees are encouraged to enrich their knowledge and skills and improve work quality and efficiency. A training management policy has been established as the foundation for the Company’s sustainable operations and development.
5. The Company’s education and training system consists of internal training and outsourced training, ensuring equal pay for equal work and equal promotion opportunities for both male and female employees, thereby promoting sustainable and inclusive economic growth.
Corporate Governance:	Corporate Governance:	1. Strengthen the functions of the Board of Directors and enhance decision-making quality.
2. Implement and enforce a risk management system to effectively control risks.
3. Maintain harmonious labor-management relations to achieve win-win outcomes.
4. Fulfill corporate social responsibility and strive to create a friendly business environment.
5. Purchase liability insurance for directors and key personnel to mitigate financial losses resulting from decision-making errors.
6. Uphold the principles of ethical business conduct to ensure the Company’s sustainable development.

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Table: Implementation of climate-related information:

Item

Implementation Status

I. Describe the supervision and governance of climate-related risks and opportunities by the Board and the management.

(1) According to the Sustainable Development Best Practice Principles for TWSE/TPEX Listed Companies, the climate assessment and responses shall be included in the Company's Sustainable Development Best Practice Principles, with the results presented in the Company's Sustainability Report, which was approved by the Board for implementation. (2) In response to climate-related risks and opportunities, the Company's Board the highest decision-making body in terms of governance, and climate change and the management structure are directly supervised by the Board. In terms of climate change and the promotion of sustainable management strategies, the Board supervises and guides the sustainable corporate development. In 2025, the reporting and verification schedule for the Company's sustainability disclosures will be presented to the Board of Directors on a quarterly basis. In August 2025, the 2024 sustainability performance results (including climate-related risks and opportunities) were reported to the Board of Directors through the Sustainability Report. The Board reviewed the progress of the strategy and, when necessary, urged the management team to make adjustments.

Item	Implementation Status
II. Describe the effects of climate risks and opportunities identified on the Company's business, strategy, and finance (short-, mid-, and long-term).	To identify the impact of climate change on the Company's finance and conduct effective information disclosure, the Company identified the transformation risks of low-carbon economy in climate risks and physical risks due to the effects of climate change, described such risks, and assessed their impacts (short-, mid-, long-term) for the Company to strengthen the climate risk management and monitoring.
	Risk category	Risk item	Risk description	Financial impact or influence	Time of influence
	Physical risk	Immediate risk	Wind and rainstorms caused by extreme climates result in the increase in equipment wear and tear harming product quality.	Maintenance costs and damages.	Short-term
		Long-term risk	Effects of extreme weather on durability of the quality of equipment and products.	Rising maintenance costs and shortened shelf life.	Long-term
			Extreme weather resulting in the increase in production energy consumption (cooling/heating).	Increase in production cost.	Long-term
	Risk category	Risk item	Risk description	Financial impact or influence	Time of influence
	Transformation risks	Risks associated with policies and regulations	GHG reduction requirements or energy conservation policies.	Penalties incurred for failure to comply.	Mid-term
		Technical risk	The technologies for carbon reduction or energy-saving practices may be immature, and the recoverable period is less favorable than expected.	Constant launches of better approaches causing unnecessary investments.	Mid-term
		Changes in consumer preferences	As consumers' preference for sustainable and low-carbon products continues to increase, failure to promptly adjust product design and operational models may adversely affect the Company's brand image and customer loyalty.	This may result in declining sales volume, inventory backlog, and additional expenditures on R&D and green transformation, thereby increasing overall operating costs.	Long-term
		Reputation risk	If the Company fails to meet stakeholders' expectations for sustainability and environmental protection during the low-carbon transition process, it may trigger negative perceptions and damage the	If the Company fails to meet stakeholders' expectations regarding environmental responsibility, it may result	Short-term

Item	Implementation Status
		Company’s reputation.	in damage to brand value, declining revenue, and increased marketing expenses and crisis response costs.
	Description of opportunity	Time of influence
	Construction of energy-saving equipment to reduce operating costs.	Long-term
	Customers may switch to products that are less affected by climate change, and the options may be our products that have advantages.	Mid-term
III. Describe the effects of extreme weather events and transformation actions on finance.	(I) Extreme weather events (physical risk)
After the assessment, there was no impact on the Company's property due to extreme weather events in 2025.
(II) Transformation actions
To identify the financial impact caused by climate risks, the Company regularly identifies and assesses the effects of climate on the future finance of the Company.
IV. Describe the incorporation method of the identification, evaluation, and management procedures of climate risks in the overall risk management system.	The Company's climate risk management is as follows
1. Climate risk identification: Refer to the relevant risk information of domestic and foreign organizations.
2. Climate risk assessment: Assess the possible effects and level of impact on the Company based on external information and the operating experience of internal sales personnel.
3. Climate risk report: Identify climate risk, make adjustments, have discussions and make amendments after a report by the responsible party.
4. Climate risk measures: Adjustments are made based on the opinions of each department after discussions. The risks are included in the Company's risk management, and the information is disclosed in a dedicated chapter in the Sustainability Report, which is published after receiving the approval.
V. If scenario analysis is used to assess resilience in the face of climate change risks, the scenarios, parameters, assumptions, analysis factors used, and major financial impacts shall be specified.	Not applicable.
VI. If there is a transformation plan in response to the management of climate-related risks, the content of the plan and the indicators and targets used to identify and manage physical risks and transformation risks shall be specified.	Not applicable.

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Item	Implementation Status
VII. If internal carbon pricing is used as a planning tool, the basis for setting the price shall be specified.	Not applicable.
VIII. If climate-related goals are set, the activities covered, the scope of GHG emissions, the planned period, and the progress of each year shall be specified; if carbon offsets or renewable energy certificates (RECs) were used to achieve the goals, the source and quantity of carbon reduction credits or quantity of RECs used for exchange shall be specified.	Not applicable.
IX. GHG inventory and assurance, and reduction targets, strategies, and substantial action plans (fill in 1-1 and 1-2 separately).	The Company conducts GHG inventories and third-party verification in accordance with government regulations and the FSC's implementation schedule, with reference to the Greenhouse Gas Protocol (GHG Protocol) or ISO 14064-1 issued by the International Organization for Standardization (ISO). Details of the 2025 GHG inventory are provided on page 68 of this annual report, and the verification is scheduled to be completed in 2027.

1-1 GHG inventory and assurance of the Company in the most recent two years

1-1-1 GHG inventory information

Disclosure of GHG emissions (metric tons $\mathrm{CO}{2}\mathrm{e}$ ), emission intensity (metric tons $\mathrm{CO}{2}\mathrm{e}$ per NT$ million), and data coverage for the most recent two years:

Year of data	2025 Emissions (metric tons of CO2e)	2024 Emissions (metric tons of CO2e)	Data Coverage Scope
Scope 1: Direct greenhouse gas emissions	430.4942	483.7483	The Company
Scope 2: Indirect greenhouse gas emissions	5393.9886	7855.3889
Total emissions	5824.483	8339.1372
Intensity (tCO2e/NT$ million)	4.336	5.786

Note 1: The emissions data for 2025 are estimated figures. For complete inventory information, please refer to the Bank's sustainability report.

1-1-2 GHG assurance information

According to the timeline stipulated under Article 10, Paragraph 2 of the Regulation, the Company will align with its parent company, China Man-Made Fiber Corporation, in completing the disclosure of verified greenhouse gas inventory information starting in 2027.

1-2 GHG Emission Reduction Targets, Strategies, and Action Plans

I. GHG Emissions Baseline Year and Reduction Target:

To formulate GHG reduction strategies, the Company's current reduction targets are primarily based on the Company's operational boundaries. The parent company, CMFC,

shall complete the disclosure of inventory information for the consolidated financial statements starting from 2025 in accordance with the timeline prescribed under the regulations set forth pursuant to Paragraph 2, Article 10 of these Regulations. Accordingly, 2024 has been designated as the base year, and the Company aims to achieve an annual reduction of at least 1% from the base year onward through the following specific actions, in order to attain a cumulative reduction target of 6% by 2030. The Company’s total Scope 1 and Scope 2 emissions in 2024 amounted to 8,339.137 metric tons of CO2e. In 2025, the Company’s estimated total Scope 1 and Scope 2 emissions are 5,824.483 metric tons of CO2e, representing a reduction of 2,514.654 metric tons of CO2e compared to the base year and achieving the phased reduction target of more than 1%.

II. GHG emission reduction strategies and specific action plans

To enhance energy efficiency and align with global GHG reduction trends, the Company has implemented the following energy-saving and carbon-reduction measures:

Replace high-energy--consumption equipment with low-energy consumption equipment, including process facilities, electrical facilities, LED lighting, and others.
During the period of non-production, the Company voluntarily stops operation of the heating system of the process to reduce the consumption of energy and fuel.
Progressively implement energy-saving improvements such as installing inverters on motors, overhauling cooling/chilled water double-suction pumps with ceramic coating, replacing lighting equipment with LED lights, and integrating gas supply systems. Under effective management.
Continue to promote waste sorting and reduction and recycling strategies to lower indirect greenhouse gas emissions volume.
Continue to perform the statistics analysis on the correlation of energy, output capacity, and GHG emissions to analyze energy utilization rate and reduce the direct GHG emissions.
Procure and use low-pollution heat and clean fuel natural gas as the source of the Company's heat source.
106 -

Taichung Commercial Bank

Items for evaluation	Implementation Status
	Yes	No	Summary
I. Has the Bank established a governance structure to promote sustainable development, and set up a dedicated (part-time) unit to promote sustainable development, which is authorized by the Board of Directors to be handled by senior management, and the supervision situation of the Board of Directors?	☑		1. To improve the management of sustainable development, on July 13, 2023, the Board approved the establishment of the "Sustainable Development Committee" under the Board. The Committee is composed of three Directors, and more than half of them are Independent Directors. The Committee has established six workforces of corporate governance, sustainable finance, human rights maintenance, environmental sustainability, climate change, and social welfare. They are responsible for establishing annual plans and coordinating the implementation of tasks related to sustainable development. In terms of economic, environmental and social issues generated from operating activities, they regularly report the implementation of sustainable development to the Sustainable Development Committee and the Board each year to examine the effects and continue to improve.
2. In 2025, the Board of Directors supervised ESG sustainable development-related proposals, including:
(1) Sustainable development promotion plans and targets.
(2) Plans for GHG inventory and verification.
(3) Annual sustainable development implementation status (including TCFD implementation details and the assessment of climate change-related risks and opportunities).
(4) Implementation status of the adoption plan for the IFRS Sustainability Disclosure Standards.
3. During the Board meetings, questions or recommendations are raised in terms of ESG plans and policy formulation contents, and resolutions are passed. The recommendations made by the Board are tracked at each meeting before completion. The Board also examines and supervises the implementation of the sustainability plans in the annual execution report and urges the management team to make adjustments and improvements when necessary.	no difference
II. Does the Bank conduct risk assessments of environmental, social and corporate governance issues related to the Company’s operations in accordance with the materiality principle, and	☑		1. The risk assessment boundary of the disclosure covers the Bank's domestic business locations for the period from January 1, 2025 to December 31, 2025.
2. In accordance with Article 3 of the Bank's "Sustainable Development Best Practice Principles," the Bank conducts risk assessments on various issues	no difference

107 -

Items for evaluation	Implementation Status
	Yes	No	Summary
formulate relevant risk management policies or strategies?			based on the principle of materiality and develops corresponding management strategies to reduce the impact and influence.
3. Risk management policies and strategies are established based on the evaluation and analysis results. Please refer to table for details: Material issues and management measures for the risks of the Bank (pages 74 to 75).
III. Environmental issues
(I) Has the Bank established a suitable environment management system by nature of the industry?	☑		1. The Bank’s “Sustainable Development Best Practice Principles” stipulates that the General Affairs Department shall serve as the dedicated unit of environmental management. Related environment management systems shall be formulated, promoted, and maintained, with specific action plans, while assisting in environmental education courses.
2. The Bank has established the "Key Points of Head Office Building Management" and "Code of Practice for Health and Safety," and introduced ISO management systems (e.g., ISO 14064-1 GHG Inventory System and ISO 14001 environmental management system).	no difference
(II) Is the Bank committed to enhance the energy efficiency and use renewable materials that are with low impact on the environmental?	☑		1. The Bank prioritizes the adoption of environmental products made with recycled materials that are recyclable, reduce pollution, or save energy. In procurement tenders, procurements from manufacturers that have obtained Green Mark Use Permit recognized by the government or whose processes and waste disposal meet renewable material, recycled material, low-pollution, or energy-saving requirements are prioritized in order to increase social benefits and reduce social costs.
2. In terms of interior decoration, minimizing the amount of interior decoration is to be encouraged, while existing office furniture are to be integrated with the new space, which not only reduces waste, reuses items, but also meets the environmental protection appeal. In addition, during interior decoration planning, building materials with the Green Mark from at home and abroad and Green Mark Building are adopted. Waste produced from decoration should be properly classified to reduce environmental impacts.	no difference

108 -

Items for evaluation	Implementation Status	Deviation and causes of deviation from the Corporate Sustainable Development Best-Practice Principles for TSEC/GTSM Listed Companies
Yes	No	Summary
(III) Does the Bank assess the potential risks and opportunities of climate change for companies now and in the future, and take measures to address related issues?	☑
(IV) Has the Bank prepared statistics on GHG emissions, water consumption, and the total weight of waste for the most recent two years and formulated policies for GHG emissions reduction, water consumption reduction, or other waste management?	☑
2. Water resource management:
The Bank focuses on five major aspects of wastewater treatment, water conservation, water safety, water source, and water conservation promotion. It also purchases products with water-saving labels and inspects the water consumption of the Head Office and departments on a monthly basis for any abnormalities. The water consumption data of the entire Bank in the most recent two years is as follows:

Year	2024	2025
Total surface water consumption (m3)	55,839	55,152
CO2e (ton)	8.588	8.321
Consumption per capita	18.218	17.632
Note: The data in 2025 is estimated, and please refer to the Sustainability Report of the Bank for the complete information.
3. Waste management:
(1) Waste is generated from the Bank's daily office operations and services. Waste is classified as general waste, food waste, and recyclable waste for

109 -

Items for evaluation	Implementation Status	Deviation and causes of deviation from the Corporate Sustainable Development Best-Practice Principles for TSEC/GTSM Listed Companies
Yes	No	Summary

(2) In terms of waste reduction, reusable cutlery is provided in canteens instead of disposable cutlery. The Bank promotes a paperless policy. For instance, internal documents are mostly transmitted through the electronic document system, and necessary paper-based documents are printed on both sides. The Bank also encourages customers to use e-statements to reduce paper consumption.
(3) The data on waste of the Head Office Building in the most recent two years is as follows:
Year	2024	2025
General garbage (ton)	16.27	16.23
Food waste (ton)	8.22	8.42
Recycled volume (ton)	13.12	13.47
Total weight (ton)	37.61	38.13
Recycling rate (%)	56.73	57.42
IV. Social issues
(I) Has the Bank established related management policy and procedure in accordance with applicable legal rules and international conventions on human rights?	☑

110 -

Items for evaluation	Implementation Status			Deviation and causes of deviation from the Corporate Sustainable Development Best-Practice Principles for TSEC/GTSM Listed Companies
	Yes	No	Summary
			2. The Bank includes human rights policy and promotion of gender equality and a friendly workplace as compulsory subjects for new employee education and training. The content includes introduction to relevant regulations (i.e., the Gender Equality Act, sexual harassment prevention, occupational health and safety, and personal data protection), introduction to whistleblowing and complaint channels, workplace blueprint and promotion system, employee career development relevant rights and obligations and welfare of employees. Through education and training, the Bank promotes the protection and focus on human rights policies, and it is committed to creating a workplace that is safe, equal, and free of discrimination or harassment. In 2025, there was no event of discrimination. Relevant human rights education and training were organized with an employee training ratio reaching 100% and a total hours of 31.5 hours.
(II) Has the Bank established and implemented reasonable employee welfare measures (include salary/compensation, leave, and other benefits), and are business performance or results appropriately reflected in employee salary/compensation?	☑		1. For related welfare measures, please refer to "Four. Operational Overview/VI. Labor Relations" regarding various employee welfare measures, retirement systems, and their implementation status.
2. The bank has set up the “Guidelines for Employee Assessment” and the “Directions for the Promotion of Incumbents.” According to the corporate operation performance situation, personal performance and in reference to salary standards in the same industry, the employees’ rank and salary shall be adjusted after thorough consideration.
3. The Bank’s holiday system is subject to the Labor Standards Act, and marriage leave, funeral leave and general injury and sick leave more favorable than the Labor Standards Act are also granted.	no difference
(III) Has the Bank provided a safe and health work environment for the employees, and provided education on labor safety and health regularly?	☑		The Bank provides all employees and stakeholders with a safe work environment. In accordance with the "Occupational Safety and Health Act," "Regulations for Occupational Safety and Health," other relevant requirements, the Bank established its "Code of Practice for Health and Safety" by adopting disaster prevention and disaster control as the core philosophy and set up a safety maintenance and supervision team to convene safety meetings once a year, in principle, and continue to improve occupational safety and health management so as to create a healthy and happy workplace.	no difference

111 -

Items for evaluation	Implementation Status
	Yes	No	Summary
			1. Working environment:
The interior decoration focuses on simplicity and practicality, and domestic and foreign building materials with environmental protection label and green building material label are adopted. Meanwhile, we also require the use of recyclable building materials, regularly test the CO2 content of the Head Office, and test water quality on a quarterly basis to ensure the level of comfort of working environments of employees.

Occupational safety:
(1) The Company has established the "List of Occupational Safety and Health Personnel of Departments" to cooperate with the HR system to automatically replace relevant personnel after personnel transfer to other departments. Occupational safety and health education and training are also arranged once a year. In 2025, there are 28 participants and 89 participants for the initial training and review training for “occupational safety and health operation supervisor, respectively”; there are 35 participants and 55 participants for the initial training and review training for “first-aid personnel health education and training,” respectively; there are 30 participants and 29 participants for the initial training and review training for “fire control management personnel seminar and training,” respectively. We prepare teaching materials for in-service employee education and training to improve professional literacy.
(2) In terms of safety contingency measures, branches conduct safety contingency drills every six months to familiarize themselves with measures for various equipment and disaster response conditions, improve hazard awareness, and reinforce employees’ self-protection and disaster management capacity.
(3) In 2025, there was no major occupational disaster (death/disability) and 0 injuries (disabling).
Health education:
According to the "Regulations Governing the Labor Health Protection," employers are required to conduct regular health inspections for employees of different ages at different frequencies. The Bank provides regular health | |
112 -

Items for evaluation	Implementation Status			Deviation and causes of deviation from the Corporate Sustainable Development Best-Practice Principles for TSEC/GTSM Listed Companies
	Yes	No	Summary
			inspections that more favorable than the regulations. All employees are entitled to free health inspections every two years, and there is also a infirmary and quarterly health seminars or consultations with physicians to raise employees' health awareness.
4. Fire prevention and response:
There was no fire incident at the Bank in 2025. The fire prevention and response measures are as follows:
(1) Fire drills:
The headquarters building conducts fire drills twice annually, while each operating unit implements digital courses on “Fire Safety Education and Training and Awareness Activities” every six months.
(2) Fire safety equipment maintenance report:
The branches shall report to the local fire department once a year.
(3) Routine prevention:
The Bank has established the "Taichung Commercial Bank Co., Ltd. Power Consumption Management Guidelines" to reduce disasters caused by power consumption It also established the "Taichung Commercial Bank Co., Ltd. Safety and Health Voluntary Inspection Program" to discover equipment, working environments, or acts that are not safe and healthy through regular and voluntary inspections of safety and health matters to prevent the occurrence of disasters and protect the safety and health of employees.
(IV) Has the Bank established the training program for the effective planning of career development for the employees?	☑		Based on the strategic development and career mapping of each employee, the Bank establishes annual education and training plans to promote exclusive training sessions of each function. Every year, outstanding talents are selected to be nurtured through individual development plan (IDP) to handle future managerial duties.	no difference
(V) Has the Bank complied with the relevant laws and international standards with regards to customer health and safety, customer privacy, and marketing and labeling of products and services, and	☑		1. Concerning related financial commodities or services, the Bank attaches importance to marketing ethics. In compliance with relevant regulations and international standards, relevant implementation strategies and specific measures have been set up by the principles of treat customer fairly, which have been implemented in business activities.
2. The bank’s norms on customer privacy has been set up in accordance with	no difference

113 -

Items for evaluation	Implementation Status
	Yes	No	Summary
implemented consumer protection and complaint policies?			relevant provisions in the “Personal Information Protection Act,” which shall serve as criteria for implementing personal information protection. The PIMS (Personal Information Management Standards) have been imported; the “BS 10012: 2017 personal Information Management System” standard certification has also been obtained.
3. The Bank has established the "Financial Consumer Protection Policy" and the "Fair Customer Treatment Principles Policy and Strategies" to implement the protection of consumer rights and interests and uphold fair customer treatment. The Bank has also established a "Fair Customer Treatment Committee" to periodically review the implementation of fair customer treatment, ensuring that products, services, and procedures treat customers fairly and reasonably, thereby enhancing customer confidence and trust in the Bank’s financial services.
4. Customers may provide feedback and file complaints through the following diversified channels:
(1) 24-hour customer service hotline: Telephone services are available at all times to answer customer inquiries and handle complaints.
(2) Toll-free complaint hotline for landline users: A dedicated complaint channel is established to provide free and convenient complaint services.
(3) Customer message mailbox on the official website: An online message channel is provided to facilitate customers in submitting feedback and receiving prompt responses.
(4) AI-powered text customer service: AI-based text customer service is provided to instantly answer frequently asked questions and, when necessary, transfer customers to live customer service representatives for further assistance.
(5) Operating unit service counters: Customers may directly provide feedback at each operating unit, where on-site personnel will handle the matter promptly.
5. The Bank follows the “Consumer Dispute Resolution System” and the “Consumer Dispute Resolution Guidelines” to clearly stipulate the operational procedures and processes for complaint handling, ensuring that

114 -

Items for evaluation	Implementation Status
	Yes	No	Summary
			all complaint cases are addressed promptly and effectively.
6. To continuously enhance service quality, the Bank has officially adopted the ISO 10002:2018 Customer Complaint Management System to ensure consistency, transparency, and efficiency in handling customer complaints and disputes. In addition, the Bank has obtained the Excellent Service Mark certification and conducts regular service quality assessments to comprehensively enhance customer satisfaction.
(VI) Has the Bank established the supplier management policy to demand suppliers observe applicable rules and regulations governing environmental protection, occupational safety and health, or labor rights, and the state of implementation?	☑		1. The Bank's suppliers are mainly engineering contractors, IT equipment, office equipment and consumables suppliers. Adhering to the principle of local procurement, priority is given to local partners for all procurements to promote local economic development and effectively reduce carbon emissions caused by the transportation process.
2. To fulfill the Bank's commitment to and responsibility of supplier management, in addition to continuously requiring suppliers to sign the "commitment on ethical corporate management, human rights, and environmental sustainability," it established matters of notice for suppliers in September 2023 to jointly achieve the targets of favorable ethical standards and respecting labor human rights and environmental sustainability with suppliers based on encouragement and cooperation so as to jointly fulfill corporate social responsibility. Relevant matters are as follows:
(1) Behavioral standards:
Behavioral standards are divided into five aspects, including corporate standards, ethical standards, labor standards, environmental standards, and safety and health standards.
(2) Implementation measures:
During the tendering process, suppliers are required to submit a “Supplier Corporate Social Responsibility Self-Assessment Form.” In 2025, a total of 145 suppliers signed the form and were informed of the Bank’s integrity management policy. The Bank may hold supplier communication meetings and conduct on-site visits from time to time, and may provide training sessions as deemed necessary.
(3) Improvement and rewards:	no difference

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Table: Material issues and management measures of the Bank's risks

Items for evaluation	Implementation Status			Deviation and causes of deviation from the Corporate Sustainable Development Best-Practice Principles for TSEC/GTSM Listed Companies
	Yes	No	Summary
			The Bank will require suppliers who are not compliant with the CSR-related requirements to improve through guidance. In addition, the suppliers' qualification may be suspended in case of the violation of ethical corporate management and CSR or causing significant effects on the environment and society. For suppliers with favorable CSR performance, the control measures of visiting may be waived. When confirming the supplier's qualification for procurements, the Bank may adopt the implementation of CSR of the supplier as the consideration.
V. 5.Does the bank refer to international criteria or guidelines for the preparation of reports, and compile reports on corporate non-financial information, such as, sustainable reports? Did the aforementioned reports obtain the assurance or guarantee opinion of a third-party verification institute?	✓		1. The Bank prepares its sustainability report for the previous year in accordance with the Universal Standards and Topic Standards issued by the GRI, the standards of the SASB, and the recommendations of the TCFD. The Bank also engages Deloitte & Touche to conduct assurance on the report in accordance with Assurance Standard No. 3000, "Assurance Engagements Other Than Audits or Reviews of Historical Financial Information."2. We obtained independent assurance opinion or limited assurance report issued by CPAs for our Sustainability Report each year starting in 2015; however, the 2025 Sustainability Report is not published as of the publication date of the annual report.	no difference
VI. If the Company has established sustainable development code of practice based on the Sustainable Development Best Practice Principles for the Listed Companies, please describe any discrepancies between the policies and their implementation in the Company: The Bank has established the "Sustainable Development Best Practice Principles" according to the "Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies" to fulfill sustainable development, and there was no difference with the Principles established.
VII. Other important information to facilitate better understanding of the Company's implementation of sustainable development: Please refer to the Bank's Sustainability Report.
Aspect	Material issues	Management policy/strategy/substantial measures
---	---	---
Environmental risks	Sustainable finance	The Bank has established systems related to responsible investments, responsible credit loans, investments and sale of sustainable financial products and formulated relevant regulations to incorporate financial products with ESG thinking to promote the sustainable development of the industry.

Aspect	Material issues	Management policy/strategy/substantial measures
Social risks	Climate action	1. Climate governance
(1) We implemented the TCFD framework, signed up as a TCFD supporter, and released the TCFD report on an annual basis in accordance with the TCFD framework.
(2) We included climate risks in the Bank's "Sustainable Development Best Practice Principles" and "risk management policy," formulated our "climate risk management policy" to include climate risk as part of the Bank's integrated risk management system, and implemented climate risk-related policies .
(3) In 2023, we established the "Sustainable Development Committee" with six workforces under the committee. The "climate change workforce" is responsible for the promotion and implementation of climate management-related systems, carrying out physical and transformation risk assessments through climate scenario analysis, and examining and establishing relevant climate mitigation and adaptation measures.
2. Energy conservation and carbon reduction
(1) We have been publishing the GHG inventory report since 2018. We make arrangements according to ISO 14064-1 and the GHG Inventory and Registration Guidelines of the Environmental Protection Administration, Executive Yuan, and disclose GHG emission and removal volumes.
(2) In 2022, the ISO 14001 environmental management system was introduced, and the third-party certification was obtained.
(3) The Head Office and branches have been concurrently implementing energy-saving and carbon reduction actions, including adjusting the time for turning on advertising signboard lights according to the seasons, replacing old and obsolete equipment and adopting energy-saving products, and the plan to install solar photovoltaic equipment in two self-owned branches each year from 2021.
	Talent attraction and retention	The Bank offers a number of welfare measures (i.e., group insurance for employees, leaves more favorable than the regulations, healthy labor-capital communication channels, promotion system, bonus system, and retirement system) in order to attract more talents candidates and retain them.
	Talent cultivation and development	We formulated the "annual education and training plan" and the “guidelines for education and training for new employees,” promised to map out the career development of employees at all levels, and provided comprehensive training plans to match employees with suitable positions and improve skills beneficial for employees throughout their lives.
	Human rights and equality	The human rights policy is adopted to protect the human rights of counterparties involved in our operations (i.e., employees, suppliers, and customers), and human rights are included as an mandatory item in the education and training for new employees; we also provide whistleblowing channels to handle relevant events.
	Occupational health and safety	We have established workplace safety maintenance measures, occupational hazard risk management, employee health management plans, health inspections and health improvement activities, and are committed to continuous improvement of occupational safety and health management in order to build a healthy and happy workplace.
	Treat customers fairly	The Directors and senior executives lead and supervise the implementation of treating customers fairly in person, and actively and duly handle all customer complaint cases. Employees’ education and training are strengthened to protect customers' rights and interests and improve the overall customer experience and satisfaction.
	Inclusive financing	1. The Bank has established the "notice for serving disabled and senior customers" and is committed to providing friendly financial services and care for disabled, senior, and disadvantaged customers.
2. Promoting various inclusive finance measures and services, including accessible ATMs, accessible facilities, bilingual

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Aspect	Material issues	Management policy/strategy/substantial measures
		branches, video sign language services, and debt negotiation services.
Corporate Governance:	Corporate Governance:	There are six functional committees (Audit Committee, Remuneration Committee, Nomination Committee, Risk Management Committee, Treat Customers Fairly Committee, and Sustainable Development Committee) under the Board to supervise the implementation effects of all aspects of operations to establish a sound corporate governance structure.
	Ethical corporate management	1. Directors and the senior management comply with relevant statements of ethical corporate management, assist the Board in implementing their commitment to ethical management, and supervise the Company's internal management and business activities to ensure that they comply with ethical corporate management.
2. Each year, we regularly arrange various ethical corporate management education and training, formulate and supervise the policies and measures related to ethical corporate management, regularly review the ethical corporate management policy, examine the implementation results, and report to the Board of Directors.
	Legal compliance	1. We strengthen legal compliance awareness through concept communication and require all employees and partners to know and be abide by the law.
2. The Bank formulates relevant policies and regulations, and works with departments to establish various legal compliance management measures, promotes a legal compliance risk management system, and effectively identifies and controls legal compliance risks.
	Operating and financial performance	The Bank established comprehensive operational, financial, and investment strategies with respect to the its operating conditions, financial performance, operating costs, market development, and investment gains or losses, implemented management measures, and is committed to create stable operating and financial performance for all stakeholders through reinforcing its financial structure and cost control.
	Information safety	1. Passed the certification of ISO 27001 information safety management system.
2. The information safety management review meeting that is convened once every half year coordinates the promotion of information safety policies and the integration of resource allocations, and regular information safety-related education and training, tests, and drills are implemented.
	Personal Data and Privacy Protection	We established various operating management measures to implement the employee personal information and privacy protection system, and continued to implement BS10012 personal information management system standards. We provide customers with an environment with comprehensive protection for personal information, privacy and business secrets and reduce the possibility of leakage of private information.
	Risk Management	1. We have established the “risk management policy,” “market risk management policy,” “liquidity risk management policy,” “credit risk management policy,” “operating risk management policy,” "capital management policy,” and “climate risk management policy” and are committed to establish various risk management systems based on the scale of business and level of risk to effectively implement risk management and control procedures.
2. The risk management structures, risk management procedures, and the Risk Management Committee, three lines of defense, are adopted to effectively manage credit, market, operating, liquidity, national, and climate risks during the course of operations.

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Climate-related information of the Bank
(I) Implementation of climate-related information:

Item	Implementation Status
(1) Supervision and governance of climate-related risks and opportunities by the Board and the management	1. To supervise the climate-related risks and opportunities, the Bank has included climate risk as a part of the integrated risk management systems of the Bank. With reference to the Climate-Related Risk Management Practice Handbooks for Local Banks, the internal collaboration model is adopted. The Board is the highest decision-making body of climate risk management. Under the Board, the Risk Management Committee implements the risk management decisions approved by the Board and reviews risk management-related matters. It holds meeting on a quarterly basis and includes climate risk monitoring in the risk management reporting, including the latest regulations on climate risk imposed by the competent authority. It also monitors and updates climate risk and opportunity identification results and propose countermeasures to improve the climate risk management of the Bank; relevant data will be subsequently reported to the Board. 2. The Bank included climate assessment and responses in the its "Sustainable Development Best Practice Principles" in accordance with the "Sustainable Development Best-Practice Principles for TWSE/TPEx Listed Companies" formulated by TWSE and TPEx, and included climate risk in the its "risk management policy" and "climate risk management policy" according to the "Climate Risk Financial Disclosure Guidelines for Local Banks" of the FSC for including climate risk as a part of the integrated risk management systems of the Bank so as to reinforce the management of climate-related risks; the abovementioned rules have been approved by the Board and implemented. In accordance with the "Regulations Governing the Preparation and Filing of Sustainability Reports by TWSE Listed Companies," a chapter dedicated to the disclosure of climate-related information was included in the Bank's "Guidelines for Preparation and Verification of Sustainability Reports," which were approved by the President and implemented
(2) Describe the effects of climate risks and opportunities identified on the Company's business, strategy, and finance (short-, mid-, and long-term).	To identify the financial impacts of climate change on the Bank and ensure effective information disclosure, the Bank conducted an assessment of both transition risks associated with the low-carbon economy and physical risks from climate change. After describing the climate risks, the Bank evaluated the "likelihood of occurrence" and "impact severity" on its operations, and then formulated strategic approaches to enhance climate risk management and monitoring. Below is the result of climate risk and opportunity identification:
Risk item	Impact area
Immediate risk	Own operations (general)
Investment business	Extreme weather events such as heavy rainfall may interrupt the operations of investee companies' offices or factories and result in property loss. Restoring operations may increase operating expenses and affect overall profitability.

Implementation Status
	Credit business	Extreme weather events may cause operational disruption or property loss to borrowers. Borrowers may experience repayment difficulties due to interrupted operations, or the value of real estate collateral may decline, resulting in potential credit recovery challenges for the Bank.	Credit loss increase	Short-term	Climate risk assessment and management in lending
Long-term risk	Own operations (general)	Sea level rise may lead to flooding of business locations, causing damage to premises or equipment and operational disruptions. Restoration of damaged equipment may increase operating expenses, while operational interruption may reduce operating income.	Increase in operating expenses / decrease in operating income	Mid-term	Climate risk assessment and management in operations
	Investment business	Sea level rise may damage real estate, factories, and equipment of investee companies, disrupting production and reducing profitability, thereby affecting the Bank's investment income.	Decline in investment income	Long-term	Climate risk assessment and management in investment
	Credit business	Rising sea levels may cause damage to the real property, plants, and equipment of the Bank's borrowers, resulting in an inability to manufacture products and adversely affecting their profitability. This may weaken customers' repayment capacity or reduce the value of real property collateral for credit facilities, thereby causing the Bank to face difficulties in recovering credit claims from customers.	Credit loss increase	Long-term	Climate risk assessment and management in lending
Risks associated with policies and regulations	Own operations (general)	Penalty for failure to comply with stringent GHG reduction requirements or energy and power conservation policies or regulations, or litigation for insufficient disclosure of climate-related risks.	Increase in operating expenses	Short-term	Net-zero emissions in operations
	Own operations (general)	With global warming, average temperatures are expected to rise, leading to higher electricity prices and increased operational costs for the Bank.	Increase in operating expenses	Short-term	Net-zero emissions in operations

Implementation Status
	Investment business	To mitigate climate change, stricter policies and regulations related to energy, carbon pricing/taxation, carbon emissions, emissions reduction targets, and reporting obligations have increased the operating costs (including compliance costs) of investee companies in high-carbon-emission industries, reducing their profitability and, through the Bank's investment business, affecting the Bank.	Decline in investment income	Mid-term	Climate risk assessment and management in lending
					Asset Portfolio Net zero emissions
	Credit business	To mitigate climate change, stricter policies and regulations related to energy, carbon pricing/taxation, carbon emissions, emissions reduction targets, and reporting obligations have increased the operating costs (including compliance costs) of corporate borrowers in high-carbon-emission industries. These increases may affect the Bank's credit recovery through its lending business.	Credit loss increase	Short-term	Climate risk assessment and management in lending
					Asset Portfolio Net zero emissions
Consumer preference/imbalanced market supply and demand risks	Credit business	Failure to respond to market trends and timely launch sustainable finance products and services may lead to the loss of market and transition opportunities related to climate change themes, resulting in business and customer losses.	Decrease in interest income	Mid-term	Green credit
Reputation risk	Own operations (general)	If the Bank fails to establish a brand image that prioritizes low-carbon transition and thus fails to meet stakeholder expectations, its reputation may be affected. This could lead to loss of business and customers, revenue decline, and difficulty obtaining funds.	Decrease in operating revenue / Increase in operating income	Mid-term	Asset Portfolio Net zero emissions
	Credit business	If the Bank's corporate borrowers are involved in environmental pollution incidents, it may indirectly affect the Bank's reputation and income. If the Bank provides funding without effectively managing its climate or environmental impact, this may	Decrease in interest income	Short-term	Climate risk assessment and management in lending

Implementation Status
		damage the Bank’s brand image and reputation among the public.
Technical risk	Credit business	In response to climate transition risks, industries to which corporate borrowers belong may be forced to transform or develop more energy-efficient and environmentally friendly products and technologies. This transformation may require additional costs, affecting their profitability and potentially weakening their repayment ability, thus making credit recovery more difficult for the Bank.	Credit loss increase	Mid-term	Climate risk assessment and management in lending
	Own operations (products and services)	In response to climate change transformation risks, if the Bank fails to successfully develop Fintech and lead the paperless, energy saving, and carbon reduction green cash flow through digital banking and electronic services, customers will have low intentions to have dealings with the Bank.	Decrease in operating income	Mid-term	Digital financial transformation
	Investment business	In response to climate transition risks, industries to which investee companies belong may be forced to transform or develop more energy-efficient and environmentally friendly products and technologies. This transformation may incur additional costs, thereby affecting their profitability and the Bank’s investment income.	Decline in investment income	Mid-term	Climate risk assessment and management in investment

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Implementation Status
Opportunities	Impact area	Opportunity description	Potential financial impact	Time of influence	Strategic approach
Market	Investment business	In response to government policy promotion and the growth of the green energy market, active participation in green investment can direct funds to green uses to promote industrial transformation, while also enhancing the climate resilience and long-term returns of the investment portfolio.	Increase in investment income	Mid-term	Green investment
	Credit business	In response to government policy promotion and the growth of the green energy market, active promotion in green credit may increase the Bank's interest income.	Increase in interest income	Long-term	Green credit
Energy source	Own operations (general)	Solar panels are installed at operating sites to increase the amount of green electricity for self-generation and self-consumption.	Increase in operating income/ Reduction in operating costs	Mid-term	Green operations
Energy efficiency	Own operations (general)	Purchase the latest energy-saving equipment and build an efficient system for the IT machine room to improve energy efficiency and save operating costs.	Reduction in operating costs	Mid-term	Green operations
	Own operations (general)	Prioritize the procurement of equipment with environmental, energy-saving, or water-saving certifications to achieve resource conservation and environmental benefits.	Reduction in operating costs	Mid-term	Green operations
	Own operations (general)	In planning and constructing new business locations, green building materials are used and the energy efficiency of buildings is improved.	Reduction in operating costs	Mid-term	Green operations

Item	Implementation Status
	Products and services	Own operations (products and services)	Optimizing digital financial services and developing fintech to enhance user convenience—through promoting online account opening, electronic transactions, and account processing services—helps improve service accessibility, expand business opportunities and customer base, drive revenue growth, and reduce labor costs.	Increase in operating income/ Reduction in operating costs	Short-term	Digital financial transformation
		Own operations (products and services)	In response to rising public environmental awareness and the growth of the green finance market, green environmental consumer financial products are issued to attract specific demographic groups and consumers with sustainability concepts.	Increase in operating income	Short-term	Green products
(3) Financial impacts of extreme climate events and transition actions	(1) Extreme weather events (physical risk): After the assessment, there was no impact on the Bank's finance due to extreme weather events in 2025.(2) Transformation actions: To identify the financial impact caused by climate risks, the Risk Management Committee regularly conducts climate scenario analysis on a quarterly basis to identify and assess the impact of climate change on the Bank's future finance, assesses the impact of the current transformation risks on investment and financing customers, formulates countermeasures, and continues to track international trends.
(4) The incorporation method of the identification, evaluation, and management procedures of climate risks in the overall risk management system	(1) The Bank's climate risk management procedures are as follows:A. Climate risk identification:a. Identify the potential impacts of climate risks on the Company's operations and financial/investment activities, along with how they differ from traditional risks.b. The Risk Management Committee meeting is convened on a quarterly basis to explore climate-related risk issues.c. Incorporate ESG and climate risk-related factors into investment and financing processes.B. Climate risk assessment:a. Scenario analysis is conducted with reference to suggestions from domestic and international institutions. Physical risks posed by climate change to collateral and operating sites, as well as transition risks potentially faced by investment and financing positions, are included in the assessment.b. Financial carbon emissions from investment and financing positions and greenhouse gas emissions from operations are calculated.C. Climate risk monitoring:Climate risks are monitored through regular review of related information and data (including greenhouse gas emissions).D. Climate risk reporting:Identified and assessed climate risks and opportunities, along with corresponding response measures, are reported to the Board of Directors, Risk Management Committee, and relevant departments.(2) To reinforce the climate risk management system of the Bank, it included climate risks in the its "Sustainable Development Best Practice

Item	Implementation Status
	Principles," "risk management policy," and "climate risk management policy" and reported climate risk monitoring quarterly in the reports at the Risks Management Committee meetings and Board meetings.
(5) If scenario analysis is used to assess resilience in the face of climate change risks, the scenarios, parameters, assumptions, analysis factors used, and major financial impacts shall be specified.	The Bank conducts scenario analysis and resilience assessments in response to climate change risks by referring to the “Planning Guidelines for Climate Change Scenario Analysis for Domestic Banks.” In terms of macroeconomic factors, the scenarios adopt the “Net Zero 2050,” “Delayed Transition,” and “Baseline” scenarios from the Network for Greening the Financial System (NGFS). In terms of environmental factors, scenarios are based on the Representative Concentration Pathways (RCPs) set by IPCC AR5, using RCP8.5 (no transition) and RCP2.6 (aggressive transition).
Based on individual asset and liability positions and profit and loss information as the calculation basis and scope benchmark, analyses are conducted on the impact of climate change risks on on- and off-balance sheet credit exposures, bond and equity investments under the domestic and overseas banking book. Assessments are also performed under scenarios of orderly transition, disorderly transition, and no-policy transition for 2030 and 2050 to evaluate the ratios of expected losses from credit risk and general corporate and individual exposures to the base year’s net worth and profit before tax.
(6) If there is a transformation plan in response to the management of climate-related risks, the content of the plan and the indicators and targets used to identify and manage physical risks and transformation risks shall be specified.	In order to manage climate-related risks, the climate risk monitoring report has been regularly reported to the Risk Management Committee and the Board in 2025. In addition, the Bank introduced the TCFD framework, signed up as a TCFD supporter, and discloses the four major core elements, including governance, strategy, risk management, and indicators and targets, of climate-related financial information according to the TCFD framework each year for the benefit of regularly identifying and managing the indicators and targets of physical risks and transformation risks. In addition, we produce a real-time risk management report on the latest sustainability and climate-related risk trends to report to the senior management for review.
(7) If internal carbon pricing is used as a planning tool, the basis for setting the price shall be specified.	The Bank has no internal carbon pricing policy at present.
(8) If climate-related goals are set, the activities covered, the scope of GHG emissions, the planned period, and the progress of each year shall specified; if carbon offsets or renewable energy certificates (RECs) were used to achieve the goals, the	(1) The Bank introduced the ISO 14064-1 greenhouse gas inventory system in 2020, with operational control as the boundary-setting method. Emissions or removals of greenhouse gases are aggregated, mainly covering office buildings and information centers. Inventory and assurance boundaries are expanded year by year, and full-bank inventory and assurance were completed in 2024.
(2) We make arrangements according to ISO 14064-1 (2018)/CNS 14064-1, and the GHG Inventory and Registration Guidelines of the Environmental. At present, we adopted Scope 1 and Scope 2 to disclose GHG emissions.
(3) Currently, the Bank’s reduction target planning focuses on its own operational scope. For related progress, please refer to page 82, “3 Greenhouse Gas Reduction Targets, Strategies, and Specific Action Plans.”

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Item	Implementation Status
source and quantity of carbon reduction credits or quantity of RECs used for exchange shall be specified.
(9) GHG inventory and assurance, and reduction targets, strategies, and substantial action plans	Please refer to pages 81 to 82 for “1-1 GHG inventory and assurance of the Bank in the most recent two years” and “1-2 GHG Emission Reduction Targets, Strategies, and Action Plans.”

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1-1 GHG inventory and assurance of the Bank in the most recent two years

1-1-1 GHG inventory information

| Year of inventory
(year of data) | 2025
(2024) | | 2026
(2025) | |
| --- | --- | --- | --- | --- |
| Boundary of inventory | The Bank | The Bank and its subsidiaries (Note 1) | The Bank | The Bank and its subsidiaries (Note 1) |
| Scope 1 (tCO2e) | 568.05 | 762.82 | 581.79 | 859.42 |
| Scope 2 (tCO2e) | 5,088.91 | 5,769.97 | 4,921.19 | 5533.85 |
| Scope 3 (tCO2e) | - | - | - | - |
| Total | 5,656.96 | 6,532.79 | 5,502.98 | 6393.27 |
| NT$ million (Revenue) | 17,905.450 | 19,299.219 | 19,417.030 | 20,641.615 |
| Intensity(metric tons CO2e / NT$ million) | 0.316 | 0.339 | 0.283 | 0.309 |

Note 1: The inventory boundary for subsidiaries includes Taichung Bank Insurance Brokers Co., Ltd., Taichung Bank Securities Co., Ltd., Taichung Bank Leasing Co., Ltd., Taichung Commercial Bank Leasing (Suzhou) Ltd., and Taichung Bank Venture Capital Co., Ltd.
Note 2: The 2026 inventory (2025 data) is an estimate. For complete information, please refer to the Bank's Sustainability Report.
Note 3: The 2025 full-bank revenue is based on unaudited financial statements. For complete information, please refer to the Bank's financial statements.
Note 4: The Bank's 2026 GHG inventory (2025 data) was not finalized before the publication of the annual report. The data is estimated. For complete assurance information, please refer to the Bank's Sustainability Report.

1-1-2 GHG assurance information

| Year of inventory
(year of data) | 2025
(2024) | | | 2026
(2025) | | |
| --- | --- | --- | --- | --- | --- | --- |
| Assurance boundary | The Bank | Taichung Bank Securities Investment Trust Co., Ltd. | Taichung Bank Venture Capital Co., Ltd. | The Bank | Taichung Bank Securities Investment Trust Co., Ltd. | Taichung Bank Venture Capital Co., Ltd. |
| Assurance institution | Taiwan Testing and Certification Center | Adhering to the principles of the united accounting firm | Adhering to the principles of the united accounting firm | Taiwan Testing and Certification Center (ETC) | Adhering to the principles of the united accounting firm | Adhering to the principles of the united accounting firm |
| Assurance standards | ISO 14064-3:2019 | Assurance standards No. 3410 | Assurance standards No. 3410 | Assurance standards No. 3410 | Assurance standards No. 3410 | Assurance standards No. 3410 |
| Assurance status | Reasonable assurance level | Limited Assurance | Limited Assurance | - | - | |

Note 1: For the assurance results of the 2025 inventory, please refer to the Bank's Sustainability Report.
Note 2: Subsidiary assurance schedule and boundary explanations are as follows:

(1) According to the "Sustainable Development Transition Execution Strategy for the Securities and Futures Industry," Taichung Bank Securities Co., Ltd. and Taichung Bank Venture Capital Co., Ltd. will follow the same schedule as the parent company.
(2) Additionally, pursuant to the "Sustainability Development Roadmap for Listed Companies," Taichung Bank Insurance Brokers Co., Ltd., Taichung Bank Leasing Co., Ltd., and Taichung Bank Financial Leasing (Suzhou) Co., Ltd. will complete assurance in 2027. GHG Emission Reduction Targets, Strategies, and Action Plans

Note 3: In response to IFRS disclosure requirements and parent company policy, the Bank will adjust its greenhouse gas inventory operations from ISO 14064-1 to the GHG Protocol in 2026 and simultaneously adjust the assurance standard.

1-2 GHG Emission Reduction Targets, Strategies, and Action Plans

(I) GHG Emissions Baseline Year and Reduction:

The Bank's emissions reduction targets are primarily focused on its own operational scope, with 2024 set as the base year. The plan is as follows:

Short-term goal (2025): Achieve a 1% annual reduction in the combined Scope 1 and Scope 2 emissions, with a 2% reduction in carbon emissions by 2026 compared with the base year.
Mid-term goal (2026 to 2028): Achieve a 1% annual reduction in the combined Scope 1 and Scope 2 emissions, with a 4% reduction in carbon emissions by 2028 compared with the base year.
Long-term goal (2029 to 2030): Achieve a 1% annual reduction in the combined Scope 1 and Scope 2 emissions, with a 6% reduction in carbon emissions by 2030 compared with the base year.

(II) GHG emission reduction strategies and specific action plans:

To continue to achieve the international trend of carbon reduction, the Bank's energy conservation and carbon reduction measures are as follows:

Since 2021, the Bank has planned to install solar photovoltaic systems in two self-owned branches each year, prioritizing self-consumption after reviewing available space in its properties. In 2025, the volume of self-generated renewable energy used was 175,520.8 kWh, and the number of renewable energy certificates obtained that year was 181.
LED lighting was adopted in all new construction and renovation projects. The damaged old lighting in the Head Office Building was replaced by LED lighting to effectively reduce heat sources and reduce power consumption.
Favorable spatial layout and traffic flow arrangements are adopted to bring in more natural lighting in office spaces and reduce the amount of artificial lighting.
Inverter high-frequency A/Cs and thermostatical control devices are adopted. For other electrical equipment, products, printers, shredders, and computers with the energy-saving labels are adopted, and sleep mode, standby, or automatic sensing functions are set.
Adjust the time for turning on advertising signboard lights according to the seasonal sunshine hours.
The Bank encourages branches to conserve electricity voluntarily and has introduced an annual electricity-saving performance incentive policy.

(III) Achievement of Reduction Targets:

The emission data and target achievement status for 2025 and 2026 are as follows:

Year of inventory (year of data)	Scope 1 (tCO2e)	Scope 2 (tCO2e)	Intensity (metric tons of CO2e / NT$ million)
2025 (2024)	568.05	5,088.91	0.316
2026 (2025)	581.79	4,921.19	0.283

Note 1: To strengthen the power infrastructure of branch operations, the Bank has gradually planned the installation of small generators at branches. Addition under the Montreal Protocol, the refrigerant R-22 used in outdated air conditioning systems is not required to be included in calculations. However, a replacement with new refrigerants (R410a, R134a, R32), such emissions must be accounted for, resulting in an increase in Scope 1 emissions.
Note 2: The increase in Scope 1 emissions in 2026 was due to increased use of generators and longer equipment operating hours.
Note 3: The 2026 inventory (based on 2025 data) is an estimate. For complete information, please refer to the Bank's Sustainability Report.

(VI) Implementation of ethical corporate management and differences from the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies and the reasons therefor

The Company

Items for evaluation	Implementation Status
	Yes	No	Summary
I. The policy and plan of business integrity
(I) Has the Company had an ethical corporate management policy approved by its Board, and rules and publicly available documents addressing its policy and measures of ethical corporate management, and commitment regarding active implementation of such policy from the Board and the senior management?
(II) Has the Company established a risk assessment mechanism against unethical conduct, analyzed and assessed on a regular basis business activities within their business scope which are at a higher risk of being involved in unethical conduct, and established prevention programs accordingly which at least cover the prevention measures against the conducts listed in paragraph 2, Article 7 of the “Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies”?	V	V	(I) The Company has not explicitly stipulated matters related to ethical management; however, it adheres to the principles of integrity, transparency, and accountability in its operations. The Company continues to promote integrity-based policies and has established sound corporate governance and risk control mechanisms to foster a sustainable business environment. The Company has developed its Code of Ethical Conduct and required directors and executives to lead by example, follow the principle of good faith and build a corporate culture of sincerity and integrity.
(II) The Company first assesses the legality and the past transaction records based on good faith of the companies before establishing business relationships in order to avoid dealing with those who have flawed records. The Company also complies with the laws and regulations, requiring each donation and sponsorship to be reported and authorized by the proper authorization levels before being approved. The Company’s Code of Ethical Conduct sets forth principles such as the “Prevention of Conflicts of Interest,” “Prohibition of Personal Gain,” “Fair Dealing,” and the “Proper Protection and Use of Company Assets,” all of which are to be adhered to in accordance with the principle of honesty and integrity to prevent employee misconduct. In addition, both the Code of Ethical Conduct and the Company’s Employee Work Rules specify	Not distinctive

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Items for evaluation	Implementation Status
	Yes	No	Summary
(III) Has the Company specified the operating procedures, guidelines for conducts punishment and appeal system for violations in the prevention programs, have they been implemented accordingly and regularly reviewed and revised the aforementioned programs?	V		disciplinary measures to deter dishonest behavior.
(III) The Code of Ethical Conduct also explicitly “encourages the reporting of any illegal acts” or “violations of the code and outlines corresponding disciplinary” and remedial measures to prevent employee misconduct.
II. The Materialization of Business Integrity
(I) Has the Company assessed the ethics records of whom it has business relationships and include business conduct and ethics-related clauses in the business contracts?

(II) Has the Company set up a dedicated department that is subordinated to the Board to promote ethical corporate management, and does it regularly (at least once a year) report to the Board on its ethical corporate management policy and unethical conduct prevention program and monitor their implementation?

(III) Has the Company established policies to prevent conflict of interests, provide appropriate communication and complaint channels, and implement such policies properly? | V | V | (I) The Company engages in transactions and purchases in accordance with the laws and regulations to prevent the engagement with those who have had records of unethical conduct.

(II) Although the Company has not established a dedicated unit for ethical management, it regularly reports the implementation of ethical conduct to the Board of Directors through its sustainability report. In August 2025, the Company presented the sustainability report to the Board, which included disclosures on the implementation of ethical management.

(III) The Company’s Code of Ethical Conduct includes provisions on the "Prevention of Conflicts of Interest" and encourages the reporting of any illegal acts or violations of ethical conduct. It also outlines related disciplinary and remedial measures. | Not distinctive |

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Items for evaluation	Implementation Status
	Yes	No	Summary
(IV) Has the Company established effective accounting and internal control systems in place for the implementation of ethical corporate management? Has the internal audit department formulated relevant audit plans based on the assessment results of unethical conduct risk to perform audits on compliance with the unethical conduct prevention program or engage CPAs to perform such audits?	V		(IV) The Company has established both a “Code of Ethical Conduct” and “Employee Work Rules on Rewards and Penalties” to prevent employee misconduct, and provides channels for reporting any illegal or improper acts. The Company has implemented an effective accounting system and internal control system. Operations are fully computerized and interlinked to ensure layered cross-checking and exception management. The Company’s internal audit framework operates on three levels: The first level is carried out by the Audit Office under the Board of Directors. An annual audit plan is developed to examine compliance with regulations and reduce the risk of misconduct. The Audit Office reports its findings quarterly to the Audit Committee and the Board. The second level consists of audits of the internal control system over financial reporting conducted annually by an external accounting firm. The third level is based on the principle that internal audit is the responsibility of all employees. Each department is required to conduct annual self-inspections to embed the internal control spirit at every level and ensure the effectiveness of the internal control system’s design and execution.
(V) Has the Company organized corporate management internal and external education and training programs on a regular basis?		V	(V) The Company’s intranet provides access to the Code of Ethical Conduct, which is available for all employees to review at any time.

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Items for evaluation	Implementation Status
	Yes	No	Summary
III. The operations of the Company’s Report System
(I) Does the Company have a specific report and reward system stipulated, a convenient report channel established and a responsible staff designated to handle the individual being reported?

(II) Has the Company established the standard operation procedures for the investigation of complaints as reported, follow-up actions after the investigation, and related mechanisms for confidentiality?

(III) Has the Company taken proper measures to protect the whistle-blowers from suffering any consequence of reporting an incident? | V | | (I) The Company has established a Code of Ethical Conduct that explicitly encourages the reporting of any illegal acts or violations of ethical standards. If any dishonest conduct is identified, employees may report the matter directly to the supervisors, including the Supervisors, the Audit Committee, management, the HR department, the head of internal audit, or other appropriate supervisors. Sufficient information should be provided to enable the Company to properly address the matter. Disciplinary actions will be taken against violators, and designated personnel will be assigned to handle reported cases to ensure confidentiality is fully upheld.

(II) The Company has also implemented both a “Code of Ethical Conduct” and “Employee Work Rules on Rewards and Penalties” to prevent misconduct. Channels are provided for employees to report any unlawful or inappropriate behavior. Disciplinary actions will be taken where necessary, and the Company assigns personnel to handle each case with strict confidentiality.

(III) To prevent retaliation, the Code of Ethical Conduct clearly states that the Company will handle all reports in a confidential manner and will make every effort to protect the safety of the whistleblower. The Company is committed to the principles of fairness and due process and to safeguarding employee rights. | Not distinctive |
| IV. Enhancing Information Disclosure
Has the Company disclosed its Ethical Corporate Management Best Practice Principles and the results of their implementation on its website and MOPS? | V | | The Company has already disclosed its "Code of Ethics" on its official website. | Not distinctive |

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Items for evaluation	Implementation Status
	Yes	No	Summary
V. If the company has established corporate governance policies based on the Ethical Corporate Management Best Practice Principles for the Listed Companies, please describe any discrepancy between the policies and their implementation in the Company: The Company has not defined its code of ethical business management but the operations follow the Ethical Corporate Management Best Practice Principles for the Listed Companies.
VI. Additional important information that may assist in the understanding of ethical corporate management operations: China Man-Made Fiber Code of Ethical Conduct It was resolved in the Board meeting on March 16, 2015
Article 1 (Purpose and basis) The Code is developed to guide the Directors, supervisors (or Independent Directors), managers and employees to comply with ethical standards and allow the Company's stakeholders to gain a better understanding about the Company's ethical standards. Article 2 (Subject of Application) This code of conduct applies to directors, supervisors (or independent directors), managers and employees. The above-mentioned subjects are hereinafter referred to as the company personnel. Article 3 (Principle of Good Faith) The Company personnel shall abide by the regulatory requirements and this code of conduct when performing their duties and maintain active, positive and responsible attitude, have empathy, value teamwork and principle of good faith and hold themselves to high ethical standards. Article 4 (Preventing Conflict of Interest) The Company personnel shall handle tasks in an objective and efficient manner and shall not direct improper benefits to themselves, spouses, parents, children or blood relatives within the second degree while holding positions in the Company. If the abovementioned people work for affiliates who have capital transactions, major assets transactions and buying and selling with the Company or the Company provides guarantee to the affiliates, the Company personnel shall take the initiative to explain if there is any potential conflict of interest and report the relation to the superiors or managers to prevent conflict of interest. Article 5 (Self-Interest Not Allowed) When the Company has an opportunity for profit, it is the responsibility of the Company's personnel to maximize the just and legal benefits that can be obtained by the Company. Company personnel shall not conduct the following acts: 1. Obtaining personal gain by using company property or information or taking advantage of their positions. 2. Engagement in competition with the Company. Article 6 (Confidentiality) 1. The Company personnel shall be bound by obligation to maintain the confidentiality of any information regarding the Company or its suppliers and customers, except when authorized or required by law to disclose such information. Confidential information includes any undisclosed information that, if exploited by a competitor or disclosed, could result in damage to the Company or the suppliers and customers. 2. The Company personnel shall keep secret information, technical data, personal data or other business information unknown to the public (whether verbal, in writing or with or without being marked with "Confidential") of the third-party, affiliates, users of affiliates or the Company confidential. Except for the performance of their tasks, the information shall not be arbitrarily inquired or used. Confidential information shall not be duplicated or produced in additional backup without the prior written consent of the Company. The information shall not be disclosed, mentioned or transferred to others in any way or published in any format. Article 7 (Fair Trade) 1. The Company's personnel shall treat all purchase (sales) customers, competitors and employees fairly, and may not obtain improper benefits through manipulation, concealment, or the abuse of the information learned by virtue of their positions, or through misrepresentation of important matters, or through other unfair trading practices. 2. Company personnel are expected to abide by the Company's ethical standards and principle of fair trade in their daily work and business operations. Pay attention to the following matters when accepting gifts or hospitality from companies who are interested parties:

Items for evaluation	Implementation Status
	Yes	No	Summary
(1) Do not request or expect or accept bribes, kickbacks, gifts or other illegitimate gains through the job position.
(2) If the gifts or hospitality from companies are found to be in violation of social etiquette or custom, they shall be rejected right away, and it is strictly forbidden to accept cash or negotiable securities as gifts.
(3) If, due to force majeure or the gifts or hospitality from companies are found to be in violation of social etiquette or custom after being accepted, the incident shall be reported to the superiors, and at the same time the top auditing supervisor shall be notified to determine further actions.
Article 8 (Proper Protection and Use of Company Assets)
Company personnel have the responsibility to safeguard company assets and ensure that they can be effectively and lawfully used for official business purposes to prevent any theft, negligence in care or waste of the assets.
Article 9 (Regulatory Compliance)
All the Company’s personnel shall be abide by all laws and regulations that govern corporate activities, corporate policies and the Securities and Exchange Act, and regulations on anti-insider trading shall be advocated. The Company's material undisclosed information shall not be used for engaging in securities trading.
Article 10 (Encouraging Reporting on Illegal or Unethical Activities)
Incidents suspected of or are found to be in violation of regulations or any code of ethical conduct shall be reported to supervisors or audit committee, managerial officers, human resources units, internal head of auditing or other appropriate individual, and sufficient information shall be provided to enable further responsive measures.
The Company will handle the reported cases in a confidential manner and do its best to protect the safety of the person filing the grievance. For those who make malicious or false reports, the Company will provide counseling or, if necessary, carry out punishment. Retaliation, threat or harassment as a result of the above shall be immediately reported to the superiors or managers, and the Company will immediately take appropriate measures.
Article 11 (Penalty and Remedy)
If the Company personnel are suspected of violating the code of ethical conduct, the Company shall handle the issues according to the related regulations. However, anyone who violates this code of conduct may file an appeal, and the Company may provide remedies for violations of the ethical code of conduct.
Article 12 (Procedures for Exemption)
If the directors, supervisors and managers are to be exempt from the requirements of this code of conduct, they shall be first approved by the board of directors.
The date of approval by the board for exemption, objection or reservation of the independent directors, exemption period and reasons and the applicable criteria shall be disclosed on the Market Observation Post System.
Article 13 (Disclosure Method)
This Code shall be published internally within the Company and disclosed in the annual report, prospectus and the Market Observation Post System, and the same applies to the amendment.
Article 14 (Enforcement)
This code of ethical conduct is to be implemented after the approval by the board, and the same applies to the amendment.

(IV) Important information regarding the Company's governance and the inquiry method: http://www.cmfc.com.tw

Consolidated company
Pan Asia Chemical Corporation

Items for evaluation	Implementation Status
	Yes	No	Summary
I. The policy and plan of business integrity
(I) Has the Company formulated an ethical corporate management policy that was approved by the board of directors, and clearly specified in the rules and external document the ethical corporate management policies and strategies and the commitment by the board of directors and senior management on rigorous and thorough implementation of the policies in internal management and in commercial activities?
(II) Has the Company established a risk assessment mechanism against unethical conduct, analyzed and assessed on a regular basis business activities within their business scope which are at a higher risk of being involved in unethical conduct, and established prevention programs accordingly which at least cover the prevention measures against the conducts listed in paragraph 2, Article 7 of the “Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies”?	V	V	(I) The Company has not explicitly stipulated matters related to ethical management; however, it adheres to the principles of integrity, transparency, and accountability in its operations. The Company continues to promote integrity-based policies and has established sound corporate governance and risk control mechanisms to foster a sustainable business environment. The Company has developed its Code of Ethical Conduct and required directors and executives to lead by example, follow the principle of good faith and build a corporate culture of sincerity and integrity.
(II) The Company first assesses the legality and the past transaction records based on good faith of the companies before establishing business relationships in order to avoid dealing with those who have flawed records. The Company also complies with the laws and regulations, requiring each donation and sponsorship to be reported and authorized by the proper authorization levels before being approved.
The Company’s Code of Ethical Conduct sets forth principles such as the “Prevention of Conflicts of Interest,” “Avoid Opportunities for Personal Gain,” “Fair Dealing,” and the “Proper Protection and Use of Company Assets,” all of which are to be adhered to in accordance with the principle of honesty and integrity to prevent employee misconduct.
In addition, both the Code of Ethical Conduct and	Not distinctive

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Items for evaluation	Implementation Status
	Yes	No	Summary
(III) Has the Company specified the operating procedures, guidelines for conducts punishment and appeal system for violations in the prevention programs, have they been implemented accordingly and regularly reviewed and revised the aforementioned programs?	V		the Company’s Employee Work Rules specify disciplinary measures to deter dishonest behavior.
(III) The Code of Ethical Conduct also explicitly “encourages the reporting of any illegal acts” or “violations of the code and outlines corresponding disciplinary” and remedial measures to prevent employee misconduct.
II. The Materialization of Business Integrity
(I) Has the Company assessed the ethics records of whom it has business relationships and include business conduct and ethics-related clauses in the business contracts?
(II) Has the Company set up a dedicated department that is subordinated to the Board to promote ethical corporate management, and does it regularly (at least once a year) report to the Board on its ethical corporate management policy and unethical conduct prevention program and monitor their implementation?
(III) Has the Company established policies to prevent conflict of interests, provide appropriate communication and complaint channels, and implement such policies properly?
(IV) Has the Company established effective accounting and internal control systems in place for the implementation of ethical corporate management? Has the internal audit department formulated relevant audit plans based on the assessment results of unethical conduct risk to perform audits on compliance with the unethical conduct prevention program or engage CPAs to perform such audits?	V	V	(I) The Company engages in transactions and purchases in accordance with the laws and regulations and reviews the contract performance of suppliers to prevent the engagement with those who have had records of unethical conduct.
(II) Although the Company has not established a dedicated unit for ethical management, it regularly reports the implementation of ethical conduct to the Board of Directors through its sustainability report. In August 2025, the Company presented the sustainability report to the Board, which included disclosures on the implementation of ethical management.
(III) The Company’s Code of Ethical Conduct includes provisions on the "Prevention of Conflicts of Interest" and encourages the reporting of any illegal acts or violations of ethical conduct. It also outlines related disciplinary and remedial measures.
(IV) The Company has established both a “Code of Ethical Conduct” and “Employee Work Rules on Rewards and Penalties” to prevent employee misconduct, and provides channels for reporting any illegal or improper acts. The Company has implemented an effective accounting system and	Not distinctive

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Items for evaluation	Implementation Status			Difference with other companies listed in TWSE/GTSM in best-practice principles of business integrity
	Yes	No	Summary
(V) Has the Company organized corporate management internal and external education and training programs on a regular basis?		V	internal control system. Operations are fully computerized and interlinked to ensure layered cross-checking and exception management. The Company’s internal audit framework operates on three levels: The first level is carried out by the Audit Office under the Board of Directors. An annual audit plan is developed to examine compliance with regulations and reduce the risk of misconduct. The Audit Office reports its findings quarterly to the Audit Committee and the Board. The second level consists of audits of the internal control system over financial reporting conducted annually by an external accounting firm. The third level is based on the principle that internal audit is the responsibility of all employees. Each department is required to conduct annual self-inspections to embed the internal control spirit at every level and ensure the effectiveness of the internal control system’s design and execution. The Company advocates for the principle of ethical business management and conveys the value to employees through meetings.

(V) The Company’s intranet provides access to the Code of Ethical Conduct, which is available for all employees to review at any time. | |
| III. The operations of the Company’s Report System
(I) Does the Company have a specific report and reward system stipulated, a convenient report channel established and a responsible staff designated to handle the individual being reported? | V | | (I) The Company has established a Code of Ethical Conduct that explicitly encourages the reporting of any illegal acts or violations of ethical standards. If any dishonest conduct is identified, employees may report the matter directly to the supervisors, including the Supervisors, the Audit Committee, management, the HR department, the head of | Not distinctive |

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Items for evaluation	Implementation Status			Difference with other companies listed in TWSE/GTSM in best-practice principles of business integrity
	Yes	No	Summary
(II) Has the Company established the standard operation procedures for the investigation of complaints as reported, follow-up actions after the investigation, and related mechanisms for confidentiality?	V		internal audit, or other appropriate supervisors. Sufficient information should be provided to enable the Company to properly address the matter. Disciplinary actions will be taken against violators, and designated personnel will be assigned to handle reported cases to ensure confidentiality is fully upheld.
(III) Has the Company taken proper measures to protect the whistle-blowers from suffering any consequence of reporting an incident?	V		(II) The Company has also implemented both a “Code of Ethical Conduct” and “Employee Work Rules on Rewards and Penalties” to prevent misconduct. Channels are provided for employees to report any unlawful or inappropriate behavior. Disciplinary actions will be taken where necessary, and the Company assigns personnel to handle each case with strict confidentiality.
(III) To prevent retaliation, the Code of Ethical Conduct clearly states that the Company will handle all reports in a confidential manner and will make every effort to protect the safety of the whistleblower. The Company is committed to the principles of fairness and due process and to safeguarding employee rights.
IV. Enhancing Information Disclosure
Has the Company disclosed its Ethical Corporate Management Best Practice Principles and the results of their implementation on its website and MOPS?	V		The Company has already disclosed its "Code of Ethical Conduct" on MOPS.	Not distinctive
V. If the company has established corporate governance policies based on the Ethical Corporate Management Best Practice Principles for the Listed Companies, please describe any discrepancy between the policies and their implementation in the Company: The Company has not defined its code of ethical business management but the operations follow the Ethical Corporate Management Best Practice Principles for the Listed Companies.
VI. Other important information for facilitating the understanding of ethical corporate management and its implementation (i.e., the examination of and amendments to the Ethical Corporate Management Best Practice Principles it established):

Pan Asia Chemical Corporation Code of Ethical Conduct | | | | |

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139 -

Items for evaluation	Implementation Status
	Yes	No	Summary
Approved by the board on March 16, 2015
I. Purpose of institution and normative reference
To help the Company's directors, supervisors, managerial officers (including general managers or their equivalents, assistant general managers or their equivalents, department directors or their equivalents, chief financial and chief accounting officers and other persons authorized to manage affairs and sign documents on behalf of a company) and other employees to act in line with ethical standards and to help interested parties better understand the ethical standards of the Company, this code of conduct is developed in accordance with the Guidelines for the Adoption of Codes of Ethical Conduct for the Listed Companies.
II. Subject of Application
This code of conduct applies to directors, supervisors, managers and other employees. The above-mentioned subjects are hereinafter referred to as the company personnel.
III. The content
The Company's code of ethics includes the following eight aspects:
(I) Prevention of the conflict of interest:
The Company’s personnel shall handle tasks in an objective and efficient manner and shall not gain improper benefits to themselves, spouses, parents, children or blood relatives within the second degree while holding positions in the Company.
If the abovementioned people work for affiliates who have capital transactions, major assets transactions and buying and selling with the Company or the Company provides guarantee to the affiliates, the Company personnel shall take the initiative to explain if there is any potential conflict of interest and report the relation to the superiors.
(II) Avoidance of seeking personal interest:
1. The Company’s personnel shall not conduct the following acts
(1) Seeking opportunities for personal interest with the use of corporate assets, information or the duties and functions they performed.
(2) Acquisition of personal interest with the use of company assets, information, or the duties and functions they performed.
(3) Engagement in competition with the Company.
2. When there is an opportunity for the Company to generate profits, the Company’s staff should strive to help generate legitimate interests for the Company.
(III) Confidentiality:
The Company personnel shall be bound by obligation to maintain the confidentiality of any information regarding the Company or its suppliers and customers, except when authorized or required by law to disclose such information. Information for non-disclosure includes the undisclosed information possibly be used by competitors or the disclosure of which may cause damage to the Company or the customers.
The Company personnel shall keep secret information, technical data, personal data or other business information unknown to the public (whether verbal, in writing or with or without being marked with "Confidential") of the third-party, affiliates, users of affiliates or the Company confidential. Except for the performance of their tasks, the information shall not be arbitrarily inquired or used. Confidential information shall not be duplicated or produced in additional backup without the prior written consent of the Company. The information shall not be disclosed, mentioned or transferred to others in any way or published in any format.
(IV) Fair Trade:
The Company’s personnel shall treat all purchase (sales) customers, competitors and employees fairly, and may not obtain improper benefits through manipulation, concealment, or the abuse of the information learned by virtue of their positions, or through misrepresentation of important matters, or through other unfair trading practices.
(V) Protection and appropriate use of company assets:

Items for evaluation	Implementation Status
	Yes	No	Summary
Company personnel have the responsibility to safeguard company assets and ensure that they can be effectively and lawfully used for official business purposes to prevent any theft, negligence in care or waste of the assets.
(VI) Compliance with applicable laws
Company personnel shall abide by the Securities and Exchange Act and other related regulations.
(VII) Encourage the reporting of any illegal act or act of defiance of the Code of Conduct:
Incidents suspected of or are found to be in violation of regulations or any code of ethical conduct shall be reported to supervisors, managerial officers, human resources units, internal head of auditing or other appropriate personnel. Sufficient information shall be provided to enable further responsive measures.
The Company will handle the reported cases in a confidential manner and do its best to protect the safety of the person filing the grievance. For those who make malicious or false reports, the Company will provide counseling or, if necessary, carry out punishment. Retaliation, threat or harassment as a result of the above conduct shall be immediately reported to the superiors or managers, and the Company will immediately take appropriate measures.
(VIII) Penalty:
If the Company personnel are suspected of violating the code of ethical conduct, the Company shall handle the issues according to the related regulations. However, anyone who violates this code of conduct may file an appeal, and the Company may provide remedies for violations of the ethical code of conduct.
IV. The Waiver Procedure
If the directors, supervisors and managers are to be exempt from the requirements of the Company's code of conduct, they shall be first approved by the board of directors.
The date of approval by the board for exemption, objection or reservation of the independent directors, exemption period and reasons and the applicable criteria shall be disclosed on the Market Observation Post System.
V. Means of Disclosure
The Code of Ethical Conduct established by the Company shall be disclosed on its website, in the annual report, prospectus and on MOPS, and the same shall apply for any amendment.
VI. Implementation
This code of ethical conduct is to be implemented after the approval by the board, and the same applies to the amendment.

(VII) Important information regarding the Company's governance operations and the inquiry method: http://www.pacc.com.tw

Taichung Commercial Bank

Items for evaluation	Implementation Status			Difference with other companies listed in TWSE/GTSM in best-practice principles of business integrity
	Yes	No	Summary
I. The policy and plan of business integrity
(1) Has the Bank formulated an ethical corporate management policy that was approved by the board of directors, and clearly specified in the rules and external document the ethical corporate management policies and strategies and the commitment by the board of directors and senior management on rigorous and thorough implementation of the policies in internal management and in commercial activities?	☑		(I) The Bank adopted the "Ethical Corporate Management Best Practice Principles" pursuant to a resolution of the Board of Directors on December 18, 2019, explicitly stipulating that directors, managers, employees, mandates, or persons having substantial control shall not engage in unethical conduct in the course of commercial activities. The principles clearly prescribe the policies and practices for ethical corporate management, as well as the commitment of the Board of Directors and senior management to actively implement the ethical corporate management policy. In addition, employees are required, as part of their employment conditions, to comply with the ethical corporate management policy.
(II) The Bank discloses its Statement on Internal Control Systems on its official website, declaring that it has complied with the Regulations Governing Internal Control and Audit Systems for Financial Holding Companies and Banking Industries, and also publishes items requiring enhancement in the internal control system together with improvement plans.
(III) In 2025, the Bank's directors signed declarations of compliance with ethical corporate management.	no difference
(2) Has the Bank had established a risk assessment mechanism against unethical conduct, regularly analyzed and assessed business activities within the business scope which were at a higher risk of being involved in unethical conduct and established prevention programs accordingly that at least included the preventive measures against the conducts specified in Article 7, paragraph 2 of the	☑		(I) In order to implement integrity management policies and actively prevent dishonest conducts, the "Operational Procedures for Integrity management and Guidelines for Conduct" and the "Code of Business Conduct for the Board of Directors and Manager." They stipulate matters to pay attention to during business execution by the Chairman, managers, and employees. In addition, they shall fulfill the obligation of care of a good administrator, urge the Company to prevent dishonest conduct, timely review implementation results and continue to make improvement to	no difference

141 -

Items for evaluation	Implementation Status			Difference with other companies listed in TWSE/GTSM in best-practice principles of business integrity
	Yes	No	Summary
“Ethical Corporate Management Best-Practice Principles for TWSE/GTSM Listed Companies?”			ensure the implementation of ethical corporate management.
(II) The Bank has established the dishonest conduct risk assessment mechanism. Through it, business activities involving higher dishonest conduct risks within the business scope are periodically analyzed. Prevention plans have been set up accordingly. The appropriateness and effectiveness of the prevention plans are periodically reviewed. They also cover the “prohibition of provision or acceptance of illegitimate profit,” “ethical corporate management evaluation before establishing business relations,” “prohibition of facilitation payment,” “prohibition of insider trading,” “intellectual property management and retention,” “confidentiality operations” and related preventive measures. The bank-wide dishonest conduct risk evaluation report was submitted to the Board of directors on April 9, 2026.
(III) The bank has set up the “Operating Standards for External Donations” in accordance with relevant laws and regulation. The donation recipients and approved amounts shall be in accordance with the said standards. The “Directions for Professional Ethics and Conducts of Financial Management Personnel” have been set up. They clearly state that employees recommend and recruit financial management businesses according to the principle of integrity;
(IV) In the “Standards for Employee Conduct,” a chapter on fair trading principles has been created, which explicitly stipulates matters not to engage in during various operations, trading conducts or duty fulfillment. At the same time, the principles of fairness, reasonability, equality, mutual benefits, and integrity shall be abided by to maintain fair trading order.
(3) Has the Bank specified the operating procedures, guidelines for conducts punishment and appeal system for violations in the prevention programs,	☑		(I) Relevant operational handling procedures, rewards and punishment, complaint system, and disciplinary disposal have been established in the bank’s “Operational Procedures for Integrity	no difference

142 -

Items for evaluation	Implementation Status			Difference with other companies listed in TWSE/GTSM in best-practice principles of business integrity
	Yes	No	Summary
have they been implemented accordingly and regularly reviewed and revised the aforementioned programs?			management and Guidelines for Conduct.” Arrangements are also made for the chairman, managers, or senior management to periodically convey to importance of integrity to the board of directors, employed persons, and appointed persons. In case of serious offenses of bank employees in violation of integrity, the said employees shall be demoted or dismissed according to relevant laws and regulation or the company’s personnel regulations.

(II) The bank actively prevents dishonest conducts and includes integrity management policies into employee assessment. An explicit and effective punishment and complaint system shall be set up for periodic implementation and review. | |
| II. The Materialization of Business Integrity
(I) Has the Bank evaluated the record on ethical practices of its counterparties, and has specified the clause of business ethic in the agreements binding the Bank and its counterparties? | ☑ | | Has the Bank paid attention to the record of ethical practices of contractors in procurement or tender invitation, and has signed the clauses in the agreements on the consequences of the violation of ethical practices, and signed the “Letter of Commitment for Ethical Corporate Management, Human Rights, and Environmental Sustainability.” | no difference |
| (II) Has the Bank set up a dedicated department that is subordinated to the Board to promote ethical corporate management, and does it regularly (at least once a year) report to the Board on its ethical corporate management policy and unethical conduct prevention program and monitor their implementation? | ☑ | | (I) The Board of Directors’ office promotes ethical corporate management policies, assists the Board and the management in setting up and supervising ethical corporate management policies and prevention plans. The implementation situation shall be reported to the Sustainable Development Committee and the Board of each year. It is mainly responsible for the following matters:
1. Assist the incorporation of integrity and ethical value into corporate operation strategies. Set up related fraud prevention measures in conjunction with the legal system.
2. Periodically analyze and evaluate dishonest conduct risk within the business scope in order to set up dishonest conduct prevention plans. In the plans, work related standard operating procedures and guidelines or conduct shall be set up.
3. Plan internal organization, preparation and responsibilities, or | no difference |

143 -

Items for evaluation	Implementation Status
	Yes	No	Summary
			business activities involving higher dishonest conduct risk within the business scope, set up a mutual supervision and balancing mechanism.
4. The promotion and coordination of integrity policy advocacy and training.
5. Plan the reporting system to ensure implementation effectiveness.
6. Assist the board of directors and senior management in inspecting and evaluating whether preventive measures for integrity management implementation are operating effectively. The compliance situation of relevant business processes shall also be periodically evaluated and made into a report.
7. Produce and properly keep documented information on the ethical corporate management policy, the implementation of commitment, and relevant documented information. Assist the incorporation of integrity and ethical value into corporate operation strategies. Set up related fraud prevention measures in conjunction with the legal system.
(II) The implementation status of ethical corporate management for 2025 was reported to the Board of Directors on April 9, 2026.
(III) Has the Bank mapped out the policy for the avoidance of the conflict of interest and has provided suitable channels for such purpose, and properly pursued the policy?	☑		(I) Control and archiving of stakeholder information is based on the Bank’s Policy Governing Control of Stakeholder Information and Lending. The Bank has also formulated a Policy Governing the Management of Transactions with Stakeholders Other than Lending to prevent conflicts of interest. The Code of Conduct for Directors and Managers also contains provisions stipulating recusal to avoid conflict of interest and thereby facilitate implementation of ethical corporate management. Directors are also required to exercise self-discipline and refrain from mutual support in improper dealings.
(II) The Bank has a designated spokesperson, acting spokesperson	no difference

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Items for evaluation	Implementation Status			Difference with other companies listed in TWSE/GTSM in best-practice principles of business integrity
	Yes	No	Summary
			contact hotline, and Audit Committee contact hotline on the bank’s external official website, thereby providing a channel for making statements.
(IV) Has the Bank established effective accounting systems and internal control systems to implement ethical corporate management, and has the internal audit department drawn up relevant audit plans based on the results of the assessment of the risk of unethical conduct, and used the audit plan to check the compliance of the prevention of unethical conducts? Or has CPAs been appointed to perform the audit?	☑		In accordance with the Bank’s “Implementation Regulations for Internal Audit System,” periodic inspection shall be conducted and the annual audit plan shall be formulated. Improvement suggestion shall also be timely provided. The audit business should be reported to the Board and the Audit Committee every six months. The “Accounting Department” has been set up, and the Bank’s “accounting system” has been established. There shall be no external accounts or confidential accounts. Furthermore, the Deloitte and Touche has been appointed to periodically inspect financial statements.	no difference
(V) Has the Bank organized internal and external training on ethical corporate management?	☑		(I) The Bank regularly holds integrity management related educational training, such as personal information protection system, money laundering prevention, consumer banking and credit business, principle to treat clients fairly, business integrity policy, whistleblower protection and important customer rights and so on. The issues shall be listed as internal educational training teaching material. Personnel shall also be timely dispatched to attend related courses organized by external agencies. The 2025 education training conduction situation is as follows:
1. All the employees are required to join the aforementioned online course and pass the test (every person is required to complete more than 12 hours of courses and complete the test every year). A total of 2,970 people completed the training, with 39,650 hours of training in total.
2. In March 2025, the Bank commissioned the Securities and Futures Institute to conduct a three-hour course titled "Friendly Finance - Corporate Integrity, Fair Customer Treatment, and Empowerment of Financial Consumers." The course covered topics including corporate integrity and corporate governance, business and human rights, consumer	no difference

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Items for evaluation	Implementation Status
	Yes	No	Summary
			protection and the role of financial consumers, protection and empowerment of financial consumers, and the principles of fair customer treatment. Participants included directors, the corporate governance officer, managerial officers, directors and supervisors of subsidiaries, and legal compliance supervisors and personnel of relevant departments. In October 2025, the Bank commissioned the Taiwan Academy of Banking and Finance to conduct a three-hour course titled "Legal Compliance: Information Governance Risk Management, Anti-Money Laundering, and Counter-Terrorism Financing." The course covered topics including anti-money laundering and counter-terrorism financing, as well as information governance risk management. Participants included directors, the corporate governance officer, managerial officers, directors and supervisors of subsidiaries, and legal compliance supervisors and related personnel of relevant departments.
3. Advocacy on the bank’s integrity management policy was conducted in 2025. The contents included: “the guideline for conduct of integrity management and dishonest conducts and preventive plans.”
(II) Self-auditor workshops are organized regularly every year and “three lines of defense” concepts are reinforced and implemented through case studies to ensure effective implementation of self-audits, strengthen internal control of business units and prevent the occurrence of unethical conduct.
(III) Legal compliance awareness of employees is strengthened through education on cases of fines and sanctions in the financial industry and the main focus of inspections and internal audits of domestic banks made public by the competent authority.

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Items for evaluation	Implementation Status			Difference with other companies listed in TWSE/GTSM in best-practice principles of business integrity
	Yes	No	Summary
III. The reporting system of the Bank in action
(I) Has the Bank established a reporting and reward system and the channels for facilitating the report on unethical practices, and has appointed designated personnel to handle the subject of reporting?	☑		In accordance with the “Regulations to Handling of Reported Cases, the “Employee Work Rules” stipulates reporting and rewarding systems. Reporting hotline, reporting email, and email box acceptance, and other acceptance channels have also been set up. The dedicated unit shall accept and track reported matters.	no difference
(II) Has the Bank established the standard operation procedures for the investigation of complaints as reported, follow-up actions after the investigation, and related mechanisms for confidentiality?	☑		(I) The Bank has established the “Regulation for Human Resources Evaluation and the Establishment of the Evaluation Committee” and the “Regulation Governing the Complaints of Sexual Harassment and Related Punishment” and also the review and investigation procedure, provisions for the avoidance of the conflict of interests by stakeholders, and confidentiality and no-disclosure mechanism.
(II) In accordance with the “Regulation to Handling of Reported Cases,” the “Reported Case Review Committee” responsible for reviewing reported cases has been set up. It is stipulated that for reported events verified to be true, the whistleblower shall be given appropriate rewards according to the employee work rules; for reported cases that are falsely reported or with false evidence, the cases will be transferred to the “the Personnel Arbitration and Assessment Committee” or disposal. The dedicated department or office shall request relevant business management units to review the internal control system and operational procedures and propose improvement measures. In case of major violations or matters that subject the bank to major damage, the matters will be reported to the independent directors. The disposal method and review and improvement measures shall be reported to the board of directors.
(III) When stipulating reported case acceptance and investigation procedures, the whistleblower’s identity and reported content should be kept confidential. Information that adequately leads to the whistleblower’s identity shall not be disclosed. Unless	no difference

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Items for evaluation	Implementation Status			Difference with other companies listed in TWSE/GTSM in best-practice principles of business integrity
	Yes	No	Summary
			otherwise provisioned by law, browsing or copying by a third party is prohibited.
(III) Has the Bank taken protection measures to protect the informant from improper treatment after reporting on unethical practices?	☑		(I) Under the “Regulations Governing the Implementation of Compliance System”, the heads of all functional units shall not take any revenge or harmful action against the Compliance Officer. The Legal and Compliance Department shall pay close attention to safeguard the rights and interest of the compliance officers of relevant functional units.
(II) The “Regulations Governing the Handling of Reporting Cases” specify it is mandatory for the whistleblower identity confidentiality. The whistleblower shall not be discharged, dismissed, demoted, receive reduced pay as a result. The whistleblower shall not be deprived of rights and interests entitled by law, contract, or custom or be subject to adverse action of a punitive nature.	no difference
IV. Enhancing Information Disclosure
Has the Bank disclosed the content of ethical corporate management best practice principles and the result at its official website and MOPS?	☑		The Bank discloses ethical corporate management related regulations and practices on its official website and MOPS, including the Ethical Corporate Management Best Practice Principles, Operational Procedures for Integrity management and Guidelines for Conduct, Code of Conduct for Directors and Managers, Procedures for Handling Material Inside Information, Rules of Procedure for Board Meetings, the Audit Committee Charter, due care and fiduciary duties of Directors, managers and employees as good administrators, performance of operations based on principles of good faith and trust, recusal of Directors if an interested party relationship exists with regard to an agenda item of a Board meeting, and faithful exercise of duties by the Audit Committee members with the due care of good administrators.	no difference
V. If the Company has established corporate governance policies based on the Ethical Corporate Management Best Practice Principles for the Listed Companies, please describe any discrepancy between the policies and their implementation in the Company:

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Items for evaluation	Implementation Status
	Yes	No	Summary
The Company has established its ethical corporate management principles in accordance with the Ethical Corporate Management Best Practice Principles for the Listed Companies.
VI. Additional important information that may assist in the understanding of corporate business integrity operations: The content of the Bank’s “Ethical Corporate Management Best Practice Principles” is irregularly revised based on regulatory requirements and practical needs. The corporate management implementation situation shall be periodically reported to the Sustainable Development Committee and the Board.

Other major information

Please visit the Market Observation Post System at http://mops.twse.com.tw for important messages and announcements.

(VIII) The following shall be disclosed in the pursuit of the internal control system

Declaration of Internal Control Policies

China Man-Made Fiber Corporation
Statement of Declaration of Internal Control System

Date: March 9, 2026

The following declaration is based on the 2025 self-audit over the Company’s internal control system:

I. The Company is aware that the establishment, execution, and maintenance of its internal control policies are the responsibilities The Company’s board of directors and managers. These policies were implemented throughout The Company. The purpose is to provide reasonable assurance on the achievement of operating effectiveness and efficiency (including profits, performance, and assets safeguarding), reporting matters with reliability, timeliness, and transparency, and compliance with the relevant law and regulations.

II. Internal control policies are prone to limitations. No matter how robustly designed, effective internal control policies merely provide reasonable assurance to the achievements of the three goals above. Furthermore, environmental and situational changes may affect the effectiveness of internal control policies. However, self-supervision measures were implemented within The Company’s internal control policies to facilitate immediate rectification once procedural flaws have been identified.

III. The Company has based on the criteria of the internal control system effectiveness in the “Regulations Governing the Establishment of Internal Control System by Public Companies” (referred to as the Regulations” hereinafter) to determine the effectiveness of the internal control system design and implementation. The criteria introduced by “The Governing Principles” consisted of five major elements, each representing a different stage of internal control: 1. Control environment, 2. Risk evaluation and response, 3. Procedural control, 4. Information and communication, 5. Supervision. Each element further contains several items. Please refer to “The Governing Principles” for details.

IV. The Company adopted the abovementioned criteria to evaluate the effectiveness of its policy design and execution.

V. Exactly pursuant to the evaluation results of the preceding paragraph, the Company firmly believes that the Company’s internal control system (including the supervision and management of subsidiaries) as of December 31, 2025, including awareness of the effectiveness of operations and the extent to which the efficiency goals are achieved where the reporting system proves reliable in real-time, transparent and consistent with laws and ordinances concerned, the design and implementation of the relevant internal control system and the like are effective enough to reasonably ensure the successful achievement of the aforementioned goals.

VI. The “Internal Control System Declaration” will be the main content of the Company’s annual report and prospectus for the reference of the public. Any misrepresentation or concealment of the aforementioned disclosures shall be liable to violation of Articles 20, 32, 171 and 174 of the Securities and Exchanges Act and the legal consequences thereof.

VII. This declaration was approved by The Company’s Board of Directors in the meeting dated March 9, 2026. None of the 9 directors present to the meeting held any objections, and had unanimously agreed to the contents of this declaration.

China Man-Made Fiber Corporation

Chairman: Kuei-Hsien Wang
President: Jeh-Yi Wang

For the CPAs specifically commissioned to review the internal control system, the Independent Auditor’s Report should be disclosed: None.
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(IX) Important Resolution of the Board of Directors and implementation as of the Publication Date of the Annual Report:

The important resolutions reached in the 2025 shareholders’ meeting and their implementation:
(1) Ratified the 2024 business report and financial statements.
(2) Ratified the proposal for the earning distribution for 2024.
Implementation Status: No shareholder dividends or bonuses were distributed, and profits were transferred to retained earnings.
(3) Approved the amendments to the Company’s Articles of Incorporation.
Implementation status: Handling in accordance with amended laws, regulations, and procedures
(4) Nine directors for the 28th term were elected, and the Board of Directors has operated smoothly.
Major Board of Directors resolutions:
March 3, 2025
Approved the Company’s bank financing proposal, 2024 Internal Control System Statement, 2024 parent company only financial statements, consolidated financial statements and business report, 2024 earnings distribution proposal, recognition of asset impairment for the cogeneration plant in accordance with IAS 36, proposed ratios for 2024 directors’ remuneration and employee compensation from earnings distribution, removal of non-compete restrictions for the Company’s corporate governance officer, amendments to certain provisions of the Company’s Articles of Incorporation, and the date and agenda items for the 2025 shareholders’ meeting.
April 18, 2025
Approved the review of 1% shareholder proposals and director (including independent director) nominations for the 2025 shareholders’ meeting.
May 12, 2025
Approved the Company’s bank financing proposal, the consolidated financial statements for Q1 2025, the proposed loan of funds to Nan Chung Petrochemical Corporation, and amendments to certain provisions of the “Internal Control System for Stock Affairs Operations.”
June 11, 2025
Elected the new Chairman and Vice Chairman and appointed three members to the Remuneration Committee for the new term.
August 11, 2025
Approved the Company’s bank financing proposal, the consolidated financial statements for Q2 2025, amendments to certain provisions of the Procedures for the Preparation and Assurance of Sustainability Reports, acknowledgment of the completed 2024 sustainability report with a limited assurance report issued by the CPA, amendments to certain provisions of the Procedures for Acquisition or Disposal of Assets, amendments to the Internal Control System for Payroll Operations and Internal Audit Regulations, amendments to the Internal Control System for Procurement and Payment Cycles - Procurement Operations and Engineering Contracting Procedures and related internal audit regulations, amendments to the Approval Authority Matrix for materials, engineering, finance and accounting matters, the 2025 salary adjustment proposal for insiders, the 2024 directors’ earnings distribution and internal employee compensation distribution proposal, the definition of entry-level employees, personnel proposals, the reassignment and remuneration proposal for the Chief Information Security Officer, the reassignment and remuneration proposal for the accounting officer, the proposed property lease agreement with Han Hua Co., Ltd., and the proposed industry-academia collaboration and academic feedback mechanism agreement with National Central University.
November 10, 2025
Approved the Company’s bank financing proposal, the proposed subscription to the 2025 cash capital increase of Taichung Commercial Bank, the consolidated financial statements for Q3 2025, the 2025
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remuneration for the appointment of Deloitte & Touche, the 2026 budget proposal, the 2026 internal audit plan, amendments to certain provisions of the “Sustainable Development Best Practice Principles,” amendments to certain provisions of the “Internal Control System for Stock Affairs Operations,” the proposed property lease agreements with Chuang Chien Investment Co., Ltd. and Formosa Imperial Wineseller Corp., the 2025 year-end bonus proposal for insiders, and the formulation of the 2026 remuneration policy for directors and insiders.

(X) If the directors or supervisors have different opinions on the resolutions reached by the Board of Directors with a record or written statement made in the most recent year and up to the printing date of the annual report, please state the content of the opinion: Not applicable.

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IV. Disclosure of CPAs' remuneration

Unit: NT$ thousand

Firm Name	Name of CPA	The duration of the audit	Auditing fee	Non-audit fees	Total	Remark
Deloitte and Touche	Shu-Lin Liu	2025.1.1 - 2025.12.31	5,630	126	5,756	Non-audit fees included NT$100 thousand for a transfer pricing report and NT$26 thousand for offshore company maintenance.
	Pan-Fa Wang

Commissioned a new CPA Firm to serve for an audit fee less than the year before: Not applicable.
Audit fee of current year is more than 10% less than the year before: None.

V. Change of CPA

As CPA Su-Huan Yu planned to retire, she was replaced starting from the second quarter of 2024 by CPAs Shu-Lin Liu and Pan-Fa Wang.

VI. Where the Company's Chairman, President, or any manager in charge of finance or accounting matters has held a position at the CPA's firm of its CPAs or at an affiliated company of the CPA's firm in the most recent year: None.

VII. Transfer of equity and changes in equity pledges of Directors, supervisors, managers, and shareholders with a shareholding of 10% and above in the most recent year and up to the date of publication of the annual report:

(I) Changes in shareholdings

Title	Name	2025		As of February 28, 2026
		Increase (decrease) in No. of Shares	Increase (decrease) in No. of Pledged Shares	Increase (decrease) in No. of Shares	Increase (decrease) in No. of Pledged Shares
Institutional Director	Chuang Chien Investment Co., Ltd.	0	(2,000,000)	0	0
Institutional Director	Pan Asia Investment Corporation	0	8,400,000	0	0
President	Jeh-Yi Wang	0	0	0	0
Assistant VP	Hung-Yang Wu	0	0	0	0
Chief financial officer	Po-Nien Lin	0	0	0	0
Chief accountant	Yun-Yun Hsu	0	0	0	0
Corporate Governance Officer	Lai-Hsiang, Tsai	0	0	0	0
Major shareholder	Pan Asia Chemical Corporation	4,574,000	0	0	0

(II) Information on equity transfer: The counterparties in the above equity transfer are not related parties; therefore, the item is not applicable.
(III) Information of shares ownership pledge: Not applicable, because the counterparts of said shares ownership pledge are not stakeholders.

153 -

VIII. Information shareholders holding over 10% of the shares who are related to each other or are spouses or second degree relatives
February 28, 2026

NAME	OWN SHAREHOLDINGS		SHARES HELD BY SPOUSE AND MINORS		SHAREHOLDINGS UNDER THE TITLE OF A THIRD PARTY		TITLE, NAME AND RELATIONSHIP OF THE TOP TEN SHAREHOLDERS WHO HAVE MUTUAL RELATIONSHIP AS SPOUSE OR BLOOD RELATIVE WITHIN THE SECOND DEGREE.
	Quantity	Shareholding ratio	Quantity	Shareholding ratio	Quantity	Shareholding ratio	Name	Affiliation
Pan Asia Chemical Corporation	266,074,828	15.78%	0	0	0	0	Sheen Ren Knitting Factory Co., Ltd. Chuang Chien Investment Co., Ltd. Co., Ltd. Chou Chin Industrial Co., Ltd. Yu Hui Co., Ltd De Xing Investment Company Chou Chin Industrial Co., Ltd.	Corporate director of the Pan Asia Chemical Corporation Substantial related party Substantial related party Same responsible person Same responsible person Substantial related party
Sheen Ren Knitting Factory Co., Ltd.	73,601,678	4.37%	0	0	0	0	Pan Asia Chemical Corporation Chuang Chien Investment Co., Ltd. Co., Ltd. Chou Chin Industrial Co., Ltd. Yu Hui Co., Ltd De Xing Investment Company Chou Chin Industrial Co., Ltd.	Institutional Director of Pan Asia Chemical Corporation Same responsible person Same responsible person Same responsible person Same responsible person Same responsible person
Chou Chin Industrial Co., Ltd.	61,487,744	3.65%	0	0	0	0	Pan Asia Chemical Corporation Sheen Ren Knitting Factory Co., Ltd. Chuang Chien Investment Co., Ltd. Co., Ltd. Pan Asia Investment Corporation Yu Hui Co., Ltd De Xing Investment Company	Substantial related party Same responsible person Same responsible person Same responsible person Same responsible person Same responsible person
Pan Asia Investment Corporation	52,393,736	3.11%	0	0	0	0	Sheen Ren Knitting Factory Co., Ltd. Chou Chin Industrial Co., Ltd. Chuang Chien Investment Co., Ltd. Co., Ltd. Pan Asia Chemical Corporation Yu Hui Co., Ltd De Xing Investment Company	Same responsible person Same responsible person Same responsible person Same responsible person Same responsible person Same responsible person
Chuang Chien Investment Co., Ltd.	43,929,431	2.61%	0	0	0	0	Pan Asia Investment Corporation Pan Asia Chemical Corporation Chou Chin Industrial Co., Ltd. Yu Hui Co., Ltd De Xing Investment Company Sheen Ren Knitting Factory Co., Ltd.	Same responsible person Institutional Director of Pan Asia Chemical Corporation Same responsible person Same responsible person Same responsible person Same responsible person
Yu Hui Co., Ltd	16,664,032	0.99%	0	0	0	0	Chou Chin Industrial Co., Ltd. Chuang Chien Investment Co., Ltd. Co., Ltd. Pan Asia Chemical Corporation Pan Asia Investment Corporation De Xing Investment Company Sheen Ren Knitting Factory Co., Ltd.	Same responsible person Same responsible person Same responsible person Same responsible person Same responsible person Same responsible person
De Xing Investment Company	15,294,530	0.91%	0	0	0	0	Chou Chin Industrial Co., Ltd. Chuang Chien Investment Co.,	Same responsible person Same responsible person Same responsible person Same responsible person

| | | | | | | | Ltd. Co., Ltd.
Pan Asia Chemical Corporation
Yu Hui Co.,Ltd
Pan Asia Investment Corporation
Sheen Ren Knitting Factory Co., Ltd. | Same responsible person
Same responsible person | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Chou Chin Industrial,
Sheen Ren Knitting Factory Co., Ltd., Chuang Chien Investment Co. Ltd., Pan Asia Investment, Yu Hui Co.,Ltd, De Xing Investment Company, and PACC Chairman: Kuei-Hsien Wang | 0 | 0 | 0 | 0 | 0 | 0 | N/A | N/A | |
| JP Morgan Chase N.A.,
Taipei Branch as a custodian for Vanguard Total International Stock Index Fund | 12,691,236 | 0.75% | 0 | 0 | 0 | 0 | N/A | N/A | |
| Hung-Chih Chiu | 12,580,000 | 0.75% | 0 | 0 | 0 | 0 | N/A | N/A | |
| JP Morgan Chase Taipei branch as a custodian for Vanguard Emerging Markets Stock Index Fund Investor Shares managed by the Vanguard Group | 10,126,016 | 0.60% | 0 | 0 | 0 | 0 | N/A | N/A | |

155 -

IX. Investments jointly held by the Company, the Company's Directors, supervisors, managers, and enterprises directly or indirectly controlled by the Company, and the shareholdings in aggregate of the above parties:

Unit: Thousand Shares; %

Investee	The Company's investment		Invested by businesses directly or indirectly controlled by Directors, supervisors, and managers		Comprehensive investment
	Quantity	Shareholding ratio	Quantity	Shareholding ratio	Quantity	Shareholding ratio
Taichung Commercial Bank Co., Ltd.	1,277,7681	21	358,973	6	1,636,741	27
Pan Asia Chemical Corporation	79,259	44	20,687	5	199,946	49
De Xing Investment Company	79,000	100	0	0	79,000	100
Taichung Securities Investment Trust Co., Ltd.	922	3	14,695	47	15,617	50
Nan Chung Petrochemical Corporation	100,000	50	0	0	100,000	50
Chou Chin Industrial Co., Ltd.	38,759	47	2,735	3	41,494	50

Note: The Company's investment in the equity method

Three. Fundraising Status

I. Capital and shares

(I) Source of share capital in the most recent year and up to the publication date of the annual report

Year /month	Issuance price	Authorized capital		Paid-in capital		Remark
		Shares	Amount	Shares	Amount	Capital Sources	Paid in properties other than cash	Others
2021/11	10	2,100,000,000	21,000,000,000	1,686,209,745	16,862,097,450	November 12, 2021 Jing-Shou-Shang-Zhi Document #11001206600 approved recapitalization of earnings at NT$648,425,280.	N/A	N/A
Type of shares	Authorized capital			Remark
---	---	---	---	---
	Outstanding shares	Unissued Shares	Total (Note)
Common stock	1,685,905,745	414,094,255	2,100,000,000	Shares outstanding are all publicly traded.

Self-registration system information: None
(II) List of major shareholders

February 28, 2026

Name of Principle shareholder	Shares	Quantity of Shares
Pan Asia Chemical Corporation	266,074,828	15.78%
Sheen Ren Knitting Factory Co., Ltd.	73,601,678	4.37%
Chou Chin Industrial Co., Ltd.	61,487,744	3.65%
Pan Asia Investment Corporation	52,393,736	3.11%
Chuang Chien Investment Co., Ltd.	43,929,431	2.61%
Yu Hui Co.,Ltd	16,664,032	0.99%
De Xing Investment Company	15,294,530	0.91%
JP Morgan Chase N.A., Taipei Branch as a custodian for Vanguard Total International Stock Index Fund	12,691,236	0.75%
Hung-Chih Chiu	12,580,000	0.75%
JP Morgan Chase Taipei branch as a custodian for Vanguard Emerging Markets Stock Index Fund Investor Shares managed by the Vanguard Group	10,126,016	0.60%

(III) The company's dividend policies and execution

Dividend policy

If the Company records a profit for the year, $1\%$ to $5\%$ thereof shall be allocated as employee remuneration (with not less than $35\%$ of such employee remuneration to be distributed to grassroots employees). The distribution ratio and the method of distribution, either in the form of shares or cash, shall be determined by a resolution of the Board of Directors. The recipients may include employees of subsidiaries who meet the criteria set by the Board of Directors or its authorized designee. The Company may also allocate, by resolution of the Board of Directors, up to $0.3\%$ of the aforementioned profit amount as director remuneration. The proposal for distributing the remuneration to employees, directors and supervisors shall be submitted to the shareholders' meeting. However, if the Company still as accumulated losses, the amount shall be retained for compensation, and then appropriated as remuneration to employees, directors and supervisors based on the percentages mentioned above.

If there is profit, the Company pays taxes and makes up for the accumulated losses in accordance with the law before allocating $10\%$ as an earnings reserve. However, the legal reserve shall not be allocated once it reaches the amount of the Company's paid-in capital.

The rest will be recognized or reversed as special earnings reserve. The reversed special earnings reserve is consolidated into undistributed surplus before being distributed. If there is a balance, it is consolidated into the accumulated undistributed earnings in the previous year. The Board may propose a profit distribution proposal, depending on the actual situation and request the shareholders' meeting to determine the distribution of dividends to shareholders.

The Company's dividend policy is in line with the current and future development plans and considers the investment environment, long-term financial planning and shareholders' equity. The annual dividends distribution is mainly in the form of cash and it may be distributed in the form of stocks. However, the proportion of stock dividends is not higher than 95% of the total dividends.

Dividend distribution proposal of this shareholders meeting: It is recommended not to distribute stock dividends and cash dividends
Expected significant changes in the dividends policy: None.

(IV) The impact of bonus shares proposed by the shareholders' meeting on the Company's operating performance and earnings per share: The Company has not prepared and announced the 2025 financial forecast and is not required to disclose such information in accordance with Letter (89)-Tai-Cai-Zheng-(1) No. 00371 dated February 1, 2000 of the Securities and Futures Bureau, Ministry of Finance.

(V) Remuneration for directors and supervisors

The percentage or scope of remuneration of the employees, Directors, and supervisors as stated in the Articles of Incorporation: Please refer to the dividends policy.
The estimation basis of remuneration to employees, directors and supervisors for the current period, and the accounting process when there is discrepancy between the calculation basis and actual distribution amount of employee remuneration distributed by shares and the estimated value:

The Company's estimate of remuneration payable to employees, directors and supervisors is based on the requirements of the articles of incorporation. At the end of the fiscal year, where the Board resolves the actual allocated amount different from the estimate, the changes shall result in the adjustment of the expenses provided for the current year. Where the shareholders' meeting resolves the actual allocated amount different from the estimate, it shall be stated as the change in accounting valuation in the year of the resolution made by the shareholders' meeting. If the shareholders' meeting resolves to allocate stock as the employees' bonus, the quantity of stock shall be determined based on the amount of the employee bonus divided by fair value of the stock. The fair value of the stock is based on the closing price on the day prior to the day of resolution made by the shareholders' meeting and takes the effect of ex-right and ex-dividends into consideration.

Remuneration to be distributed as resolved in the board of directors:

(1) Remunerations for employees, directors and supervisors distributed in cash or stocks. (If there is a difference with the annual estimate of the recognized expenses, disclose the difference, reasons and ways to handle the circumstances): For the year ended 2025, the remuneration for employee is NT$6,437 thousand and for directors and supervisors, it is NT$386 thousand. The shareholder meeting resolved that if there is a difference with the actual distributed amount, the difference will be used as the change in accounting estimate of 2026.
(2) The proportion of amount equivalent to the stock distributed as remuneration of employees in the earnings after tax in the parent company only or individual financial statements of the period and the total amount of remuneration of employees: Not applicable.

Actual distribution of remuneration to employees, directors, and supervisors for the previous year (including the number of shares distributed, amounts, and share price), and where there is any difference from the recognized remuneration for employees, directors, and supervisors, the amount of difference, reasons, and handling thereof shall also be disclosed: The actual distributed amounts of employee remuneration of NT$1,453 thousand and remuneration to directors and supervisors of NT$87 thousand for 2024 were consistent
158 -

with the amounts recognized for 2024, with no differences.

(VI) Buy-back of the Company's shares by the company: Not applicable.

II. Any offering of corporate bonds (including offshore bonds): None.
III. Disclosure relating to preference shares: None.
IV. Disclosure relating to global depository receipts: None.
V. Disclosure related to employee stock warrants: None.
VI. Restricted stock awards: None.
VII. Disclosure on new shares issued for the acquisition or transfer of shares of other companies: None.
VIII. Progress on the use of funds: None.

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Four. Operational Overview

I. Content of business

(I) Scope of business

The Company
Principal business activities

(1) Manufacture, processing and trading of artificial fiber, glass paper, polyamine fiber, polyester fiber, chemical products and raw materials thereof;

(2) Development, manufacture and trading of the machines referred to in the preceding paragraph;

(3) Manufacture and trading of ethylene glycol, eto ethylene oxide, nonylphenol, ethylene, LGP and petrochemical industry-related products;

(4) Commission construction firms to build residential and commercial buildings to be rented or for sale.

(5) Distribution, sorting, handling and storage of various products;

(6) Operate supermarkets which sell fresh food, vegetables, fish, meat, cooking garnishes and spices and seasonings.

(7) Manufacturing and sales of steam and industrial and commercial electricity by cogeneration (electricity shall not be sold to energy users).

(8) Agency and distribution of cogeneration and pollution-prevention equipment, and contract of installation work;

(9) Manufacture and trading of oxygen, liquid oxygen, nitrogen, argon, liquid argon, CO2 and compressed air;

(10) F212011 Gas stations

(11) D201021 Automobile Liquefied Petroleum Gas Station

(12) Non-prohibited or non-restricted businesses, in addition to the permitted businesses.

Percentage of current business

In the Company's 2025 business operations, chemical products account for 46.2%, chemical fiber products account for 48.4%, and the rest account for 5.4%.

Current products

Category	Item
Chemical products	Ethylene glycol, ethylene oxide, nonylphenol
Chemical fibers	Polyester pellet, polyester filament

New products planned for development

Continuing the development of oriented yarn, we plan to manufacture products made of oriented yarn and develop another new type of product, textured yarn, which retains the characteristics of oriented yarn and improves the texture and comfort.

(1) Draw textured color yarn:

Polyester color yarn is dyed before spinning, so it does not fade easily. It offers good color fastness against sunlight, water and rubbing. It does not require post-dyeing processing, so there is no waste water pollution. DTY with colors offers good texture feel and a variety of applications, such as in home decoration, curtains, luggage, backpacks and others.

(2) Moisture absorption and wicking DTY fibers:

Offer better moisture absorption and quick drying than the oriented yarn, improving the wearing comfort of the fabric. It uses irregular cross-section with high surface area and capillary effect to accelerate the sweat wicking, keeping body dry and comfortable.

(3) DTY high denier count fiber:

The thinner the denier, the softer the fiber, offering better texture of fabric and products will have better added value. In addition to retaining the original characteristics of oriented yarn, it offers even better texture and softness and can be widely used in high-end dresses for females.

(4) DTY FD dull yarn:

By adding high-concentration inorganic particles, the gloss of the fiber is reduced, at the same time enhancing the suspension of fiber. FD dull yarn is mainly used in sportswear.

(5) DTY CD yarn:
By using cationic dye particles, fiber in dark and vivid color effect can be spun, creating a softer touch with better fastness. CD yarn is mostly used in sportswear, casual wear, jackets and coats.

(6) DTY antibacterial and mold resistant yarn:
Antibacterial materials are added according to different needs, and the yarn does not get decomposed by ultraviolet rays, acids, alkalis or organic solvents. It provides long-term antibacterial and mold resistant effects and is mainly used in sportswear, underwear, medical fabrics, bedding fabrics and shoe materials.

(7) UV resistant fiber:
UV-resistant fiber offers the best protection for skin, as UV-A and UV-B with a wavelength of 200-400nm may penetrate the ozone layer and cause great damage to human skin. They can lead to melanogenesis, skin aging and even skin cancer.

(8) Hollow fiber:
The lightweight and warm hollow fiber is a new type of material of which the cross-section is hollow. The inner air layer blocks the loss of body temperature, so that the surface temperature of the skin is not quickly lost due to the harshness of weather conditions, hence the insulation effect.

(9) SDY and DTY environmental protection yarn:
Use eco-friendly yarns used in woven fabric made of eco-friendly pellets, reduce reliance on petrochemical raw materials, carbon dioxide and the use of energy and risk of warming climate.

(10) Eco-friendly pellets:
Use recycled PET bottles for circular manufacturing and use, produce eco-friendly polyester pellet of spinning raw materials, to provide for downstream to produce yarn.

Consolidated company
Pan Asia Chemical Corporation
(1) Principal business activities
A. C801020 Petrochemical manufacturing.
B. C802090 Cleaning products manufacturing.
C. D101050 Steam and electricity paragenesis.
D. F212011 Gas stations
E. F212061 Automobile Liquefied Petroleum Gas Station
F. H701010 Residence and buildings lease construction and development.
G. ZZ99999 All business items that are not prohibited or restricted by law, except those that are subject to special approval

(2) Percentage of current business
Nonionic surfactants account for about 80% of the revenue and esterified products account for about 20%.

(3) Current products
Polyethylene glycol and alkane ether, polyethylene glycol and alkyl ether, castor oil EO addenda, polyethylene glycol propanamine, polyethylene glycol and fatty acid esters, polyethylene glycol, poly-propylene glycol and polyethylene glycol, trimethylolpropane EO additive, polyol EO, PO addenda, spinning oil agent, lubricating oil esters, plastic slip agents, cosmetic esters, cleaning agent esters and bath softeners.

(4) New products to be developed:
Polyethylene glycol derivatives, spinning oil agents, fiber softeners, esterified products.

Taichung Commercial Bank
(1) Principal business activities
161 -

Deposits, corporate finance, consumer banking, foreign exchange, wealth management, digital finance, trust and investment, financial market business.

(2) Percentage of current business: 100% in banking.
(3) Current products: Not applicable.
(4) New products under development: Not applicable.

(II) Industry overview

The Company
Industrial status and development:

(1) Ethylene Glycol: With increased market supply and intensifying competition, most suppliers have responded by cutting production.

(2) Polyester yarns:

A. In the face of depleting earth’s resources and global warming, issues related to green environmental protection must be faced by mankind. Therefore, businesses in Taiwan have actively promoted laying down roots the concept of circular economies in industrial development. From product design to production, they will move in the direction of re-use, recycle, waste reduction, and energy conservation. Green environmental products have become mainstream in the research and development of polyester products in Taiwan.

B. In recent years, facing the competition with Mainland China and Southeast Asia and the loss of downstream suppliers, the supply and demand in the industry was imbalance, and the operations of domestic polyester manufacturers became difficult. The Company shall adjust human resources in due course, improve production efficiency, improve quality, expand the customer base, conduct proper screening to find long-term and stable customers who are willing to collaborate for win-win situations. Besides timely grasping the market trends, adjusting prices and being flexible in accepting orders, the Company should continue to improve the automation of equipment and technical R&D, reduce defects, abnormality and production cost, produce high-quality and value-added product with good economies of scale and collaborate with downstream players to quickly respond to the market in order to maintain good competitiveness in the industry.

C. In recent years, imported yarn from Vietnam, whether produced locally in Vietnam or manufactured by Taiwanese companies and re-exported to Taiwan, has been sold at low prices, gradually impacting the survival of the domestic synthetic fiber industry.

D. Unfavorable factors such as geopolitical issues, rising domestic electricity costs, and labor shortages have accelerated the downsizing or relocation of Taiwan’s textile fiber industry and increased reliance on external textile product supply chains.

E. Unfavorable factors such as geopolitical risks, rising domestic electricity costs, and labor shortages have accelerated the downsizing or relocation of Taiwan’s textile fiber industry.

(3) Nonylphenol: Provided as an additive to industrial products, and the demand is stable.

Correlation between upstream, midstream and downstream industries:

(1) The Company obtains ethylene from CPC Corporation and Formosa Petrochemical Corp. to produce ethylene glycol and ethylene oxide. The produced ethylene glycol is used at the Company's polyester plant and sold to other polyester plants in Asia. Ethylene oxide is sold to surfactant manufacturers.

(2) Nonene and Phenol raw materials are sourced from other companies both at home and abroad to produce nonylphenol, which is then sold to the other domestic and foreign surfactant manufacturers.

(3) Polyester yarn is supplied to other domestic and foreign processing fiber plants and textile mills.

Developing trend and competitiveness of products:
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(1) Ethylene glycol: Stable downstream customers and reinforce the supply-demand relationship.
(2) Nonylphenol: the booming development of the textile industry in Asia drives the demand for textile additives. Build a quality brand image and produce in volume to reduce cost.
(3) Polyester fiber: Product customization, diversification, refinement, differentiation and market segmentation.

Consolidated company
Pan Asia Chemical Corporation

(1) Industrial status and development: In 2025, the global market was affected by strong price competition from Chinese products, which caused changes in supply and demand in Asian markets. Overall sales volume remained the same as the previous year.
(2) Correlation between upstream, midstream and downstream industries: Non-ionic surfactants serve as a bridge between the upstream petrochemical industry and the downstream consumer and industry product industries and they are irreplaceable to the growth of industries.
(3) Developing trend and competitiveness of products:

A. Nonionic surfactants are essential for economic development and are less susceptible to the impact from economic fluctuations.
B. The industry requires the advantages of having EO plants, and the Company has the competitive advantage.
C. Due to the zero tariff between the member countries in the ASEAN-China Free Trade Area starting 2009, the Company has faced challenges in terms of the pricing.

Taichung Commercial Bank: not applicable.

(III) Technological research and development

The Company
Research and development expenses R&D expenses invested in the most recent two years: None.
Successfully developed technologies or products: None.
Expected R&D plan in the future and the estimated R&D expenses to be invested: No R&D plan.
Consolidated company
Pan Asia Chemical Corporation

(1) R&D expenses: NT$15,442 thousand.
(2) Technologies or products successfully developed: environmentally friendly plasticizer-DOTP, metal cleaning agent, spinning oil agent, lubricating oil esters, plastic slip agents, cleaning agent esters and bath softeners.

Taichung Commercial Bank

(1) R&D expenses the past two years

Unit: NTD thousand

Year	2025	2024
R&D expenditures	414,512	346,810
Information security expenditures	74,428	66,201

(2) R&D results the past two years:

A. Fair Customer Treatment and Enhanced Customer Experience

(a) Self-service Automation

A foreign currency cash inventory inquiry function for each operating site has been added to the official website to enhance information transparency.
An "Application for Cash Advance PIN" function has been added to

internet banking services, eliminating the need to contact customer service and enhancing customer convenience.

A new function has been added to internet banking that allows customers to reapply for a software OTP using a chip financial card, eliminating the need to visit a branch counter for reapplication.
The “NTD Transaction Reservation Service” has been optimized to provide functions such as pre-filled transaction overviews, reservation reminders, and voucher printing, effectively reducing the risk associated with carrying corporate seals outside the office and shortening counter processing time.
The PDF layout for NTD and foreign currency transaction details in internet banking has been optimized, allowing customers to download records independently, reducing the need for branch counter services and enhancing operational efficiency.

(b) Process Simplification

A preferential USD time deposit program is offered, and a new fund automatic identification system has been introduced to simplify the customer application process.
Foreign currency consolidated deposit accounts are now eligible for use as securities settlement accounts, simplifying the account opening process for sub-brokerage trading.
A new “Enable Non-Designated Transfer Function for Internet Banking” service has been added to physical ATMs, addressing customer difficulties caused by the lack of card readers or restrictions from business hours and enhancing service convenience.

New functions have been added to the LollyPay mobile banking service, including utility bill payment, e-invoice carrier integration, and charity code binding.
The web version of internet banking allows users to log in by scanning a QR Code with the mobile banking app and using FIDO combined with biometric authentication for verification.
The official website has added online application functions for corporate loans and supplementary document submission for personal consumer loans, and the online credit card application webpage has been redesigned to provide step-by-step form completion and simplify the operation process.
The Bank has partnered with Tsann Kuen 3C, Order, and UWOOD to launch the “Happy Living Club,” integrating interior decoration and design services with mortgage loan information, while also providing the Happy Loan Program on the official website for customer reference.
In conjunction with the web-based integration of foreign currency and fund operations, a new transaction message function has been added to provide real-time inquiry of debit and reversal results for fund and foreign currency accounts.
Collaborated with diversified electronic payment service providers (icash Pay, iPASS MONEY, and LINE Pay Money) to implement linked account debit services and introduce QR Code payment scanning, thereby expanding the Bank’s digital payment channels.
Launched the Lolly Bank digital account and online video-based replacement and reissuance services for financial cards, while also supporting two-way referral account opening services between digital accounts and securities accounts, thereby enhancing convenience and attracting younger customer segments.

(d) Inclusive financing

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The “Accessible Financial Services Section” on the Bank’s official website has obtained the AA-level accessibility certification mark under the website accessibility standards of the Ministry of Digital Affairs.
An additional 46 voice-guided ATMs for visually impaired users have been installed, bringing the Bank-wide total to 98 units. Operating units also provide headphone lending services to enable visually impaired individuals to conveniently conduct various financial transactions.
A new “Physical ATM Coin Deposit Machine” has been installed in the Yizhong commercial district of Taichung to provide ATM coin deposit services for merchants and the public.
The Bank continues to optimize accessible financial services. As of the end of 2025, the “Simplified Internet Banking/ATM” services had cumulatively provided 32 functions. Disability advocacy groups were also invited to participate in practical testing and exchange sessions, with user feedback incorporated into optimization assessments to implement people-centered digital inclusion.
A new “Accessible Account Opening Section” has been added for pre-filled branch account opening forms, providing convenient pre-application services for senior citizens, persons with disabilities, and individuals with dementia.

B. Financial Supervision, Information Security, and Fraud Prevention

(a) Risk Management

A new status annotation and alert function for foreign migrant workers has been added to assist bank personnel in promptly verifying identities and transaction legitimacy, thereby strengthening branch counter protection measures.
A new maintenance operation for Money Service Business (MSB) institution data has been introduced to strengthen the monitoring of illicit financial flows and the tracing of fund sources, thereby establishing a financial security network.
In cooperation with the policies of the FISC and the competent authorities, relevant NTD host system programs were developed to add real-time “gray list” verification for designated transfer-in accounts.
Login activities to internet banking and mobile banking from non-Taiwan IP addresses are detected, with real-time email and app push notifications sent to prevent account theft.
In cooperation with the policies of the National Police Agency, online transactions through internet banking and mobile banking are restricted for missing persons and migrant workers with abnormal status, effectively combating mule accounts and illegal money laundering.

(b) Information safety

The operating system of the Labuan Branch was upgraded to strengthen the protection capabilities of overseas branch application systems.
ISO 22301:2019 (BCM) was adopted to establish a standardized business continuity management system, with off-site backup environments and practical drills planned accordingly.
The mobile banking app passed the “Mobile Application Basic Information Security Testing” standards of the Industrial Development Bureau of the Ministry of Economic Affairs, as well as the OWASP Mobile App Security Checklist L2 assessment.
In cooperation with international organizations, the Bank carried out
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the SWIFT system ISO 20022 MX message migration and version upgrade to strengthen cybersecurity protection capabilities for cross-border remittance operations.

The financial fraud prevention awareness section has been optimized to include guidance on identifying legitimate website addresses and sharing the latest fraud schemes, thereby enhancing customer vigilance.
The dedicated financial industry SMS code “68053” service has been adopted to enhance the identification of SMS message sources and effectively prevent spoofed phishing messages.
In cooperation with the Criminal Investigation Corps of the Taichung City Police Department, a new “AI Fraud Detection Technology” has been introduced, adding a face-covering detection and alert function to physical ATMs to effectively deter money mule criminal activities.
The intelligent form-filling system automatically cross-checks “domestic financial accounts suspected of involvement in fraud” and “virtual asset service providers,” while integrating the “Eagle Eye Fraud Detection Model” and adding a “real-time inquiry function.” Through AI and system automation, the Bank enhances the accuracy of fraud detection and implements technology-driven fraud prevention.
A total of 21 enhancements have been continuously implemented for corporate and personal internet banking services, as well as mobile banking app functions and fraud prevention mechanisms, with digital financial services improved in accordance with customer suggestions and regulatory requirements.
A “Payee Account Name Display” mechanism has been added to internet banking, mobile banking, ATM transfers, and deposit services to reduce the risk of transfer errors and block fraudulent fund flows.

C. Operational Efficiency and Process Optimization

(a) A new function for foreign currency cash vault inventory checking and transaction display has been added to facilitate bank personnel in monitoring foreign currency cash movements.
(b) The Bank introduced Central Bank API reporting, digitalized system workflows, and developed a foreign exchange operations platform to enhance operational efficiency.
(c) Established a third-generation wealth management system and an over-the-counter fund and bond trading system to provide employees with a user-friendly operating environment and deliver stable and professional financial planning services.
(d) A securities settlement file integration platform for typhoon days has been established to assist branches in consolidated processing of various securities settlement-related files, thereby enhancing branch operational efficiency during typhoon conditions.
(e) Through RPA technology, highly repetitive tasks such as data entry, transaction processing, and patent applications have been automated, significantly reducing human error and improving work efficiency.
(f) External API resources were integrated alongside concurrent architecture adjustments and optimizations to enhance system maintainability and overall operational performance.
(g) A new batch transfer category has been added to the “Corporate Payment Section,” with validation functions for the “transfer-in account number” and “national ID number/unified business number” in media files to enhance service flexibility and convenience.

166 -

(h) The Bank has integrated the “eDDA Electronic Authorization” and “eACH Funds Reservation and Debit Services” of the Taiwan Clearing House, while also integrating “DDA/ACH Services” to provide customers with diversified and secure online authorized debit payment options, simplify operational procedures, and implement paperless operations.

(i) The Bank introduced the “Digitalization of Physical ATM Chronological Paper Rolls,” significantly increasing the amount of transaction information that can be retained while effectively reducing paper consumption.

(j) The automated monitoring and electronic log management system (DMS) was upgraded to support the Edge browser and complete underlying environment updates, optimizing the user experience and eliminating risks associated with system replacement.

(k) The customer service system was upgraded and a customer complaint module was established, incorporating mechanisms aligned with the principles of fair customer treatment and ISO 10002 standards. The customer service center database and ECP system were also optimized to enhance performance, security, and scalability.

(l) A new combined foreign currency passbook update transaction function has been added to simplify transaction details and reduce paper waste.

D. Innovation, R&D, and AI Deployment

(a) An AI Smart Finance Task Force was established to develop the Bank’s AI applications in operational efficiency, customer service, risk management, and financial innovation.

(b) Patent R&D and protection, patents granted:
- New Patent - Intelligent Name Matching System.
- New Patent - AI Smart Voice Pre-Filled Form System.
- Utility Model Patent - Communication Management System.
- Invention Patent - Communication Management System and Method.

(IV) Long- and short-term business development plans

Ethylene glycol

Short-term: High market stability allows for product sales planning.

Long-term: Strengthen customer relationships, align with carbon reduction trends, seek investment and cooperation opportunities, restart ETE equipment, and resume bio-based ethylene glycol production.

Nonylphenol

Short-term: Establish collaboration with downstream partners; for example, outsource the contract manufacturing of surfactants to downstream partners or help them to promote products.

Long-term: Form long-term partnership with downstream players so both parties benefit from long-term interests.

Polyester yarns

Short-term: Develop environmental and special-purpose yarns to diversify products and increase operating profit.

Long-term:
A. Make products more refined, diversified and technological to gain higher profit.
B. Adequate adjustment of order and product mixes to facilitate selection of high-profit orders.
C. Collaborate and integrate with industry peers to provide mutual support and shared benefits.
D. Integrated development with the upstream and downstream partners to take advantage of vertical integration.

Consolidated company
Pan Asia Chemical Corporation

(1) Short-term: increase the proportion of sales of EOD and esterified products which are value-added to increase overall revenue and profit.
(2) Long-term: improve the technology level of products, develop vertical integration to explore new fields in the market. Cooperate with customers to import related products for sales in order to increase profits, sales, and sales volume. Collaborate with customers to develop electronic-grade products or products related to the electronics industry.

Taichung Commercial Bank
(1) Short-term: Please refer to (II) Expected sales and its basis on page 4.
(2) Long-term: please refer to (IV) Future development strategies on pages 4 to 5.

II. Market and sales overview

(I) Market analysis

The Company
The regions for the sale of premium products
(1) Ethyl glycol: Approximately 73% and 27% are for the supply to domestic manufacturers and for export sales, respectively, and sales are mostly in Asia.
(2) Ethylene oxide: mainly supply domestic downstream companies who manufacture ethylene oxide derivatives.
(3) Nonyl phenol: Approximately 20%, 69%, and 11% are for domestic sales, export sales to Asia, and export sales to other regions, respectively.
(4) Polyester yarns: Approximately 87% and 13% are for domestic sales and export sales to other regions, respectively.
(5) Electricity: sold to Taipower beside the proportion for in-house use.
Market share

Product portfolio	Market share (domestic)	Product portfolio	Market share (domestic)
Ethylene glycol	20 %	Nonylphenol	50 %
Ethylene oxide	30 %	Polyester yarns	7 %

Future market supply and demand and the growth
(1) Ethylene Glycol: With the expansion of domestic downstream polyester fiber production capacity leading to increased competition, the overall supply of ethylene glycol has exceeded demand, resulting in intense market competition.
(2) Ethylene oxide: stable demand from downstream customers. Expect to maintain stable sales volume.
(3) Nonylphenol: Larger fluctuation in price of raw material. Fierce competition for products in the market.
(4) Electricity: domestic power supply has been insufficient.
(5) Polyester Filament: As upstream chemical fiber production capacity scales down, the oversupply situation is gradually improving. Entering the third quarter, which is traditionally the peak season for polyester filament demand, market growth is expected to be driven accordingly.
Competitive niche

Focus on production in full capacity and sales in full capacity. Reduce production cost. Improve product quality and competitiveness.

Favorable and unfavorable factors and response policy of development vision
(1) Favorable conditions: the demand for polyester fiber will gradually increase, further driving the demand for ethylene glycol. Competitors in polyester market will gradually withdraw from the market, which will increase the Company's market share and selling price.
(2) Unfavorable conditions: main product materials come from CPC and the contracted quantity is insufficient.
(3) Responsive measures: find other import channels or purchase from Formosa Petrochemical to avoid the insufficient supply of CPC.
168 -

Consolidated company
Pan Asia Chemical Corporation

(1) The regions for the sale of premium products

A. Domestic sales: About 43%, through other distributors or by the Company.
B. Export: About 57%, with the most comes from China, followed by Southeast Asia, the Middle East and Australia.

(2) Market share: Account for 40% of the market share in the domestic market.

(3) Future market supply and demand and the growth

In 2024, strong pricing competition from Chinese products impacted supply and demand dynamics across various Asian markets. However, overall sales volume still increased by nearly 10% compared to the previous year.

(4) Competitive niche

A. Stable supplies of raw materials of EO, NP, DEG and natural alcohol.
B. Stable quality. Competitive price. Seamless marketing channels.

(5) Favorable and unfavorable factors and response policy of development vision

A. Favorable factors

a. Diversified products, wide variety of demands in the industry, and it is less susceptible to the impact from economic fluctuation.
b. Higher levels of technology than China and Southeast Asia. Stable production and supply. Stable export volumes to China and Southeast Asia every year.
c. Strong sales channels and relationships. Products are sold to various industries both domestically and internationally.
d. Secure supply of raw materials. The supply of main raw materials, NP and petrochemical EO, comes from a long-term partner, CMFC's production line.

B. Unfavorable

a. With increasing environmental awareness and increasingly stringent government regulations on carbon reduction and zero emissions, competition among domestic and international peers has become increasingly fierce. Our Company will maintain a high proportion of bulk product sales to reduce unit production costs, while increasing sales of high-margin specialty products to support overall revenue and continue improving product quality.
b. The domestic industries continue to move out, further reducing the demand. We are actively collaborating with customers on product development and expanding into indirect export markets to maintain and enhance sales volume.
c. The domestic environmental protection policy limits the use of nonylphenol products and the textiles sold to Europe are prohibited from using nonylphenol additives. Our company actively develop alternative products for nonylphenol series and cooperate with customers to develop new products or new purpose.

C. Countermeasures

a. In response to global trends in environmental protection, carbon reduction, and the circular economy, the Company is developing environmentally friendly product lines to mitigate the impact of rising petrochemical material costs.
b. Develop high value-added products and contract manufacturing products in response to the industry upgrade and customer demands to improve the competitiveness in the industry.

Taichung Commercial Bank

(1) Territories of banking business

At the end of 2025, the Bank has 92 domestic and foreign branches, and personal finance, corporate finance, wealth management, and other diversified businesses are provided. Through the regional characteristics, sophisticated financial commodities, and business field expansion, customers are provided with financial services of higher quality and convenience through dedicated professional operations.

(2) Supply and Demand of the market and growth in the future

A. Market supply:

There are numerous banks in Taiwan, and the financial services and products they provide are highly homogeneous. In response to changes in the

169 -

financial market driven by the accelerated development of innovative technologies and the growing emphasis on green issues, and to align with shifts in consumer behavior, banks are promoting digital banking and digital accounts, thereby moving toward a new “people-oriented” financial ecosystem model. Banks also continue to collaborate with businesses in other industries and further expand into the technology sector in order to maintain financial competitiveness. Among non-economic factors, ESG remains the primary focus. The Taiwan government has further established the “National Climate Change Countermeasures Committee” and expanded its focus to issues related to the Taskforce on Nature-related Financial Disclosures (TNFD). Through financing businesses such as support for the six strategic core industries and green consumer loans, the Bank will fulfill its role as a financial intermediary in supporting ESG industries and strengthening Taiwan’s supply chain.

B. Market demand:

With global stock markets trending upward—both the Nasdaq and the Taiwan Stock Exchange Weighted Index reaching historic highs—demand for emerging technology equipment, including domestic artificial intelligence (AI), is rising. This has driven steady growth in import and export trade. The investment market also shows upward momentum, with ample liquidity and growing income from wage increases contributing to stronger private consumption. International tourism has rebounded, significantly boosting wealth management, credit card transaction fees, and credit business growth. Moody’s maintains a "Stable" outlook for Taiwan, and S&P continues to rate Taiwan's sovereign credit at "AA+." The Central Bank of Taiwan, after evaluating global economic and financial trends and the gradual easing of domestic inflation in 2025, has revised its economic growth forecast for the upcoming year to 3.13%, projecting steady moderate growth.

(3) The competitive edge, factors favorable and unfavorable for development in the long run, and responses

A. Favorable

(A) The global economy is entering an interest rate-cutting cycle, signaling an increasingly active investment market.
(B) Rising domestic consumption power supports increased fee-based income.
(C) The coming era of carbon fees is expected to drive growth in green financing.

B. Unfavorable

(A) The high market concentration of domestic financial institutions limits room for market share expansion.
(B) Elections in various countries may increase political uncertainty worldwide.
(C) Rapid advancements in digital technology pose challenges to information security and increase the cost of managing critical talent needed for technological innovation and transformation.

C. Countermeasures

(A) Strengthen deposit and loan structure and actively expand market share.
(B) Increase overseas profitability and expand international presence.
(C) Deliver precise, differentiated services and smart, convenient wealth management.
(D) Promote a green, symbiotic future and create sustainable value.
(E) Operate under strong financial regulation and uphold full legal compliance.
(F) Embody the value of financial inclusion and foster a culture of equality.

(II) Intended use and production processes of the main products

The Company
Intended use of the main products

(1) Monoethylene glycol (MEG): Mainly used as the raw material of polyester fiber, and it can also be used to manufacture antifreeze, high temperature coolant, ice and snow remover and explosive.

170 -

(2) Diethylene glycol (DEG): It is mainly used as a basic raw material for plastics, and can also be used to manufacture ink solvents, brake oils, solvent oils, gas water removers, fiber softeners and plastic fillers.
(3) Triethylene glycol (TEG): Mainly used as a regulator, for air treatment and as a wetting agent.
(4) Ethylene oxide (EO): Mainly used as raw materials for surfactants, glycol ethers and others.
(5) Nonylphenol (NP): Mainly used as a raw material for surfactant, antioxidant, stabilizer, phenol formaldehyde resin, lubricant additives and others.
(6) Polyester yarn: Mainly used to make garment fabric, woven bags (straps), industrial fabric, shoe materials and others.
(7) Electricity: Energy supply.

2. Manufacturing process

(1) Ethylene oxide + Water ---> Monoethylene glycol
(2) Monoethylene glycol + Ethylene oxide ---> Diethylene glycol
(3) Diethylene glycol + Ethylene oxide ---> Triethylene glycol
(4) Ethylene + Oxygen ---> Ethylene oxide
(5) Phenol + terpene ---> Nonylphenol
(6) Ethylene glycol + PTA ---> Polyester pellet
(7) Electricity: A cogeneration system that generates steam and electricity by burning coal

Consolidated company

1. Pan Asia Chemical Corporation

(1) Intended use of the main products:

Main products	Polyethylene glycol alkylphenol ether, polyethylene glycol alkyl ether, castor oil EO addenda, polyethylene glycol propanamine, polyethylene glycol and fatty acid esters, polyethylene glycol, poly-propylene glycol and polyethylene glycol, trimethylolpropane, EO additive, spinning oil agent, lubricating oil esters, plastic slip agents, cosmetic esters, cleaning agent esters and bath softeners
Main applications	Household cleaners
Personal toiletries
Fiber industry
Metal industry
Pulp and paper industry
Plastic industry
Rubber industry
Paint industry
Cosmetic industry
Electronics industry
Polymer industry	Detergent, penetrant, emulsifier, wetting agent, softener
Detergent, penetrant, emulsifier, wetting agent, softener
Detergent, penetrant, dyeing auxiliary, emulsifier, bath softener
Cleaning agent, emulsifier, additives for electroplating
Degreaser, deinking agent, wetting agent
Emulsified polymeric emulsifier, internal and external lubricants for plastic
Additives, release agents
Dispersant, emulsifier
Cleaning agent, emulsion, base material, wetting agent
Cleaning agent
Modifier, emulsifier, antistatic agent

Taichung Commercial Bank: not applicable.

(III) The supply of main raw materials

The Company
The petrochemical plant in Kaohsiung obtains ethylene from CPC Corporation, a long-term supplier, to produce ethylene glycol.
The raw materials for nonylphenol are terpene and phenol. At this point, the supply of terpene comes from import from a variety of sources to diversify risk. As for phenol, the Formosa Chemicals and Fiber is a stable long-term supplier.
The main raw material for cogeneration is coal which is imported. The Company maintains long-term stable relationship with suppliers to ensure no interruption to supply.
Consolidated company
Pan Asia Chemical Corporation

(1) Ethylene oxide: Supply contract with CMFC.
(2) Nonylphenol: the source of supply is CMFC, and the current status of supply is good.
(3) Natural alcohol: there is no domestic manufacturer so it is imported from various sources.

Taichung Commercial Bank: not applicable.

(IV) The list of any companies accounting for 10 percent or more of the Company's total purchase (or sales) amount in the last two years

The Company

Main suppliers the most recent two years
Unit: NTD thousand

	2024				2025
Item	Name	Amount	Percentage of the net purchase of the year (%)	Affiliation with issuer	Name	Amount	Percentage of the net purchase of the year (%)	Affiliation with issuer
1	A	1,566,984	29%	N/A	A	1,363,412	30%	N/A
2	B	1,128,124	21%	N/A	B	1,076,787	24%	N/A
3	-	-	-%	-	C	434,912	10%	N/A
4	Others	2,780,639	50%	N/A	Others	1,697,303	36%	N/A
	Purchase - net	5,475,747	100%		Purchase - net	4,572,414	100%

Note List the suppliers accounting for 10% or more of the Company's total purchase amount in the most recent two years and the purchase amount and the percentage of the total purchase. Replace the suppliers' names with codes if, due to contractual obligation, the names cannot be disclosed or the transaction counterparty is an individual who is not a related party.
Note In 2024, there were two customers whose net purchases accounted for over 10%.

The main customers for sales within the last two years
Unit: NTD thousand

	2024 (Note)				2025
Item	Name	Amount	Percentage of the net sales of the year (%)	Affiliation with issuer	Name	Amount	Percentage of the net sales of the year (%)	Affiliation with issuer
1	PACC	769,604	14%	Investee valued under the equity method	PACC	635,000	13%	Investee valued under the equity method
2	Others	4,911,855	86%	N/A	Others	4,292,284	87%	N/A
	Sales - net	5,681,459	100%		Sales - net	4,927,284	100%

Note: List the customers accounting for 10% or more of the Company's total sales amount in the most recent two years and the sales amount and the percentage of the total sales. Replace the suppliers' names with codes if, due to contractual obligation, the names cannot be disclosed or the transaction counterparty is an individual who is not a related party.
Note: Only one customer accounts for 10% of the net sales in 2025.

Consolidated company
Pan Asia Chemical Corporation

Main suppliers the most recent two years
Unit: NTD thousand

	2024				2025
Item	Name	Amount	Percentage of the net purchase of the year (%)	Affiliation with issuer	Name	Amount	Percentage of the net purchase of the year (%)	Affiliation with issuer
1	CMFC	735,207	60	The parent company	CMFC	597,122	56	The parent company
2	Others	498,792	40	-	Others	461,013	44	-
	Purchase - net	1,233,999	100	-	Purchase - net	1,058,135	100	-
Reason for Increase/Decrease: The decrease in purchases from the parent company during the current year was primarily due to the decline in the costs of major raw materials in 2025.

Note: List the suppliers accounting for 10% or more of the Company's total purchase amount in the most recent two years and the purchase amount and the percentage of the total purchase. Replace the suppliers' names with codes if, due to contractual obligation, the names cannot be disclosed or the transaction counterparty is an individual who is not a related party.

The main customers for sales within the last two years
Unit: NTD thousand

	2024				2025
Item	Name	Amount	Ratio to the annual net sales amount [%]	Affiliation with issuer	Name	Amount	Ratio to the annual net sales amount [%]	Affiliation with issuer
1	B	223,305	15	N/A	B	160,683	12	N/A
2	A	155,172	11	-	Others	1,182,710	88	-
3	Others	1,062,707	74	-				-
	Sales - net	1,441,184	100	-	Sales - net	1,343,393	100	-
Reason for Increase/Decrease: The decrease in sales to Customer B was primarily due to lower sales volume and declining selling prices in 2025, while sales to Customer A in 2025 did not reach 10%.

III. Employees

The Company

(I) Employees' information

Year		2024	2025	As of February 28, 2026
Employee No.	Employees	172	168	170
	Workers	318	300	297
	Total	490	468	467
Average age		47.04	47.89	47.98
Average seniority		15.79	16.53	16.63
Academic qualification	PhD	0%	0%	0%
	Masters	3.27%	3.63%	3.85%
	Tertiary institution	62.04%	62.61%	62.53%
	Senior High School	34.69%	33.55%	33.4%
	Below Senior High School	0.0%	0.21%	0.21%

(II) With respect to personnel handling the transparency of financial information, the certification they obtained as specified by the authority:

Certificate and license name	Number of people in finance and accounting	Number of people in internal audit
Passed the internal control and internal audit examinations organized by the Taiwan Academy of Banking and Finance.	0	0
Senior Professional and Technical Exams hosted by the Ministry of Examination - Accountant	0	0
Junior Professional and Technical Exams hosted by the Ministry of Examination - Bookkeeper	0	0

*Consolidated companies

(I) Pan Asia Chemical Corporation

Year		2024	2025	As of February 28, 2026
Employee No.	Employees	44	45	45
	Workers	60	57	59
	Total	104	102	104
Average age		45.492	45.647	45.42
Average seniority		15.9	14.907	15.486
Academic qualification	PhD	0.00%	0.00%	0.00%
	Masters	7.53%	7.61%	7.61%
	Tertiary institution	74.19%	75.00%	75.00%
	Senior High School	18.28%	17.39%	17.39%
	Below Senior High School	0.00%	0.00%	0.00%

(II) Taichung Commercial Bank

Year		2024	2025	2026 (As of February 28)
Employee No.	More than 50 years old	807	809	811
	More than 40 years old	547	545	541
	More than 30 years old	653	718	734
	More than 20 years old	1,062	1,052	1,022
	Less than 20 years old	1	4	4
	Total	3,070	3,128	3,112
Average age		38.4	38.6	38.7
Average seniority		9.7	10.0	10.1
Education Background	Masters	14.60%	15.1%	15.3%
	Bachelor	72.64%	72.8%	72.71%
	College	11.17%	10.2%	10.06%
	Senior High School	1.56%	1.8%	1.9%
	Junior High School	0.03%	0.01%	0.03%
Name of professional licenses held by employees	Securities sales traders	326	340	496
	Investment Insurance Products	1,120	1,130	1129
	Salesperson of investment trust and investment consultation (including relevant regulations)	1,718	1,848	1,862
	Initial credit extension personnel's professional ability	1,014	1,070	1,068
	Advanced credit extension personnel's professional ability	36	35	36
	Futures sales traders	199	199	198
	Life Insurance Agent	2,154	2,266	2,264
	Bond sales qualified in professional ability test	33	34	34
	Initial foreign exchange personnel's professional ability	1,206	1,282	1,289
	Wealth management and planning personnel	429	426	424
	Trust operations personnel (including the Qualification Exam for Securities Investment Trust and Consulting Regulations)	2,323	2,446	2,469
	Bank's internal control basic test	2,203	2,323	2,311
	Senior Securities sales traders	224	216	212
	Property Insurance Agent	2,434	2,585	2,594
	Notes and bills traders	48	48	49
	Marketable securities, financing and financial instruments sales traders	4	4	4
	Internal auditor	2	2	2
	Stock affairs personnel qualified in professional ability test	34	35	35
	Foreign exchange professional ability	14	17	17
	Financial personnel's professional ability in appraising collaterals for credit extension	7	7	7
	Proficiency test for debt collection personnel	181	182	182
	Test for anti-money laundering and counter-terrorism financing professionals	1,252 (911 valid licenses)	1,353 (1,010 valid licenses)	1,360 (1,033 valid licenses)
	Qualification test for derivatives sales personnel	1,826	1,914	1,917
	Senior Professional and Technical Exams - Accountant	1	1	1
Senior Professional and Technical Exams - Lawyer	3	4	3

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IV. Environmental Protection Expenditure

(I) Losses caused by environmental pollution in the most recent year and up to February 28, 2026:

Date of punishment	Reference number of the penalty document	Legal violation	Description of legal violations	Description of penalties	Responding measures
2025.3.17	20-114-030013	Paragraph 1 of Article 20 of Air Pollution Control Act	The 1-hour recorded values of nitrogen oxides in the CEMS monitoring data all exceeded the 30 ppm emission standard stipulated in the “Kaohsiung City Air Pollutant Emission Standards for Power Facilities,” with the accumulated duration reaching 13 hours, which failed to comply with Article 13 of the “Stationary Source Air Pollutant Emission Standards,” requiring that the accumulated duration exceeding the emission standard value shall not exceed 2 hours.	NT$220,000	Adjusted the chemical dosage of pollution control facilities.
2025.4.25	20-114-040029	Subparagraph 3 of Paragraph 1 of Article 32 of Air Pollution Control Act	This case arose from a public complaint. Personnel were dispatched to conduct an on-site inspection and discovered smoldering inside the coal storage silo (without open flames), causing continuous emission of white smoke from the top of the coal bunker accompanied by the odor of coal.	NT$210,000	Water was sprayed on the smoldering coal, which was then promptly transported to the coal bunker for boiler combustion to prevent the smoldering situation from expanding.
2025.7.15	40-114-070025	Subparagraph 2, Paragraph 1, Article 31 of the Waste Disposal Act	Non-hazardous organic waste liquid or solvent (D-1504) was not correctly reported in terms of generated quantity, manifests, and storage volume; in the phenol chemical manufacturing process, waste ion exchange resin (D-0201) was not correctly reported in terms of generated quantity, manifests, and storage volume.	NT$6 thousand	Avoid filing manifests across month-end weekends to prevent discrepancies in data reconciliation.
2025.7.15	40-114-070026	Article 36, Paragraph 1 of the Waste Disposal Act and Article 6, Paragraph 1, Subparagraph 4 and Article 10, Paragraph 1, Subparagraph 1 of the Methods and	Waste containers, waste plastic mixtures, and general industrial waste (D-1801) piled in the M06 process area were not labeled with Chinese names in conspicuous locations, and no equipment or measures were installed to prevent surface water or rainwater	NT$6 thousand	The storage area was reorganized and replanned, and the names of recyclable materials were clearly labeled in prominent locations.

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		Facilities Standards for the Storage, Clearance and Disposal of Industrial Waste	from flowing in or infiltrating.
2025.8.12	20-114-080013	Subparagraph 1 of Paragraph 1 of Article 32 of Air Pollution Control Act	The case originated from a public complaint. Personnel were dispatched to conduct an on-site inspection, during which black smoke (non-water vapor) caused by incomplete combustion due to equipment malfunction was found to have escaped directly from the equipment without being collected and treated before discharge through emission ducts.	NT$225,000	Strengthen the management of fixed equipment, and ensure that appropriate pollution prevention measures are implemented before any fuel switching is carried out due to abnormalities.
2025.11.20	20-114-110014	Subparagraph 3 of Paragraph 1 of Article 32 of Air Pollution Control Act	This case arose from a public complaint. Personnel were dispatched to conduct an on-site inspection and discovered smoldering inside the coal storage silo (without open flames), causing continuous emission of black smoke from the top of the coal bunker accompanied by the odor of coal.	NT$300,000	1. Records are maintained for the storage duration and stacking levels of each batch of coal upon arrival at the plant.
2. A laser methane detector was purchased for daily monitoring and early detection.
3. Spotlight inspections are conducted when each chamber is emptied to remove wall residue attachments.
4. Coal inventory levels are reduced during maintenance shutdown periods for management purposes.
During smoldering incidents, water is sprayed to reduce the temperature, and the coal is immediately transported to the daily coal bunker for handling.

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(II) Future countermeasures: As above.
(III) ROHS information: No impact on the Company.

Consolidated company

(I) Pan Asia Chemical Corporation

In the most recent year and up to February 28, 2026, the loss and impairment undergone by the Company as a result of environmental pollution (including compensation and environmental protection audit results in violation of environmental protection laws and regulations, the punishment date, file number of penalty, provisions of violated regulations, the content of violated regulations, content of penalty). The Company shall, as well, disclose the estimated amount and countermeasures for a potential occurrence in the future. Where such impairment is unable to be estimated, the Company shall explain the facts why it could not be estimated in a rational manner: None.
Future countermeasures: None.
RoHS information: no impact on the Company.

(II) Taichung Commercial Bank: not applicable.

V. Labor-capital Relationships

The Company

(I) The implementation of employee welfare policy, continuing education and training, and retirement system, and labor-management coordination and the protection of the rights of the employees:

Continuing education and training of employees: The Company has always spared no effort in the education and training of employees. Some employees engaged in specialized functions are assigned to attend external training sessions and they are regularly monitored and retrained from time to time. The Company provides the education and training sessions for department or specified units as needed to reinforce the occupational competence of employees at all levels.

Details on the education and training (specialized and general) of employees in 2025:

Gender	Male	Female
Average number of persons throughout the company	475	82
Training category	Training hours (hr)
Training of specialized occupational competence (preliminary training and re-training for occupational and environmental safety and firefighting certification)	1736	126
Toxic and chemical hazards training (external drills and training)	184	0
Firefighting education and training (annual dumpster firefighting training)	255	33
General knowledge training (education and training sessions for new hires)	158	20
Occupational safety and health regulation training	62	6
Course for accounting personnel	0	51
Continuing education courses for internal auditing personnel	222	68
Corporate governance officer continuing education course	0	3
Total hours of training (hr)	2617	307
Average number of hours (hr/number of people)	5.51	3.74

Employee behaviors or code of ethics: The Company has developed a "Work Rules" manual for employees and personnel management rules, so that employees can clearly understand their rights and the standards on behaviors to be observed.

Work environment and employees' personal safety protection measures:

(1) Access control security: A strict access control and monitoring system is available at all time, and a security patrol company is contracted to maintain the security and safety at night and during the weekend.

(2) Maintenance and inspection of equipment: In accordance with the Regulations for Inspecting and Reporting Public Safety of Buildings, professional firms are contracted to conduct public safety inspection every two or four years. In accordance with the Fire Services Act, firefighting equipment inspection is contracted out to be conducted every year. In accordance with the Occupational Safety and Health Act, the Company regularly conducts maintenance and inspection of air-conditioning, firefighting and various equipment.

(3) Physiological / psychological health: The Company prohibits smoking at the job site, in line with the government's policies. Non-smoking signs are posted to remind employees not to smoke at work to maintain the quality of working environment. Regular and irregular health examinations for employees are arranged to maintain employees' health.

(4) Insurance: Purchase labor insurance (including occupational disaster insurance), health insurance, group insurance according to law. In the event of any casualties, the personnel unit will assist in handling issues related to insurance.

(5) Employee benefits: The Company established an employee welfare committee on December 15, 1976, which is responsible for the welfare of all employees. The measures include welfare assistance, cultural and recreational activities and other welfare subsidies. The budgeting, expenditures and arrangement of welfare benefits every year are discussed and monitored by committee members of the employee welfare committee every three month in their meetings, providing positive stabilizing effect to employees' mental state. Currently, the Employee Welfare Committee provides various subsidies to employees, including holiday bonuses for the three major festivals, birthday gift vouchers, and hospitalization consolation payments. Based on the financial conditions of the committee, domestic group tours are held for employees to develop the bonding.

(6) Employee retirement: The Company has developed retirement, consolation and severance measures in accordance with the Labor Standards Act to offer employees with on-the-job and retirement benefits to appreciate their dedication in providing professional services. In terms of retirement measures for the existing employees who choose the old pension plan and the tenure payment of the old pension plan of the existing employees who choose the newer pension plan, the Company appropriates the proper amount of pension payment in accordance with the Labor Pension Act to the escrow account at Bank of Taiwan. Effective July 1, 2005, the Company has established a defined contribution pension plan under the Labor Pension Act, allocating 6% of monthly salaries and wages of new hires and the existing employee who selected the newer pension plan to the retirement fund personal account at Bureau of Labor Insurance. The application procedures for retirement is stipulated in the Labor Standards Act: Those who have reached the age of 55 and worked for more than 15 years, or those who have worked for more than 25 years, may apply for retirement. Pension benefits are based on the number of ears of service tenure, and two base units are accrued for each year of service. But for the rest of the service years over 15 years, one base is given for each full year of service rendered. The total number of bases shall be no more than 45. The Company also has formed a Supervisory Committee of Labor Retirement Reserve and allocated monthly an amount in accordance with the rules above to a retirement fund at the Bank of Taiwan. In terms of consolation measures, if an employee dies of occupational injury or disease, the Company pays funeral subsidy equal to five months of average wage and a lump sum survivors compensation equal to forty months of average wage to his/her survivors. Condolence payment is given to those who die not of occupational injury or disease. Various amounts of condolence payment are given according to the circumstances. In terms of severance packages, the issuance of severance is based on the service tenure. One month of average salary is

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given for every one year of service. For those who have not worked more than one year at the Company, the payment is at a prorated amount.

(7) Collective Agreement: As the Company has not established a labor union, no collective agreement has been signed with employees. Nevertheless, the Company fully respects and safeguards employees' rights to freedom of association and collective bargaining in accordance with the law. To facilitate employee expression and strengthen harmonious two-way labor-management communication, the Company has established diversified communication channels, including regular labor-management meetings, routine meetings, and employee suggestion mailboxes, to actively listen to employee feedback, respond to needs, and appropriately address various labor-management issues. The operation of the Company's labor-management meetings complies with the "Regulations for Implementing Labor-Management Meeting". Both parties engage in comprehensive communication and consultation on matters including working conditions, welfare policies, and workplace safety, striving to create a harmonious, respectful, and open working environment, with meeting minutes publicly announced. In 2025, a total of four labor-management meetings were convened, attended by labor-management representatives from across the Company and supervisors from various units, to convey, address, negotiate, and respond to issues raised by employees. The meetings included thorough discussions on topics of concern to employees, such as the replacement of employer and employee representatives due to retirement upon reaching mandatory retirement age, periodic evaluations, remuneration and benefits, health examinations, and recruitment through employment service stations, among other issues of mutual concern to both labor and management. These meetings ensured that employees' collective bargaining rights and opinions were properly expressed and reflected. Both parties engaged in timely communication and consultation through labor-management meeting representatives, while unit supervisors also communicated with employees through regular internal meetings to jointly foster a safe and friendly workplace environment. In the future, the Company will continue to uphold the principles of fair treatment and respectful communication to promote positive labor-management interactions, safeguard employees' fundamental rights and interests, and jointly advance the sustainable development of the Company.

(II) Any labor disputes or loss sustained as a result of labor disputes in the most recent year and up to February 28, 2026: None.

*Consolidated companies

(I) Pan Asia Chemical Corporation

The implementation of employee welfare policy, continuing education and training, and retirement system, and labor-management coordination and the protection of the rights of the employees:

(1) Employee welfare policies, profit sharing, and remuneration fairness

The Company upholds a "people-oriented" management philosophy and recognizes that outstanding talent is the core driving force behind continuous innovation in the specialty chemicals industry. Accordingly, the Company is committed to establishing a comprehensive remuneration and care system with strong market competitiveness:

A. As expressly stipulated in the Company's Articles of Incorporation, if there are profits in a given year, 1% to 5% shall be appropriated as employee remuneration. Employee compensation for 2025 was approved by the Board of Directors in March 2026, with the allocated amount and ratio fully consistent with the material information disclosure announcements, thereby implementing the sharing of operating results.

B. In addition to fixed salaries and bonuses, the Company optimized its remuneration structure in 2025 with reference to industry salary surveys, achieving an average annual salary adjustment rate of 2.64% to ensure that remuneration levels remained within the upper percentile range of industry peers.

C. The Company strictly implements the principle of "equal pay for equal work" to ensure that employment, performance evaluations, and promotions are not

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influenced by gender, race, or political affiliation. In 2025, the Company proactively reviewed its gender-based remuneration structure and actively worked to reduce the gender pay gap. Relevant indicators were disclosed in the sustainability report to demonstrate the Company's commitment to workplace equality and to ensure the transparency and fairness of its remuneration structure.

D. The Employee Welfare Committee operates in accordance with the law and provides comprehensive benefits, including festival bonuses, birthday gift vouchers, scholarships and grants for employees' children, marriage and funeral subsidies, and childbirth allowances, thereby comprehensively alleviating employees' living burdens.

E. The Company fully covers the cost of employees' group accident insurance. In 2025, the Company continued to implement friendly workplace programs, including prenatal examination accompaniment leave, paternity leave, and the maintenance of standard lactation rooms. In response to the Ministry of Labor's 2025 initiative promoting "Flexible Unpaid Parental Leave," the Company will, starting from 2026, allow employees to apply for parental leave on a daily or weekly basis. The Company provides on-site consultation services by occupational medicine specialists.

(2) Continuing education and training systems and implementation status To address global decarbonization trends and the challenges of digital transformation, the Company continued to expand its investment in education and training resources in 2025 to build a learning organization:

A. In response to the high-risk characteristics of the chemical industry, the Company focused in 2025 on certification training programs covering "Process Safety Management (PSM)," "Toxic and Concerned Chemical Substance Operators," "High-Pressure Gas Operations," and "Hazardous Chemical Spill Response." By placing equal emphasis on theoretical instruction and practical drills, the Company ensures both technology transfer and production safety.

B. In preparation for the new regulations requiring full disclosure in sustainability reports beginning in 2026, the Company completed employee training for all personnel in 2025 on "GHG Inventory Management (ISO 14064) Competency," "Digital Information Security Protection," and "Anti-Corruption and Corporate Ethics," thereby transforming employee competencies to align with global net-zero targets.

C. In 2025, the total investment in education and training increased compared to previous years, with a total of 515 training participants (72 female and 443 male employees), total training hours reaching 1,997 hours, and average training hours per employee reaching 19.58 hours. The Company continuously tracks posttraining performance outcomes and closely integrates training effectiveness with promotion evaluations.

Item	Total number of person			Total hours	Total cost
	Female	Male	Total
Training for new recruits	1	5	6	48	0
Professional competence training	18	86	104	660	81,424
Managerial skills training	19	34	53	362	36,300
General knowledge training	34	318	352	927	45,145
Total	72	443	515	1,997	162,869

(3) Retirement system and its implementation status The Company rigorously implements all applicable retirement protection regulations to ensure the stability and dignity of employees' retirement lives:

A. Old Pension Scheme: In accordance with the "Labor Standards Act", retirement reserve funds are contributed monthly at a specified percentage of total salaries and deposited into a dedicated account with Bank of Taiwan. The contribution rate is regularly reviewed by the committee to ensure that sufficient funds were fully appropriated and properly allocated in 2025.

B. New Pension Scheme: In accordance with the "Labor Pension Act", 6% of employees' monthly salaries is contributed to individual accounts maintained by the Bureau of Labor Insurance each month. The contribution implementation rate reached 100% in 2025, and career planning and pension application consultation services were provided to employees approaching retirement.

(4) Labor-management agreements, rights protection, and occupational safety

The Company upholds honest communication to maintain stable and harmonious labor-management relations and actively safeguards employees' fundamental rights and interests:

A. Labor-management meetings: Regular meetings were held quarterly in 2025 (a total of four meetings), with the proportion of labor representatives in compliance with regulatory requirements, and a 100% achievement rate was attained for proposals concerning the optimization of labor conditions. A complaint mailbox has been established to ensure that communication channels remain timely and transparent.

B. Occupational safety and health promotion: Health Protection Network: In 2025, annual health examinations (including special health examinations for chemical operations) were conducted, with health risk classification management carried out by dedicated occupational nurses. Work environment monitoring: Indoor air quality, noise, and dust monitoring are conducted regularly to maintain the annual target of "zero disabling injuries."

C. Human rights protection and ethical corporate management: The Company has announced and implemented the "Measures for Prevention, Complaint Handling, and Investigation Procedures for Sexual Harassment" and the "Workplace Sexual Harassment Prevention Measures, Complaint Handling, and Disciplinary Regulations." Following a review conducted in 2025, the Company had no records involving workplace bullying, human rights violations, or significant penalties imposed by competent authorities for violations of labor regulations, thereby fulfilling its corporate social responsibility.

Any labor disputes or loss sustained as a result of labor disputes in the most recent year and up to February 28, 2026: None.

(II) Taichung Commercial Bank

Employees' continuing education:

(1) The Bank organizes training courses for various business operations (such as depository, credit issuance, wealth management and others). Qualified employees are selected to serve as lecturers to conduct internal training and education to help employees in their job planning and career development. In response to the ever-changing trends in the financial markets, employees are encouraged to learn the latest financial knowledge, product information, regulatory systems and markets to provide customer with quality and professional services. Employees are frequently assigned to participate in external training courses. In 2025, a total of 18,854 people were assigned to attend external courses.

(2) To provide convenient learning methods and extended learning time for employees, the Bank also organized different series of courses on its digital learning management system, and the content covers "regulatory requirements," "various professional functions," "workplace soft power," and "workplace English." Except for mandatory participants for different courses, they are also available for all employees to select appropriate courses to take on the platform, so as to reinforce the functions required for different positions. In 2025, there were 70,679 employees who participated in the audio and video courses.

(3) Conceived with the corporate philosophy of "We do our best for you," the Bank has upgraded its belief to "Whole-hearted concern for a bright future" and makes service

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attitude and common courtesy an integral part of routine training of branches. Through the professional code of conduct and legal education, the Bank makes self-discipline and affection an integral part in customer reception so that each competent employee with integrity will be the foundation of the Bank in sustainable development.

Employee Code of Conduct and Ethical Corporate Management Best Practice Principles: Announced on the Company's internal port for all employees to inquire.

(1) All employees shall be law abiding and perform their duties with utmost effort.
(2) The principles of honesty, integrity, caution, diligence shall be duly observed by all and there shall be no arrogance, greed, luxury, unrestrained, loitering and gambling at the expense of the reputation of the Bank. Be humble and courteous in treating the customers and efficient at work.
(3) All employees shall keep the information on the business of the Bank, the customers and their transactions, and any other secretive activities in strict confidence, and shall not disclose to any third party. This code shall be applicable to employees who resigned or discharged from the Bank.
(4) Employees shall not have transaction with current customers of the Bank in lending and borrowing, or shall not act as guarantor or the subject of guarantee.
(5) Employees shall not act as guarantor under their occupational title.
(6) Employees shall not undertake any part-time work beyond the duties of the Bank unless otherwise approved by the Bank.
(7) Employees shall not run business homogenous to the operation of the Bank, and shall not engage in any speculative works privately.
(8) Except in weekend and recognized holidays, employees shall report to duties in designated span of time, and shall be punctual and shall not leave their duties before the end of the working day. In addition, no employee may be absent from their duties without the approval of the supervisor.

Work environment and employees' personal safety protection measures:

Item	Contents
Entrance guard safety	1. A strict access control and monitoring system is available at all time.
2. Contract with the security company to maintain the safety of the office premises at nighttime and holidays.
3. Access to the police authority hotline for caution.
Maintenance and inspection of equipment	The Bank has established the "Taichung Commercial Bank Co., Ltd. Power Consumption Management Guidelines" to reduce disasters caused by electricity usage. The Bank has also established the "Taichung Commercial Bank Co., Ltd. Occupational Safety and Health Self-Inspection Plan" to conduct regular self-inspections of occupational safety and health matters, including daily pre-operation inspections of small boilers; monthly inspections of elevators, mechanical parking facilities, generators, air-conditioning equipment, drinking fountains, accessibility facilities, drainage outlets, and flood barriers; quarterly inspections of official vehicles and firefighting equipment; and annual inspections of high- and low-voltage electrical equipment and small boilers. Through these regular inspections, unsafe equipment, work environments, or operational behaviors can be identified in advance and eliminated or controlled to prevent accidents and safeguard the safety and health of employees.

| Disaster prevention measures and response actions | 1. Fire drills: The headquarters building conducts fire drills twice annually, while each operating unit implements digital courses on “Fire Safety Education and Training and Awareness Activities” every six months.
2. Fire safety equipment maintenance report: The branches shall report to the local fire department once a year.
3. Safety drills: Each operating unit shall organize employee self-defense teams in accordance with environmental characteristics and operational requirements, and may request support from local police authorities. Various emergency response drills shall be conducted at least once every six months.
4. Work environment monitoring for employees: To protect employees from exposure to hazardous substances in the workplace, indoor work environments in buildings equipped with centrally managed air conditioning systems undergo carbon dioxide concentration monitoring once every six months, providing employees with a healthy and comfortable working environment.
5. Drinking water testing: As the Bank uses tap water supplies, the water quality after treatment through drinking water equipment is tested for coliform bacteria once every three months. |
| --- | --- |
| Physical/mental health Health inspection | According to the "Regulations Governing the Labor Health Protection," employers are required to conduct regular health inspections for employees of different ages at different frequencies. The Bank provides regular health inspections that more favorable than the regulations. All employees are entitled to free health inspections every two years, and there is also a infirmary and quarterly health seminars or consultations with physicians to raise employees' health awareness. |
| Insurance | Be enrolled in the labor insurance and health insurance programs pursuant to laws. In the case of any casualty, it is necessary to designate the dedicated personnel to safeguard evidence, contact the insurance company, work with the accidental liability insurance investigation conducted by the employer, filing of the claims and report to the competent authority. |

Labor-capital dispute: There have been no labor-capital disputes in 2025.

VI. Cybersecurity Management

(I) Describe the cybersecurity risks management structure, cybersecurity policy, concrete management plan and resources invested in cybersecurity management.

The Company

(1) Cyber security risks management structure and organization structure

On November 7, 2022, the Company convened the Board meeting and the Audit Committee meeting and resolved to establish a dedicated information security department with a Chief Information Officer (CIO), dedicated information security supervisor, and dedicated personnel to be responsible for the planning of the information security system, monitoring and implementation of information security maintenance operations. The Audit Office is responsible for reviewing and deciding information security and information protection guidelines and policies, refining the effectiveness of information security management measures.

(2) Cyber security policies

To ensure the integrity, confidentiality and availability of the corporation's information, information security policies have been established regulating information security segregation of duties, personnel management and information security educational training, computer system security management, network security management, system access control management, system development and maintenance of security management, information assets security management, physical and environment security management, business sustainable operations plan management, and information security audit; It is a goal to fulfill monitoring and audit matters to ensure the continuous effectiveness of information security regulations.

(3) Specific management plan

A. All computers of the entire Company have been installed with anti-virus software and have been updated with virus codes on a regular basis. The Company has further set up a network firewall to prevent hackers, virus attacks and or any sorts of damage.

B. The Company has elaborately built virtualized server environment along with a fault-tolerant environment to maximize availability. For the data backup of application software and database, the Company has adopted an automatic backup mechanism and a regular version to exercise the disaster recovery plan on an annual basis to minimize the potential risk.

C. The Company has developed system access control and password mechanisms to avoid potential information security risks.

D. The computer mainframe room has been equipped with sound access control system, redundant air conditioning equipment and backup uninterruptible power system protection. The temperature sensing alarm notification system is linked up to the automatic gas firefighting equipment to assure the uninterrupted normal operation of the system all the time.

E. The Company puts into implementation thoroughly information security advocacy to strengthen employees’ personal awareness and watchfulness of information security to minimize potential human risks.

(4) Resources invested in cybersecurity management

A. Establish the information security department and assign one CIO, one dedicated information security supervisor and two dedicated information security personnel in accordance with the requirements.

B. Invested in the upgrade and replacement of information security equipment and firewalls in 2021. In 2022, the Company purchased the next-generation hyperconverged virtual mainframe hardware, introduced it in 2023, and established a backup structure for the existing mainframe.

(II) In most recent two years and up to the publication date of the prospectus, losses arising from material information security events, its possible impacts and countermeasures. If unable to give a reasonable estimation, explain the reasons for being unable to give a reasonable estimation:

Since 2025, the Company has passed both internal and external cyber security audit and there are no discovery of significant deficiencies. There have been no occurrences of information security events such as penalties as a result of data leakage from information security breaches.

Consolidated company
Pan Asia Chemical Corporation

(1) Cyber security risks management structure and organization structure

The Company has established the Administrative Department to coordinate the negotiation and discussions of information security policies, plans, resource allocation, and other matters. On November 13, 2023, the Company convened the Board meeting and the Audit Committee meeting and resolved to establish a dedicated information security department with a dedicated information security supervisor, and dedicated personnel to be responsible for the planning of the information security system, monitoring and implementation of information security maintenance operations. The highest management of the IMO will report to the Board of directors and Audit Committee on the outcomes and related issues of information security management for proposing adjustments to information security policies and amendments. The Audit Office is responsible for reviewing and deciding information security and information protection guidelines and policies, refining the effectiveness of information security management measures.

(2) Cyber security policies

To ensure the integrity, confidentiality and availability of the corporation’s information, information security policies have been established regulating information security segregation of duties, personnel management and information security educational training, computer system security management, network

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security management, system access control management, system development and maintenance of security management, information assets security management, physical and environment security management, business sustainable operations plan management, and information security audit; It is a goal to fulfill monitoring and audit matters to ensure the continuous effectiveness of information security regulations.

(3) Specific management plan

C. The Company has developed system access control and password mechanisms to avoid potential information security risks.

(4) Resources invested in cybersecurity management

A. Establish the information security department and assign one dedicated information security supervisor and one dedicated information security personnel in accordance with the requirements.

B. Currently, there are two information security personnel involved in the management of information security. Their duties include the management and maintenance of information security equipment, and education, training and promotion of information security for personnel.

C. Invested in the upgrade and replacement of information security equipment and firewalls in 2021. In 2022, the Company purchased the next-generation hyperconverged virtual mainframe hardware, introduced it in 2023, and established a backup structure for the existing mainframe.

Taichung Commercial Bank

(1) Information security risk management structure

The highest strategy unit of the Bank’s risk management organization structure is the Board of directors. The Risk Management Committee is established to coordinate risk management of the Bank. The Bank’s Information Security Promotion Committee is convened by the Chief Information Security Officer, with the head of the IT Operations Department serving as deputy convener. The committee oversees the Information Security Implementation Team and the Internal Audit Subgroup, which are responsible for planning and executing information security and business continuity management systems. Additionally, an Information Security Incident Response Team is established to handle and respond to information security incidents. A dedicated Information Security Section is set up under the IT Operations Department to centrally plan the Bank’s information security strategy, implement security policies, promote security awareness, and enhance employee information security consciousness. This section is also responsible for collecting and improving the performance of the Bank’s information security management system in terms of confidentiality, integrity, availability, and compliance of its standards, technologies, and products—ensuring

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alignment with the Bank's business objectives. Two information security management review meetings are held each year to ensure that the implementation of information security management aligns with the intended objectives.

(2) Information security policies

To employ information security management, the Bank has established the information security operation and so on regulations and procedures. It is in the hope to achieve the following policy goals with joint efforts of the entire company employees:

A. Confidentiality: Protect sensitive information from unauthorized disclosure or use.
B. Availability: assure that information and important services are accessible when needed by users.
C. Integrity: appropriate security and protection measures to prevent improper alterations to information. These measures provide assurance in the accuracy and completeness of data.
D. Compliance: ensure that the execution by the Bank's various business service is in compliance the requirements of relevant laws and regulations.

(3) Concrete management plan

In line with the Bank's digital finance development strategy, and to provide reliable and uninterrupted information services, guard against internal and external cybersecurity threats, and enhance employee cybersecurity awareness, the Bank has established cybersecurity controls aligned with business objectives. To strengthen the Bank's defense-in-depth, the U.S. National Institute of Standards and Technology (NIST) Cybersecurity Framework (CSF) has been adopted, as categorized below:

A. Identity

Employees are authorized and managed under the principle of least privilege, and a web security protection system has been implemented to ensure safe internet use within the Bank. Outgoing emails are audited individually by an email outbound review system to prevent sensitive data leakage. Enterprise antivirus software is deployed not only to defend against known risks but also to prevent abnormal behaviors. All external systems must undergo penetration testing, source code and vulnerability scanning, and patching prior to launch, in accordance with internal procedures. Mobile applications are also tested annually. Cybersecurity awareness for all employees is strengthened through regular social engineering drills and cybersecurity training each year.

B. Protect

For external defenses, the Bank uses web application firewalls, intrusion detection and prevention systems, email security systems, and firewalls to establish layered protection. The responsible unit will review and discharge on information protection. Access control is managed by privileged account to prevent non-authorized users from using the system. The physical security management for engine room is maintained through isolation and door access restrictions control. Use of USB ports and CD burners on internal computers is generally prohibited, with limited exceptions.

C. Detect

The Bank subscribes to phishing website and mobile application monitoring services to detect, analyze, and take down fake platforms, reducing fraud risks for customers. For ATM software installation and monitoring, a whitelist management and ATM monitoring system is in place.

D. Respond

To effectively monitor system behavior and incorporate internal and external cybersecurity threat intelligence, the Bank's cybersecurity incident monitoring platform provides dashboards, reports, log retention, and incident analysis. Monitoring rules are reviewed regularly to maintain the effectiveness of automated correlation analysis and alert mechanisms.

E. Recover

The Bank has adopted a business continuity management system. Information systems are built on a two-site, three-center architecture to enhance disaster

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recovery capabilities and shorten recovery time. Tailored drills for each system are conducted annually to ensure effectiveness. For emergency cybersecurity incident response, forensic investigation and digital forensics services are commissioned to ensure that, when incidents occur, the Bank can activate a coordinated defense mechanism to minimize loss.

Each year, the Bank commissions a third party to assess and report on overall information security implementation to the Board of Directors and complete an information security maturity assessment. The implementation of information protection is achievable through the ISO 27001 Information Security Management System (ISMS) which is continuously improved and refined using the PDCA approach, compliance to the BS 10012 (PIMS) system and its relevant regulations.

(4) Resources invested in cybersecurity management

A. Received the 2025 “BSI Digital Trust - Excellence Award” from the British Standards Institution.

B. For three consecutive years, the Bank received the “Quality Award - Digital Information Security Award (Security Category)” from Commercial Times in 2023 and 2024, and the “Gold Award - Digital Information Security Award (Security Category)” in 2025.

C. 40 guidelines and 38 procedures related to information security were established.

D. The Bank obtained the ISO 27001:2022 Information Security Management System transition certification in September 2024. The certificate is currently valid from September 15, 2024 to September 14, 2027. In August 2025, the Bank also passed the ISO 27001:2022 surveillance audit and continues to maintain ISO 27001:2022 Information Security Management System certification in order to strengthen the Bank’s information security resilience.

E. The Bank obtained ISO 22301:2019 Business Continuity Management System certification in January 2025. The certification is currently valid from January 23, 2025 to January 22, 2028, and the Bank passed the surveillance audit in October 2025. The Bank continues to maintain the ISO 22301:2019 Business Continuity Management System certification and continuously optimize the availability of its business continuity services.

F. Over 500 hours of professional education and trainings for dedicated information security personnel.

G. Current cybersecurity certifications held across the Bank include: CISSP (4), CCSP (1), CISM (3), CISA (3), ISO 27001 LA (38), ISO 22301 LA (37), CEH (3), CHFI (1), ECIH (1) and CCISO (1).

H. An information security intelligence section was made available for employees’ reference, sharing more than 28 pieces of information security updates, case analyses, official guidance documents, and monthly information security threat intelligence reports.

I. Investments in protective equipment: Firewall, intrusion prevention system, email protection, email censorship, information security event monitoring platform, web application firewall (WAF), online behavior control, detection of fraudulent websites and mobile applications, mobile device management, privileged management and operation behavior profiling, enterprise anti-virus software, and the physical environment monitoring and protective facilities of the machine room.

J. Regularly conduct Distributed Denial-of-Service (DDoS) drills: As information security attack methods continue to evolve and new security vulnerabilities constantly emerge, cyberattacks have become more extensive and sophisticated than ever before. The Bank therefore conducts regular annual Distributed Denial-of-Service (DDoS) drills to strengthen information security response mechanisms and response measures, while continuously carrying out various information security incident scenarios to enhance protection and response capabilities.

K. Intrusion and Breach Attack Simulation (BAS) testing services: By simulating intrusion and attack techniques used by APT hackers, information security resilience testing is conducted in an automated, continuous, consistent, and risk-

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controlled manner to assess information security protection capabilities. The testing methods adopt both “external-to-internal” and “internal-to-external” attack approaches, with the techniques used covering the tactics listed in the MITRE ATT&CK information security framework. Specific and effective optimization recommendations are also proposed for detected attack scenarios.

L. Red Team attack drill services: The Bank engages professionally certified third parties to conduct Red Team attack drills, simulating the tactics, techniques, and procedures used by attackers or hackers. Within an agreed timeframe, hacker attack methods are employed to conduct attack simulations targeting the Bank’s information systems. Protection and improvement recommendations are proposed for related system risks and vulnerabilities to strengthen the security resilience of the Bank’s digital financial environment and demonstrate the Bank’s commitment to protecting customer assets and achieving sustainable operations.

M. Zero Trust security architecture deployment and assessment were carried out by inventorying resource access paths and distinguishing implementation stages and levels. Based on the principles of maintaining controllable scope, minimizing impact, and achieving substantial reinforcement benefits, priority was given to strengthening the Zero Trust architecture in high-risk environments to enhance the security of the Bank’s systems and data access.

N. Implementation of outbound email review: To strengthen personal data protection in electronic mail communications, the Bank enhanced its electronic mail review and release mechanisms by establishing comprehensive review procedures for encrypted files, image files, and emails containing sensitive information.

O. Conduct information security assessments for computer systems: External parties are commissioned to perform comprehensive information security assessments covering information architecture reviews, network activity reviews, inspections of network equipment, servers, and endpoint devices, Internet server inspections, client application inspections, security configuration reviews, and compliance reviews. These assessments identify potential cybersecurity threats and vulnerabilities from multiple perspectives, thereby continuously strengthening information security operations and security protection mechanisms.

(III) In most recent two years and up to the publication date of the prospectus, losses arising from material information security events, its possible impacts and countermeasures. If unable to give a reasonable estimation, explain the reasons for being unable to give a reasonable estimation:

Since 2025, the Company has passed both internal and external cybersecurity audit and there are no discovery of significant deficiencies. There have been no occurrences of information security events such as penalties as a result of data leakage from information security breaches.

Consolidated company
Pan Asia Chemical Corporation

Up to 2025, the Company has passed both internal and external cybersecurity audits, with no material deficiencies identified. During January 2026, the Company’s external website was subjected to a cyberattack incident. However, no leakage of personal data, confidential information, or important documents occurred, no material impact was caused to the Company’s operations, and no regulatory penalties were imposed due to the information security incident.

Taichung Commercial Bank

No major cybersecurity incidents occurred in 2025 (including overseas branches).

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VII. Major contracts

The Company

Major Agreements	The parties	Contract start and end dates	Term of Agreement	Restriction clauses
Product sale and purchase contract	Pan Asia Chemical Corporation	2023.8.1 - 2026.6.30	Ethylene Oxide Sale Agreement	The buyer shall not resell products purchased from seller
Product sale and purchase contract	Pan Asia Chemical Corporation	2020.7.1 - 2026.6.30	Ethylene Glycol, Diethylene Glycol, and Nonylphenol sales agreement	The buyer shall not resell products purchased from seller
Product sale and purchase contract	Pan Asia Chemical Corporation	2024.5.1 - 2028.12.31	Contracts for the sale of pure water, electricity, steam, and nitrogen and wastewater treatment.	The buyer shall not resell products purchased from seller
Technical cooperation	Shell Research Limited (SHELL RESEARCH LTD.)	From 2003.12.4	Shell EO/EG Process Use License and Engineering Service Permit	Conferred rights shall not be transferred to third parties
Raw material supply	CPC Corporation, Taiwan	2023.1.1 - 2023.12.31	Ethylene and methane purchase agreement	Limited to petrochemical industry
Technical cooperation	Shell Research Limited (SHELL RESEARCH LTD.)	From 2011.5.19	Shell EO/EG Process Use License and Engineering Service Permit	Conferred rights shall not be transferred to third parties
Product sale and purchase contract	Air Liquide Far Eastern Ltd.	From 2011.7.29	Supply Contract for Oxygen and Nitrogen required for EG3 Plant	The buyer shall not resell products purchased from seller
Product sale and purchase contract	ShinHsiung Natural Gas Co., Ltd.	2020.10.31~2030.10.30	Agreement for Installation of Natural Gas Pipeline and Purchase of Natural Gas	The buyer shall not resell products purchased from seller
Loan agreement	Nan Chung Petrochemical Corporation	2024.8.20 - 2025.8.19	Capital lending to joint venture	Non-restriction clauses
Cooperative housing construction agreement	WE & WIN Development CO., LTD.	2023.10.30	Cooperative housing project – Wanhua District, Taipei City	Non-restriction clauses
Cooperative housing construction agreement	WE & WIN Development CO., LTD.	2024.11.11	Cooperative housing project – Sanchong District, New Taipei City	Non-restriction clauses

Consolidated company

(I) Pan Asia Chemical Corporation

Major Agreements	The parties	Contract start and end dates	Term of Agreement	Restriction clauses
Distributor contract	Dong-Fang Trading Co., Ltd.	1. 1. 2025.1.1 - 2025.12.31 2. Both parties may agree to priority renewal upon the expiration of the contract 3. The contract became effective in 1984	1. Distribute products 2. Quantity of distribution 3. Price of distribution 4. Sales region	Party B shall not deal the same type of, similar or competitive products from other manufacturers.
Distributor contract	Chin Yee Chemical Industries Co., Ltd.	1. 2025.1.1 - 2025.12.31 2. Both parties may agree to priority renewal upon the expiration of the contract 3. The contract became effective in 1984	1. Distribute products 2. Quantity of distribution 3. Price of distribution 4. Sales region	Party B shall not deal the same type of, similar or competitive products from other manufacturers.
Distributor contract	Yuan Jen Enterprises Co., Ltd.	1. 2025.1.1 - 2025.12.31 2. Both parties may agree to priority renewal upon the expiration of the contract. 3. The contract became effective in 1984	1. Distribute products 2. Quantity of distribution 3. Price of distribution 4. Sales region	Party B shall not deal the same type of, similar or competitive products from other manufacturers.
Distributor contract	Bun Hong Trading Co., Ltd.	1. 2025.1.1 - 2025.12.31 2. Both parties may agree to priority renewal upon the expiration of the contract. 3. The contract became effective in 1984	1. Distribute products 2. Quantity of distribution 3. Price of distribution 4. Sales region	Party B shall not deal the same type of, similar or competitive products from other manufacturers.
Purchase contract	China Man-Made Fiber Corporation	1. 2023.8.1 - 2025.6.30 2. Automatic extension for one year if both parties do not negotiate to terminate the contract upon the expiration of the contract period.	Purchase EO materials	In-house use, not for resale
Purchase contract	China Man-Made Fiber Corporation	1. 2020.7.1~2025.6.30 2. Automatic extension for one year if both parties do not negotiate to terminate the contract upon the expiration of the contract period.	Purchase NP materials	In-house use, not for resale
Purchase contract	China Man-Made Fiber Corporation	1. 1. 2024.5.1 - 2028.12.31 2. Automatic extension of validity if both parties do not negotiate to terminate the contract upon the expiration of the contract period.	Contracts for the purchase of pure water, electricity, steam and nitrogen and wastewater treatment.	In-house use, not for resale

(II) Taichung Commercial Bank

Major Agreements	The parties	Contracting Parties	Term of Agreement	Restriction clauses
Service agreement	Leebao Security Co., Ltd. Anfeng Enterprise Co., Ltd.	2023.3.4 - 2026.3.3	ATM cash loading and problem elimination service	N/A
Service agreement	G4S Taiwan (Security)	2025.11.1 - 2027.10.31	Security guards at the banking locations	N/A
Service agreement	G4S Taiwan (Security)	2025.11.1 - 2027.10.31	Security guards at corporate headquarters	N/A
Labor service procurement	Yu Hsiao-lan Architects Office	2016.1.05- Construction completed	Appointment of supervision and technical design services for the construction of the corporate headquarters new building	N/A
Labor service procurement	EARTH POWER Co., Ltd.	2024.12.01 - 2026.01.01	Interior renovation project for the banking space of the new headquarters building	N/A
Labor service procurement	Da-Cin Construction Co., Ltd. EARTH POWER Co., Ltd.	2019.3.29 - Construction completed	New Construction Project for the Taichung Commercial Bank Office Building and Hotel	N/A
Labor service procurement	Rich Honour International Designs Co., Ltd.	2022.9.29 - Construction completed	Commission for interior decoration and design of buildings	N/A
Labor service procurement	Transnational Logistics Solutions (Taiwan) Pte Ltd. Taiwan Branch (Singapore)	2024.07.01 - 2026.06.30	Procurement project for check and document delivery services	N/A
Labor service procurement	Leebao Security Co., Ltd.	2025.1.14 - 2026.12.31	Cash transportation for 2025-2026 Outsourced service procurement project	N/A

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Five. Review of financial position and financial performance, and risk disclosure

I. Financing status (extra-industry combined information)

Table of Comparative Analysis of Financial Conditions
Unit: NTD thousand

Year Item	2024	2025	Difference
			Amount	%
Current assets	745,922,400	789,172,649	43,250,249	5.80
Funds and investments	212,311,976	209,076,238	(3,235,738)	(1.52)
Property, plant and equipment	28,829,510	30,200,482	1,370,972	4.76
Investment property	3,568,796	3,546,728	(22,068)	(0.62)
Intangible assets	339,512	571,368	231,856	68.29
Other assets	5,608,409	5,720,867	112,458	2.01
Total assets	996,580,603	1,038,288,332	41,707,729	4.19
Current liabilities	883,413,218	912,922,378	29,509,160	3.34
Long term liabilities	8,060,580	8,238,801	178,221	2.21
Other liabilities	21,049,281	25,181,370	4,132,089	19.63
Total liabilities	912,523,079	946,342,549	33,819,470	3.71
Share capital	16,859,057	16,859,057	0	0.00
Capital surplus	1,712,237	1,748,211	35,974	2.10
Retained earnings	2,633,385	2,732,618	99,233	3.77
Other equity	86,599	635,399	548,800	633.73
Non-controlling interest	62,766,246	69,970,498	7,204,252	11.48
Total equity	84,057,524	91,945,783	7,888,259	9.38
Note: the most recent two years' increase/decrease exceeds 20%: 1. Increase in intangible assets: Primarily due to an increase in computer software at the subsidiary Taichung Commercial Bank. 2. Increase in other equity items: Primarily attributable to an increase in unrealized valuation gains from financial assets measured at fair value through other comprehensive income by the parent company (China Man-Made Fiber).

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II. Financial performance (extra-industry combined information)

(I) Financial performance comparative analysis table

Unit: NTD thousand

Item	2024	2025	Increase (decrease)	Variation %
Income	45,380,155	45,272,858	(107,297)	(0.24)
Expenses	(37,446,485)	(36,565,179)	881,306	2.35
Income before tax from continuing operations	7,933,670	8,707,679	774,009	9.76
Income tax expenses	(1,632,857)	(1,814,369)	(181,512)	(11.12)
Net profit after tax from continuing operations	6,300,813	6,893,310	592,497	9.40
Net (loss) profit attributable to owners of the parent	27,521	118,827	91,306	331.77
Net profit attributable to non-controlling interest	6,273,292	6,774,483	501,191	7.99
Earnings per share	0.02	0.09	0.07	350.00
Description on the most recent two year’s fluctuation of an increase or decrease exceeding 20%:
3. Net profit attributable to owners of the parent increased compared to the previous period: Mainly due to higher non-operating income and lower non-operating expenses.
4. Earnings per share increased compared to the previous period: Primarily due to the increase in net profit of the parent company (China Man-Made Fiber).

(II) The basis for anticipating the future one year’s sales volume, the probable impact to company future finance operation and the response plan: the merged company’s ethylene glycol, ethylene oxide, surface active agent and related products would take into consideration the overall operating strategy by allocating a most suitable production volume on various products, through which to create the best profitability.

III. Cash flows (consolidated information from different industries)

Unit: NTD thousand

Balance of cash and cash equivalents at the beginning of the period	Net cash flow from operating activities for the year	Full year cash and cash equivalent outflow volume	Exchange rate impact	Balance of cash and cash equivalents at the end of the period	Remediation measures against expected cash flow deficit
					Investment plans	Finance plans
49,506,703	3,373,644	2,562,591	(3,734)	55,439,204	Not applicable	Not applicable

(I) Changes of cash flow in current year analysis:

Operating activities: derived from operating activity net cash inflow at NT$3,373,644 thousand, which primarily stems from the cash inflow from deposits and remittances of Taichung Commercial Bank.
Investing activities: Cash inflow of NT$714,809 thousand from investing activities can mainly be attributed to the acquisition of financial assets measured at fair value through other comprehensive income by Taichung Commercial Bank.
Fundraising activity: fundraising activity has generated of the cash inflow is at $1,847,782 thousand, which primarily stems from Taichung Bank issuing financial bonds.

(II) Responsive measures and liquidity analysis on cash flow deficits: not applicable.

(III) Liquidity analysis for the next year:

Unit: NTD thousand

Balance of cash and cash equivalents at the beginning of the period	Net cash flow from operating activities for the year	Full year cash and cash equivalent outflow volume	Exchange rate impact	Balance of cash and cash equivalents at the end of the period	Remediation measures against expected cash flow deficit
					Investment plans	Finance plans
55,439,204	5,021,845	4,015,005	(6,954)	64,469,100	Not applicable	Not applicable

IV. The material effects of significant capital expenditures on finance and business in the most recent year: Capital expenditures of the Company amounting to approximately NT$53 million in 2025 had no significant impact on financial operations of the Company. Expenditures were mainly generated by equipment improvement and replacement.

V. Direct investment policy, the main reasons for profit or loss and corrective action plan in the most recent year and investment plan in the next year:

(I) Explanation of Investment Gains and Losses: Adhering to the principle of prudent management, the Company's investee enterprises have demonstrated sound performance in various aspects, including risk control and business development. The overall performance of these investee enterprises remains in a state of continued profitability.

(II) Investment plan scheduled toward the upcoming year: As of February 28, 2026, there was no major investment plan ahead.

VI. Risk disclosure

(I) The impact of changes in interest rate, exchange rate, and inflation on the Company's profit or loss in recent years, and future response measures.

Explain the impact upon the Company's exchange gains and losses and interest income as well as expenditure in the most recent two years on the Company's profit and loss: (Consolidated information from different industries)

Item	2025	2024
Exchange gain (loss) (A)	1,517,019	(1,805,503)
Interest receipt (expenditure)(B)	12,871,368	11,885,559
Operating revenue (C)	45,272,858	45,380,155
A/C	3.35%	(3.98)%
B/C	28.43%	26.19%

Impact of inflation on the Company's profit and loss in the most recent year: Based on the annual growth rate of the Consumer Price Index in 2025, there was no significant inflation issue, and the impact on the Company's profit and loss was minimal.
The Company's tangible measures for countering exchange rate fluctuation, interest rate fluctuation and inflation:

The company's export market revenue accounts for a certain ratio in its revenue, and export payments are also largely in USD, thus exchange rate fluctuations bear a certain impact to company loss or gain. In response to exchange rate fluctuations, adequate exchange rate hedging financial products are used, under a conservation principle (i.e., buying/selling longer-term foreign exchange and related maneuvers to adequate hedge against exchange rate fluctuation risk).

The consolidated company has hold of floating interest rate asset and the floating interest rate debt it sustains may see market interest rate fluctuation to create fluctuation risk on said asset and liability and upon assessing it, the merged company controls the liquidity gap in its practical implementation of the operation, through which to mitigate the risk arisen form interest rate fluctuations.

(II) The policy of engaging in high-risk, highly leveraged investments, loaning of funds,

endorsements and guarantee and derivatives trading, the main reason for profit or loss and future response measures:

Engaging in high risk, high leverage investment: nil.
Lending to others and endorsement and guarantee:

(1) Information on capital lending to others

To step up the finance management in loans to others and mitigating the operating risk, the procedure has been formulated in accordance with the “public listed companies’ capital lending and endorsement guarantee processing criteria.”

(2) The information on endorsement guarantee for others is as follows:

Unit: NTD thousand

Name of Endorser/Guarantor	Endorsed/Guaranteed		Maximum endorsement and guarantee balance for the current period
	Company name	Affiliation
Chou Chin Industrial Co., Ltd.	Greenworld Food Co., Ltd.	Subsidiary of Chou Chin Industrial Co., Ltd.	15,000
Taichung Commercial Bank Lease Enterprise	Taichung Commercial Bank Leasing (Suzhou) Ltd.	A subsidiary of Taichung Commercial Bank Company, Limited	6,667,866

Derivative transactions:

The derivative transactions were conducted in accordance with the Company’s established “Procedures for Handling Derivative Transactions.” The derivative instruments signed by the consolidated company include forward foreign exchange contracts, currency swap contracts and convertible bond asset swap contracts that are used to manage the interest rate and exchange rate risk of the consolidated company.

(III) Recent R&D projects, current progress of unfinished R&D projects, estimated additional R&D expenditures required, expected timing for mass production completion, and major factors affecting future R&D success: The Company’s products belong to a mature industry, and therefore there are no significant R&D expenditures.

(IV) The most recent year’s critical local, foreign policy and legal changes to the company finance’s impact and countermeasures: the company has all adopted adequate countermeasures in response to critical local/foreign policy and legal changes, which bear no critical impact to company finance operations.

(V) The impact of technological change (including cyber security risks) to the Company’s finance, business, and the countermeasures: In the most recent year, the Company’s industry has not had any major industry change, thus it bears no impact to the Company’s finance and business.

(VI) The Company has established firewalls and intrusion detection systems to monitor anomalies, along with antivirus systems for servers and computers at all levels, and patch management for operating systems and databases. Starting this year, cybersecurity education and training have been reinforced each quarter, with awareness programs implemented according to employee rank and role. Areas requiring further enhancement and implementation include outsourced vulnerability scanning and penetration testing, email-based social engineering drills, and the evaluation of cybersecurity insurance. Even with comprehensive cybersecurity protection measures in place, the risk of corporate losses due to malicious hacker attacks cannot be entirely eliminated. Therefore, insurance coverage is being considered as a means to mitigate potential losses.

(VII) The impact of the most recent year’s enterprise image change to the company’s crisis management and the countermeasures: the company management has always emphasized on a good corporate image, solid management, and there has not been any major change in recent years, thus bears no impact to its enterprise crisis management, as the company would continue to uphold the principle to achieve a sustainable management.

197 -

(VIII) Expected results and possible risks of mergers and acquisitions and countermeasures: None.

(IX) The expected benefits from plant expansion, the potential risks associated, and the responsive measures: None.

(X) The risk confronting the incoming goods or good sold and the countermeasures: upon assessing it, the risk is flow, but the company would continue to step up the collaboration relations as the countermeasure.

(XI) The risks and impacts of significant shareholding transfers by directors, supervisors, or major shareholders with more than 10% ownership interest and the responsive measures to such risks: none.

(XII) The effects, risks and responsive measures associated with changes in management: None.

(XIII) Litigious or non-litigious matters:

O-Bank and Yuanta Bank filed a joint and several liability litigation against the company in February and November, 2020 following the New Site Industries Inc. case. The company has appointed a lawyer to defend by law. The attorney argues that this case does not objectively involve performance of duties by employees and that the Company should therefore bear no joint and several liability with regard to this case. However, the court believes after hearing the case that the bank is entitled to request compensation from the Company, but it should also consider negligence on the part of the bank, which could result in the reduction or exemption of the liability to compensation thereby affecting the compensation amount payable by the Company. On August 23, 2024, the Company received a notice from the Taipei District Court informing that Yuanta Bank had withdrawn its lawsuit. The case was concluded as Yuanta Bank withdrew its claim against the Company. The Company has recognized a provision of NT$53,916 thousand for the pending litigation case involving O-Bank.

(XIV) Other important risks and response measures: none

VII. Other important matters: None

198 -

199 -

Six. Special remarks

I. Affiliated companies
Information Access Path: Taiwan Stock Exchange MOPS
https://mops.twse.com.tw/ >> Individual Company >> Electronic Document Download >> Related Enterprise Reports Section >> Company Code 1718 >> Search

II. Status of private placement of securities and progress of plan execution for the most recent year and up to the date of annual report publication: None

III. Other supplementary information: None

IV. Occurrences of events defined under Article 36-3-2 of the Act in the latest year up till the publishing date of this annual report that significantly impacted shareholders' equity or security prices: None

200 -

China Man-Made Fiber Corporation

Chairman Kuei-Hsien Wang

AI assistant

CMFC Annual Report 2025

51899_rns_2026-05-22_7321c224-a576-48ed-8cf2-d23065a82559.pdf

China Man-Made Fiber Corporation

2025 Annual Report

Table of Contents

III. Development strategy of the Company in the future

I. Information on the directors

II. Remuneration paid to Directors, President and Vice President in the most recent year

1. Remuneration of directors and independent directors

2. Remuneration to the President and Vice President

3. Individual remuneration paid to each of the top five management personnel

Responsibilities of the Renumeration Committee

1-1 GHG inventory and assurance of the Company in the most recent two years

1-1-1 GHG inventory information

1-1-2 GHG assurance information

1-2 GHG Emission Reduction Targets, Strategies, and Action Plans

II. GHG emission reduction strategies and specific action plans

Three. Fundraising Status

I. Capital and shares

(II) Industry overview

2. Manufacturing process

1. Pan Asia Chemical Corporation

VII. Major contracts

Five. Review of financial position and financial performance, and risk disclosure

II. Financial performance (extra-industry combined information)

(I) Financial performance comparative analysis table

III. Cash flows (consolidated information from different industries)

(I) Changes of cash flow in current year analysis:

(II) Responsive measures and liquidity analysis on cash flow deficits: not applicable.

(III) Liquidity analysis for the next year:

Six. Special remarks

China Man-Made Fiber Corporation

AI assistant

CMFC — Annual Report 2025

51899_rns_2026-05-22_7321c224-a576-48ed-8cf2-d23065a82559.pdf

China Man-Made Fiber Corporation

2025 Annual Report

Table of Contents

III. Development strategy of the Company in the future

I. Information on the directors

II. Remuneration paid to Directors, President and Vice President in the most recent year

1. Remuneration of directors and independent directors

2. Remuneration to the President and Vice President

3. Individual remuneration paid to each of the top five management personnel

Responsibilities of the Renumeration Committee

1-1 GHG inventory and assurance of the Company in the most recent two years

1-1-1 GHG inventory information

1-1-2 GHG assurance information

1-2 GHG Emission Reduction Targets, Strategies, and Action Plans

II. GHG emission reduction strategies and specific action plans

Three. Fundraising Status

I. Capital and shares

(II) Industry overview

2. Manufacturing process

1. Pan Asia Chemical Corporation

VII. Major contracts

Five. Review of financial position and financial performance, and risk disclosure

II. Financial performance (extra-industry combined information)

(I) Financial performance comparative analysis table

III. Cash flows (consolidated information from different industries)

(I) Changes of cash flow in current year analysis:

(II) Responsive measures and liquidity analysis on cash flow deficits: not applicable.

(III) Liquidity analysis for the next year:

Six. Special remarks

China Man-Made Fiber Corporation

More from CMFC

CMFC Annual Report 2025