Stock Code: 8341

SUNNY FRIEND ENVIRONMENTAL TECHNOLOGY CO.,LTD.

Annual Report 2025

Address : 10F.-3,No.20,Sec.3,Bade Rd.,Songshan Dist.,Taipei City
Tel : (02)2579-5580 Fax : (02)2579-4015
Market Observation Post System: http://mops.twse.com.tw/
www.sunnyfriend.com.tw

Printing Date: March 31, 2026

THIS IS A TRANSLATION OF THE 2025 ANNUAL REPORT (THE “ANNUAL REPORT”) OF SUNNY FRIEND ENVIRONMENTAL TECHNOLOGY CO.,LTD. (THE “COMPANY”). THIS TRANSLATION IS INTENDED FOR REFERENCE ONLY AND NOTHING ELSE, THE COMPANY HEREBY DISCLAIMS ANY AND ALL LIABILITIES WHATSOEVER FOR THE TRANSLATION. THE CHINESE TEXT OF THE ANNUAL REPORT SHALL GOVERN ANY AND ALL MATTERS RELATED TO THE INTERPRETATION OF THE SUBJECT MATTER STATED HEREIN.

I. Spokesperson:

Name: Ming-Hung Hsieh

Title: Assistant Vice President

Tel: (02) 2579-5580#307

E-mail: [email protected]

Deputy Spokesperson:

Name: Yong-Dian Chang

Title: Vice General Manager

Tel: (05) 788-5788#703

E-mail: [email protected]

II. Contact Information of the Head Office, Branch Offices and Factories

Head office and Yunlin Plant:

Add: No.1-20, Yuan Dong Rd., Yuanchang Township, Yunlin County

Tel: (05) 788-5788 Fax: (05)788-7933

Zhangbin Plant:

Add: No. 2, Zhangbin W. 5th Rd., Xianxi Township, Changhua County

Tel: (04) 791-0135 Fax: (04)791-0239

Taipei Office:

Add: 10F.-3, No.20, Sec. 3, Bade Rd., Songshan Dist., Taipei City

Tel: (02) 2579-5580 Fax: (02)2579-4015

III. Share Transfer Agency

Name: Grand Fortune Securities Co., Ltd. Stock Transfer Dept

Address: 6F., No.6, Sec.1, Zhongxiao W. Rd., Zhongzheng Dist., Taipei City

Website: https://www.gfortune.com.tw/

Tel: (02)2371-1658 Fax: (02)2371-5618

IV. Contact Information of the Certified Public Accountants for the Latest Financial Report

Name: Accountant Chin-Lien Huang and Chih-Fan Yu

CPA Firm: Pricewaterhouse Coopers (PwC) Taiwan

Address: 27F, No. 333, Section 1, Keelung Road, Taipei City

Website: www.pwc.com/tw

Tel: (02)2729-6666 Fax: (02) 2757-6371

V. Overseas Trade Places for Listed Negotiable Securities: None

VI. Company Website: www.sunnyfriend.com.tw

Items

One. Letter to Shareholders... 1
Two. Corporate Governance Report... 8
I. Profile of directors, general managers, vice general managers, assistant presidents, and supervisors of departments and branches ... 8
II. Remuneration paid during the most recent fiscal year to directors of the board, the general manager, and vice general managers... 24
III. Implementation of Corporate Governance... 41
IV. Audit Fee of Independent Auditors... 151
V. Change of Auditors... 151
VI. If the chairman, general managers, and managerial officers in charge of its finance and accounting operations held any positions within the company's independent audit firm or its affiliates during the past one year, the name, title and the period of the employment shall be disclosed... 151
VII. Any transfer of equity interests and/or pledge of or change in equity interests (during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report) by a director, supervisor, managerial officer or shareholder with a stake of more than 10 percent during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report... 152

VIII. Information on top ten shareholders and their mutual relationship as spouse or blood relative within the second degree according to the Accounting Standards 6... 153

IX. The total number of shares and total equity stake held in any single enterprise by the Company, its directors, supervisors, managerial officers, and any companies controlled either directly or indirectly by the Company... 155

Three. Financing Activities... 156

I. Capital and Shares... 156

II. Corporate bonds, preferred stocks, global depository receipts, restricted stock awards and new share issuance in connection with mergers and acquisitions... 160

III. Financing plans and implementation... 160

Four. Overview of operations... 161

I. Description of Business... 161

II. Overview of Market, Manufacturing and Sales... 168

III. The number of employees employed for the 2 most recent fiscal years and during the current fiscal year up to the date of publication of the annual report, their average years of service, average age and educational levels... 178

IV. Environmental protection expenditure... 178

V. Labor relations... 178

VI. Information security management... 181

VII. Import contracts... 183

Five. Review and Analysis of Financial Position and Results of Operations and Risk Management... 185

I. Financial position... 185
II. Operating Performance... 186
III. Cash flow... 187
IV. Effect upon financial operations of any major capital expenditures during the most recent fiscal year... 187
V. The Company's reinvestment policy for the most recent fiscal year, the main reasons for the generated profits/losses, the plan for improving re-investment profitability and investment plans for the coming year... 187
VI. Analysis and assessment of risks in the most recent fiscal year and up to publication date of the annual report... 190
VII. Other important matters... 193

Six. Special Items to be Included... 194

I. Information related to the company's affiliates... 194
II. Status of private placement of securities during the most recent fiscal year or up to the date of publication of the annual report... 194
III. Other matters that require additional description... 194

Seven. If any of the situations listed in Article 36, paragraph 2, sub-paragraph 2 of the Securities and Exchange Act, which might materially affect shareholders' equity or the price of the company's securities, have occurred during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report, such situations shall be listed... 194

One. Letter to Shareholders

Greetings to all of our valued shareholders,

We welcome all shareholders to take the time to attend the 2026 annual general meeting. The Company's 2025 business report and the 2026 business plan are described as follows:

I. 2025 Business Results

(I) Results of the business plan:

Owing to the support of our shareholders and employees, the Company and its subsidiaries delivered consolidated revenue and net income after taxes totaling NT$3,990,550,000 and NT$688,353,000, respectively, for 2025. Compared with NT$3,696,692,000 of consolidated revenues and NT$558,153,000 of consolidated net income after taxes of 2024, they represented growth rates of 7.95% and 23.33%, respectively, with an after-tax EPS of NT$4.48 in 2025. On behalf of the board of directors, we would like to thank all employees for their contribution and the shareholders for your continuous support.

Unit: NT$1,000

Account\Year	2025	2024	Difference	YoY growth %
Operating revenue	3,990,550	3,696,692	293,858	7.95%
Gross profit	1,723,728	1,566,636	157,092	10.03%
Profit before income tax	910,788	671,272	239,516	35.68%
Net income	688,353	558,153	130,200	23.33%
Earnings per share	4.48	3.69	0.79	21.41%

(II) Budget implementation:

The Company was not required to make public financial forecasts in 2025 under the prevailing laws. Business performance is generally in line with internal plans.

(III) Financial income and expense and profitability analysis:

(1) Financial income and expense

Items		2025	2024
Financial structure	Debt to asset ratio (%)	42.27	46.14
	Long-term funds to fixed assets ratio (%)	125.77	127.83
Solvency	Current ratio (%)	154.67	163.96
	Quick ratio (%)	135.93	145.55

Note: Based on the data of the consolidate financial statements.

(2) Profitability

In terms of profitability, the Company produced NT$910,788,000 of net profit before tax, up NT$239,516,000 or 35.68% from last year's NT$671,272,000. After-tax earnings per share are calculated at NT$4.48 for the year, up NT$0.79 from the previous year's NT$3.69. Both profitability indicators have shown improvements on a year-on-year basis. The increase in profitability is mainly due to the increase in this year's operating revenue compared to the previous year's, resulting in an increase in net income after tax.

Items	2025	2024
Return on assets	6.93%	5.71%
Return on shareholders’ equity	11.96%	10.18%
Operating profit margin	23.75%	19.41%
After-tax profit margin	17.25%	15.10%
After-tax earnings per share	4.48	3.69

(IV) Status on research and development

We are a company specializing in handling medical and business waste. In view of the awareness of environmental protection in the field of business and corporate social responsibility, the Company formulates control measures to prevent negative impact on the surrounding environment due to mishandling of waste and uses effective statistical data to enhance the processing capability.

In 2021, we collaborated with Ruentex Materials' plant in Dongshan Township, Yilan County to start the reuse of bottom slag of incinerator as an alternative raw materials to be used in cement production and obtained the general reuse permit for incinerator bottom slag in September 2025.

II. Summary of 2026 Business Plan

(I) Business guidelines:

In response to the stability in the supply and demand of businesses handling infectious industrial waste, the Company actively develops the business of general medical waste mixture to increase the utilization of production capacity.

In response to the 6th batch of the new control target of the Continuous Emission Monitoring System (CEMS) for air pollutants from stationary pollution sources, the Company actively adopts joint or shared processing systems that have been eliminated.
Differentiate the positioning to improve the competitive advantage of the cleaning service in the price-oriented pure competition.
Maintain the Company's leadership in handling medical waste and expand to the markets where solidification and physicochemical treatment of business waste are required, and develop environmental testing and inspection agency licensing services.
Introduce an information management system to strictly control revenue and expense and abide by the budgeting to improve the operating performance and ensure profitability.

(II) Business objectives:

The plant in the Changhua Coastal Industrial Park is in smooth operation overall, and the plants of Beijing Ruentex and Yunlin have been operating throughout the year. For 2026, we will continue to cultivate the medical waste market and the industrial waste business, continuously cooperate with the Resource Circulation Administration, Ministry of Environment to implement the "Reduction, Recovery and Resource Recycling Promotion Plan - Asbestos Building Materials Waste Removal and Treatment Plan", and strengthen the development of waste business as the key focus.

The operating permit for the Phase 3 landfill at Changhua Coastal Industrial Park was obtained in August 2023. The Company acquired the environmental protection land plot at W3 of Xianxi District, located in Changhua Coastal Industrial Park, from the Industrial Development Bureau of the Ministry of Economic Affairs in 2020. The construction permit was approved on April 28, 2023, and the project was contracted in August of the same year and is now in progress. The project is expected to be completed in the second quarter of 2026, and the user license will be obtained in the third quarter.

In response to the damage to buildings in Chiayi City, Chiayi County, and Tainan City caused by Typhoon Danas on July 6, 2025, the Ministry of Environment approved subsidies for the three counties and cities, requesting local governments to prioritize assisting residents in transporting asbestos building material waste to storage areas. The Executive Yuan approved the cleanup of asbestos waste generated by residential, livestock, and agricultural facilities, as well as other structures affected by the disaster, on July 29, 2025, to accelerate recovery efforts. The Company also cooperated with the central government's policy to assist in the disposal of typhoon-damaged asbestos building materials.

The industrial waste market in China is affected by the downturn of the overall economy, and the overall industrial waste market has shrunken in both volume and prices, resulting in

the operating conditions of the subsidiary in China not as good as expected. Nonetheless, the subsidiary continues to improve its treatment technology in hopes of increasing waste processing efficiency and maintaining 2026 levels of waste processing capacity.

(III) Important manufacturing and sales policies:

Regularly hold the training of or contracts out the training of operators and equipment maintenance personnel of the plant and continue to improve the incineration operations to raise the efficiency.
Improve the existing processing equipment to comply with the increasing stringent environmental regulations, further improving the utility of working hours and the effective capacity of different organizational units.
Regularly organize training sessions for professional ability of sales staff and their assistants and the Company drivers and make commitment to handle customers' claims or complaints.
Enhance customer service to ensure their satisfaction.
Focus on defining market positioning to avoid competition posed by new market entrants.
Keep an eye on the demand and supply of market and adopt the necessary marketing strategies in a timely manner.
Establish strategic alliances with recycling operators to have a more complete product offering.
Assess markets related to environmental protection to conduct investment diversification.

III. Future Development Strategies

(I) Biomedical waste:

According to the latest statistics from the Ministry of Health and Welfare, there are about 24,000 medical institutions nationwide. About 33% of the waste from medical institutions is biomedical waste that requires special attention. For many years, biomedical waste disposal has been one of the most successful tasks handled by government agencies. Almost all of the produced biomedical waste are disposed of according to regulations, so the market is saturated. In view of such market conditions, we intend to adopt a strategic alliance approach to increase our competitiveness and expect to improve the stability of market prices. We use our own market advantages and economies of scale to carry out consolidation, merger, and acquisition for small and medium cleaning companies and treatment organizations.

In order to promote diverse reporting channels for the delivery notes of non-controlled

hazardous industrial wastes, the Ministry of Environment of the Executive Yuan has announced the amendment to Article 17 of the Methods and Facilities Standards for the Storage, Clearance and Disposal of Industrial Waste on February 16, 2022, which added that electronic forms would be available for network transmission in addition to paper document submission. The Company will encourage collaborating cleaning companies to cooperate in the implementation of electronic delivery forms to jointly achieve energy conservation, paper reduction, and improvement of work efficiency.

(II) Business waste:

Waste management presents challenges and requires attention:

The Ministry of Environment is promoting challenging waste removal and disposal procedures that require attention. The Company will also continue to cooperate with the handling of asbestos building material waste.

Advocate for the remediation of pollution sites:

The Environmental Management Administration of the Ministry of Environment has been accelerating pollution improvement efforts since 2017, promoting plans for the remediation of polluted sites. Starting in 2024, it has implemented phased and annual projects to achieve comprehensive pollution improvement and risk control. The Company cooperated with rectification policies to seek revenue sources.

Adopt the business waste policies of the Ministry of Economic Affairs to help the government in solving the cleaning and disposal issues.

The output of industrial waste from designated businesses nationwide in 2024 was 19.83 million metric tons. The industrial sector produced the most industrial waste nationwide, with an output of 16.73 million metric tons, of which 1.55 million metric tons are hazardous industrial waste (accounting for 9.3%). The Industrial Development Bureau provides guidance to Super-Max Engineering in northern Taiwan, Sunny Friend (plant in Changhua Coastal Industrial Park) in central Taiwan and Cowin Environmental Resources Waste Treatment Center in southern Taiwan. The incineration units in the three regions can process a total of 12,030 metric tons per month. Sunny Friend's plant at Changhua Coastal Industrial Park will continue to help the government resolve the imbalance of supply and demand in the market for industrial waste disposal.

Develop partnerships among industry, the government and academe and expand capabilities to improve the processing of waste generated by various industries.
Rooted in Taiwan and expansion in China:

Currently, we have bases in Beijing, Jiangsu Suqian, Shanxi Yuncheng and

Shandong Rizhao.

IV. Impacts of the Competitive, Regulatory and Macroeconomic Environmental Factors

(I) Biomedical waste:

The government authority has been working on adding more recycling facilities for infectious business waste. Medical institutions have vigorously promoted waste reduction and resource recovery and recycling, which will reduce the amount of combustible biomedical waste.

In response to the announcement of the Ministry of Environment to add the 6th batch of fixed pollution sources for which continuous automatic monitoring facilities should be installed in public and private places which should be linked to the competent authorities, the Company will continue to monitor the willingness of the joint processing system and competitors in the same industry to invest in the equipment.

(II) Business waste:

Incineration of hazardous business waste:

To continue to promote the active implementation of sustainable development, the FSC has been actively encouraging TWSE/TPEx-listed companies to set reduction targets, strategies and action plans, and thereby ensure that the waste management policies of large-scale business institutions are oriented towards waste sorting and recycling. The Company will continue to monitor the impact of the international ESG on the waste disposal market.

Solidification and landfill treatments of hazardous business waste:

On June 18, 2024, the Ministry of Environment amended the "Principles of Subsidy for Removal and Treatment of Asbestos Building Material Waste" by expanding the scope of subsidies to include business buildings that have construction stopped or been closed down or shut down. Based on the on-site investigation experience, on November 12, 2024, its report was approved by the Executive Yuan to include them in the scope of subsidies for business buildings. Subsequently, "livestock farms" will be given priority in being included in the subsidy program for removal and disposal of asbestos building materials waste, and it was expected to be implemented in 2025. This amendment will help accelerate the proper cleanup of old asbestos-containing building materials waste.

Environmental regulations:

In order to continue expanding real-time monitoring of air pollutant emissions from stationary sources in public and private facilities, and to enhance the monitoring and control capabilities of these sources, the Ministry of Environment amended the

"Fixed Pollution Sources Required to Install Continuous Automatic Monitoring Facilities and Connect to the Competent Authority" on January 2, 2025. The amendment adds a sixth group of public and private facilities required to install these facilities and connect to the authority, and includes sources that use solid recycled fuels and waste-derived fuels, hazardous waste thermal treatment processes, and facilities that have received serious shutdown orders. This amendment also incorporates small incinerators with a processing capacity of less than 400 kg per hour into the monitoring requirements (with some exclusions), which will encourage technological upgrades within the incineration industry or facilitate market exit for less competitive facilities.

In order to align with the new national carbon reduction target and increase the carbon reduction efforts of various sectors, the Ministry of Environment announced a list of emission sources that businesses are required to inventory and report GHG emissions on March 4, 2025. This list includes the service sector, transportation sector, medical institutions, and other businesses. Entities that meet the criteria specified in the announcement will be required to complete annual GHG emission inventory and reporting by April 30 of the following year, starting in 2026. On December 19, 2025, amendments were announced to some provisions of the "Management Regulations for Greenhouse Gas Emissions Inventory, Registration, and Verification" to simplify the inventory process, which help reduce inventory costs for businesses, and ensure the full utilization of domestic testing resources.

In recent years, China has prioritized state-owned enterprises over the private sector, leading to intense internal competition. At present, China is facing overcapacity and difficulties in the transformation of some industries, while the global economy is also being impacted by the continuing US-China trade conflicts. Looking to the future, we aspire to thrive and adapt in the landscape of global competition.

Finally, in the coming year, the Company will enhance the competitive advantages in waste processing and continue to improve the whole operating procedures to raise the work efficiency, add more education, training and specialization knowledge courses and strengthen the budgeting system and review to reach the profitability goals. We sincerely thank all shareholders for your continued support and encouragement.

Yours truly,

We wish everyone good health,

good luck and prosperity.

Chairman: Fang-Chen Chang

Two. Corporate Governance Report

I. Profile of directors, general managers, vice general managers, assistant presidents, and supervisors of departments and branches

(I) Information of board members

March 30, 2026

Title	Nationality or Place of Registration	Name	Gender/Age	Election / Appointment Date	Term of Service	Initial Elected Date	Number of Shares Owned at Time of Election		Number of Shares Currently Held		Shareholding of Spouse and Minor Children		Shares Held in the Name of Others		Main Work Experience or Education Background	Concurrent Position in the Company or other Companies	Other Managers, Directors or Supervisor who are Spouse or Blood Relatives Within the Second Degree			Notes
							Number of Shares	Shareholdings Percentage	Number of Shares	Shareholdings Percentage	Number of Shares	Shareholding x Percentage	Number of Shares	Shareholdings Percentage			Title	Name	Relations hip with the endorser's sarantor
Chairperson	R.O.C	Ren-Ying Industrial Co., Ltd.	-	2023.5.26	3 Years	2002.5.14	3,884,224	3.48%	4,367,574	3.36%	-	-	-	-	-	-	-	-	-	-
		Representative: Fang-Chen Chang	Male /61~70				-	-	-	-	-	-	3,766,000	2.90%	1. Master's degree from the Department of Business Management, Tatung University
2. Master's degree from the College of Law, National Chengchi University
3. Assistant General Manager of Ruentex Construction
4. General Manager of Shing-Ye Construction	1. General Manager of the Company
2. Chairman of Chin Hsin Environ Engineering
3. Chairman of Cheng Shin Environmental Engineering
4. Chairman of Liang Wei Environmental Engineering
5. Chairman of Beijing Ruentex Environmental Technology
6. Chairman of Jiangsu Suqian Ruentex Environmental Technology
7. Chairman of Yuncheng Ruentex Environmental Technology
8. Chairman of Rizhao Panyue Environmental Technology	-	-	-	Note 1
Director	R.O.C	Yuan-Ting Investment Co., Ltd	-	2023.5.26	3 Years	2002.5.14	8,576,496	7.69%	9,643,750	7.41%	-	-	103,448	0.08%	-	-	-	-	-	-
		Representative: Ming-Yuan Cheng	Male /61~70				600	0.00%	674	0.00%	218,166	0.17%	-	-	1. Master's degree from College of	1. Chairman of Cosmactive Broadband Network	-	-	-	-

Title	Nationality or Place of Registration	Name	Gender/Age	Election / Appointment Date	Term of Service	Initial Elected Date	Number of Shares Owned at Time of Election		Number of Shares Currently Held		Shareholding of Spouse and Minor Children		Shares Held in the Name of Others		Main Work Experience or Education Background	Concurrent Position in the Company or other Companies	Other Managers, Directors or Supervisor who are Spouse or Blood Relatives Within the Second Degree			Injunction
							Number of Shares	Shareholdings Percentage	Number of Shares	Shareholdings Percentage	Number of Shares	Shareholdings Percentage	Number of Shares	Shareholdings Percentage			Title	Name	Relations hip with the endorser/generator
Director	R.O.C	Ruentex Development Co.,Ltd.	-	2023.5.26	3 Years	2008.6.10	29,677,148	26.62%	33,370,156	25.67%	-	-	-	-	-	-	-	-	-	-
		Representative: Tien-Jie Li	Male /61~70				40,000	0.04%	44,977	0.03%	-	-	-	-	Department of Business Management, Tatung University	1. Vice president of Capital Management Department of Ruentex Industries Limited Manager
2. Chairman of Ruentex Xing Limited
3. Director of Jing-Hong Investment
4. Director of Ruen Chen Investment Holding
5. Director of Shing-Ye Construction	-	-	-	-
Director	R.O.C	Ruentex Development Co.,Ltd.	-	2024.8.1	3 Years	2024.8.1	29,677,148	26.62%	33,370,156	25.67%	-	-	-	-	-	-	-	-	-	-
		Representative: Chin-Tzu Lin	Male /51~60				20,977	0.02%	30,977	0.02%	-	-	-	-	Master's degree from Institute of Finance, National Taiwan University	1. Vice president of Accounting Department of Ruentex Development International
2. Director of Ruentex Construction
3. Director of Ruentex Bai Yi
4. Director of Ruentex Engineering & Const.Co
5. Supervisor of Ruentex Property
6. Supervisor of Shing-Ye Construction	-	-	-	-

Title	Nationality or Place of Registration	Name	Gender/Age	Election / Appointment Date	Term of Service	Initial Elected Date	Number of Shares Owned at Time of Election		Number of Shares Currently Held		Shareholding of Spouse and Minor Children		Shares Held in the Name of Others		Main Work Experience or Education Background	Concurrent Position in the Company or other Companies	Other Managers, Directors or Supervisor who are Spouse or Blood Relatives Within the Second Degree			Injencing
							Number of Shares	Shareholdings Percentage	Number of Shares	Shareholdings Percentage	Number of Shares	Shareholdings Percentage	Number of Shares	Shareholdings Percentage			Title	Name	Relations hip with the endorser/g suicator
Director and Vice General Manager	R.O.C	Cheng-Chi Investment Co., Ltd.	-	2023.5.26	3 Years	2023.5.26	3,075,871	2.76%	3,766,000	2.90%	-	-	-	-	-	-	-	-	-	-
		Representative: Yung-Tien Chang	Male /51~60				402,975	0.36%	495,120	0.38%	114,388	0.09%	-	-	Master's degree from the Department of Business Administration, National Chung Cheng University	1.Vice President of the Company
2.Vice Chairman of Chin Hsin Environ Engineering
3.Vice Chairman of Cheng Shin Environmental Engineering
4.Vice Chairman of Liang Wei Environmental Engineering
5. Director of Jiangsu Suqian Ruentex Environmental Technology
6.Director of Rizhao Panyue Environmental Technology	-	-	-	-
Independent Director	R.O.C	Su-Ming Lin	Male /61~70	2023.5.26	3 Years	2023.5.26	-	-	-	-	-	-	-	-	1.Ph.D. in Accounting at Arizona State University.
2. Dean and director of the Department of Accounting at NTU.	1.Independent director of Chunghwa Telecom Co., Ltd
2. Independent director of Taiwan Fertilizer Co Ltd
3. Independent director of AP Biosciences Inc	-	-	-	-
Independent Director	R.O.C	Wen-Chieh Wang	Male /61~70	2023.5.26	3 Years	2023.5.26	-	-	-	-	-	-	-	-	1. Doctor of Law, National Chengchi University
2.Dean of College of Law, National Chengchi University	1.Professor at College of Law, National Chengchi University
2. Independent director of Toplus Global Co., Ltd.
3. Independent director of Ableprint Technology	-	-	-	-
Independent Director	R.O.C	Chun-Chung Chen	Male /71~80	2023.5.26	3 Years	2023.5.26	-	-	-	-	-	-	-	-	1. Master's degree from the College of Management at SYSU
2.Vice president of the Chemical Business Department,	-	-	-	-	-

Title	Nationality or Place of Registration	Name	Gender/Age	Election / Appointment Date	Term of Service	Initial Elected Date	Number of Shares Owned at Time of Election		Number of Shares Currently Held		Shareholding of Spouse and Minor Children		Shares Held in the Name of Others		Main Work Experience or Education Background	Other Managers, Directors or Supervisor who are Spouse or Blood Relatives Within the Second Degree
							Number of Shares	Shareholdings Percentage	Number of Shares	Shareholdings Percentage	Number of Shares	Shareholdings Percentage	Number of Shares	Shareholdings Percentage		Title	Name	Relations hip with the endorser/g suicator
														executive vice president of the Office of the President, and manager of the Audit Office at Hopax
Independent Director	R.O.C	Chin-Fa Chiu	Male /61~70	2023.5.26	3 Years	2023.5.26	-	-	-	-	-	-	-	-	1. Master's degree from the Institute of Business Administration, National Taiwan University
2. President of Shin Kong Textile
3. Vice president of Capital Management Department of Ruentex Industries Limited Manager	1. Director of Shinkong Textile Co. Ltd	-	-	-

Note 1: The reasons for and rationality and necessity of having the general manager and chairman as the same person and countermeasures: A chairman taking a concurrent position of a general manager can help improve a company's operating efficiency and facilitate the decision-making process. Since General Manager Chang took over as the chairman, his leadership has led Sunny Friend to take steps forward and experience continuous growth in revenue and profits, making the Company the only vertically integrated environmental protection enterprise in the country. Only two directors takes a concurrent position of an employee. Only one director takes a concurrent position of an employee. The other directors are all external directors and independent directors, and there are no signs of becoming a family business. An audit committee was established in May 2020 to strengthen the supervisory function of the board.

Majority corporate shareholders

March 31, 2026

Name of Corporate Shareholders	Majority corporate shareholders
Ren-Ying Industrial Co., Ltd.	Samuel Yin (92.86%) 、 Leda Wang (7.14%)
Yuan-Ting Investment Co., Ltd.	Ming-Yuan Cheng (20%) 、 Chien-Mei Liu (28%) 、 Ting-Chieh Cheng (10%) 、 Ting-Ba Cheng (10%) 、 Jin-Chao-Tsuan Investment (32%)
Ruentex Development Co.,Ltd.	Ruentex Industries Limited (25.70%) 、 Huei Hong Investment (6.45%) 、 Yi-Tai Investment (4.00%) 、 Changchun Investment (3.85%) 、 Ruen-Hua Dyeing and Weaving (1.51%) 、 Ying-Jia Investment (1.22%) 、 Tang Prize Education Foundation (0.90%) 、 Ruentex Xing Co. Ltd(0.88%) 、 JP Morgan Chase N.A., Taipei Branch in custody for Vanguard Total International Stock Index Fund (0.79%) 、 J.P. Morgan Chase Bank Taipei Branch in custody of Vanguard Emerging Markets Stock Index Fund, a series of Vanguard (0.76%)
Cheng-Chi Investment Co., Ltd.	Hui-Min Zhong, (43.33%) 、 Fang-Chen Chang (43.33%) 、 Zhi-Hao Chang (6.67%) 、 Zhi-Qi Chang (6.67%)

2. Majority corporate shareholders who are representatives of corporate shareholders

March 31, 2026

Name of Legal Person	Majority corporate shareholders
Ruentex Industries Limited	Ruentex Development International (14.28%) 、 Ruentex Engineering & Construction (4.55%) 、 Yi-Tai Investment (4.22%) 、 Huei Hong Investment (4.02%) 、 Ying-Jia Investment (3.78%) 、 Changchun Investment (3.43%) 、 Jing-Hong Investment (3.31%) 、 Sheng Cheng Investment (3.18%) 、 Li- Ching Chen (1.86%)
Huei Hong Investment Co., Ltd.	Ruen-Hua Dyeing and Weaving (63.53%) 、 Ruentex Xing (19.93%) 、 Yi-Tai Investment (16.54%).
Yi-Tai Investment Co., Ltd.	Ren-Ying Industrial (85.10%) 、 Ruentex Xing (14.90%).
Changchun Investment Co., Ltd.	Huei Hong Investment (48.00%) 、 Ruen-Hua Dyeing and Weaving (33.00%) 、 Ruentex Xing (19.00%).
Ruen-Hua Dyeing and Weaving Co., Ltd.	Ruentex Xing (19.55%) 、 Ren-Ying Industrial (19.14%) 、 Changchun Investment (18.44%) 、 Huei Hong Investment (17.96%) 、 Samuel Yin (13.7%) 、 Leda Wang (6.55%) 、 Mr. Hsun-Ruo Yin Educational Foundation (4.4%) 、 Lena Yin (0.26%).
Ying-Jia Investment Co., Ltd.	Changchun Investment (75.86%) 、 Ruen-Hua Dyeing and Weaving (24.14%).
Tang Prize Education Foundation	Huei Hong Investment (39.73%) 、 Changchun Investment (18.69%)
Ruentex Xing Co. Ltd	Samuel Yin (99.997%) 、 Leda Wang (0.003%)
JP Morgan Chase N.A., Taipei Branch in custody for Vanguard Total International Stock Index Fund	Not applicable.
J.P. Morgan Chase Bank Taipei Branch in custody of Vanguard Emerging Markets Stock Index Fund, a series of Vanguard	Not applicable.
Jin-Chao-Tsuan Investment Co., Ltd.	Ming Wang (79.9%) 、 Jian-Mei Liu (20.1%)

Disclosure of professional qualifications of directors and supervisors and independency of independent directors:

| Conditions
Name | Professional qualifications and experience (Note 1) | Independence (Note 2) | Concurrently serving as an independent director in other publicly listed companies |
| --- | --- | --- | --- |
| Ren-Ying Industrial Co., Ltd.
Representative Fang-Chen Chang | Master's degree from the College of Law, National Chengchi University; once served as the Vice General Manager of Ruentex Construction and General Manager of Shing-Ye Construction, has rich practical experience and work experience required for the Company's business, has not been a person under any conditions defined in Article 30 of the Company Act. | 1. The spouse or second-degree relatives do not serve as directors, supervisors. | None |
| Yuan-Ting Investment Co., Ltd.
Representative: Ming-Yuan Cheng | Master's degree from College of Management, National Taiwan University; concurrently serving as the Chairman of Cosmactive Broadband Network, with extensive accumulated industry and business expertise, and has not been a person under any conditions defined in Article 30 of the Company Act. | 1. The spouse or second-degree relatives do not serve as directors, supervisors or employees of the company or its affiliates.
2. The amount of remuneration not received by providing the Company or its affiliates with business, legal, financial, accounting and other services in the last 2 years. | None |
| Ruentex Development International
Representative: Tien-Jie Li | Department of Business Management, Tatung University; concurrently serving as the Vice President of Capital Management Department of Ruentex Development International and Ruentex Industries Limited, with many years of extensive experience in financial and capital management, and has not been a person under any conditions defined in Article 30 of the Company Act. | 1. The spouse or second-degree relatives do not serve as directors, supervisors or employees of the company or its affiliates.
2. The amount of remuneration not received by providing the Company or its affiliates with business, legal, financial, accounting and other services in the last 2 years. | None |
| Ruentex Development International
Representative: Chin-Tzu Lin | Master's degree from Institute of Finance, National Taiwan University; concurrently serving as the Vice President of Accounting Department of Ruentex Development International and Ruentex Industries Limited, with many years of extensive experience in financial and capital management, and has not been a person under any conditions defined in Article 30 of the Company Act. | 1. The spouse or second-degree relatives do not serve as directors, supervisors or employees of the company or its affiliates.
2. The amount of remuneration not received by providing the Company or its affiliates with business, legal, financial, accounting and other services in the last 2 years. | None |

Conditions Name	Professional qualifications and experience (Note 1)	Independence (Note 2)	Concurrently serving as an independent director in other publicly listed companies
Cheng-Chi Investment Co., Ltd Representative: Yung-Tien Chang	Master's degree from the Department of Business Administration at National Chung Cheng University. Currently serving as the Company's vice president. with professional expertise in business management and commercial judgment, and has not been involved in circumstances specified in Article 30 of the Company Act.	1. The spouse or second-degree relatives do not serve as directors, supervisors or employees of the company or its affiliates.	None
Su-Ming Lin	Ph.D in Accounting at Arizona State University, and had once served as the Dean and director of the Department of Accounting at NTU. He is qualified to lecture in finance and accounting disciplines in public and private colleges and universities and has not involved in circumstances specified in Article 30 of the Company Act.	1. The spouse or second-degree relatives do not serve as directors, supervisors or employees of the company or its affiliates. 2. The person, spouse or second-degree relatives (or in the name of others) do not own shares of the Company. 3. Has not served as a director, supervisor or employee of a company (in compliance with the provisions of Subparagraph 5 to 8, Paragraph 1, Article 3 of the Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies) that has a specific relationship with the Company. 4. The amount of remuneration not received by providing the Company or its affiliates with business, legal, financial, accounting and other services in the last 2 years.	3
Wen-Chieh Wang	He holds a doctoral degree in law from National Chengchi University. He once served as the Dean of the College of Law at National Chengchi University and is currently a professor there. He is qualified to lecture in law disciplines in public and private colleges and universities and has not involved in circumstances specified in Article 30 of the Company Act.	1. The spouse or second-degree relatives do not serve as directors, supervisors or employees of the company or its affiliates. 2. The person, spouse or second-degree relatives (or in the name of others) do not own shares of the Company. 3. Has not served as a director, supervisor or employee of a company (in compliance with the provisions of Subparagraph 5 to 8, Paragraph 1, Article 3 of the Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies) that has a specific relationship with the Company. 4. The amount of remuneration not received by providing the Company or its affiliates with business, legal, financial, accounting and other services in the last 2 years.	2

Conditions Name	Professional qualifications and experience (Note 1)	Independence (Note 2)	Concurrently serving as an independent director in other publicly listed companies
Chun-Chung Chen	Master's degree from the College of Management at NSYSU, once served as the vice president of the Chemical Business Department, executive vice president of the Office of the President, and manager of the Audit Office at Taiwan Hopax Chemicals Mfg. Co. Ltd. Has rich practical experience required for the Company's business and has not been involved in circumstances specified in Article 30 of the Company Act.	1. The spouse or second-degree relatives do not serve as directors, supervisors or employees of the company or its affiliates. 2. The person, spouse or second-degree relatives (or in the name of others) do not own shares of the Company. 3. Has not served as a director, supervisor or employee of a company (in compliance with the provisions of Subparagraph 5 to 8, Paragraph 1, Article 3 of the Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies) that has a specific relationship with the Company. 4. The amount of remuneration not received by providing the Company or its affiliates with business, legal, financial, accounting and other services in the last 2 years.	None
Chin-Fa Chiu	Master's degree from the Institute of Business Administration, National Taiwan University, had served as the President of Shinkong Textile Co. Ltd. He is currently serving as a Director of Shin Kong Textile Co., Ltd., specializing in business management and leadership decision-making and has not been involved in circumstances specified in Article 30 of the Company Act.	1. The spouse or second-degree relatives do not serve as directors, supervisors or employees of the company or its affiliates. 2. The person, spouse or second-degree relatives (or in the name of others) do not own shares of the Company. 3. Has not served as a director, supervisor or employee of a company (in compliance with the provisions of Subparagraph 5 to 8, Paragraph 1, Article 3 of the Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies) that has a specific relationship with the Company. 4. The amount of remuneration not received by providing the Company or its affiliates with business, legal, financial, accounting and other services in the last 2 years.	None

Note 1: Professional qualifications and experience: Describe the professional qualifications and experience of individual directors and supervisors. If they are members of the audit committee and have accounting or financial expertise, their accounting or financial background and work experience should be stated, and explain whether there are no circumstances described in Article 30 of the Company Act.
Note 2: Describe the independence of independent directors, including but not limited to whether the person, spouse or relative within the second degree of kinship are serving as directors, supervisors or employees of the Company or its affiliates; the number of shares and the shareholding percentage held by the person, spouse or relative within the second degree of kinship (or in the name of others); whether the person is serving as a director, supervisor or employee of a company that has a specific relationship with the Company (please refer to Subparagraph 5 to 8, Paragraph 1 of Article 3 of the Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies); and the amount of remuneration received by providing the Company or its affiliates with business, legal, financial, accounting and other services within the last 2 years.

Board Diversity and Independence:

(1) Diversity of the Board:

Diversity policy: Describe the board diversity policy, goals and achievement. The diversity policy includes, but is not limited to, the selection criteria for directors, the professional qualifications and experience that the directors should have, the composition or ratio of gender, age, nationality, ethnicity, etc., and describe the Company's specific goals and current achievement for the policy. If the number of female directors on the Board of Directors of a TWSE/TPEx-listed company is less than one-third of the total number of directors, the reason for the shortage and the measures to be taken in response to the shortage must be disclosed.

1-1 Diversity policy: The Company stipulates in Article 20 (competence of the board) of the Corporate Governance Best Practice Principles that the composition of the board of directors should take diversity into consideration, and the policy should include but not be limited to the following two standards:

Background and value: Gender, age, nationality, ethnicity, etc.
Knowledge and skills: Career background (e.g., law, finance, accounting, industry or management), professional skill and industry experience.

In addition to limiting those who hold concurrent positions to no more than 1/3 of the total board seats, the operations, managing and development requirements take diversification policy into consideration.

1-2 Specific management objectives: Independent directors should serve no more than nine consecutive years. The number of directors taking concurrent positions as the Company's managers shall not exceed 1/3 of the board seats. The age distribution should be even, at least one director of different genders and their professional capabilities cover various fields.

1-3 Current achievements:

The Company's independent directors all took office after the re-election at the 2023 annual general shareholders' meeting, and their consecutive terms currently have not exceeded nine years.
Among the Company's directors, 22% of them have concurrent positions as the

Company's employees, 33% are external directors and 45% are independent directors.

The age distribution is 51-80 years old, with 2 directors aged 51-60 years old and 6 directors aged 61-70 years old and 1 director aged 71-80 years old.
As for the professional capabilities, 100% in business management, 100% in leadership and decision-making, 56% in finance, accounting, and law, 56% in industry knowledge, 33% in industrial technology, 56% in marketing, 56% in business development, 100% in risk management, 100% in environmental sustainability, 67% in social engagement, and 56% in supply chain management.
The Company values gender equality in the composition of the board. Currently, all board members are male directors. Considering the gender diversity of the board of directors, we plan to add at least one female director in the next (for 2026) board of directors election. This director must have rich practical experience and extensive work experience required by the Company's business.

1-4 If the number of directors of either gender on the Board of Directors is less than one-third of the total number of directors, the reason and the countermeasures shall be disclosed in the annual report.

Reason: The professional skills of the Company's directors are in different fields, including business management, leadership decision-making, industry knowledge, finance, and law, which have met the requirement of the Board of Directors to be professional and diversified as required by laws.

Measures adopted: To improve the diversity of the Board of Directors, at least one female director will be added to the next board meeting (2026).

1-5 The status of implementation of board diversity is as follows

Currently, the 9 board seats include:

The professional backgrounds of the members of the Board of Directors cover management, accounting and financial analysis, and legal expertise, and they have operational experience in the environmental protection and cleaning industry: Chairman Fang-Chen Chang holds a master's degree in law from National Chengchi University and possesses legal expertise. Director Yung-Tien Chang holds a master's degree in business administration from National Chung Cheng University and has professional skills in management and business judgment. Directors Tien-Chieh Li and Chin-Tzu Lin both served as Deputy General Managers of Ruentex Global Co., Ltd. and Ruentex Innovation

International Co., Ltd., respectively, and have many years of experience in financial management. Director Ming-Yuan Cheng previously served as the company's Chairman and currently sits on the boards of several companies, having accumulated substantial industrial business experience. Regarding the independent directors, Independent Director Su-Ming Lin holds a Ph.D. in Accounting from Arizona State University, served as Director and Dean of the Department of Accounting at National Taiwan University, and is currently an honorary professor at Taiwan University. Independent Director Wen-Chieh Wang holds a Ph.D. in Law from National Chengchi University, previously served as Dean of the College of Law at National Chengchi University, and is currently a professor in the Department of Law at National Chengchi University. Independent Director Chun-Chung Chen holds a master's degree from the College of Management at National Sun Yat-Sen University, previously served as Deputy General Manager of the Chemical Department at Juho International Co., Ltd., Executive Deputy General Manager of the General Manager's Office, and Manager of the Auditing Office, and has extensive practical experience. Independent Director Chin-Fa Chiu holds a master's degree from the Graduate Institute of Business Administration at Taiwan University, previously served as General Manager of Shin Kong Textile Co., Ltd., and currently sits on the board of Shin Kong Textile Co., Ltd., specializing in management and leadership decision-making. All Board members can provide professional operational advice from different perspectives, ensuring that the board's decision-making process fully considers various professional knowledge and viewpoints, and can be independent of the company's management, thereby improving the company's operating performance and management efficiency.

The implementation is as follows:

Name	Gender	Con-current Position as Employee of the Company	Age			Service Term of Independent Directors	Service Term of Independent Directors	Professional Expertise and Experience
			51 to 60	61 to 70	71 to 80			Less than 3 years	Operations and Management	Finance, Accounting, and Legal Affairs	Industry Knowledge	Industrial Technology	Marketing	Business Development	Risk Management	Social Engagement	Supply Chain Management
Fang-Chen Chang	Male	V		V			V	V	V	V	V	V	V	V	V	V	V
Tien-Jie Li	Male			V			V	V	V					V	V
Chin-Tzu Lin	Male		V				V	V	V					V	V
Ming-Yuan Cheng	Male			V			V	V		V	V	V	V	V	V		V
Yung-Tien Chang	Male	V	V				V	V		V	V	V	V	V	V	V	V
Su-Ming Lin	Male			V		V	V	V	V					V	V	V
Wen-Chieh Wang	Male			V		V	V	V	V					V	V	V
Chun-Chung Chen	Male				V	V	V	V		V		V	V	V	V	V	V
Chin-Fa Chiu	Male			V		V	V	V		V		V	V	V	V	V	V

(2) Independence of the Board: State the number and proportion of independent directors and that the board is independent. Explain with reasons whether there are no circumstances as specified in Paragraph 3 and 4 of Article 26-3 of the Securities and Exchange Act, including a description of whether there are relationship of spouse or second-degree relative between the directors, supervisors or between directors and supervisors.

There are a total of 4 independent directors, accounting for 45% of the board seats. The independent directors of the Company have the necessary professional knowledge, and maintain their independence during their tenure, and regularly take continuing education courses for directors every year. External directors and independent directors account for as high as 78% of the board seats. Directors are not a spouse or relative within the second degree of kinship to one another. To sum it up, the board of directors has established enough independent directors to make the board independent.

(II) Profile of general managers, vice general managers, assistant presidents, and supervisors of departments and branches
March 30, 2026

Title	Nationality	Name	Gender	Election / Appointment Date	Shareholdings		Shareholdings of Spouse and Minor Children		Shares Held in the Name of Others		Main Work Experience or Education Background	Concurrent Position in Other Companies	Managers who are Spouse or Blood Relatives Within the Second Degree			Operating
					Number of Shares	Percentage	Number of Shares	Percentage	Number of Shares	Percentage			Title	Name	Relationship with the endorser/guarantor
Chairperson and general manager	R.O.C.	Fang-Chen Chang	Male	2001/12/1	-	-	-	-	3,766,000	2.90%	Master's degree from the Department of Business Management, Tatung University Master's degree from the College of Law, National Chengchi University Assistant General Manager of Runtex Construction General Manager of Shing-Ye Construction	Chairman of Chin Hsin Environ Engineering Chairman of Cheng Shin Environmental Engineering Chairman of Liang Wei Environmental Engineering Chairman of Beijing Runtex Environmental Technology Chairman of Jiangsu Suqian Runtex Environmental Technology Chairman of Yuncheng Runtex Environmental Technology Chairman of Rizhao Panyue Environmental Technology	-	-	-	Note 1
Director and General Manager's Office,Sales, Planning Department, and Office of Environmental Safety Vice General Manager	R.O.C.	Yong-Dian Chang	Male	1997/11/1	495,120	0.38%	114,388	0.09%	-	-	Master's degree from the Department of Business Administration, National Chung Cheng University Department of Electrical Engineering, National Formosa University General Manager of Hicitron	Vice Chairman of Chin Hsin Environ Engineering Vice Chairman of Cheng Shin Environmental Engineering Vice Chairman of Liang Wei Environmental Engineering Director of Jiangsu Suqian Environmental Technology Director of Rizhao Panyue Environmental Technology	-	-	-	-

Note 1: The reasons for and rationality and necessity of having the general manager and chairman as the same person and countermeasures: A chairman taking a concurrent position of a general manager can help improve a company's operating efficiency and facilitate the decision-making process. Since General Manager Chang took over as the chairman, his leadership has led Sunny Friend to take steps forward and experience continuous growth in revenue and profits, making the Company the only vertically integrated environmental protection enterprise in the country. Only one director takes a concurrent position of an employee. Only one director takes a concurrent position of an employee. The other directors are all external directors and independent directors, and there are no signs of becoming a family business. An audit committee was established in May 2020 to strengthen the supervisory function of the board.

Title	Nationality	Name	Gender	Election / Appointment Date	Shareholdings		Shareholdings of Spouse and Minor Children		Shares Held in the Name of Others		Main Work Experience or Education Background	Concurrent Position in Other Companies	Managers who are Spouse or Blood Relatives Within the Second Degree			Remarks
					Number of Shares	Shareholdings	Number of Shares	Shareholdings	Number of Shares	Percentage			Title	Name	Relationship with the endorser/guarantor
General Manager's Office, Vice General Manager	R.O.C.	Yao-Xian Wu	Male	2023/2/24	20,000	0.02%	3,000	0.00%	-	-	Department of Civil Engineering, NCKU Deputy General Manager of Ruentex Engineering General Manager of northeast region operations of RT-Mart	Director of Beijing Ruentex Environmental Technology Director of Yuncheng Ruentex Environmental Technology Director of Rizhao Panyue Environmental Technology General Manager of Beijing Ruentex Environmental Technology	-	-	-	-
Director and General Manager's Office,Zhangbi n Plant General Affairs Department Vice General Manager	R.O.C.	Ming-Hsiang Wang	Male	2014/3/1	67,399	0.05%	-	-	-	-	Department of Economics, National Taiwan University Finance specialist of Ruentex Construction Executive assistant at the General Manager's Office of Ruentex Group	Supervisor of Beijing Ruentex Environmental Technology	-	-	-	Note 2
Director of Yunlin Plant Affairs Department, Public Relations and Legal Department Assistant Vice President	R.O.C.	Long-Wei Lin	Male	2013/1/1	1,440	0.00%	-	-	-	-	Master's degree from the Department of Labor Relations, National Chung Cheng University	Director of Liang Wei Environmental Engineering Supervisor of Cheng Shin Environmental Engineering Supervisor of Jiangsu Suqian Ruentex Environmental Technology Supervisor of Yuncheng Ruentex Environmental Technology	-	-	-	-

Note 2: Assistant Vice President Ming-Hsiang Wang was promoted to the position of Vice President on January 1, 2026.

Title	Nationality	Name	Gender	Election / Appointment Date	Shareholdings		Shareholdings of Spouse and Minor Children		Shares Held in the Name of Others		Main Work Experience or Education Background	Concurrent Position in Other Companies	Managers who are Spouse or Blood Relatives Within the Second Degree			Remarks
					Number of Shares	Percentage	Number of Shares	Percentage	Number of Shares	Percentage			Title	Name	Relationship with the endorser/ guarantor
General Manager's Office Assistant Vice President	R.O.C.	Ze-Zhi Li	Male	2014/1/1	5,000	0.00%	-	-	-	-	Master's degree from the Department of Business Administration, National Chung Hsing University	Director of Yuncheng Ruentex Environmental Technology General Manager of Yuncheng Ruentex Environmental Technology	-	-	-	-
General Manager's Office Assistant Vice President	R.O.C.	Hong-Bin Hung	Male	2015/1/1	6,622	0.01%	-	-	-	-	Master's degree from the Department of Water Resources and Environmental Engineering, Tamkang University Chemical Engineering, National Taiwan University of Science and Technology	-	-	-	-	-
General Manager's Office Assistant Vice President	R.O.C.	Rui-Yi Wu	Male	2016/3/1	18,248	0.01%	-	-	-	-	Mechanical Engineering, National United University	-	-	-	-	-
General Manager's Office Assistant Vice President	R.O.C.	Jun-Lin Yeh	Male	2016/11/11	20,000	0.02%	-	-	-	-	PhD, Department of Chemistry of Tsinghua University	Director of Jiangsu Suqian Ruentex Environmental Technology General Manager of Jiangsu Suqian Ruentex Environmental Technology	-	-	-	-
General Manager's Office Assistant Vice President	R.O.C.	Xin-Huang Li	Male	2023/2/24	5,000	0.00%	-	-	-	-	Department of Mechanical Manufacturing Engineering, National Formosa University	Director of Rizhao Panyue Environmental Technology General Manager of Rizhao Panyue Environmental Technology	-	-	-	-

Title	Nationality	Name	Gender	Election / Appointment Date	Shareholdings		Shareholdings of Spouse and Minor Children		Shares Held in the Name of Others		Main Work Experience or Education Background	Concurrent Position in Other Companies	Managers who are Spouse or Blood Relatives Within the Second Degree			Remarks
					Number of Shares	Percentage	Number of Shares	Percentage	Number of Shares	Percentage			Title	Name	Relationship with the endorser/ guarantor
General Manager's Office Assistant Vice President and Chief Financial Officer	R.O.C.	Ming-Hung Hsieh	Male	2023/2/24	15,124	0.01%	-	-	-	-	Department of Accounting, Tamkang University
Assistant President of Audit Service
Department of PricewaterhouseCoopers, Taiwan	Director of Cheng Shin Environmental Engineering
Supervisor of Liang Wei Environmental Engineering
Director of Beijing Ruentex Environmental Technology
Director of Jiangsu Suqian Ruentex Environmental Technology
Director of Yuncheng Ruentex Environmental Technology
Supervisor of Rizhao Panyue Environmental Technology	-	-	-	-
Executive assistant at the General Manager's Office	R.O.C.	An-Tung Kuo	Male	2024/7/16	-	-	-	-	-	-	PhD, Business Administration program, National Chengchi University
Director of Procurement Division, Shanghai C-Store
Marketing and Human Resources Director, Northeast Region, China RT-Mart	-	-	-	-	-
Sales Department Assistant Vice President	R.O.C.	Rong-Mu Hsu	Male	2025/1/1	85,112	0.07%	15,733	0.01%	-	-	Department of Industrial Safety and Health, Chia Nan University of Pharmacy and Science
Hicitron Technology	-	-	-	-	-
Audit Office Manager	R.O.C.	Shi-Chang Chen	Male	2017/3/20	-	-	1,248	0.00%	-	-	Department of History, Tamkang University	-	-	-	-	-

II Remuneration paid during the most recent fiscal year to directors of the board, the general manager, and vice general managers

Remuneration paid during the most recent fiscal year to directors and independent directors (name and remuneration paid disclosed for each)

Unit: NT$ 1,000

Title	Name	Directors' remuneration							Total Remuneration (A + B + C + D) and as a % of the Net Income (Note 10)	Remuneration for concurrent position as an employee								Total Compensation (A + B + C + D + E + F + G) and as a % of the Net Income(Note 10)	Receive remuneration from non-consolidated affiliates or the parent company (Note 11)
		Base Compensation (A) (Note 2)		Severance Pay and Pensions (B)		Compensation to Directors (C) (Note 3)		Allowances for Operations (D) (Note 4)			Base Compensation, Bonuses, and Allowances (E) (Note 5)		Severance Pay and Pensions (F)		Employees' Profit Sharing Bonus (G) (Note 6)
		The Company	From All Consolidated Entities (Note 7)	The Company	From All Consolidated Entities (Note 7)	The Company	From All Consolidated Entities (Note 7)	The Company	From All Consolidated Entities (Note 7)	The Company	From All Consolidated Entities (Note 7)	The Company	From All Consolidated Entities (Note 7)	The Company	From All Consolidated Entities (Note 7)	Check	Check	Check		Check	Check	Check
Chairman and General Manager	Ren-Ying Industrial Co., Ltd. Representative Fang-Chen Chang	0	0	0	0	3,345	3,345	60	60	3,405 0.58%	3,405 0.58%	5,308	5,330	0	0	5,001	0	5,001	0	13,714 2.35%	13,736 2.36%	None
Director	Yuan-Ting Investment Co., Ltd. Representative Ming-Yuan Cheng	0	0	0	0	1,674	1,674	60	60	1,734 0.30%	1,734 0.30%	0	0	0	0	0	0	0	0	1,734 0.30%	1,734 0.30%	None
Director	Ruentex Development International Co., Ltd. Representative Tien-Jie Li	0	0	0	0	1,674	1,674	60	60	1,734 0.30%	1,734 0.30%	0	0	0	0	0	0	0	0	1,734 0.30%	1,734 0.30%	None
Director	Ruentex Development Co., Ltd. International Representative Chin-Tzu Lin	0	0	0	0	1,674	1,674	30	30	1,704 0.29%	1,704 0.29%	0	0	0	0	0	0	0	0	1,704 0.29%	1,704 0.29%	None
Director and Vice General Manager	Cheng-Chi Investment Co., Ltd. Representative Yung-Tien Chang	0	0	0	0	1,674	1,674	60	60	1,734 0.30%	1,734 0.30%	4,438	4,438	108	108	861	0	861	0	7,141 1.23%	7,141 1.23%	None
Independent Director	Su-Ming Lin	600	600	0	0	0	0	70	70	670 0.11%	670 0.11%	0	0	0	0	0	0	0	0	670 0.11%	670 0.11%	None
Independent Director	Wen-Chieh Wang	600	600	0	0	0	0	60	60	660 0.11%	660 0.11%	0	0	0	0	0	0	0	0	660 0.11%	660 0.11%	None

Title	Name	Directors' remuneration	Total Remuneration (A + B + C + D) and as a % of the Net Income (Note 10)	Remuneration for concurrent position as an employee	Total Compensation (A + B + C + D + E + F + G) and as a % of the Net Income(Note 10)	Receive remuneration from non-consolidated affiliates or the parent company (Note 11)
Base Compensation (A) (Note 2)	Severance Pay and Pensions (B)	Compensation to Directors (C) (Note 3)	Allowances for Operations (D) (Note 4)	Base Compensation, Bonuses, and Allowances (E) (Note 5)	Severance Pay and Pensions (F)	Employees' Profit Sharing Bonus (G) (Note 6)
The Company	From All Consolidated Entities (Note 7)	The Company	From All Consolidated Entities (Note 7)	The Company	From All Consolidated Entities (Note 7)	The Company
Independent Director	Chun-Chung Chen	600	600	0	0	0
Independent Director	Chin-Fa Chiu	600	600	0	0	0
1. Please state the policy, system, standards and structure of remuneration payments to independent directors, and describe the relationship between the responsibility, risk, time committed to the organization and other factors and the amount of remuneration to them.: According to the Company's "Measures of Remuneration to Directors, Audit committee and Remuneration Committee," the remuneration for independent directors is restricted in the form of monthly salary and specified amount of transportation allowance, and the independent directors will not participate in the distribution of remuneration for directors. In addition to the disclosure shown in the above table, the remuneration received by the directors for their service provided (such as in the companies/re-investment of the parent/or in the financial reports) to all companies listed in the financial reports in the most recent fiscal year: Director Yung-Tien Chang served as the Vice Chairman of Ching Hsin Environmental Engineering Corporation and received a remuneration of NTD840 thousand.

Note 1: The names of directors should be separately listed (legal person shareholder should list the name of the legal person and the representative separately), and the payment to each director and independent director should be summarized and disclosed. If the director takes a concurrent position as the general manager or assistant general manager, please fill out this Table and (3-1), or (3-2-1) and (3-2-2) below.
Note 2: Refers to the remuneration of directors in the most recent year (including the salary, differential pay for the job, severance pay, various rewards, bonuses and others).
Note 3: Fill in the remuneration amount allocated to directors approved by the board meeting in the most recent year.
Note 4: Refers to the related business implementation expenses of directors in the most recent years (including transportation, special disbursement, various allowance, housing, cars and other tangibles). In the case of provision of housing, cars and other forms of transportation or personal expenditure, disclose the nature and cost of the assets provided and the rent, gasoline and other payments paid at the actual or the fair market price. If a driver is assigned to the executive, please note the Company's payment to the driver, which is not included in the remuneration here.
Note 5: Refers to the salary, differential pay for the job, severance pay, various rewards, bonuses, transportation, special disbursement, various allowances, housing, cars and other tangibles for the directors taking concurrent positions as employees (including as the general manager, assistant general manager, other department managers or employees). In the case of provision of housing, cars and other forms of transportation or personal expenditure, disclose the nature and cost of the assets provided and the rent, gasoline and other payments paid at the actual or the fair market price. If a driver is assigned to the executive, please note the Company's payment to the driver, which is not included in the remuneration here. The salary expenses recognized in accordance with IFRS 2 Share-based Payment, including obtaining employee stock options, restricted stock awards, participation in new share issuance through cash capital increase, should be included in the remuneration.
Note 6: Refers to those directors taking concurrent positions as employees (including as the general manager, assistant general manager, other department managers or employees) and receiving employee compensation (including stocks and cash) in the most recent year, of whom the allocated employee compensation approved by the board shall be disclosed. If the amount cannot be estimated, calculate the amount for this year based on the actual allocated amount last year and then fill out Table 1-3.
Note 7: The total amount of remunerations paid to directors of the Company by all companies (including the Company) shall be disclosed in the consolidated report.
Note 8: The total amount of various types of remunerations paid by the Company to each director and disclose the names in the specified range grades.
Note 9: The total amount of various types of remunerations paid by all companies (including the Company) in the consolidated report to each director should be disclosed. Disclose the names of directors in the specified range grades.

Note 10: Net income after tax in the most recent year. If the IFRS has been adopted, the net income after tax refers to the number in the standalone and individual financial reports.

Note 11: a. This field should clearly state the amount of remuneration paid to directors from non-consolidated affiliates or the parent company. (Please fill in "None", if there is none).

b. If a director of the Company receives a remuneration from a non-consolidated affiliates or the parent company, the amount shall be included in Field I of the appropriate range grade, and the field name should be changed to "Parent company and all non-consolidated affiliates".

c. Remunerations refer to remuneration, compensation (including employee, director and supervisor compensation) and allowance for business operations received by the directors of the Company who serve as directors, supervisors or managing executives of the other non-consolidated affiliates that are not subsidiaries or the parent company.

*The remunerations disclosed here in this Table are different from the incomes defined by the Income Tax Act. This Table is for the purpose of information disclosure and not for tax matters.

Remuneration paid during the most recent fiscal year to the general manager and assistant general managers (name and remuneration paid disclosed for each).

Title	Name	Salary (A) (Note 2)		Severance Pay and Pensions (B)		Bonuses and Allowances (C) (Note 3)		Employees' Profit Sharing Bonus (D) (Note 4)				Total Remuneration (A + B + C + D) and as a % of the Net Income (Note 8)		Whether receive remuneration from non-consolidated affiliates or the parent company (Note 9)
		The Company	From All Consolidated Entities (Note 5)	The Company	From All Consolidated Entities (Note 5)	The Company	From All Consolidated Entities (Note 5)	The Company		From All Consolidated Entities (Note 5)		The Company	From All Consolidated Entities (Note 5)
								Cash	Stock	Cash	Stock
Chairman and General Manager	Fang-Chen Chang	2,628	2,650	0	0	2,680	2,680	5,001	0	5,001	0	10,309 1.77%	10,331 1.77%	None
Director and Vice General Manager	Yung-Tien Chang	2,348	2,348	108	108	2,090	2,090	861	0	861	0	5,407 0.93%	5,407 0.93%	None
Vice General Manager	Yao-Xian Wu	2,276	3,567	108	108	1,624	1,922	861	0	861	0	4,869 0.84%	6,458 1.11%	None

Regardless of the title, the positions that are equivalent to the general manager or vice general manager (such as president, CEO, department director) shall also be disclosed.

Note 1: The names of general manager and assistant general managers should be separately listed and summarized to disclose the payment for each person. If the director takes a concurrent position as the general manager or assistant general manager, please fill out this Table and (1-1), or (1-2-1) and (1-2-2) below.

Note 2: Refers to the salary, differential pay for the job and severance of general manager and assistant general managers in the most recent year.

Note 3: Refers to the various rewards, bonuses, transportation, special disbursement, various allowances, housing, cars and other tangibles and other remunerations of general manager and assistant general managers in the most recent year. In the case of provision of housing, cars and other forms of transportation or personal expenditure, disclose the nature and cost of the assets provided and the rent, gasoline and other payments paid at the actual or the fair market price. If a driver is assigned to the executive, please note the Company's payment to the driver, which is not included in the remuneration here. The salary expenses recognized in accordance with IFRS 2 Share-based Payment, including obtaining employee stock options, restricted stock awards, participation in new share issuance through cash capital increase, should be included in the remuneration.

Note 4: Refers to the employee remuneration (including stocks and cash), approved by the board, to be allocated to the general manager and assistant general managers in the most recent year. If the

amount cannot be estimated, calculate the amount for this year based on the actual allocated amount last year and then fill out Table 1-3.

Net income after tax in the most recent year. If the IFRS has been adopted, the net income after tax refers to the number in the standalone and individual financial reports.

Note 5: The total amount of remunerations paid to the general manager and assistant general managers of the Company by all companies (including the Company) shall be disclosed in the consolidated report.

Note 6: The total amount of various types of remunerations paid by the Company to the general manager and each assistant general manager and disclose the names in the specified range grades.

Note 7: The total amount of various types of remunerations paid by all companies (including the Company) in the consolidated report to each one of general manager and assistant general managers should be disclosed. Disclose their names in the specified range grades.

Note 8: Net income after tax in the most recent year. If the IFRS has been adopted, the net income after tax refers to the number in the standalone and individual financial reports.

Note 9: a. This field should clearly state the amount of remuneration paid to the general manager and assistant general manager from non-consolidated affiliates or the parent company. (Please fill in "None", if there is none).

b. If the general manager or assistant general managers of the Company receive remuneration from a non-consolidated affiliates or the parent company, the amount shall be included in Field E of the appropriate grade range, and the field name should be changed to "The parent company and all non-consolidated affiliates."

c. Remunerations refer to remuneration, compensation (including employee, director and supervisor compensation) and allowance for business operations received by the general manager and assistant general managers of the Company who serve as directors, supervisors or managing executives of the other non-consolidated affiliates that are not subsidiaries or the parent company.

*The remunerations disclosed here in this Table are different from the incomes defined by the Income Tax Act. This Table is for the purpose of information disclosure and not for tax matters.

Company's five highest paid executives in the most recent fiscal year (name and remuneration paid disclosed for each)

Title	Name	Salary (A) (Note 2)		Severance Pay and Pensions (B)		Bonuses and Allowances (C) (Note 3)		Employees' Profit Sharing Bonus (D) (Note 4)				Total Remuneration (A + B + C + D) and as a % of the Net Income (Note 6)		Whether receive remuneration from non-consolidated affiliates or the parent company (Note 7)
		The Company	From All Consolidated Entities (Note 5)	The Company	From All Consolidated Entities (Note 5)	The Company	From All Consolidated Entities (Note 5)	The Company		From All Consolidated Entities (Note 5)		The Company	From All Consolidated Entities
								Cash	Stock	Cash	Stock
Chairman and General Manager	Fang-Chen Chang	2,628	2,650	0	0	2,680	2,680	5,001	0	5,001	0	10,309 1.77%	10,331 1.77%	None
Director and Vice General Manager	Yung-Tien Chang	2,348	2,348	108	108	2,090	2,090	861	0	861	0	5,407 0.93%	5,407 0.93%	None
Vice General Manager	Yao-Xian Wu	2,276	3,567	108	108	1,624	1,922	861	0	861	0	4,869 0.84%	6,458 1.11%	None
Assistant Vice President	Ze-Zhi Li	1,646	3,081	95	95	810	1,008	662	0	662	0	3,213 0.55%	4,846 0.83%	None
Assistant Vice President	Xin-Huang Li	1,438	2,556	83	83	864	1,346	773	0	773	0	3,158 0.54%	4,758 0.82%	None

Note 1: The "Five highest paid executives" refer to the Company's managers. Please refer to Tai-Tsai-Zheng-San-Zhi #0920001301 document published by the Securities and Futures Bureau, Financial Supervisory Commission on March 27, 2003 on the standards which define the scope of roles of managers. As for the calculation of the five highest amount in remuneration, it is the total of salary, retirement pensions, bonuses and allowances and employees' remuneration (that is, $\mathrm{A} + \mathrm{B} + \mathrm{C} + \mathrm{D}$ ) recorded on the consolidated financial reports received by the Company's managers, which are then ranked to show the managers who have the five highest figure in remuneration. For directors who take concurrent positions as the abovementioned managers, please fill in this table and the table above (1-1).

Note 2: Refers to the salary, differential pay for the job and severance of five highest paid managers in the most recent year.

Note 3: Refers to the various rewards, bonuses, transportation, special disbursement, various allowances, housing, cars and other tangibles and other remunerations of the five highest paid managers in the most recent year. In the case of provision of housing, cars and other forms of transportation or personal expenditure, disclose the nature and cost of the assets provided and the rent, gasoline and other payments paid at the actual or the fair market price. If a driver is assigned to the executive, please note the Company's payment to the driver, which is not included in the remuneration here. The salary expenses recognized in accordance with IFRS 2 Share-based Payment, including obtaining employee stock options, restricted stock awards, participation in new share issuance through cash capital increase, should be included in the remuneration.

Note 4: Refers to the employee remuneration (including stocks and cash), approved by the board, to be allocated to the five highest paid managers in the most recent year. If the amount cannot be estimated, calculate the amount for this year based on the actual allocated amount last year and then fill out Table 1-3.

Note 5: The total amount of remunerations paid to the five highest paid managers of the Company by all companies (including the Company) shall be disclosed in the consolidated report.

Note 6: The net income after tax refers to the number in the standalone and individual financial reports.

Note 7: a. This field should clearly state the amount of remuneration paid to the five highest paid managers from non-consolidated affiliates or the parent company. (Please fill in "None," if there is none).

b. Remunerations refer to remuneration, compensation (including employee, director and supervisor compensation) and allowance for business operations received by the five highest paid managers of the Company who serve as directors, supervisors or managing executives of the other non-consolidated affiliates that are not subsidiaries or the parent company.

The remunerations disclosed here in this Table are different from the incomes defined by the Income Tax Act. This Table is for the purpose of information disclosure and not for tax matters.

*The remunerations disclosed here in this Table are different from the incomes defined by the Income Tax Act. This Table is for the purpose of information disclosure and not for tax matters.

Names of managerial officers who are assigned employee compensation and the assignment in the most recent year:

December 31, 2025

	Title (Note 1)	Name (Note 1)	Stock	Cash	Grand Total	Total as % of the Net Income
Managerial officers	General Manager	Fang-Chen Chang	0	14,107	14,107	2.42%
	Vice General Manager	Yung-Tien Chang
	Vice General Manager	Yao-Xian Wu
	Assistant Vice President	Ming-Hsiang Wang①
	Assistant Vice President	Long-Wei Lin
	Assistant Vice President	Rong-Mu Hsu
	Assistant Vice President	Xin-Huang Li
	Assistant Vice President	Hong-Bin Hung
	Assistant Vice President	Rui-Yi Wu
	Assistant Vice President	Ze-Zhi Li
	Assistant Vice President	Jun-Lin Yeh
	Assistant Vice President	Ming-Hung Hsieh
Special Assistant	An-Tung Kuo

① Assistant Vice President Ming-Hsiang Wang was promoted to the position of Vice President on January 1, 2026.
Note 1: Names and titles can be disclosed separately and the profit distribution can be summarized in an aggregate amount.
Note 2: Refers to the employee remuneration (including stocks and cash), approved by the board, to be allocated to the managerial officers in the most recent year. If the amount cannot be estimated, calculate the amount for this year based on the actual allocated amount last year. Net income after tax in the most recent year. If the IFRS has been adopted, the net income after tax refers to the number in the standalone and individual financial reports.
Note 3: The applicability for managerial officers is based on Document No. 0920001301 of Tai-Tsai-Zheng-San-Zhi announced by the Financial Supervisory Commission on March 27, 2003.
(1) General manager and the equivalent position levels.
(2) Vice general manager and the equivalent position levels.
(3) Assistant president and the equivalent position levels.
(4) Head of the Finance Department.
(5) Head of the Accounting Department.
(6) Other people who manage matters for and sign on behalf of the Company.
Note 4: For the directors, general manager and vice general managers who receive employee remuneration (including stocks and cash), this Table will be to be filled out in addition to Table I-II.

Separately compare and describe total remuneration, as a percentage of net income stated in the standalone or individual financial statements, paid by the Company and by each of the companies included in the consolidated financial statements during the past 2 fiscal years to directors, supervisors, general managers, and assistant general managers and analyze and describe remuneration policies, standards and packages, the procedure for determining remuneration and its linkage to operating performance and future risk exposure.

(1) Analysis of the total remuneration paid, as a percentage of net income, to directors of the board, supervisors, the general manager and vice general managers during the most recent two years:

Unit: NT$ 1000; %

Year	2025		2024
	The Company	From All Consolidated Entities	The Company	From All Consolidated Entities
Director	2.22%	2.22%	2.29%	2.29%
General Manager and Vice General Managers	3.53%	3.81%	4.49%	4.88%

The remuneration of the directors, general manager and assistant general managers is in accordance with the salary management regulations of the Company and should be sufficient to recognize their responsibilities and risks.

(2) The remuneration policies, standards and packages, the procedure for determining remuneration and its linkage to the Company's operating performance:

The policy on the remuneration for directors is described in the Company's article of incorporation, " Annual profits concluded by the Company are subject to employee remuneration of at least 7%, and of the employee remuneration distributed, no less than 30% shall be distributed to entry-level employees, which the board of directors may decide to distribute in cash or in shares. Employees of subsidiaries may also be entitled to receive remuneration, provided that they meet the criteria specified by the board of directors. Up to 1.4% (inclusive) of the aforementioned profit may be distributed as directors' remuneration at the discretion of the board of directors. Employee's and director's remuneration proposals are to be raised for resolution during the shareholders' meetings. Profits must first be taken to offset against cumulative losses, if any, before the remainder can be distributed as employee/director remuneration in the above percentages." The remuneration payment for the general manager and vice general managers is in accordance with Sunny Friend's "Management Measures for Remuneration of Managerial Officers"

and the performance bonus is based on the Company's operating performance and individual work performance. The remuneration policies and amount are disclosed in the annual report in accordance with the regulatory requirements, and the future risks are limited.

The remuneration for independent directors is restricted in the form of monthly salary and specified amount of transportation allowance. The independent directors will not participate in the distribution of remuneration for directors. The remuneration for the remaining directors is distributed in the form of the specified amount of transportation allowance and the compensation distribution for directors.

Determine the procedures for specifying the amount for the remuneration of directors. The remuneration committee provides the proposal for the remuneration percentage based on the Company's operating results, performance, and the appraisal of the board for the year to the board for review. The remuneration is distributed in accordance with the "Guidelines on the Remuneration for Directors and Audit Committee and Remuneration Committee Members" to provide the directors with a reasonable amount in remuneration.

The Company's managerial officers' remunerations are defined as various allowances and bonuses in accordance with the "Regulations Governing the Salary of Employees" and the Regulations Governing the Salary of Managers Business performance, financial status, operating status, and individual work performance; if the Company makes a profit in the year, 7% of the profit is appropriated as employee remuneration in accordance with Article 31 of the Company's Articles of Incorporation. The results of the performance evaluation conducted by the Company in accordance with the "Appraisal Management Regulations" are used as the reference for the allocation of managerial officers' bonuses. The performance evaluation items for the managers are:

Financial indicators:

It is linked to the Company's financial profitability, and adjusted according to the Company's regulations for the distribution of employee remuneration and regulations for the distribution of year-end bonuses, and with reference to the target achievement rate of managers.

Non-financial indicators:

The remuneration of managerial officers is taken into consideration with

reference to various managerial officers' performance (e.g., the practice of the Company's core values, operational management ability, participation in sustainable operations, etc.)

The combination of remuneration paid by the Company shall be determined in accordance with the organizational charter of the Remuneration Committee, including cash remuneration, stock options, bonus shares, retirement benefits or severance pay, various allowances and other measures with substantial incentives.

Procedures for determining remuneration:

The remuneration to directors and managers is regularly evaluated based on the evaluation results of the Company's "Regulations Governing Performance Evaluation of the Board of Directors" and "Regulations Governing the Evaluation of managers and employees."
The results of the self-evaluation on the performance of the Board of Directors, members of directors, and members of various functional committees in 2025 were all good. In addition, the results of the Company's 2025 managerial performance evaluation showed that the performance of all managers has achieved the target requirements.
The performance evaluation and reasonableness of the remuneration of the Company's directors and managers are evaluated and reviewed by the Remuneration Committee and the Board of Directors. In addition to individual performance achievement rates and contributions to the Company, as well as the Company's overall operating performance, industry Future risks and development trends, as well as review the remuneration system in a timely manner depending on the actual operating conditions and relevant laws and regulations, and also comprehensively consider the current corporate governance trend, and provide reasonable remuneration in order to seek a balance between the Company's sustainable operation and risk control.

III. Implementation of Corporate Governance

(I) The operations of the board of directors: Number of meetings, attendance rate of each director, an evaluation of targets and performance for strengthening of the functions of the board during the current and the most recent years and any other matters that require reporting:

As of the most recent fiscal year (2025), they have participated in the board meetings 6 times

(A), and the attendance of director is shown below:

Title	Name	Actual Attendance in Person, B	Attendance by Substitution	Actual Attendance Rate (%) (B/A)	Remarks
Chairperson	Ren-Ying Industrial Co., Ltd.
Representative: Fang-Chen Chang	6	0	100%	—
Director	Yuan-Ting Investment Co., Ltd.
Representative: Ming-Yuan Cheng	6	0	100%	—
Director	Ruentex Development International Co., Ltd.
Representative: Tien-Jie Li	6	0	100%	—
Director	Ruentex Development International Co., Ltd.
Representative: Chin-Tzu Lin	3	3	50%	—
Director	Cheng-Chi Investment Co., Ltd.
Representative: Yung-Tien Chang	6	0	100%	—
Independent Director	Su-Ming Lin	6	0	100%	—
Independent Director	Wen-Chieh Wang	6	0	100%	—
Independent Director	Chun-Chung Chen	6	0	100%	—
Independent Director	Chin-Fa Chiu	5	1	83%	—
Other issues to be recorded:
I. The issues listed in accordance with Article 14-3 of the Securities and Exchange Act and other resolutions of the board, of which the independent directors have objected or reserve opinions on record or written statements and the date, term and proposal content of meeting, the opinions of independent directors and the measures taken by the Company in response to the opinions: no such circumstances.
II. For the recusal of directors due to conflicts of interests, please describe the name of the director, the proposal content, the reason for recusal and the participation in voting:
Board resolution on December 26, 2025:

For the proposal of 2025 distribution of remuneration for directors, as Mr. Fang-Chen Chang, Ming-Yuan Cheng, Tien-Chieh Li, Chin-Tsi Lin and Yung-Tien Chang are the Company's general directors that involves in the remuneration for directors, they recused themselves from the discussion and voting. The Chairperson appointed Independent Director Shih-Ming Lin as the acting Chairperson. The proposal was unanimously approved by the other directors attending the meeting without objections.
For the proposal of 2025 year-end bonus for the Company's managers: Yung-Tien Chang directors who also serves as the Company's Vice President, recused himself from both discussion and voting. Except for Yung-Tien Chang Director, who recused himself due to a conflict of interest, the proposal was unanimously approved by the other directors attending the meeting without objections.

III. A publicly traded and OTC company shall disclose the information on evaluation cycle and period, scope, method and contents of the board's self (or peer) appraisal and fill out the attached Table II (2) regarding the execution of board appraisal.

The Company's board revised the Measures for Evaluation of Board Performance on August 7, 2020, which stipulates that the board should conduct performance evaluation of the board, its members and functional committees at least once a year, and performance evaluation is to be completed in accordance with the Measures before the end of the first quarter of the following year.

The Company issued 9 copies of questionnaires of "Board Members Self-Assessment," and received all 9 copies in return in December 2025. Together the "Board Performance Self-Assessment", "Audit Committee Performance Appraisal Self-Evaluation Questionnaire" and "Remuneration Committee Performance Appraisal Self-Evaluation Questionnaire", they were compiled into a board performance evaluation report for 2024, and the report has been submitted to the board on March 5, 2026.

The Audit Committee performance appraisal self-evaluation questionnaire covers five aspects: A. Participation in the operation of the Company; B. Awareness of the duties of the functional committee; C. Improvement of quality of decisions made by the functional committee; D. Makeup of the functional committee and election of its members; and E. Internal control. A total of 22 questions were used for the evaluation, and the total weighted score for 2025 was a perfect score.

The Remuneration Committee performance appraisal self-evaluation questionnaire covers four aspects: A. Participation in the operation of the Company; B. Awareness of the duties of the functional committee; C. Improvement of quality of decisions made by the functional committee; and D. Makeup of the functional committee and election of its members. A total of 19 questions were used for the evaluation, and the total weighted score for 2025 was a perfect score.

Evaluation cycle	Evaluation period	Scope of evaluation	Evaluation methods	Evaluation Contents
Once a year.	January 1, 2025 to December 31, 2025	Performance appraisal of the board, individual board members and functional committees (salary and remuneration committee and audit committee)	Performance appraisal is conducted through the questionnaires of "Board Members Self-Assessment," "Board Performance Self-Assessment" and "Functional Committees Performance Self-Assessment" given at the end of each year, which are then compiled into a board performance evaluation report for the year.	Board performance appraisal:
(1) participation in the operation of the Company,
(2) improvement of the quality of the board of directors' decision making,
(3) composition and structure of the board of directors, election and and internal control
(4) continuing education of the directors
(5) internal control
Individual board member performance appraisal:
(1) At least includes six aspects
(2) the alignment of the goals and missions of the Company
(3) awareness of the duties of a director
(4) management of internal relationship and communication, participation in the operation of the Company
(5) the director's professionalism and continuing education
(6) internal control.
Functional committee performance appraisal:
(1) participation in the operation of the Company
(2) awareness of the duties of the functional committeentermal control.
(3) improvement of quality of decisions made by the functional committee
(4) the makeup of the functional committee and election of its members
(5) internal control.

IV. An evaluation of targets (such as establishing an audit committee, improving information transparency and others) and performance for strengthening the functional competence of the board during the current and the most recent years:

The board of Sunny Friend established an audit committee. Key proposals are dissous audit committee then submitted to the board for discussion and are carried out only after obtaining the opinion of each director and reaching a consent. The key proposals and resolutions are announced in accordance with the regulatory requirements and the authority for information transparency.
Sunny Friend has established positions of specialists responsible for corporate governance and the main responsibility includes handling matters relating to board meeting and shareholder meeting according to laws; preparing the meeting minutes of board meetings and shareholder meetings; assisting in onboarding and continuous training of directors; furnishing information required for business execution by directors; assisting directors with regulatory compliance; reporting to the board on the review results of whether the nomination, election and the service period of independent directors meet the relevant laws and regulations; handling matters related to change of directors; and other matters set out in the Company's Articles or Incorporation or agreements.

The progress of directors' continuing education: (For 2025)

Title	Name	Date	Organizer	Courses	hours	Total hours	Whether the continuing education program complies with the requirements
Chairman Representative of Ren-Ying Industrial Co., Ltd.	Fang-Chen Chang	9/19	Chinese National Association of Industry and Commerce	The Impact of New Global Geo-political and Economic Shifts on Taiwanese Enterprises	3	6	Yes
		11/4	Greater China Financial and Economic Development Association	Trump 2.0: An Observation of the US-China Game and the Risks of Peace and War Across the Taiwan Strait	3
Director Representative of Ruentex Development Co.,Ltd.	Tien-Jie Li	7/9	Taiwan Stock Exchange Corporation	2025 Cathay Sustainable Finance Climate Change Summit	3	9	Yes
		7/25	Securities and Futures Institute	2025 Regulatory Compliance on Insider Equity Trading Briefing Seminar	3
		11/14	Consultant of Straits Exchange Foundation	ESG Strategy Power: A Natural Positive Growth Path	3
Director Representative of Ruentex Development Co.,Ltd.	Chin-Tzu Lin	7/9	Taiwan Stock Exchange Corporation	2025 Cathay Sustainable Finance Climate Change Summit	6	6	Yes
Director Representative of Yuan-Ting Investment Co., Ltd.	Ming-Yuan Cheng	11/28	Securities and Futures Institute	Legal Responsibilities and Considerations for Insider Equity Transactions	3	6	Yes
		11/28	Securities and Futures Institute	Business Integrity Management and Fraud Prevention Practices	3
Director Representative of Cheng-Chi Investment Co., Ltd.	Yung-Tien Chang	4/18	Accounting Research and Development Foundation	Corporate Governance - Responsibilities and obligations of enterprises and directors/supervisors under the Securities and Exchange Act	3	6	Yes
		5/23	Taiwan Project Management Association	Listed Companies Directors Refresher Course - Anti-Money Laundering and Counter-Terrorism Financing	3
Independent Director	Su-Ming	5/9	Industrial Technology Research Institute	AI Security and Digital Trust	3	18	Yes

Title	Name	Date	Organizer	Courses	hours	Total hours	Whether the continuing education program complies with the requirements
	Lin	8/8	Industrial Technology Research Institute	From Risks to Opportunities: Sustainable Finance and TNFD Help Enterprises with Green Transformation	3
		8/12	Securities and Futures Institute	Analysis of Global Net-Zero Sustainability Trends and Taiwan's Decarbonization Paths	3
		9/3	Taiwan Corporate Governance Association	The 21st (2025) Corporate Governance International Forum – The Role of the Board of Directors in Shaping Corporate Strategy Amidst Global Environment Shifts.	3
		10/30	Taiwan Corporate Governance Association	Corporate governance and securities regulations	3
		12/5	Industrial Technology Research Institute	Interpreting the global net-zero sustainability trend and Taiwan's carbon reduction strategy for COP30.	3
Independent Director	Wen-Chieh Wang	7/17	Greater China Financial and Economic Development Association	Company financial decisions that directors and supervisors should pay attention to	3	9	Yes
		8/21	Greater China Financial and Economic Development Association	Impacts of Carbon Pricing on Business Operations	3
		11/11	Independent Director Association Taiwan	Corporate Mergers and Acquisitions, Shareholders' Agreements and Legal Compliance	3
Independent Director	Chun-Chung Chen	8/15	Securities and Futures Institute	2025 Regulatory Compliance on Insider Equity Trading Briefing Seminar	3	6	Yes
		9/19	Chinese National Association of Industry and Commerce	The Impact of New Global Geo-political and Economic Shifts on Taiwanese Enterprises	3
Independent Director	Chin-Fa Chiu	10/17	Taipei Foundation of Finance	ESG Basics: Interpreting Taiwan's Sustainability Transformation Blueprint	3	6	Yes
		10/31	Corporate Operating and Sustainable Development Association	Non-consensual mergers and acquisitions practices and corporate governance issues	3

(II) Professional qualifications, experience, annual work focus and operation of the audit committee and its participation in the operation of the board of directors

Professional qualifications and experience :

Name	Professional qualifications and experience
Su-Ming Lin	Ph.D in Accounting at Arizona State University, and had once served as the Dean and director of the Department of Accounting at NTU. He is qualified to lecture in finance and accounting disciplines in public and private colleges and universities and has not involved in circumstances specified in Article 30 of the Company Act.
Wen-Chieh Wang	He holds a doctoral degree in law from National Chengchi University. He once served as the Dean of the College of Law at National Chengchi University and is currently a professor there. He is qualified to lecture in law disciplines in public and private colleges and universities and has not involved in circumstances specified in Article 30 of the Company Act.

Chun-Chung Chen	Master's degree from the College of Management at NSYSU, once served as the vice president of the Chemical Business Department, executive vice president of the Office of the President, and manager of the Audit Office at Taiwan Hopax Chemicals Mfg. Co. Ltd. Has rich practical experience required for the Company's business and has not been involved in circumstances specified in Article 30 of the Company Act.
Chin-Fa Chiu	Master's degree from the Institute of Business Administration, National Taiwan University, had served as the President of Shinkong Textile Co. Ltd. He is currently serving as a Director of Shin Kong Textile Co., Ltd., specializing in business management and leadership decision-making and has not been involved in circumstances specified in Article 30 of the Company Act.

Chun-Chung Chen

Master's degree from the College of Management at NSYSU, once served as the vice president of the Chemical Business Department, executive vice president of the Office of the President, and manager of the Audit Office at Taiwan Hopax Chemicals Mfg. Co. Ltd. Has rich practical experience required for the Company's business and has not been involved in circumstances specified in Article 30 of the Company Act.

Chin-Fa Chiu

Master's degree from the Institute of Business Administration, National Taiwan University, had served as the President of Shinkong Textile Co. Ltd. He is currently serving as a Director of Shin Kong Textile Co., Ltd., specializing in business management and leadership decision-making and has not been involved in circumstances specified in Article 30 of the Company Act.

The expected action areas of the audit committee are as follows:
Establish or amend the internal control protocols in accordance with Article 14-1 of the Securities and Exchange Act.
Evaluation of the effectiveness of the internal control protocols.
Establish or amend procedures major financial or operational actions, such as acquisition or disposal of assets, engaging in derivatives trading, lending funds to others, endorsements or guarantees to others, in accordance with Article 36-1 of the Securities and Exchange Act.
A matter bearing on the personal interest of a director.
A material asset or derivatives transaction.
A material monetary loan, endorsement or provision of guarantee.
The offering, issuance or private placement of any equity-type securities.
The hiring or dismissal of an attesting CPA or the compensation given thereto.
The appointment or discharge of a financial, accounting, or internal auditing officer.
Annual financial reports.
Any other material matter so required by the company or the Competent Authority.
As of the most recent fiscal year (2025), they have participated in the board meetings 5 times, and the attendance of independent directors is shown below:

Title	Name	Actual Attendance in Person(B)	Attendance by Substitution	Actual Attendance in Person(B/A)	Remarks
Independent Director	Su-Ming Lin	5	0	100%	-
Independent Director	Wen-Chieh Wang	5	0	100%
Independent Director	Chun-Chung Chen	5	0	100%
Independent Director	Chin-Fa Chiu	4	1	80%

Other issues to be recorded:

I. The date, session and proposal content of Audit Committee meetings, objection, qualified opinions and content of significant recommendations of independent directors, the Audit Committee's resolutions and the Company's handling of the Audit Committee's comments shall be specified under any one of the following circumstances.

(I) Matters specified in Article 14-5 of the Securities and Exchange Act:

Date of the Meeting	Proposal Content and Follow-up Implementation	Any objection, expression of reservations or significant recommendations by an independent director	Resolution result of audit committee	Company's handling of audit committee's opinions
2nd term 9th time
2025/2/27	1. The 2024 financial statements, consolidated financial statements and business reports are submitted for deliberation.	None	Unanimous approval by the committee members.	Unanimous approval by all directors attending the board meeting.
	2. 2024 Statement on Internal Control.
	3. 2024 remuneration for employees and directors.
	4. 2024 Annual profit distribution.
2nd term 10th time
2025/5/9	1. The Company's 2025 Q1 financial report.	None	Unanimous approval by the committee members.	Unanimous approval by all directors attending the board meeting.
	2. Appointment, remuneration, independence and competency evaluation of CPAs
	3. Company Auditing Report Approval
	4. Endorsement and guarantee for subsidiaries in China
2nd term 11th time
2025/8/7	1. The Company's 2025 Q2 financial report.	None	Unanimous approval by the committee members.	Unanimous approval by all directors attending the board meeting.
2nd term 12th time
2025/11/6	1. The Company's 2025 Q3 financial report.	None	Unanimous approval by the committee members.	Unanimous approval by all directors attending the board meeting.
	2. Revised the "Budget Management Regulations"
	3. Amendment to the "Sustainable Development Best Practice Principles".
2nd term 13th time
2025/12/26	1. Formulate the "Detailed Rules for Auditing Employee Compensation Payment Methods".	None	Unanimous approval by the committee members.	Unanimous approval by all directors attending the board meeting.
	2. The 2026 annual audit plan.
	3. Reorganization of invested businesses in China

(II) Except for the abovementioned matters, others which have not been passed by the Audit Committee but have been approved by more than two-thirds of all directors: None.

II. When there is avoidance of conflicts of interest by a director, state the director's name, the involved proposal(s), the cause(s) of the avoidance of conflicts of interest, and the participation in the voting of that director: None.

III. Communication between independent directors and principal internal auditing officer and accountants (communicate materiality, methods and results of the Company's financial and business conditions).

Date	Method	Communication counterparty
2025/02/27	Seminar	Independent Director:
Su-Ming Lin
Wen-Chieh Wang
Chun-Chung Chen
Principal Internal Auditing Officer:
Shi-Chang Chen
Accountant:
Chin-Lien Huang	2024 Key Audit Matters	No objection.
2025/12/26	Seminar	Independent Director:
Su-Ming Lin
Wen-Chieh Wang
Chun-Chung Chen
Principal Internal Auditing Officer:
Shi-Chang Chen
Accountant:
Chin-Lien Huang	Communication with the governance unit at the planning stage	No objection.

(III) Status of corporate governance implementation and the differences from the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies and the reasons:

Issues to be Assessed	Implementation Status			Differences from the rules for governance practices and the reasons
	Yes	No	Explanation
I. Does the Company follow "Corporate Governance Best Practice Principles" to establish and disclose its corporate governance practices?	☑		The board has approved the Company's amended "Corporate Governance Best Practice Principles" on November 8 2024 and it is disclosed on the Company's website and the "Market Observation Post System."	No difference.
II. Shareholdings' structure and shareholders' equity
(I) Does the Company have internal operating procedures for handling shareholders' suggestions, concerns, disputes and litigation matters. If yes, have these procedures been implemented accordingly?
(II) Does the Company possess a list of major shareholders and beneficial owners of these major shareholders?
(III) Has the Company built and executed a risk management system and "firewall" between the Company and its affiliates?
(IV) Has the Company established internal rules prohibiting insider trading on undisclosed information?	☑
☑
☑
☑		(I) The Company has formulated the relevant "Corporate Governance Best Practice Principles" and has a spokesperson and acting spokesperson system that will handle the issues listed on the left together with the specialized shareholder services organization.
(II) The securities agency can provide the actual information and Sunny Friend will disclose the list of major shareholders and beneficial owners of these major shareholders.
(III)Sunny Friend has established written specifications for the financial operations between its affiliates, and the operations and management, financial information, auditing and other supervision operations of the subsidiaries are carried in accordance with the "Subsidiaries Supervision Procedures."
(IV)Sunny Friend has established policies to prevent insider trading.	No difference.
No difference.
No difference.
No difference.

Issues to be Assessed	Implementation Status
	Yes	No	Explanation
III. Composition and responsibilities of the board of directors
(I) Has the board established a diversification policy and specific management objectives for the composition of the board and has it been implemented accordingly?	☑		(I) The composition of the board of Sunny Friend has embraced the diversity principles.
(1) The diversity policies should include, but are not limited to, the following two aspects:
1. Background and value: Gender, age, nationality, ethnicity, etc.
2. Knowledge and skills: Career background (e.g., law, finance, accounting, industry or management), professional skill and industry experience.
In addition to limiting those who hold concurrent positions to no more than 1/3 of the total board seats, the operations, managing and development require take diversification policy into consideration.
(2) Specific management objectives:
Independent directors should serve no more than nine consecutive years. The number of directors taking concurrent positions as the Company's managers shall not exceed 1/3 of the board seats. The age distribution should be even. There shall be at least one director of different genders. Their professional capabilities cover various fields, and each field shall have at least one director having the designated professional qualifications.
(3) Achievement:
1. The Company's independent directors all took office after the re-election at the 2023 annual	No difference.

Issues to be Assessed	Implementation Status
	Yes	No	Explanation
			general shareholders’ meeting, and their terms currently have not exceed nine years.
2. Among the Company's directors, 22% of them have concurrent positions as the Company's employees, 33% are external directors and 45% are independent directors.
3. The age distribution is 51-80 years old, with 2 directors aged 51-60 years old, 6 directors aged 61-70 years old and 1 directors aged 71-80 years old.
4. As for the professional capabilities, 100% in business management, 100% in leadership and decision-making, 56% in finance, accounting, and law, 56% in industry knowledge, 33% in industrial technology, 56% in marketing, 56% in business development, 100% in risk management, 100% in environmental sustainability, 67% in social engagement, and 56% in supply chain management.
5. The Company values gender equality in the composition of the board. Currently, all board members are male directors. Considering the gender diversity of the board of directors, we plan to add at least one female director in the next (for 2026) board of directors election. This director must have rich practical experience and extensive work experience required by the Company's business.
(4)The diversification policy of the board members is disclosed on the Company's website and the

Issues to be Assessed	Implementation Status
	Yes	No	Explanation
(II) Other than the Compensation Committee and the Audit Committee which are required by law, does the Company plan to set up other functional committees?	☑		“Market Observation Post System.”
(II) The Company has set up a compensation committee and audit committee according to law. In the future, more other functional committees may be established voluntarily according to regulations and actual needs.	No difference.
(III) Has the Company established its Board Performance Appraisal Measures and the evaluation methods, conducted the performance appraisal regularly every year and provided the results to the board as the reference for directors' remuneration and nomination and renewal?	☑		(III) The Company has passed the adoption of the Board Performance Appraisal Measures at the board meeting on August 7, 2020. The Office of the General Manager conducted the performance appraisal self-assessment in the form of questionnaires and the results were submitted to the board on March 5, 2026 as a reference for directors' remuneration and nomination and renewal. The overall implementation was good.
The measurements of the Company's board performance appraisal include the following five aspects:
(1) Participation in the operation of the company
(2) Improvement of the quality of the board of directors' decision making
(3) Composition and structure of the board of directors
(4) Election and continuing education of the directors
(5) Internal control
Individual board member performance appraisal:
(1) At least includes six aspects
(2) the alignment of the goals and missions of the	No difference.

Issues to be Assessed	Implementation Status
	Yes	No	Explanation
(IV) Does the Company regularly evaluate its external auditors’ independence?	✓		Company
(3)awareness of the duties of a director
(4)management of internal relationship and communication, participation in the operation of the Company
(5)the director's professionalism and continuing education
(6)internal control.

Functional committee performance appraisal:
(1)participation in the operation of the Company
(2)awareness of the duties of the functional committeenternal control.
(3)improvement of quality of decisions made by the functional committee
(4)the makeup of the functional committee and election of its members internal control.

(IV) The selection of Sunny Friend's certified public accountants is based on professionalism, responsibility, independence and other criteria. They are hired upon the board's approval, and the board will evaluate if they are capable enough based on the actual progress of their tasks. The CPAs provide their accountant's independence statement and AQIs, the Office of the General Manager collected and evaluated the information, and the selection was approved by the audit committee and board on May 9,2025 The assessment criteria are shown as follows: | No difference. |

Issues to be Assessed	Implementation Status
	Yes	No	Explanation
			1. The appointment of the accountant has experienced changes within past seven years as required by the regulation.
2. The appointed accountant has no significant financial interests with the Company.
3. The appointed accountant avoids any inappropriate relationship with the Company.
4. The appointed accountant ensures that the assistants maintain honesty, impartiality and independence.
5. The appointed accountant has not served as a board member or taken a position that may impact the audited cases. It is also confirmed that the accountant will not hold the aforementioned position during the future auditing period.
6. The appointed accountant does not have a marital relationship and is not a relative within the second degree of kinship to any other executive officers of the Company.
7. Has not received valuable gifts or presents (or the value has not exceeded the general social etiquette standard) from the Company's directors and managerial officers.
8. The name of the appointed accountant shall not be used for other purposes.
9. The appointed accountant shall not have loaning or borrowing transactions with the Company.
10. The appointed accountant shall not operate other businesses that may cause a loss of the

Issues to be Assessed	Implementation Status
	Yes	No	Explanation
			independence.
11. The appointed accountant shall not request any commission related to the business.
12. The appointed accountant shall not hold the shares of the Company.
13. The appointed accountant shall not hold a concurrent position in the Company receiving a steady salary payment.
14. The appointed accountant shall not have a joint investment or benefits sharing with the Company.
15. The appointed accountant shall not be involved in the management of the Company's decision-making.
IV. Has the Company allocate qualified and sufficient number of personnel and appoint principal corporate governance officer in charge of corporate governance affairs (including but not limited to furnishing information required for business execution by directors and supervisors, assisting directors and supervisors to comply with laws, handling matters relating to board meetings and shareholders’ meetings according to laws, recording minutes of board meetings and shareholders’ meetings, etc)?	✓		Sunny Friend has designated dedicated personnel responsible for corporate governance related matters described as follows: (Scope of authority)
(I) Handle matters related to the board meetings and shareholders' meetings in accordance with the law and prepare minutes of the board of directors and shareholders' meetings.
(II) Assistance is offered for the onboarding and continuing education of directors.
(III) Assistance is offered to provide data required for directors to perform their duties.
(IV) Assistance was offered to directors to comply with relevant regulations.
(V) Report to the board the results of the review on whether the qualifications of independent directors	No difference.

Issues to be Assessed	Implementation Status
	Yes	No	Explanation
			comply with relevant laws and regulations at the time of nomination, election, and during their tenure. (VI) Handle matters related to the change of directors. (VII) Other matters stipulated in accordance with the Company's Articles of Incorporation or contracts.
V. Has the Company established communication channels with stakeholders (including, but not limited to, shareholders, employees, customers and suppliers) and set up an area dedicated to stakeholders on the Company website and does the Company respond appropriately to corporate social responsibility issues that stakeholders consider important?	☑		Sunny Friend has a spokesperson and acting spokesperson system and maintains good relationships with stakeholders, respecting and safeguarding their legitimate rights and interests. Sunny Friends publishes a corporate social responsibility report every year as a measure to further disclose its policies, specific actions and plans on the subject of Sustainable development. Sunny Friends publishes a Sustainable development report every year as a measure to further disclose its policies, specific actions and plans on the subject of Sustainable development and the report is submitted regularly together with the report on the communication with each stakeholder to the board. (I) Shareholders
1. Concerns
Operating performance/compliance/waste water and garbage.
2. Methods of communications
Shareholders' meeting, Company's website, annual reports, Market Observation Post System and disclosure of information on operations.
3. Specific measures
Maintain legitimate management and seek stable profitability. Hold shareholders' meeting on a	No difference.

Issues to be Assessed	Implementation Status			Differences from the rules for governance practices and the reasons
	Yes	No	Explanation
			regular basis and proactively announce important information on the website.

(II) Public section
1. Concerns
Air pollution and greenhouse gas emissions, waste water, garbage and compliance.
2. Methods of communications
Policy brief meetings, public hearings, government websites and exchanges with the authority by official documents.
3. Specific measures
Actively participate in the policy brief meetings, discussion sessions on compliance and announcement clarification organized by the government.

(III) Business organizations
1. Concerns
Regulatory compliance
2. Methods of communications.
Telephone interviews, visits in person, e-mail and exchanges by official documents.
3. Specific measures
Properly handle documents to be sent. Frontline personnel interview customers or conduct customer satisfaction surveys to understand their feedback and levels of satisfaction and establish a dedicated point of contact.

(IV) Suppliers
1. Concerns | |

Issues to be Assessed	Implementation Status
	Yes	No	Explanation
			Indirect economic impact/supplier evaluation /quality and price.
2. Methods of communications.
Email and telephone. Visits to their factories from time to time.
3. Specific measures
Procurement contract formulation. Supplier evaluation system. Participation in suppliers' showcase of new technologies.

(V) Employees
1. Concerns
Occupational health and safety training and education/regulatory compliance.
2. Methods of communications
Laborer and employer meetings/employee welfare committee's two-way communication/internal communication protocols.
3. Specific measures
Regularly hold laborer and employer meetings, employee welfare committee's two-way communication, public addressing of employees' concerns and regularly hold education and training.

(VI) Local communities.
1. Concerns
Regulatory compliance/local residents' health and safety.
2. Methods of communications
Visits, participation in public events, company website, office of the local village chiefs, township office. | |

Issues to be Assessed	Implementation Status
	Yes	No	Explanation
			3. Specific measures
Proactively visit the local communities and schools, participation in public events, donate books, issue publications and hold activities to increase interaction.

(VII) Academic and industry-academe collaboration organizations
1. Concerns
Regulatory compliance/air pollution and greenhouse gas emissions/waste water and garbage/economic performance.
2. Methods of communications
Telephone interviews, visits in person, e-mail, exchanges by official documents and meetings.
3. Specific measures
Industry-academia collaboration projects from time to time, interpretation of regulations, amendments to regulations, expression of opinions at public hearing sessions, regulations related to waste disposal and impact assessment regarding new technologies. | |
| VI. Has the Company designated an agent specializing in the handling of stock affairs to handle shareholder meeting affairs? | ☑ | | The Company has appointed a professional agent to handle the matters related to the shareholders' meetings. | No difference. |
| VII. Information disclosure
(I) Has the Company established a public website to disclose operational, financial and corporate governance information?

(II) Has the Company adopted other methods of information disclosure (e.g., setting up | ☑ | | (I) Sunny Friend has an official website (http://www.sunnyfriend.com.tw) and it has established information about the Company's business for shareholders and the public to refer to.

(II) Sunny Friend has designated personnel responsible for the disclosure of important information of the | No difference.

No difference. |

Issues to be Assessed	Implementation Status
	Yes	No	Explanation
an English website, designating a specialist responsible for gathering and disclosing Company information, setting up a spokesperson system, uploading recordings of investor conferences onto the Company website)?
(III) Has the Company published and reported its annual financial report within two months after the end of a fiscal year and published and reported its financial reports for the first, second and third quarters as well as its operating status for each month before the specified deadline.	☑		Company, and the information is posted on the Market Observation Post System and the Company's website regularly.

(III)The quarterly financial reports and monthly operational status are announced and reported before the specified deadline. | Although the annual financial report could not be published and filed within two months after the end of the fiscal year, it was still completed before the prescribed deadline. |
| VIII. Does the Company have other important information to facilitate better understanding of the Company's corporate governance practices (including, but not limited to current status of employee rights, employee care, investor relations, supplier relations, stakeholder rights, director and supervisor training regimes, risk management policies, and risk measurement standards as well as the implementation of client policies and the Company's purchase of liability insurance for its directors and supervisors)? | ☑ | | (I) The Company has arranged further education courses for directors and kept them informed of the changes in the relevant laws and regulations.
(II) The Company and its clients maintain a smooth communication channel and the implementation demonstrates good results.
(III) Except for special circumstances, all directors are to attend board meetings. Directors may not be involved in the board's resolutions if there is a conflict of interest of which their decision may compromise the best interest of the Company.
(IV) The Company always emphasizes the rights and interests of employees and it complies with the Labor Standards Act to protect the legitimate rights and interests of its employees. | No difference. |

Issues to be Assessed	Implementation Status			Differences from the rules for governance practices and the reasons
	Yes	No	Explanation
			(V) The Company has a spokesperson system to specifically handle shareholders' recommendations. The Company also immediately releases its financial, business and material information on the Market Observation Post System, so that investors can fully understand the direction and strategic moves of the Company.

(VI) The Company has purchased liability insurance for directors and reported such purchases in accordance with the regulations. In 2025, the insured amount was US$5 million and the policy period was one year. The purchase of insurance was reported to the board in November 2025. | |
| IX. Please explain improvements that have been made as well as priorities to improve the results of the Corporate Governance Evaluation issued by the Taiwan Stock Exchange Corporate Governance Center:

One female director is to be elected in the re-election at the next board meeting.
A policy is proposed to disclose the compensation and ESG-related performance evaluations of senior managers.
Planned disclosure of the scope 3 categories of greenhouse gas emissions and amounts for the past year.
Plan to introduce internal carbon pricing.
Formulate policies to appropriately reflect business performance or results in employee compensation, and disclose them on the Company’s website or in the annual report.
Formulate specific measures to enhance corporate value, submit them to the Board of Directors, and disclose the relevant information on the MOPS.
Establish an information security risk management framework, define information security policies and specific management plans, and allocate resources to information security.
Formulate policies and specific management plans to protect human rights, and disclose these policies and their implementation status.
Conduct employee satisfaction surveys regularly and disclose the implementation status and improvement plans.
Formulate a personal data protection policy and disclose its content and implementation. | | | | |

(IV) If the Company has established a Compensation Committee, please disclose its composition, responsibilities and operations:

The board has approved the establishment of the Compensation Committee, whose members are appointed by the board of directors. The main duties are to regularly review the policies, systems, standards and structure of performance appraisal and salary remuneration of directors and managers and submit the recommendations to the board for discussion.

Information on members of the Compensation Committee

| Title | Conditions
Name | Professional qualifications and experience (Note 1) | Criteria of independence (Note 2) | Number of other public companies for which the director concurrently serving as a compensation committee member |
| --- | --- | --- | --- | --- |
| Independent Director | Su-Ming Lin | Ph.D in Accounting at Arizona State University, and had once served as the Dean and director of the Department of Accounting at NTU. He is qualified to lecture in finance and accounting disciplines in public and private colleges and universities and has not involved in circumstances specified in Article 30 of the Company Act. | 1. The spouse or second-degree relatives do not serve as directors, supervisors or employees of the company or its affiliates.
2. The person, spouse or second-degree relatives (or in the name of others) do not own shares of the Company.
3. Has not served as a director, supervisor or employee of a company (in compliance with the provisions of Subparagraph 5 to 8, Paragraph 1, Article 3 of the Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies) that has a specific relationship with the Company.
4. The amount of remuneration not received by providing the Company or its affiliates with business, legal, financial, accounting and other services in the last 2 years. | 4 |

Title	Conditions	Professional qualifications and experience (Note 1)	Criteria of independence (Note 2)
Independent Director	Wen-Chieh Wang	He holds a doctoral degree in law from National Chengchi University. He once served as the Dean of the College of Law at National Chengchi University and is currently a professor there. He is qualified to lecture in law disciplines in public and private colleges and universities and has not involved in circumstances specified in Article 30 of the Company Act.	1. The spouse or second-degree relatives do not serve as directors, supervisors or employees of the company or its affiliates.
2. The person, spouse or second-degree relatives (or in the name of others) do not own shares of the Company.
3. Has not served as a director, supervisor or employee of a company (in compliance with the provisions of Subparagraph 5 to 8, Paragraph 1, Article 3 of the Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies) that has a specific relationship with the Company.
4. The amount of remuneration not received by providing the Company or its affiliates with business, legal, financial, accounting and other services in the last 2 years.	2

Title	Conditions	Professional qualifications and experience (Note 1)	Criteria of independence (Note 2)
Independent Director	Chun-Chung Chen	Master's degree from the College of Management at NSYSU, once served as the vice president of the Chemical Business Department, executive vice president of the Office of the President, and manager of the Audit Office at Taiwan Hopax Chemicals Mfg. Co. Ltd. Has rich practical experience required for the Company's business and has not been involved in circumstances specified in Article 30 of the Company Act.	1. The spouse or second-degree relatives do not serve as directors, supervisors or employees of the company or its affiliates.
2. The person, spouse or second-degree relatives (or in the name of others) do not own shares of the Company.
3. Has not served as a director, supervisor or employee of a company (in compliance with the provisions of Subparagraph 5 to 8, Paragraph 1, Article 3 of the Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies) that has a specific relationship with the Company.
4. The amount of remuneration not received by providing the Company or its affiliates with business, legal, financial, accounting and other services in the last 2 years.	-

Title	Conditions Name	Professional qualifications and experience (Note 1)	Criteria of independence (Note 2)	Number of other public companies for which the director concurrently serving as a compensation committee member
Independent Director	Chin-Fa Chiu	Master's degree from the Institute of Business Administration, National Taiwan University, had served as the President of Shinkong Textile Co. Ltd. He is currently serving as a Director of Shin Kong Textile Co., Ltd., specializing in business management and leadership decision-making and has not been involved in circumstances specified in Article 30 of the Company Act.	1. The spouse or second-degree relatives do not serve as directors, supervisors or employees of the company or its affiliates. 2. The person, spouse or second-degree relatives (or in the name of others) do not own shares of the Company. 3. Has not served as a director, supervisor or employee of a company (in compliance with the provisions of Subparagraph 5 to 8, Paragraph 1, Article 3 of the Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies) that has a specific relationship with the Company. 4. The amount of remuneration not received by providing the Company or its affiliates with business, legal, financial, accounting and other services in the last 2 years.	-

Note 1: Professional qualifications and experience: Describe the professional qualifications and experience of each individual compensation committee member.
Note 2: Status of independence: Describe the independence of members of the Compensation Committee, including but not limited to whether the person, spouse or relative within the second degree of kinship are serving as directors, supervisors or employees of the Company or its affiliates; the number of shares and the shareholding percentage held by the person, spouse or relative within the second degree of kinship (or in the name of others); whether the person is serving as a director, supervisor or employee of a company that has a specific relationship with the Company (please refer to Subparagraph 5 to 8, Paragraph 1 of Article 6 of the Regulations Governing the Appointment and Exercise of Powers by the Remuneration Committee of a Company Whose Stock is Listed on the Stock Exchange or Traded Over the Counter); and the amount of remuneration received by providing the Company or its affiliates with business, legal, financial, accounting and other services.

2. Operations of the Compensation Committee

(1) The Compensation Committee has 4 members.

(2) Term of office for this term: May 26, 2023 to May 25, 2026 The Committee has held 2 meetings (A) in the most recent fiscal year, and the qualifications and attendance of the members are shown as follows:

Title	Name	Actual Attendance in Person (B)	Attendance by Substitution	Actual Attendance Rate (%) (B/A)	Remarks
Convener	Su-Ming Lin	2	-	100%	-
Member	Wen-Chieh Wang	2	-	100%
Member	Chun-Chung Chen	2	-	100%
Member	Chin-Fa Chiu	1	1	50%
Other issues to be recorded: (1) Duty of the Salary and Compensation Committee: the Committee shall exercise the care of a good administrator to faithfully perform the following duties and present its recommendations to the board of directors for discussion. 1-1. Regularly review the procedures and propose amendments. 1-2. Establish and periodically review the annual and long-term performance of the directors and managerial officers and the policies, systems, standards and structure for their compensation. 1-3. Regularly assess the performance targets of the directors and managerial officers and determine conditions and amount of each individual's salary and remuneration. (2) If the board of directors does not adopt or amend the recommendations of the Compensation Committee, it shall clarify the date, term, proposal content and resolution of the board and how the Company handles the recommendations of the Committee: None (3) If the Committee members have objections or reservations and there are records or written statements from the meetings, the date, term, proposal content, opinions of all members and the handling of their opinions shall be clearly stated: None

Salary and Compensation Committee	Proposal Content and Follow-up Implementation	Opinions from the Committee members	Company handling the members' opinions	Resolution
5th term 5th time 2025.6.27	1. Severance pay for the retirement of Company Assistant Vice President Wen-Chen Huang.	None	None	Unanimous approval by the Committee members.
5th term 6th time 2025.12.26	1. It is proposed to amend the Company's "Regulations for the Distribution of Employees' Remuneration".	None	None	Unanimous approval by the Committee members.
	2. It is proposed to amend the company’s “Dragon Boat Festival and Mid-Autumn Festival Bonus Distribution Policy”.
	3. Proposed to amend the Company's "Management Measures for Remuneration of Management Officers".
	4. Proposed to amend the Company's "Remuneration Policy, System, Standard and Structure for Management Officers".
	5. The percentage of 2025 remunerations to directors of the Company
	6. 2025 year-end bonus for the Company's managers.
	7. Promotion of AVPs to Vice Presidents.

(V) Status of promotion of sustainable development and its differences from the Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies and the reasons:

Issues to be Assessed	Implementation Status			Differences from the Corporate Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies and reasons for discrepancies.
	Yes	No	Explanation
I. Has the Company established a governance structure to promote sustainable development, and set up a dedicated (or one holding concurrent positions) unit to promote sustainable development, with the board authorizing the senior management to manage the organization which is supervised by the board? (Publicly traded or OTC companies shall report the actual implementation, not just compliance or interpretation)	✓		Sunny Friend should follow the Corporate Governance Best Practice Principles, the Ethical Corporate Management Best Practice Principles and the Code of Ethics to establish an effective corporate governance framework, relevant ethical standards and matters to improve corporate governance. The directors of the Company shall have the duty of care of good administrators to supervise the Company to put sustainability into practice and always review the results of the implementation and make improvements to ensure thorough implementation of its sustainability policies. When promoting the sustainability goals, the board of Sunny Friend should fully consider the interests of stakeholders which include the following matters:	No difference.

Issues to be Assessed	Implementation Status
	Yes	No	Explanation
			1. Propose a sustainability mission or vision. Develop sustainability policies, practices or related management guidelines.
2. Incorporate sustainability into the Company's operating activities or development direction, and approve specific promotion plans.
3. Ensure the timeliness and correctness of information disclosure related to sustainability. The economic, environmental and social issues arising from Sunny Friend's operating activities should be managed by the senior management team authorized by the board, and the team should report the status of issues to the board. The process of tasks and the respective personnel for the tasks should be specific and clear.
Sunny Friend should regularly hold education and training sessions on sustainability, including the promotion and other matters.
Sunny Friend has established its Sustainability Best Practice Principles. Sunny Friend's Environmental

Issues to be Assessed	Implementation Status			Differences from the Corporate Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies and reasons for discrepancies.
	Yes	No	Explanation
			Safety Department is the dedicated operating unit that promotes sustainable development, with other departments offering assistance. The Principles are disclosed in Sunny Friend's Sustainability Report and official website. The board authorizes the Chairman (President) to instruct the management officers of the Environmental Safety Department to hand the related issues and report the findings to the board. Sunny Friend's Environmental Safety Department presents the sustainable development report to the board at least once a year. The board expresses its opinions and provides recommendations on the directions, or shows no objection to further implementation. Every year, after the sustainability report is completed and submitted to the board for review and confirmation of the content, it is then uploaded to the Market Observation Post System and announced on Sunny Friend's company website. 2024 sustainability report was approved by the board resolution on

Issues to be Assessed	Implementation Status
	Yes	No	Explanation
			August 7, 2025.
On December 26, 2025, the Corporate Governance Officer reported the implementation of ethical corporate management and communication with stakeholders to the Board of Directors for the year, and regularly tracked the effectiveness of sustainable development implementation.
Sunny Friend should formulate a reasonable remuneration policy to ensure that the remuneration plan can meet the strategic objectives of the organization and the interests of stakeholders.
The employee performance appraisal system should be integrated with the sustainability policy, and a clear and effective reward and penalty system should be established.
Sunny Friend should value stakeholder interests and identify the Company's stakeholders. A stakeholder page should be set up on the Company's website to serve an appropriate communication channel to understand stakeholders' reasonable expectations

Issues to be Assessed	Implementation Status
	Yes	No	Explanation
			and needs, and respond to their concerns with sustainability issues.
II. Does the Company have a dedicated ESG organization (or one holding concurrent positions) with the board authorizing the senior management to manage the organization, which reports to the board of directors? (Publicly traded or OTC companies shall report the actual implementation, not just compliance or interpretation)	☑		This disclosure covers the sustainability performance of Sunny Friend's Yuanchang and Changbin plants. The margin of risk assessment and the discussion of major topics are both mainly based on the two plants.
In order to understand stakeholder concerns, Sunny Friend focuses on its sustainability vision, the ESG promotion task force (AA1000 Stakeholder Engagement Standard) and the GRI Standards to conduct stakeholder identification and negotiation.
The identified key stakeholders and major topics are incorporated into the production of the sustainability report, which further formulates main management policy and implementation plan to respond to the needs and expectations of stakeholders.
Sunny Friend has adopted surveys and conducted analysis based on the sustainability materiality to	No difference.

Issues to be Assessed	Implementation Status	Differences from the Corporate Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies and reasons for discrepancies.
Yes	No	Explanation

Major topics	Measures
Regulatory compliance	Sunny Friend is mainly in the businesses of medical waste treatment, hazardous and general industrial waste treatment, design, planning and construction of treatment facilities, and the contract construction of incineration plants or landfills, and is considered in the waste treatment industry. In addition to complying with the Compact Act and the relevant regulations of the TWSE for listed companies, the Company follows the standards introduced by the Environmental Protection Administration, Executive Yuan and the Ministry of Economic Affairs. The key laws are the Waste Disposal Act, the Permit Management Regulations for Public or Private Waste Clearance and Disposal Organizations, the Regulations Governing Establishment and Administration of Enterprise Waste Removal and Disposal Facilities (Promulgated by the Ministry of Economic Affairs) and others. Sunny
65

Issues to be Assessed	Implementation Status
	Yes	No	Explanation
				Friend abides by these waste disposal regulations to establish its in-house rules.
			Wastewater and waste	Sunny regularly holds environmental management meetings to discuss the implementation progress of environmental management plans, compliance with environmental regulations, changes in environmental regulations, environmental improvement proposals, major environmental considerations and review of documents. The environmental management meetings have been effective in tracking the implementation of the system. The management team hold environmental management review meetings every year to discuss the implementation effectiveness of the management system and verify the audit plan for next year, annual education and training plans and other implementations to ensure the proper implementation of environmental management in-house.
			Occupational safety and health	In order to build a good occupational health and safety environment and a safety and health management organization to achieve the purposes of effective management, supervision and improvement, Sunny Friend's Environmental Safety Office coordinates
66

Issues to be Assessed	Implementation Status			Differences from the Corporate Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies and reasons for discrepancies.
	Yes	No	Explanation
			the related matters such as occupational safety and health management and environmental protection. To reinforce the safety and health management and in response to the provisions of the Occupational Safety and Health Act, the Changbin plant has established the Occupational Safety Office. Sunny Friend has established its safety and health work rules to provide employees with compliance regulations, and set up occupational disaster prevention plans and emergency response plans for the related operating units to implement. The Company also regularly tracks the update of laws and regulations and supervises the planning, management an audit of in-house safety and health operations to give employees a safe working environment. Comprehensive protection plans are provided to enhance employees' awareness and ideas of safety, so that operators can develop a keen sense and correct occupational safety and health mindset. Various software and hardware protection measures are provided to ensure that employees can work to their capacity with a peace of mind in a good environment, and improve the operation

Implementation Status
Yes	No	Explanation
			and management of Changbin plant.
		Economic performance	Sunny Friend values professionalism and the opinions of shareholders and investors, and shares the business results with all shareholders. in order to create long-term and stable business performance, we have consolidated to provide a one-stop service framework at home and abroad to assist the government and the public properly dispose of waste through incineration, physicochemical, solidification and final disposal (landfill) methods.
		Ethical operations and anti-corruption	In order to establish a corporate culture and sound development based on ethics to have good business operations, the Company has followed the Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies to create its in-house Ethical Corporate Management Best Practice Principles. The board also approved the establishment of the Procedures for Ethical Management and Guidelines for Conduct which specify the requirements of ethical management and prevention of unethical behaviors. Guidelines defines the Company's principles in ethics, and are announced on the Company's website and the MOPS for both the

Issues to be Assessed	Implementation Status			Differences from the Corporate Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies and reasons for discrepancies.
	Yes	No	Explanation
			internal and external stakeholders to review and follow. The two standards clearly stipulate that when engaging in commercial activities, directors, managers, employees, and mandates of the Company or persons having substantial control over such companies ("significant controllers") shall not directly or indirectly offer, promise to offer, request or accept any improper benefits, nor commit unethical acts including breach of ethics, illegal acts, or breach of fiduciary duty for purposes of acquiring or maintaining benefits. The benefits refer to any valuable things, including money, endowments, commissions, positions, services, preferential treatment or rebates of any type or in any name. Anti-corruption is part of the practices against unethical behaviors. Sunny Friend shall comply with the Company Act, Securities and Exchange Act, Business Entity Accounting Act, Political Donations Act, Anti-Corruption Statute, Government Procurement Act, Act on Recusal of Public Servants Due to Conflicts of Interest, TWSE/GTSM listing rules, or other laws or regulations regarding commercial activities, as the

Implementation Status			Differences from the Corporate Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies and reasons for discrepancies.
Yes	No	Explanation
		underlying basic premise to facilitate ethical corporate management. Sunny Friend shall abide by the operating philosophies of honesty, transparency and responsibility, base policies on the principle of good faith which have been approved by the board, and establish good corporate governance and risk control and management measures so as to create a sustainable business environment. The contracts established by Sunny Friend and its business partners have terms of ethical operations which specify that Sunny Friend may suspend the performance of contract if the counterparty is directly or indirectly involved in providing, requesting, promising, paying or accepting illegitimate funds, property or other interests or engaged in other activities that demonstrate the breach of good faith and fiduciary duty and are illegal. If there is legitimate evidence, Sunny Friend may terminate or cancel the contract without announcement in advancement and not be responsible for any damages.
		Greenhouse gas emissions	The global warming issue has attracted much attention. Sunny Friend's greenhouse gas emissions mainly come

Issues to be Assessed	Implementation Status	Differences from the Corporate Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies and reasons for discrepancies.
Yes	No	Explanation

Local community	As a local company, Sunny Friend's Yunlin and Changbin plants are the main contributors giving back to the community and fulfilling the Company's corporate social responsibility. The head office is located in Yuanchang Township, Yunlin County, and there are 21 villages in the township. Most of the residents of Yuanchang Township engage in farming and animal husbandry, and they are rather economically disadvantaged. For years, the Company has continued to organize winter relief programs and offer scholarships, helped families in need or

Issues to be Assessed	Implementation Status			Differences from the Corporate Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies and reasons for discrepancies.
	Yes	No	Explanation
			given out funeral grants, supported local social groups with materials and funding, and actively sponsored essay writing competitions, literary camps, science camps, free magazine giveaways for show care for the education in remote areas.
Sunny Friend's comprehensive processing center for business waste in central Taiwan (at Changhua Coastal Industrial Park) conducts its community give-back program in accordance with "Cashback Reward Agreement for Sunny Friend Central Taiwan Comprehensive Processing Center for Business Waste". All local reward matters are handled by Shengang Township Office and Xianxi Township Office, and the Company actively participate in environmental protection activities together with Changhua Coastal Industrial Park.
Besides, Sunny has established a communication channel with community residents nearby, and is ready to communicate with the public at any time in the event of an incident.
			Employee welfare and rights	Sunny Friend regards employees as the most important asset and an important part of interactions with the society. The

Issues to be Assessed	Implementation Status			Differences from the Corporate Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies and reasons for discrepancies.
	Yes	No	Explanation
			Company adheres to the principles of working locally and giving back locally, and prioritizes hiring local talents. It cares for every employee, providing everyone with a stable, fair and open working environment. Sunny Friend does not discriminate people based on race, class, language, ideology, religion, party affiliation, place of origin, place of birth, gender, sexual orientation, age, marital status, appearance, facial features , physical and mental disabilities and other factors. Sunny Friend values employee welfare and labor condition, and provides a comprehensive human resources management system for training, reward, promotion and retirement. The Company adheres to the equality principles of equal pay for equal work, and prohibits harassment or inhuman treatment of any form, so that employees can have a work environment with dignity. Sunny Friends follow the rules of the Labor Standards Act and the Regulations for Implementing Labor-Management Meeting to hold employee-employer meetings and employee welfare committee meetings at least once a quarter, and labor representatives present

Implementation Status			Differences from the Corporate Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies and reasons for discrepancies.
Yes	No	Explanation
		employees' recommendations and opinions on specific issues. The discussions in the meetings help everyone reach a consensus to build a harmonious work environment between employees and the management. Sunny Friend also has established personnel management regulations and work rules. The working conditions, wages and welfare of employees comply with relevant requirements. The work rules have been reported to the local county and city governments for verification. Sunny Friend provides employees with a friendly work environment, so that they can work to their capacity. The Company complies with relevant labor laws and regulations such as the Labor Standards Act, Employment Service Act, Occupational Safety and Health Act and the Act of Gender Equality in Employment.
		Recycling economy and technological innovation	Sunny Friend has improved its waste treatment technology, replaced old incineration equipment used new incineration equipment in the newly constructed plants. Technological innovation is continuously incorporated into the recycling technology to improve the performance.

Issues to be Assessed	Implementation Status
	Yes	No	Explanation
				The promotion of recycling technology reduces the materials used and cost of solidification process, extending the service life of landfills.
The investment in recycling technology achieves the reduction of waste. All the bottom slag produced is reused, and it is expected that the waste produced can be reduced by about 7%.
III. Environmental issues
(I) Has the Company set an environmental management system designed to industry characteristics?	☑		(I) Based on the awareness of environmental protection and the needs for pollution prevention and management and to fulfill the corporate responsibility of environmental protection, Sunny Friend's Yunlin plant had obtained the ISO14001 certification for environmental management system in July 2000 and obtained the new version of the certification after renewal in 2018. The latest certificate is valid from March 5, 2024 to March 4, 2027.
The Zhangbin Plant had obtained the ISO14001 certification for environmental management system in December 2009 and obtained the new		(I) No difference.

Issues to be Assessed	Implementation Status
	Yes	No	Explanation
			version of the ISO14001: 2015 Environmental Management System in 2022. The latest certificate is valid from October 18, 2022 to October 17, 2025. The Company actively promotes the ISO14001 environmental management system to achieve objectives of environmental management and continuous improvement.
Through the operation of ISO14001 environmental management system, the air, water and waste pollution generated from the disposal of waste in the processing plant can be managed and the practice can be reported to the authority to obtain the related certificates.
1.Air pollution
Obtain a "Permit for Operating Stationary Sources of Pollution" and add activated carbon and other chemicals to the in-house prevention equipment to remove pollutants from the exhaust gas. After proper processing, the

Issues to be Assessed	Implementation Status
	Yes	No	Explanation
			emissions meet the regulatory requirements and then entrust testing agencies recognized by the Environmental Protection Administration to conduct regular inspection of discharge or emission channels.
2. Water pollution
Obtain the prevention and control measures for water pollution approved by the authority and implement the measures based on the approved content.
3. Waste management
Sunny Friend handles business wastes in accordance with the waste categories approved by the authority. Waste residues derived from the disposal process are processed in accordance with the "Waste Cleanup Proposal."

Issues to be Assessed	Implementation Status			Differences from the Corporate Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies and reasons for discrepancies.
	Yes	No	Explanation
(II) Is the Company committed to improving energy efficiency and to the use of renewable materials with low environmental impact?	☑		(II) Sunny Friend has developed the basic concept of environmental protection openly available both to the internal and external parties and fully utilized resources to make continuous improvement and pollution prevent as the main environmental policy.	(II) No difference.
(III) Has the Company assessed the current and future potential risks and opportunities from climate changes and taken measures to address climate-related issues?	☑		(III) Risk management of climate change Sunny Friend prioritizes issues brought about by climate change, so in response to the impact of climate change, the Company follows the Task Force on Climate-related Financial Disclosures (TCFD) published by the Financial Stability Board (FSB) to conduct risk analysis and formulates response measures to reduce losses caused by natural disasters and continue to plan more energy-saving and environmentally friendly waste cleaning processes to improve competitive advantages. For the Company's assessment of the potential	(III)No difference.

Issues to be Assessed	Implementation Status
	Yes	No	Explanation
(IV) Has the Company compiled the greenhouse gas emissions, water consumption and total weight of waste the past two years and established management policies for energy saving and reduction of greenhouse gas emission, water consumption and other wastes?	☑		risks and opportunities of climate change to the present and future of the Company and the countermeasures, please refer to Chapter III-(VI): Climate Related Information of TWSE/TPEx Listed Company on page 118 of this annual report.
(IV) Sunny Friend collects the statistics on greenhouse gas emissions, water consumption and total waste weight from its plants in Yunlin and Zhangbin Plant every year and discloses the information on the Company's Corporate Sustainability Report.
1.Greenhouse gas emissions
For the Company's greenhouse gas emission status in the past two years, please refer to Chapter III-(VI): Greenhouse Gas Inventory Information - Climate Related Information of TWSE/TPEx Listed Company on page 123 of this annual report.	(IV) No difference.

Issues to be Assessed	Implementation Status
	Yes	No	Explanation
			2. Water consumption
Three sites of Sunny Friend are not located in water-stressed areas. They draw water from third-party sources (tap water), and the water quality is freshwater. Drainage is discharged to third-party treatment facilities (the Changhua Coastal Industrial Park sewage treatment plant and commissioned Chin Hsin for treatment).
In 2025, Sunny Friend’s total water intake was 291.158 megaliters, with a unit water intake (water intake per ton of waste disposal) of 0.0029 megaliters/metric ton. The 2025 water intake volume increased by 6.2% compared to 2024.
This was mainly due to an increase in waste treatment volume, which led to higher water usage, but did not affect the unit water intake volume (water intake per tonne of waste treatment).

Issues to be Assessed	Implementation Status	Differences from the Corporate Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies and reasons for discrepancies.
Yes	No	Explanation

Water source category	Water quality indicator	Water consumption
2024	2025
All regions	All regions
Third-party water	Freshwater	274.094
Total water withdrawal	274.094	291.158
Recycled water volume	44.002	39.119
Recovery percentage (%)	16.1	13.4
Unit water intake (megaliters/metric tons)	0.0031	0.0029
Note 1: Water recovery rate = Total water recycled / Total water withdrawal across all regions Note 2: Unit water intake = Total water intake across all regions / Total waste treatment volume (total waste treatment volume includes incineration, stabilization, and physicochemical treatment volumes, excluding landfill volume)
3. Total waste weight
Item	Year	2024
Derived Waste	Annual production	11,706.888
Unit production volume	0.131	0.113

Issues to be Assessed	Implementation Status
	Yes	No	Explanation
			Note 1: Derived waste unit output = Annual derived waste generation (metric tons) / Annual waste disposal volume (metric tons)
Through the use of green building materials and energy-saving lighting, the upgrades to factory equipment and improvement to equipment efficiency, Sunny Friend promotes its energy conservation and carbon reduction policies. The adoption of environmental management system for continuous improvement identifies and assesses the site processes and manufacturing equipment. Management review meetings are held every year to evaluate the performance of environmentally-friendly policies and the objectives of pollutant reduction, effectively enhancing the Company's image and reducing the waste of resources.

Issues to be Assessed	Implementation Status
	Yes	No	Explanation
			Sunny Friend's goals for environmental management:
(1) Targets for reduction of greenhouse gas
In recent years, Sunny Friend has renovated the processing equipment in house to reduce greenhouse gas emissions. Yunlin Plant 1st as undergone the renovation process since 2018 to upgrade its heat exchange system to make full use of the heat generated from the incineration system, further reducing the amount of fuel used. At the same time, diesel with less sulfur is used to replace heavy oil. In order to effectively monitor the benefits of carbon management, Sunny Friend has set emission reduction targets, using 2025 as the base year, aiming to achieve a 3% reduction in emission intensity by 2027 and a 5% reduction by 2030.
(2) Target for power saving
Sunny Friend adopts central air-conditioning management and energy-saving lighting and

Issues to be Assessed	Implementation Status			Differences from the Corporate Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies and reasons for discrepancies.
	Yes	No	Explanation
			promotes turning off lights when not in use for its office buildings and subscribes for green power with the Ministry of Economic Affairs. The most recent phase is based on 2025, and it is estimated that in 2030, 4% reduction in energy consumption can be achieved.

(3) Target for waste management
In order to reduce the amount of waste generated, the Company promotes the reduction of domestic waste at offices, re-use of recycled resources and classification and management of waste. When photocopying, try using the backside of scrap paper first. As for plants, the Company promotes the reduction of fly ash and bottom slag from waste incineration. 2025 is set as the base year, with a goal to reduce derived waste generated per tonne of waste processed by 4% by 2027. In 2025, derived waste generated from waste treatment per metric ton was 13.7% lower than in 2024. | |

Issues to be Assessed	Implementation Status
	Yes	No	Explanation
			(4) Target for water consumption
In response to the growing imbalance of supply and demand of water resources, Sunny Friend as a global citizen, advocates for the importance of water conservation through environmental education at offices for its employees, so the concept of water conservation can be incorporated into every detail of daily life. For internal factory processes, water usage per tonne of waste incineration, based on the 2025 average, is targeted to decrease by 3% per tonne of waste incineration by 2027.
Specific measure adopted by Sunny Friend to achieve targets:
1. Specific measures for the reduction of greenhouse gas
Due to the characteristics of the waste treatment industry, Sunny Friend’s energy consumption primarily stems from waste incineration (78%), electricity (7%), and

Issues to be Assessed	Implementation Status
	Yes	No	Explanation
			diesel (3%). Accordingly, short-term reduction strategies focus on lowering electricity and diesel usage, while long-term plans involve enhancing process and pollution prevention efficiency. These plans include evaluating process improvements and upgrading environmental protection measures for incinerators to meet air pollution control standards and reduce greenhouse gas emissions. Sunny Friend has set reduction targets, using 2025 as the base year, to achieve a 3% reduction in emission intensity by 2027 and a 5% reduction by 2030.
2. Specific measures for saving energy With 2024 as the base year, Sunny Friend has established its own internal energy-saving plan and begun compiling statistics on the power equipment of each

Issues to be Assessed	Implementation Status	Differences from the Corporate Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies and reasons for discrepancies.
Yes	No	Explanation

Energy conservation measures	Descriptions	Implementation in 2025
Office power equipment upgrade	In terms of lighting and air-conditioning improvements, the company replaced older models with energy-efficient equipment.	A total of 265 T8 lights were replaced with 36W LED lights at the Chang-Bin Plant, which is expected to save 55,968 kWh of electricity per year.
Deep energy saving for high-energy-consumption equipment	The Company cooperated with the government's electricity conservation policy and evaluated the strategic direction for improving energy efficiency in the plants based on recommendations from energy technology service providers.	1. The Chang-Bin plant replaced the fixed-frequency air compressor used in the hardening process with a variable-frequency air compressor, which is expected to save 10% of the equipment's electricity consumption annually, approximately 65,700 kWh. 2. The optimization of the air compressor

Issues to be Assessed	Implementation Status
	Yes	No	Explanation
				pipeline at the second phase of the Chang-Bin incinerator plant has been completed, reducing pressure loss and improving equipment efficiency. The results have been outstanding, and the improvement is expected to save approximately 963,600 kWh of electricity annually, or approximately a 33% reduction in power consumption. 3. The Yunlin Plant evaluated the operation of air compressors within the facility and reduced the number in use to prevent energy waste. This improvement has saved approximately 130,000 kWh of electricity consumption per year.
			3. Specific measures for the reduction of waste
(1) Garbage is classified as recyclable and non-recyclable.
(2) Water conservation.

Issues to be Assessed	Implementation Status			Differences from the Corporate Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies and reasons for discrepancies.
	Yes	No	Explanation
			(3) Use the unused backside of recycled paper to reduce the paper consumption.
(4) Bring your own cup and cutlery sets to work to reduce the use of disposable tableware.
4. Specific measures for the reduction of water consumption
(1) Water conservation in daily life.
(2) Change water-cooled air-conditioning to air-cooled air-conditioning to reduce the use of cooling water.
(3) Adjust water supply used in equipment cooling to reduce the use of cooling water.
IV. Social Issues
(I) Does the Company establish policies and procedures in compliance with regulations and internationally recognized human rights principles?	☑		(I) The Company is committed to providing employees with a friendly working environment where they can fully put their job skills to good use. The Company recognizes and refers to the UN "Universal Declaration of Human Rights," "UN Guiding Principles on Business and Human Rights," "International	(I) No difference.

Issues to be Assessed	Implementation Status
	Yes	No	Explanation
			Labor Organization Convention," "ILO Declaration on Fundamental Principles and Rights at Work" and other international human rights conventions and other domestic labor regulations, such as the "Labor Standards Act," "Act of Gender Equality in Employment," "Occupational Safety and Health Act" and others, to develop the Company's governance and human rights policies. The Company's collaborating vendors are required to comply with the relevant policies to prevent any violations of human rights, so that both the internal and external parties can be treated with fairness and dignity.
The responsible unit for the Company’s human rights governance framework is the “Administration Department.” This department coordinates and establishes a cross-functional Human Rights Working

Issues to be Assessed	Implementation Status
	Yes	No	Explanation
			Group. The scope of human rights governance primarily covers the Company’s employees and suppliers, encompassing areas such as corporate sustainability, environmental, health and safety (EHS), human resources, legal affairs, and operations. Through collaboration across these functional units, the Company systematically and effectively promotes human rights management practices.
The Company's related policies (human rights policies) are described as follows and have been disclosed on the Company website:
1. Compliance with the law
Commitment to fully comply with the applicable labor laws and human rights standards.
2. Right to work
All work should be voluntary and selective, giving employees the right to leave freely with reasonable notice, and the use of forced and

Issues to be Assessed	Implementation Status
	Yes	No	Explanation
			child labor is prohibited.
3. Dignity of labor
Any form of harassment or inhuman treatment is prohibited, including sexual harassment, abuse, slavery, corporal punishment, threat, exploitation, mental or physical oppression or verbal abuse. The Company also provides an environment for employees to work in dignity.
4. Equal employment opportunity
Employees are hired based on their capabilities. At the time of recruiting, hiring, training, rewarding, promotion, termination, retirement or other employment circumstances, they are not assessed based on their race, social class, language, thoughts, religion, political party, place of birth, gender, sexual orientation, age, marital status, appearance, facial features, physical and mental disability, past membership in the labor union or other conditions which are protected by the law.

Issues to be Assessed	Implementation Status
	Yes	No	Explanation
			There shall not be discrimination and the Company adheres to the concept of equal pay for equal work.
5. Work schedule management
Except for special circumstances approved by the authority, the Company complies with the working hours, rest and vacation standards specified by the labor regulations.
6. Salary and benefits
Provide remuneration and treatment for employees in accordance with the labor regulations, including minimum wages, paid leave, official holidays, rest days and other benefits as required by laws and regulations.
7. Freedom of association
Respect the rights of employees to associate freely and organize unions, and arrange labor-management meetings in accordance with the laws and regulations to provide a communication channel for employees.

Issues to be Assessed	Implementation Status
	Yes	No	Explanation
			8. Functional skills development
Committed to protecting employees' equal development opportunities, providing training sessions required for their duties and continuously improving and adding employees' work abilities and skills.
To implement human rights policy, the Company plans the following management measures:
1. Establish rules related to right to work, work schedule management and salary and benefits. They are included in Sunny Friend's "Workplace Rules" which are submitted to the local labor authorities for review.
2. Regularly conduct human rights education and training for employees, such as gender equality, prevention of unlawful violations at workplace and others. In 2025, a total of 252 employees participated in relevant training programs, accounting for approximately 70% of the Company’s total workforce.

Issues to be Assessed	Implementation Status
	Yes	No	Explanation
			3. Establish "Measures of Prevention, Correction, Complaint and Punishment of Sexual Harassment at Workplace" to protect employees' right to work in dignity.
4. Regularly hold labor-management meetings, at least once every three months.
5. In accordance with the labor laws and regulations, the Company has no labor dispute and violations of labor laws and regulations in 2025.
6. Sunny Friend complies with the "Employment Service Act" to adhere to the principle of equal employment opportunity and has no records of violations in 2025.
7. To ensure employees' functional skills development, the Company continues to organize education and training sessions and provide subsidies to improve employees' professional competence.

Issues to be Assessed	Implementation Status
	Yes	No	Explanation
(II) Has the Company established and implemented reasonable employee welfare measures (including remuneration, vacation and other benefits) and appropriately reflected the business performance or results in the employee remuneration policy?	☑		(II) The Company has established and implemented reasonable employee welfare measures (including remuneration, vacation and other benefits) and appropriately reflected the business performance or results in the employee remuneration policy. The details are described as follows:
1. Determine employees' salary in accordance with Sunny Friend's "Employee Salary Management Measures" to provide remuneration and benefits in compliance with labor laws and regulations.
2. Employees are granted paid leave, official holidays, rest days and other vacation benefits in accordance with Sunny Friend's "Human Resources Management Policies" and relevant labor laws.
3. Provide employees with vacation travel, education and training subsidies, Dragon Boat Festival, Mid-Autumn Festival and other	(II) No difference.

Issues to be Assessed	Implementation Status
	Yes	No	Explanation
(III) Does the Company provide employees with a safe and healthy working environment and regularly conduct safety and health training?	✓		benefits in accordance with Sunny Friend's other regulations.
4. Sunny Friend's year-end bonuses are based on the EPS of the year, the base approved by the chairman (general manager) and the Company's Articles of Incorporation. 7% of the profits of the year is allocated as employee remunerations according to the Company's rules, which appropriately reflect the business performance or results.
5. The Company adheres to the principles of equal employment opportunity. Women account for 21.2% of the total of the Company's employees, and they also account for 8.8% of the people who have a managerial position, from assistant manager and up.	(III)No difference.
			(III) In addition to providing employees with a safe and healthy working environment, Sunny Friend regularly conducts safety and health

Issues to be Assessed	Implementation Status
	Yes	No	Explanation
			education and training and health examination. The key safety and health management tasks are shown as follows: The key safety and health management tasks are shown as follows:
1. Regulatory compliance: Regular revise the safety and health work rules in accordance with the revision of regulations to provide employees with compliance regulations, occupational disaster prevention plan and emergency response plan, and the responsible departments are instructed to adopt the rules.
2. Equipment inspection: Plan and supervise the inspection of safety and health facilities. There are regular inspection, key inspection and operational inspection. The details and descriptions of various inspections are developed by the responsible organizational units and the Environmental Protection

Issues to be Assessed	Implementation Status
	Yes	No	Explanation
			Office before being implemented, and the inspections are conducted on a monthly basis.
3. Working environment: Patrol inspection, regular inspection, key inspection, hazard identification and measurement of the working environment. Conduct inspection of the working environment on a monthly basis and test and measure the conditions of the working environment every half a year.
4. Education and training: Plan and implement occupational safety and health education and training courses every year. Those who are engaged in hazardous operations, supervisors of the operations, high-risk machinery shall periodically receive advanced on-the-job training.
In 2025, a total of 30 sessions of education and training for new hires and a total of 33 sessions for internal education and training

Issues to be Assessed	Implementation Status
	Yes	No	Explanation
			were held. A total of 99 person-time attended external education and training courses. A total of 1,550 person-time attended education and training courses, totaling 5,093 hours. Employees received an average of at least 14.2 training hours per person.
5.Health examination: Plan labor health check. Conduct health management and monitor the investigation and statistics of employees' illness, injuries, disability and death. Conduct health examinations of the plant personnel every half a year and the administrative staff every two years.
6.Fire safety: Maintain the robustness and functionality of fire-fighting equipment and emergency response equipment. Regularly conduct emergency response drills twice a year.

100

Issues to be Assessed	Implementation Status	Differences from the Corporate Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies and reasons for discrepancies.
Yes	No	Explanation

Total working hours	613,864
General occupational injury	0
Frequency of work-related fatalities (occurrences)	0
Fatality rate from occupational injury	0
Serious occupational injury	0
Rate of serious occupational injury	0
No. of accident involvements (times) recorded	7
Documented accident rate	2.3
Frequency of occupational illness	0
Incidence of occupational illness	0
Note 1: Occupational injury fatality rate = Number of occupational injury fatalities / Total work hours x 200,000.
Note 2: Severe occupational injuries refer to those that prevent or make it difficult for employees to recover to the state of health before the injuries within six months, but the statistics should exclude the death toll.
Note 3: Severe occupational injury rate = (Number of severe occupational injuries / Total work hours) x 200,000.
Note 4: The number of recordable accident cases refers to all occupational injuries occurring in the year,

Issues to be Assessed	Implementation Status
	Yes	No	Explanation
			including the number of serious occupational injuries and fatalities resulting from occupational injuries.
Note 5: Occupational hazard records for non-employee workers: Data for external workers was not included in the statistics.
Note 6: Occupational illness rate = (Number of occupational illness / Total work hours) x 200,000.
In order to build a good occupational health and safety environment and a safety and health management organization to achieve the purposes of effective management, supervision and improvement, Sunny Friend's Environmental Safety Office coordinates the related matters such as occupational safety and health management and environmental protection. To reinforce the safety and health management and in response to the provisions of the Occupational Safety and Health Act, the Changbin plant has established the Occupational Safety Office in July 2016. Sunny Friend has established its safety and

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Issues to be Assessed	Implementation Status			Differences from the Corporate Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies and reasons for discrepancies.
	Yes	No	Explanation
			health work rules to provide employees with compliance regulations, and set up occupational disaster prevention plans and emergency response plans for the related operating units to implement. The Company also regularly tracks the update of laws and regulations and supervises the planning, management an audit of in-house safety and health operations to give employees a safe working environment. Comprehensive protection plans are provided to enhance employees' awareness and ideas of safety, so that operators can develop a keen sense and correct occupational safety and health mindset. Various software and hardware protection measures are provided to ensure that employees can work to their capacity with a peace of mind in a good environment, and improve the operation and management of Changbin plant.

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Issues to be Assessed	Implementation Status
	Yes	No	Explanation
			In 2017, the Changbin plant established an occupational safety and health committee which holds quarterly meetings to review, coordinate and recommend safety and health-related matters.
Starting May 2019, the Changbin plant hired professional medical staff to provide on-site labor health education, health promotion and other programs.
In November 2019, the Changbin plant obtained the ISO45001, 2018 Occupational Safety and Health Management System. The latest certificate is valid from October 18, 2022 to October 17, 2025. It enables the organization to eliminate hazards or minimize occupational safety and health risks, establish an effective management system, and continuously improve its occupational safety and health performance.
In 2025, there were 0 incidents of fire at Sunny Friend, with 0 casualties, and a casualty rate of

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Issues to be Assessed	Implementation Status			Differences from the Corporate Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies and reasons for discrepancies.
	Yes	No	Explanation
(IV) Has the Company established effective career development training plans?	☑		0% relative to the total number of employees.
(IV) Sunny Friend establishes an effective career development training program for employees and provides subsidies when they participate in certification courses aiming to improve their functional skills. In addition, when there are opportunities for growth in other positions, the Company, at the consent of the employees, transfers them to other departments or affiliated companies to add to their work experience to facilitate future promotion.	(IV)No difference.
(V) Has the Company complied with the relevant regulations and international standards and formulated policies for consumer or customer protection and grievance procedures with respect to consumer health and safety, customer privacy, marketing and labeling of products and services?	☑		(V) Sunny Friend's product line is in the removal, incineration, physiochemical treatment, solidification and landfill treatment of biomedical and other business wastes. The Company has always adhered to the principle of service first to provide clients with the most comprehensive and professional treatments. Sunny Friend has complied with the Waste	(V) No difference.

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Issues to be Assessed	Implementation Status			Differences from the Corporate Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies and reasons for discrepancies.
	Yes	No	Explanation
			Disposal Act, the Methods and Facilities Standards for the Storage, Clearance and Disposal of Industrial Waste and other relevant regulations with respect to clients' health, safety, privacy, marketing, labeling and other protection measures of rights. Sunny Friend also signs waste disposal agreements with clients in accordance with the law to define the rights and obligations of both parties. Sunny Friend has also established channels to communicate with clients, and the specific measures adopted include that the Company's front-line personnel interview customers or conduct customer satisfaction surveys to understand their feedback and levels of satisfaction and establish a dedicated point of contact. In order to prevent the Company's personnel from engaging in any illegal activities or violating the Code of Ethics and Code of Business Integrity, Sunny Friend has

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Issues to be Assessed	Implementation Status			Differences from the Corporate Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies and reasons for discrepancies.
	Yes	No	Explanation
			established the "Operating Procedures for Handling the Grievances Filing" to serve as a channel where complainants can report their findings of any illegal or unethical behaviors. The abovementioned reporting shall be conducted in a way of which the complainants provide their real names, contact information and the issues to be reported, and they shall sign a "Consent Form for Collection, Handling and Use of Personal Information." If the information provided is incomplete and can be corrected or supplemented, the complainant shall be notified to provide additional information with 7 days of the reporting. If no further information is provided before the deadline, the reported case will not be processed. However, if the reported issues seem to require further investigation, they can be considered as separate cases to be used as the reference materials for internal review.

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Issues to be Assessed	Implementation Status			Differences from the Corporate Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies and reasons for discrepancies.
	Yes	No	Explanation
(VI) Has the Company established supplier management policies which require suppliers to comply with regulations on environmental protection, occupational safety and health or labor rights and reported the implementation?	☑		The unit handling the case shall investigate and verify the identity of the complainant. Unnamed reported cases that provide solid evidence may not be subject to the restrictions set forth in the preceding paragraph. The abovementioned grievance channel has been announced on the Company's official website and the corporate sustainable development reports available for external stakeholders to examine and comply with.

(VI)The Company has established supplier management policies which require suppliers to comply with regulations on environmental protection, occupational safety and health or labor rights, and reported the implementation which includes the following information:
1. Supplier management:
The raw materials, construction engineering, mechanical engineering, equipment, services | (VI)No difference. |

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Issues to be Assessed	Implementation Status
	Yes	No	Explanation
			and other procurement required during Sunny Friend's operation are provided by suppliers. As a domestic specialized waste treatment company, Sunny Friend's mission is helping enterprises and government agencies to properly dispose of wastes. We actively seek quality suppliers, as they can continuously provide us with products and services which are stable in quality and work with Sunny Friend to realize the goal of sustainability. Our supplier management policies are shown as follows:
(1) Evaluation and control to ensure the quality of technical services.
(2) Local sourcing to strengthen our responsibility in environmental protection.
(3) Occupational safety and quality assurance to ensure the safety of our operations.
(4) Conduct with ethics and integrity to jointly pursue sustainable growth.

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Issues to be Assessed	Implementation Status
	Yes	No	Explanation
			2. Implementation:
Sunny Friend requests its suppliers to comply with the Company's management policy on supplier management and demands that those conduct labor services or construction vendors abide by the "Labor Standards Act," the "Occupational Safety and Health Act" and other labor-related laws to ensure the rights of labors of the contractors. The Company's Management Department is responsible for the supplier management process of more than 1,000 vendors. The requisition units can provide the Management Department with the information regarding items, comparison and negotiation, contract signing and implementation. The requisition and procurement units frequently communicate with the suppliers, and it is expected that the discussion can prevent mistakes and improve the quality of supply. We select our suppliers

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Issues to be Assessed	Implementation Status
	Yes	No	Explanation
			based on their credit records. We conduct supplier evaluation on a quarterly basis. We conduct on-site audit of suppliers, communicate with and train them and hold supplier meetings based on the project progress and requirements. With communication and collaboration as the foundation, we put sustainability in actual practice through our supplier management process, expecting that our suppliers can pay attention to corporate social responsibility together with us and examine aspects of impact such as the environment, labor, human rights, society and products and promote the sustainable development of industry.
V. Has the Company referred to international reporting standards or guidelines in its preparation of corporate Sustainability reports and other reports which disclose the Company's non-financial information? Have the abovementioned reports	✓		Sunny Friends has referred to the GRI Standards: Core published by the GRI in the preparation of its sustainable development reports.
Sunny Friend has not yet obtained the verification or assurance opinions from any third-party certification	The Company complies with the core options of the GRI Standards in its preparation of the sustainability report. The Company has not yet obtained

Issues to be Assessed	Implementation Status			Differences from the Corporate Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies and reasons for discrepancies.
	Yes	No	Explanation
obtained the verification or assurance opinions from third-party certification organizations?			organization for its sustainable development report.	the verification or assurance opinions from any third-party certification organization for the report.
VI. If the Company has established its corporate Sustainability code of practice according to the " Sustainable Development Best Practice Principles for Listed Companies," please describe the operational status and differences:
Sunny Friend currently has the "Give Back to Community Program of Sunny Friend Yuanchang Plant" and the " Sustainable Development Best Practice Principles " complying with the " Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies."
VII. Other important information for facilitating the understanding of Status of sustainable development and its implementation:
The specific promotion plan and implementation results of Sunny Friend's sustainable development.
Specific promotion plans for sustainable development for the current year:
I. Social care
As a local company, Sunny Friend is committed to sustainability. We adhere to the principles of community-friendliness to draw us closer to the local residents. For years, we have given back to the local communities and actively participated in the community development to establish good interactions.
(I) Emergency assistance and funeral subsidies
Help those in needs due to natural disasters, accidents, serious illness, death or family incidents in Yuanchang area. Emergency donation or subsidies for funerals are given out.
(II) Winter relief activities
Every year, we collaborate with Yuanchang Township Office at the end of the year and donate rice, cooking oil, noodles and other daily necessities to low-income households in Yuanchang Township.

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(III) Environmental volunteers in the Tomb-Sweeping Day

In caring for the efforts and hard work of the local residents during the Tomb-Sweeping Day, the Company provides free beverage, water and environment cleaning services every year, and the gesture has always been well received by the local people.

(IV) Sponsorship of club activities

Sunny Friend adheres to the principles of community-friendliness and actively participates in the community and club activities to draw itself closer to the local residents and establish a good relationship and trust.

(V) Awards and scholarships

As an encouragement to the young students in Yuanchang Township, the Company issues scholarship every year to inspire students and encourage their learning, hoping that they will give back to the society in the future to benefit more students.

Promotion results of social care and give-back activities:

Year	Emergency relief (person)	Funeral subsidy (person)	Winter relief activities (person)	Awards and scholarships (person)
2023	2	10	185	90
2024	3	6	173	90
2025	0	6	175	90

II. Current year's results of sustainable development

The headquarters of the Company is located in Yuanchang Township. The whole township has 21 villages, with a total population of 22,478. The local residents are mainly engaged in agriculture and animal husbandry, and the financial status is relatively disadvantageous. As a local enterprise, Sunny Friend prioritizes the hiring of people from the places where the company operates as employees, providing employment opportunities to improve identification with the local communities and fulfill local give-back to achieve sustainability. The Company cares about the hometown education. In 2011, the Company started to expand the community give-back program to education activities. It made donations to purchase books, hold essay competitions, environmental science camps, essay writing camps and establish an "Vanellus Student Literature Collection" journal. The Company extends its welfare collaboration with the Global View Educational Foundation and periodically donates the Global Magazine, Future Children and Future Teenagers. A series of investments in education resources bring hope to the rural area and the underprivileged students can make a difference in their lives and dream big for the future.

(I) Book donation to elementary and junior high schools

Seeing the education gap between the rural and urban areas, the Company donates books to the libraries of ten schools, junior high schools and elementary schools, in Yuanchang Township. Since 2011, the Company has donated a total of NT$4.276 million over three years, close to 18,000 books.

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(II) Host essay competitions in Yuanchang Township

The Company hopes to improve students' reading habits after donating the books. Since 2012, the Company has organized essay competitions together with the Township Office of Yuanchang and the township branch of Kiwanis International and regularly discussed the improvements to the rules of the competition and grading criteria, awarding of prizes, medals and certificates. Award ceremonies are held to help students feel the sense of honor. The essay competition divides student writers from elementary schools into three different groups based on their age and then there is also a group for students from junior high schools. The competition has always received a lot of pieces of writing. The content includes their thoughts on their extracurricular readings and the inspiration from the local life in Yunlin County. The process of writing can enhance students' observation and improve their language expression and creativity. 149 people awarded in the 2025 essay competition.

(III) Publish "Vanellus Student Literature Collection"

The journal of Vanellus Student Literature Collection publishes the award-winners from the essay competitions and invites all elementary and junior high schools to introduce their characteristics and education ideals. The introduction of people, events and objects in Yuanchang makes the magazine publication feel just right at home. Issued 2,500 copies of the 13th issue of the "Vanellus Student Literature Collection" in 2025.

(IV) Organize "Sunny Friend Essay Writing Camp"

Organize "Sunny Friend Essay Writing Camp" with Department of Chinese Language and Literature, National Kaohsiung Normal University Publishing, invite qualified instructors and introduce rich courses to improve students' observation and experience of the lives around them. Students can learn to express themselves in various forms of literature and study various literary creations. 61 participants in 2025.

(V) Host "Sunny Friend Science Camps"

Organize "Sunny Friend Environmental Protection Science Camps" and incorporate special courses designed by the Department of Mechanical Engineering of National Yunlin University of Science and Technology. Children are encouraged to touch equipment to learn science through lab sessions, activities and games. In the fun learning environment, a model of experiential learning is created to inspire children to develop good habits of proactive learning. 55 participants in 2025.

(VI) Gives out outstanding monthly magazines "Future Youth" and "Future Children"

Gives out the magazines to classes, so that reading is within students' reach. The magazine is updated regularly to make reading more interesting and lively. There are diverse fields to expand the scope of learning. Children can explore different interests, further growing their motivation for learning. Children in rural areas can have a richer learning environment, and have the chance to make a difference in their lives. In 2025, 24 volumes for Future Children and 32 volumes for Future Youth are donated.

III. Give-back plan at the Changhua Coastal Industrial Park

Sunny Friend's plant at Changhua Coastal Industrial Park conducts its community give-back program in accordance with "Cashback Reward Agreement for Sunny Friend Central Taiwan Comprehensive Processing Center for Business Waste". All local reward matters are handled by

Shengang Township Office and Xianxi Township Office. Sunny Friend's plant at Changhua Coastal Industrial Park, with the local Shengang Township Office and Xianxi Township Office, develops an "Environmental Protection and Supervisory Committee of the Central Taiwan Comprehensive Processing Center for Business Waste" to ensure that the plant complies with the environmental regulations and maintains good conducts to safeguard the local environmental quality.

(1) Environmental beautification and sanitation and the related matters.
(2) Construction, management and maintenance of public facilities.
(3) Environmental protection, public hazard supervision, environmental facilities, equipment procurement and advocacy for environmental education.
(4) Promotion activities for the local customs, festivals and industries.
(5) Improve the quality of life and organize educational and cultural activities.
(6) Subsidies for national health insurance policies of the local residents.

Carried out the give-back plan of 2025 based on the abovementioned give-back contracts. The implementation period was from January 1, 2025 to December 31, 2025, and completion date was December 31, 2025.

Statistics of the give-back plan at the Changhua Coastal Industrial Park (Unit: NT$)

Year	2023	2024	2025
Shengang Township Office (57.5%)	6,665,460	7,502,009	7,666,821
Xianxi Township Office (42.5%)	4,926,645	5,544,964	5,666,781
Grand Total	11,592,105	13,046,973	13,333,602

IV. Environmental protection

(I) Northern lapwing survey for environmental education activities

Co-organized by the Bird Association of Yunlin and the Endemic Species Research Institute, the "Yunlin Northern Lapwing Survey" has been held for many years. Yuanchang Township has the largest number of northern lapwings in Taiwan, which has attracted survey volunteers all around Taiwan to come to Yunlin County to search for the birds. Sunny Friend's employees have been participating in the survey for many years to truly fulfill environmental education and strengthen the concept of ecological conservation. Participated in the event once a year between 2013 and 2025, for a total of 13 times.

(II) Adoption of clean air quality zones

Sunny Friend's plant at Changhua Coastal Industrial Park has applied to the Changhua County Environmental Protection Bureau to adopt the clean air quality zones (the maintenance unit is Datong Elementary School of Shengang Township) of "Exposed land greening project (Shenkang Township Coastal Botanical Garden) in land lot No. 254, Shengang Township, Shenggu Section" in 2017. The base area is 2.6227 hectares, and

related operations such as planting and watering, pest control and pest control are carried out regularly. From January 1, 2025 to December 31, 2025, watering and plant maintenance were carried out three times a week (costing NT$186,000/year), and pest control was carried out twice a year (costing NT$40,000/year), the total cost is NT$202,000 per year.

(III) Clean coast adoption

Sunny Friend's plant at Changhua Coastal Industrial Park has applied to the Changhua County Environmental Protection Bureau to adopt a beach area in 2021 to protect the beach with love. The adoption is the section of "West to North of Intersection of Xianxi Township Changbin West Second Road and Hsien-Gong South Four Road", and the length is about 2,000 meters. The area is cleaned regularly. The Company adheres to the attitude of "Caring for the local area and protecting the environment", and independently carries out beach cleaning to achieve environmental protection with actions. From February 1, 2025 to December 31, 2025, 2 to 4 people were dispatched to perform environmental cleaning every month, with a total of 12 times per year, and 28 participants per year.

(IV) Assist the government to improve social and environmental issues

Sunny Friend has specialized waste treatment technology and knows that environmental protection work is urgent. Adhering to the principle of doing its part for environmental sustainability, we actively assist the government in solving social and environmental issues, and properly dispose of illegally abandoned waste to prevent environmental pollution from expansion.

(1) In response to public demand for home renovation and asbestos waste removal, the Ministry of Environment secured a $1.6 billion subsidy from the Executive Yuan to continue assisting with the notification, survey, and removal of asbestos-containing building materials. On June 18, 2024, the Ministry amended the "Principle for the Disposal of Asbestos-Containing Waste Removal Subsidies" to expand the subsidy scope to include business buildings that have ceased, suspended or closed down operations. Based on experience gained through on-site inspections, the Ministry reported to the Executive Yuan on November 12, 2024, to include business buildings within the subsidy framework, prioritizing "livestock farms" as the initial recipients of asbestos-containing waste removal subsidies, effective in 2025. The Company has entered into a joint supply contract with the Resource Circulation Administration of the Ministry of Environment to implement the "Reduction, Recycling and Resource Circulation Promotion Plan - Asbestos Building Materials Waste Removal and Treatment Plan" for 2025, and is actively cooperating with national environmental policy initiatives.

(2) In response to the damage to buildings in Chiayi City, Chiayi County, and Tainan City caused by Typhoon Danas on July 6, 2025, the Ministry of Environment approved subsidies for the three counties and cities, requesting local governments to prioritize assisting residents in transporting asbestos building material waste to storage areas. The Executive Yuan approved the cleanup of asbestos waste generated by residential, livestock, and agricultural facilities, as well as other structures affected by the disaster, on July 29, 2025, to accelerate recovery efforts. The Company also cooperated with the central government's policy to assist in the disposal of typhoon-damaged asbestos building materials.

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(3) On September 23, 2025, Hualien County’s Guangfu Township was affected by Typhoon Ragasa, resulting in flooding of Matai'an Creek Barrier Lake and causing serious damage to Guangfu Township. The disaster ultimately resulted in deaths and injuries among local residents, as well as severe damage including over 500 hectares of farmland buried by debris and agricultural and livestock losses exceeding NT$430 million. More than 1,000 homes, schools, and government offices were invaded and damaged by silt. The Yunlin County Government actively coordinated with various bureaus and private entities to launch rapid rescue efforts, providing materials, manpower, and heavy machinery support to assist with post-disaster reconstruction and cleanup. The Company also sent a vehicle on September 25, 2025, to help transport post-disaster supplies.

(4) A farm in Wuqi District, Taichung City, reported ongoing pig deaths through its chemical monitoring system. On October 20, 2025, personnel from the Animal Protection Office collected samples from the farm and sent them to the Veterinary Research Institute of the Ministry of Agriculture for testing. On October 21, 2025, the Veterinary Research Institute notified the Animal and Plant Health Inspection Agency that the test results were positive for African swine fever nucleic acid. Emergency epidemic prevention measures were immediately implemented at the case site, and a retrospective epidemiological investigation of the suspected site was launched. An inspection revealed that three businesses in Yunlin County had potentially received meat (oil) products from a farm in Taichung City confirmed to have African Swine Fever, and must therefore destroy the products according to the highest epidemic prevention standards. On October 28, 2025, the Company assisted the Yunlin County Animal and Plant Disease Control Office in destroying a total of 6,940 kilograms of items related to a specific swine plague disposal case.

(5) According to Taiwan’s current laws, heated tobacco products and devices must pass a “health risk assessment review” to be legally sold. The Yunlin County Health Bureau commissioned the destruction of illegal heated tobacco products, with a total of 395 kilograms processed on December 5, 2025.

V. Local sourcing to strengthen our responsibility in environmental protection.

To minimize long-distance energy consumption in transportation, Sunny Friend actively promotes the procurement from ‘local vendors,’ except for cases involving contracted vendors, primary low-cost vendors, or special item purchases. Given that Sunny Friend’s Yunlin plant is located in Yunlin County and its Changhua Coastal plant is situated in Changhua County, the procurement from neighboring counties and cities (including Yunlin County, Changhua County, and Taichung City) accounts for approximately 61% of the total number of procurement contracts. This collaborative approach not only serves to give back to local communities and make the most of local resources but also fosters stronger ties with local vendors. In addition to promoting local procurement, Sunny Friend also adheres to the concept of a new environmental founder and actively cooperates with the government to promote various environmental protection policies. In the process of outsourcing and procurement, the priority is given to recyclable materials, green building materials, environmental protection labels, energy saving labels and other products as much as possible. The environmental protection-related procurement amount in 2025 was NT$43,527,283.

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(VI) Climate-related information of publicly traded and OTC companies

Items	Implementation
1. Describe board and management supervision and governance of climate-related risks and opportunities.	1. In terms of promoting climate change and sustainable management strategies, the board of directors is responsible for supervising the management of climate issues and playing the role of supervision and governance. Sunny Friend's directors shall exercise the duty of care of good administrators to urge the Company to perform its sustainable development initiatives, examine the results of the implementation thereof from time to time and continually make adjustments so as to ensure the thorough implementation of its sustainable development policies. The Company included climate issue in its consideration of corporate governance and business strategy, and also integrated the climate risk and opportunity management into the overall policy. Through the continuous supervision of the implementation of various risk management mechanisms, the Company hopes to enforce climate change related management practices while expecting the business to continue to grow, and demonstrated the Company's commitment to climate governance. The Board of Directors of the Company authorized all departments to designated personnel to establish a sustainability information work group, hold annual meetings from time to time to discuss climate-related risks and opportunities, be responsible for supervising the corporate sustainability management strategy and subsequent action plans, and report the status to the Board of Directors every year, so that the Board of Directors is aware of the implementation plan and results of the Company's climate-related indicators and targets, so as to achieve the monitoring and supervision purpose.
2. Describe how the identified climate risks and opportunities will affect the Company's business, strategy and finances (short, intermediate and long term).	2.
	Main category	Sub-category	Risks or opportunities	Description	Financial impact	Level of impact②	Occurrence frequency②	Time of Occurrence②	Occurrence probability②
	Transition risk	Policy and regulation risk	Air pollution Control	In response to the impacts of global climate change, the government has strengthened the adoption of adaptation measures, and amended the law to encourage the current and future carbon tax subjects to accelerate the adoption of voluntary reduction measures, including energy efficiency	Increasing operating or capital costs	5	4	Long-term	5

			improvement, process improvement, etc.						protection measures, and filed applications in accordance with relevant laws and regulations, in order to achieve the standard of air pollution control in 2025/11/10 and reduce greenhouse gas emissions.
General environmental regulations	In order to connect with international standards while taking into account the needs of sustainability, the government has been strictly amending environmental protection regulations and has introduced international carbon pricing experience and imposed the carbon fee.	Increasing operating or capital costs	4	4	Long-term	5	The Company will continue to monitor changes in domestic and foreign regulations, plan for investment and improvement of environmental protection equipment, and conduct regular inspections of the quality of effluents and actively participate in government seminars to learn and give advice. For issues related to greenhouse gas inventory, the 2022-2025greenhouse gas inventory emission inventory list has been established, and the 2025 internal audit of greenhouse gas inventory has been implemented. In the future, the inventory will be conducted continuously according to the sustainable development roadmap announced by the FSC, and the third-party verification will be completed within the designated period.
Market risk	Increase in raw material cost	In response to the rise of raw material costs and the shift to alternative products (such as low-priced raw materials with a high carbon footprint) with a high environmental impact, it is not possible that the concept of sustainable development can be considered at the same time, and stakeholders may have a doubt about the sustainability of the Company, which will then affect the Company's image and reputation. In recent years, the government has strengthened waste management and environmental protection regulations. If the treatment cost increases, the Company must invest additional funds to upgrade equipment and strengthen pollution prevention measures. For example, Taiwan's 2050 Net Zero Emission Policy requires incinerators to reduce carbon emissions, which may increase operating costs.	Increasing operating or capital costs	4	4	Long-term	5	An increase in the treatment rate: Negotiate with the government or customers to increase the waste treatment expenses to reflect the cost increase. Enhancing equipment efficiency: Plan for process improvement, improve resource utilization efficiency, and reduce energy and medical consumption.
Potential opportunities	Resource utilization efficiency	Reduce water consumption and water wastage	Reduce water consumption and water wastage	Decrease in operating or capital cost	4	3	Medium-term	4	A rainwater collection system was installed over the steel-structure roof of the burial site to collect rainwater and store it in the plant for use in the manufacturing process and for cleaning the streets. The wastewater from the water washing tower generated from the incineration

									process is treated with the regeneration and treatment process of inorganic salt wastewater, and then the regenerated clean water is circulated in the original process. Both reduce water consumption and increase the utilization rate of valuable water resources. Pursuant to the law, on November 10, 2025, the Company submitted an application to improve the incineration furnace process and reduce the amount of cooling water used in the front end of the originally designed incineration flue gas system.
		Recycling and reusing	Reuse of bottom ash from incinerators	Increase in demand for products or services	4	4	Long-term	4	Plan to recycle the bottom ash from the Changbin incineration process.
	Market opportunities	Making good use of incentives provided by the public sector	On March 20, 2024, the Ministry of Economic Affairs amended the Demonstration and Promotion Subsidy Plan for the Energy Saving Performance Guarantee Project, and the plan was entrusted to the Bureau of Energy to handle the promotion of energy-saving operations, and to assist in the implementation of the Energy Saving Performance Guarantee Project, in order to drive the development of energy technology services and improve the overall energy consumption efficiency.	Decrease in operating or capital cost	4	3	Short-term	4	The Company evaluates the strategy for improving the energy efficiency in the plant based on the content of the Demonstration and Promotion Subsidy Plan for the Energy Saving Performance Guarantee Project and the suggestions from the energy technology service industry.

Note 1: The higher the score is, the greater the impact. 0 represents no impact.
Note 2: The time intervals set by the Company are short-term: 1~3 years, medium-term: 3~10 years, and long-term: more than 10 years.

After the Company's identification and assessment, extreme climate events such as typhoons, droughts (lack of rain), high temperatures and floods (heavy rains) are not material discussion items and have no significant impact on the Company's finance. Therefore, there is no evaluation content for the transformation action.
Describe the financial impact caused by extreme climate events and transition action.

| 4. Describe how the identification, assessment, and management processes of climate risks are integrated into the overall risk management system. | 4. The risk management of the Company is jointly promoted by the corporate sustainability unit - the Corporate Environmental Safety Department and various relevant units. They jointly identify risk categories based on the materiality principle of corporate sustainability, and cooperate with relevant units to formulate relevant risk management policies or strategies to effectively control risks.
In order to promote the transparent disclosure of information related to climate-related risks and opportunities, the Company has referred to the Task Force on Climate-Related Financial Disclosures (TCFD) announced by the International Financial Stability Board (IFB), and drawn a risk and opportunity matrix based on the "degree of impact/profit" and "probability of occurrence" of risks and opportunities to confirm the impact and materiality of each item. Based on the analysis results, the Company has selected the top three climate-related risk items, which are air pollution control, general environmental regulations, and increase in raw material costs, as well as the top three climate-related opportunity items, which are reducing water consumption and wastage, recycling and reusing, and making good use of incentives provided by the public sector. Also disclosed are their actual and potential impacts on the organization. |
| --- | --- |
| 5. If scenario analysis is used to assess resilience to climate change risks, the scenarios, parameters, assumptions and analysis factors used and significant financial impacts should be explained. | 5. As of the publication date of the annual report, scenario analysis has not been used to assess resilience to climate change risks and is therefore not applicable. |
| 6. If there is a transition plan to manage climate-related risks, explain the content of the plan and the indicators and goals used to identify | 6.As of the date of publication of the annual report, there is no transition plan in response to the management of climate-related risks. |

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and manage physical risks and transition risks.
7. The basis for setting the price should be explained if internal carbon pricing is used as a planning tool.	7. As of the publication date of the annual report, the Company has not yet used internal carbon pricing as a planning tool.
8. If climate-related goals are set, the activities, scope of greenhouse gas emissions, planning schedule, annual progress and other information should be explained. If carbon credits or renewable energy certificates (RECs) are used to achieve relevant goals, the source and quantity of carbon reduction credits to be exchanged or the quantity of renewable energy certificates (RECs) should be explained.	8. As of the publication date of the annual report, the Company has not yet climate-related targets
9. Status of greenhouse gas inventory and assurance and the reduction goals, strategy and specific action plans are to be filled in 1-1 and 1-2 separately).	9. The Company has completed the standalone greenhouse gas inventory for the parent company in 2025, but has not yet completed greenhouse gas assurance. In the future, we will follow the timeline of the sustainable development roadmap and expect to complete assurance disclosure by 2028. Further, the greenhouse gas reduction goals, strategies, and concrete action plans are detailed in Table 1-2.

1 Status of greenhouse gas inventory and assurance in the last two years

1- 1-1 Greenhouse Gas Inventory Information

Describe the greenhouse gas emissions in the last two years (metric tons CO 2 e), intensity (metric tons CO 2 e/NT$ million) and data coverage.

(1) The organizational boundary setting adopts the "operational control method." The organizational boundary for this year includes the Yunlin factory, the Changbin factory, and the Taipei office. The report boundary has been expanded to include categories 3 to 6, which are category 1 (stationary emission sources, mobile emission sources, fugitive emission sources, and process emission sources), category 2 (purchased electricity), category 3 (business travel), and category 4 (purchased products, waste disposal, and transportation). The report identifies the main sources of greenhouse gas emissions within its boundary. The greenhouse gases included are carbon dioxide (CO₂), methane (CH₄), nitrous oxide (N₂O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulfur hexafluoride (SF₆), and nitrogen trifluoride (NF₃)—a total of seven types.

(2) For this greenhouse gas emissions inventory, the "emission factor method" was mainly adopted. The quantification method is activity data multiplied by the emission factor and global warming potential (hereinafter referred to as GWP), and all calculation results were converted into carbon dioxide equivalent (CO2 e), with tonnes as the unit. The source of the emission factor is the latest announcement of the "greenhouse gas emission factors" by the Ministry of the Environment, and the global warming potential (GWP) adopted the GWP of various greenhouse gases from the IPCC Sixth Assessment Report (2021). In addition to the above-mentioned emission factor method, the mass balance method was also adopted to calculate refrigerants, fire extinguishers, welding rods, acetylene, and urea. Self-diffusion coefficients were adopted for waste; the power emission coefficient refers to the 2024 annual power emission coefficient announced by the Bureau of Energy in 2025; and the purchased product items refer to the product carbon footprint information network - carbon footprint database and Ecoinvent 3.12 coefficients.

(3) Greenhouse gas emissions:

Greenhouse gas emissions	2024	2025
Category 1	132,707.333	123,249.383
Percentage (%)	92.1	80.6
Category 2	11,442.565	10,413.350
Percentage (%)	7.9	6.8
Category 3	-	2.740
Percentage (%)	-	0.0
Category 4	-	19,286.052
Percentage (%)	-	12.6

Category 5	-	0.000
Percentage (%)	-	0.0
Category 6	-	0.000
Percentage (%)	-	0.0
Total greenhouse gas emission volume	144,149.898	152,951.525
Emission intensity (tCO2e/ton of waste)	1.609	1.548

Note 1: The denominator of the greenhouse gas emission intensity, "waste processing volume per tonne," includes volumes from incineration, stabilization, and physicochemical treatment, but excludes landfill volume.
Note 2: Emissions for categories 3-6 were not tallied for 2024.

Note 1: Direct emissions. Scope 1, i.e., emissions directly from sources owned or controlled by the Company, and emissions from indirect energy choices. Scope 2, i.e., indirect greenhouse gas emissions from input electricity, heat, or steam and other indirect emissions. Scope 3, i.e., emissions from company activities that are not indirect energy emissions, but originate from sources owned or controlled by other companies.
Note 2: The coverage of direct emissions and energy indirect emissions data shall be compiled per the timetable specified in the order stipulated in Paragraph 2, Article 10 of these Guidelines. Other indirect emissions information may be disclosed voluntarily.
Note 3: Greenhouse gas inventory standard: Greenhouse Gas Inventory Protocol (GHG Protocol) or International Organization for Standardization (ISO) ISO 14064 1.
Note 4: The intensity of GHG emissions can be calculated per unit of product/service or revenue, but at least the data calculated in terms of revenue (NT$ million) should be stated.

1-2 Greenhouse Gas Assurance Information

Describe the status of assurance in the last 2 years up to the date of publication of the annual report, including the scope of assurance, institutions for assurance, criteria of assurance, and opinions of assurance.

To be planned based on the timeline of the sustainable development roadmap, the parent company is expected to complete its own assurance disclosure in 2028, and the subsidiaries in the consolidated financial statements are expected to complete their assurance disclosure in 2029.

Note 1: It should be carried out in accordance with the timetable specified in the order stipulated in Paragraph 2, Article 10 of the Regulations. If the Company fails to obtain a complete greenhouse gas assurance opinion by the publication date of the annual report, it should indicate that "The complete assurance information will be disclosed in the sustainability report". If the Company does not prepare a sustainability report, it should indicate that "The complete assurance information will be disclosed in the Market Observation Post System" and disclose the complete assurance information in the annual report of the following year.
Note 2: The base year should be the year in which the inventory is completed based on the boundaries of the consolidated financial report. For example, in accordance with the provisions of Paragraph 2, Article 10 of the Guidelines, companies with a capital of more than NT$10 billion should complete the 2024 consolidated financial report in 2025. Inventory, so the base year is 2024. If the company has completed the inventory of consolidated financial reports in advance, the earlier year can be used as the base year. In addition, the data in the base year can be calculated as the average of a single year or several years.
Note 3: For disclosure methods, please refer to the Best Practice Examples on the Corporate Governance Center of the Taiwan Stock Exchange Corporation's website.

1-2 Greenhouse gas reduction goals, strategies and concrete action plans

Describe the greenhouse gas reduction base year and data, reduction goals, strategies, and concrete action plans and achievement of reduction goals.
Energy Conservation and Carbon Reduction Project Due to the characteristics of the waste treatment industry, Sunny Friend's energy consumption primarily stems from waste incineration (78%), electricity (7%), and diesel (3%). Accordingly, short-term reduction strategies focus on lowering electricity and diesel usage, while long-term plans involve enhancing process and pollution prevention efficiency. These plans include evaluating process improvements and upgrading environmental protection measures for incinerators to meet air pollution control standards and reduce greenhouse gas emissions. The Company has set reduction targets, using 2025 as the base year, to achieve a 3% reduction in emission intensity by 2027 and a 5% reduction by 2030. (1) Electricity equipment management The Company began tracking power equipment for each department in 2024 and commissioned an energy technical service provider to conduct an evaluation. In 2025, it implemented an improvement plan. After implementing various energy-saving measures, it is estimated that approximately 576,037 kgCO2e of greenhouse gas emissions were reduced annually. The specific improvement measures are described as follows:
Improvement item	2025 improvement details
Improvement of lighting equipment	A total of 265 T8 lighting fixtures were replaced with 36W LED lighting fixtures at the Chang-Bin plant, which is expected to reduce approximately 26,529 kgCO2e annually.
Improvement of air compressor system	The curing process fixed-frequency air compressor at the Chang-Bin Plant was replaced with a variable-frequency air compressor, which is expected to save 10% of the equipment's electricity consumption, reducing CO2e emissions by approximately 31,142 kg.
	The optimization of the air compressor pipeline at the second phase of the Chang-Bin incinerator plant has been completed, reducing pressure loss and improving equipment efficiency. The results have been outstanding, and the improvement are expected to save 33% of power consumption approximately 456,746 kgCO2e.
	The Yunlin Plant evaluated air compressor operations and reduced the number of units in use to prevent energy waste, resulting in an annual reduction of approximately 61,620 kgCO2e.
Description: Description of the calculation method: Equipment energy consumption = Equipment power (kW) x Number of units x Operating hours; total energy savings = Power improvement equipment energy consumption - Post-improvement equipment energy consumption; total carbon reduction = Total energy savings x Carbon emission coefficient (the carbon emission coefficient is based on the latest coefficient announced by the Bureau of Energy, Ministry of Economic Affairs).

(2) Transportation routes and capacity planning

The Company and the professional waste disposal organizations it works with not only use a GPS monitoring system but also adopt the most suitable transportation routes and optimize capacity planning to reduce the distance waste is transported on roads, achieving the goal of reducing clearance costs while protecting the environment.

(3) Increasing local procurement ratios

The Company prioritizes local sourcing of raw materials. If raw materials of the same specifications and quality are available, we will prioritize sourcing them from nearby locations. This not only fosters good neighborly relations but also shortens the transportation time of raw materials. After receiving purchase orders, the Management Department prioritizes the economical delivery volume of raw material suppliers. By 2025, the local procurement ratio of Sunny Friend will be 61%, effectively reducing the energy consumption of raw material transportation and avoiding resource waste.

(4) Improvement of incineration process

The original design of the incinerator in Phase 1 of the Chang-Bin Plant cooled flue gas using cold water in the exhaust cooling room. Recognizing the significant waste of heat energy and water resources from this process, the plant opted to replace the original design with a combined waste heat boiler and power generation system. This effectively utilizes the flue gas's waste heat for heating or power generation for subsequent equipment. Conservative estimates project power generation of approximately 100 kWh/hour (about 816,000 kWh/year), with all generated power used on-site. This is expected to reduce CO2e emissions by approximately 387 tons. An application for this project was submitted on November 10, 2025, in accordance with relevant regulations, and the improvement project is anticipated to be implemented following application approval.

(5) Planning for the introduction of internal carbon pricing (ICP)

Apart from its efforts in optimizing the production process and saving energy with equipment, Sunny Friend also actively incorporates climate risks into its financial decision-making process. The Company conducted a preliminary internal carbon pricing study in 2025, combining input from senior management and external expert consultants to discuss and plan based on Sunny Friend's current situation and the industry's specific characteristics.

To ensure that the system effectively drives carbon reduction while considering operational resilience, the Company plans to conduct cross-departmental impact analysis and cost-benefit analyses subsequently. In the future, a phased approach is expected to be adopted to develop pricing models and carbon price application methods for each stage, tailored to industry characteristics and company objectives. This will aim to minimize operational impact and maximize carbon reduction, gradually strengthening the company's sustainability and competitiveness.

Note 1: It shall be processed in accordance with the schedule prescribed in Paragraph 2, Article 10 of these Guidelines.

Note 2: The base year should be the year in which the inventory is completed based on the boundaries of the consolidated financial report. For example, in accordance with the provisions of Paragraph 2, Article 10 of the Guidelines, companies with a capital of more than NT$10 billion should complete the 2024 consolidated financial report in 2025. Inventory, so the base year is 2024. If the company has completed the inventory of consolidated financial reports in advance, the earlier year can be used as the base year. In addition, the data in the base year can be calculated as the average of a single year or several years.

Note 3: For disclosure methods, please refer to the Best Practice Examples on the Corporate Governance Center of the Taiwan Stock Exchange Corporation's website.

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(VII) Status of the Company's practice of ethical management and differences from the Code of Business Integrity for the Listed Companies and reasons for discrepancies:

Issues to be Assessed	Implementation Status
	Yes	No	Explanation
I. Establish corporate conduct and ethics policy and implementation measures.
(I) Does the company establish ethical management policies approved by the board and have bylaws and publicly available documents addressing its corporate conduct and ethics policy and measures and the commitment regarding the implementation of such policy from the board and the executive management team?
(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	✓		(I) Sunny Friend's ethical operations management policies have been approved by the board resolution and announced on the Company's official website and the sustainable development reports available for external stakeholders to examine and comply with. Sunny Friend's directors have declared that they comply with the Company's " Code of Business Integrity" and "Guidelines for Integrity Operating Procedures and Behavior," and have signed a declaration on ethical operations management principles to take all legal responsibilities in case of violation of regulations.
(II) In order to prevent unethical conduct and establish a risk assessment mechanism to regularly analyze and assess business activities within their business scope which are at a higher risk of being involved in unethical conduct, Sunny Friend has established its "Guidelines for Integrity Operating Procedures and Behavior" and	(I) No difference.
(II) No difference.

Issues to be Assessed	Implementation Status			Differences from the Code of Business Integrity for the Listed Companies and reasons for discrepancies
	Yes	No	Explanation
Code of Business Integrity for TWSE/GTSM Listed Companies?			defined the said business activities (such as offering and acceptance of bribes; illegal political donations; improper charitable donations or sponsorship; offering or acceptance of unreasonable presents or hospitality, or other improper benefits; misappropriation of trade secrets and infringement of trademark rights, patent rights, copyrights, and other intellectual property rights, engaging in unfair competitive practices; damage directly or indirectly caused to the rights or interests, health or safety of consumers or other stakeholders in the course of research and development, procurement, manufacture, provision, or sale of products and services) in accordance with Paragraph 2, Article 7 of the Code of Business Integrity for TWSE/GTSM Listed Companies, and actively taken preventive measures.
(III) Has the Company defined operating procedures, conduct guidelines, disciplinary penalties and grievance process in the program preventing unethical conduct and put them in practice and regularly reviewed and amended the program?	☑		(III)Sunny Friend has defined operating procedures, conduct guidelines, disciplinary penalties and grievance process in its Guidelines for Integrity Operating Procedures and Behavior, put them in practice, and regularly reviewed and amended the abovementioned standard.	(III) No difference.

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Issues to be Assessed	Implementation Status
	Yes	No	Explanation
II. Practice ethics management
(I) Does the company assess the ethics records of those with whom it has business relationship with and include business conduct and ethics related clauses in the business contracts?	☑		(I) Before conducting transactions with the counterparty, Sunny Friend carries out various assessments, including ethical conduct, to prevent the engagement with those who have had records of unethical conduct. The Company's Management Department is responsible for the process. The requisition units can provide the Management Department with the information regarding items, comparison and negotiation, contract signing and implementation. The requisition and procurement units frequently communicate with the external partners, and it is expected that the discussion can prevent mistakes and improve the quality of supply. Sunny Friend's policy on the management of transaction counterparty is shown as follows:
1. Evaluation and control to ensure the quality of technical services.
2. Local sourcing to strengthen our responsibility being an environmental protection enterprise.
3. Occupational safety and quality assurance to ensure the safety of our operations.
4. Conduct with ethics and integrity to jointly pursue sustainable growth.	(I) No difference.

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Issues to be Assessed	Implementation Status			Differences from the Code of Business Integrity for the Listed Companies and reasons for discrepancies
	Yes	No	Explanation
			Sunny Friend requests its transaction counterparty to comply with the Company's management policy on transaction counterparty and demands that those conduct labor service or construction abide by the "Labor Standards Act," the "Occupational Safety and Health Act" and other labor-related laws to ensure the rights of the laborers of the contractors. Sunny Friend considers the importance of transaction counterparty to the Company's overall operations and signs long-term supply or contracting agreements with the major counterparties and contractors to ensure the quality and stable and reasonable price of raw materials and this approach also protects the rights and interests of transaction counterparties in making the Company a priority in the long-term supply chain or in providing service. The management of a transaction counterparty is the responsibility of Sunny Friend, so the Company expects that the counterparty complies with the "Code of Business Integrity" which specify various types of reward and punishment and code of conduct. To ensure that the counterparty meets the requirements in quality, technology and service during the performance of contract, the organizational unit using the service or products and the procurement unit conduct quarterly

Issues to be Assessed	Implementation Status
	Yes	No	Explanation
			evaluation on the quality, technology and services as a reference for communication and future renewal.
Sunny Friend has started developing suppliers' self-assessment requirements since 2016. Since 2017, the Company has requested its transaction counterparties to fill out the survey forms and included the survey results as part of the reference to assess counterparties for future transactions. In addition to the self-assessment, the Company also has started conducting site visits of its counterparties since 2017. The results from the site visits are compiled and analyzed and can be used as a reference to identify those with the philosophy of corporate social responsibility closer to Sunny Friend and further develop a collaboration.
Supplier ESG self-assessment form:
1. Suppliers shall respond to environmental protection and carry out environmental protection and energy conservation measures to effectively facilitate the development of environmental sustainability.
2. With respect to the operations and the products and services provided, the suppliers make great efforts in assuring

131

Issues to be Assessed	Implementation Status
	Yes	No	Explanation
			that they do not cause significant impact to the environment or violate the environmental regulations, and all operations shall comply with the environmental protection policies.
3. Suppliers shall participate in green procurement and prioritize using those products with environmental labeling, energy label, water conservation labels and others.
4. Suppliers' employment policies provide equal opportunities in treatment, compensation, employment conditions, training and promotion, with respect to gender, race, age, marital and family status.
5. Suppliers provide their employees with the related safety and health education and training to prevent the occurrence of accidents or incidents.
6. Suppliers ensures the basic labor rights of employees, prohibits the employment of child laborers under the age of 16 and avoids all forms of forced labor, and there are no issues harmful to the basic rights of workers.
7. Suppliers are in compliance with the occupational safety and health regulations

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Issues to be Assessed	Implementation Status
	Yes	No	Explanation
(II) Has the Company established a specialized unit under the board responsible for the promotion of corporate ethics management, which regularly (at least once a year) reports policies on ethical operations,	☑		and are committed to providing employees with a safe and health workplace environment and ensuring their legal rights and interests.
8. Other statements on CSR.
Since 2015, Sunny Friend has specified ethical terms and conduct in the contracts when signing contracts with transaction counterparties. The contracts between the parties shall clearly state the following: Sunny Friend may suspend the performance of contract if the counterparty is directly or indirectly involved in providing, requesting, promising, paying or accepting illegitimate funds, property or other interests or engaged in other activities that demonstrate the breach of good faith and fiduciary duty and are illegal. If there is legitimate evidence, Sunny Friend may terminate or cancel the contract without announcement in advancement and not be responsible for any damages.
(II)For the purpose of management of corporate conduct and ethics, The Management Department is the dedicated operating unit that promotes ethical management, the Company	(II) No difference.

Issues to be Assessed	Implementation Status			Differences from the Code of Business Integrity for the Listed Companies and reasons for discrepancies
	Yes	No	Explanation
programs on prevention of unethical conduct and the status of supervision to the board?			has authorized the Management Department for the formulation and supervision of the Company's ethical standards and preventive measures, and it shall report to the board once a year.

The Company's fulfillment of ethics and conduct and the Management Department's related implementation work include:
1. Assist in incorporating ethics and moral values into the Company's business strategy and adopting appropriate prevention measures against corruption and malfeasance to ensure ethical management in compliance with the requirements of laws and regulations.
2. Analyzing and assessing on a regular basis the risk of involvement in unethical conduct within the business scope, adopting accordingly programs to prevent unethical conduct and setting out in each program the standard operating procedures and conduct guidelines with respect to the Company's operations and business.
3. Planning the internal organization, structure and allocation of responsibilities and setting up check-and-balance mechanisms for mutual supervision of the business activities | |

Issues to be Assessed	Implementation Status
	Yes	No	Explanation
			within the business scope which are possibly at a higher risk for unethical conduct.
4. Promoting and coordinating awareness and educational activities with respect to ethics policy.
5. Developing a whistle-blowing system and ensuring its operating effectiveness.
6. Assisting the board of directors and management in auditing and assessing whether the prevention measures taken for the purpose of implementing ethical management are effectively operating, and preparing reports on the regular assessment of compliance with ethical management in operating procedures.
The Company's fulfillment of ethics and conducts and the related implementation in 2025:
1. Education and training for ethical conducts and regulatory compliance. The Company conducted one education and training for ethical conduct and regulatory compliance in 2025. One time (Including ethics management, regulatory compliance, environment protection management, safety and health management, accounting system, internal control and related courses), for a total of 1,217 people and 4,197

Issues to be Assessed	Implementation Status
	Yes	No	Explanation
(III) Does the Company establish policies to prevent conflict of interest, provide appropriate communication and complaint channels and implement such policies properly?	☑		man-hours.
2. Formulation of regulations and establishment of systems. The competent authority revised the Sample Temple for ○○ Co., Ltd. Procedures for Ethical Management and Guidelines for Conduct in 2020. Sunny Friend has compiled with the changes to amend the Company's Procedures for Ethical Management and Guidelines for Conduct.
3. Identify if suppliers violate ethical requirements in their business activities. In 2025, the Company always tried to identify if the suppliers violated ethical requirements in their business activities as the basis for contract signing, before engaging in transactions with them.
4. Provide a grievance filing system. The Company did not have violations listed in the Code of Business Integrity and the Guidelines for Processes of Best Practice and Conduct in 2025.

(III) To maintain proper corporate conduct and ethics and proactively prevent unethical behaviors, the Company specifically regulated in its "Ethical Operations and Conduct Guidelines" the key essentials when the Company's personnel perform | (III) No difference. |

Issues to be Assessed	Implementation Status			Differences from the Code of Business Integrity for the Listed Companies and reasons for discrepancies
	Yes	No	Explanation
(IV) Has the Company established an effective accounting and internal control system to put ethical operations management into practice and arranged for the internal audit unit to formulate audit plans based on the risk assessment of unethical conduct and audit the compliance to prevent unethical conduct or commissioned independent auditors to conduct the audit?	☑		their duties. The Public Relations and Legal Department also assists the Management Department in the revision, implementation, interpretation, inquiry response, announcement and filing of the guidelines, and the Public Relations and Legal Department also provide an information channel (Telephone: 05-7885788, ext: 513, email: [email protected]) where the employees and the external inquirers can present their opinions.	(IV) No difference.
(V) Does the Company provide internal and external ethical conduct training programs on a regular basis?	☑		(IV) Sunny Friend has established an effective accounting and internal control system to closely monitor the business risk of unethical behaviors and ensure the proper practice of corporate conduct and ethics, and the Audit Office is responsible for regularly examining the compliance of such system.
(V) Sunny Friend's "Ethical Operations and Conduct Guidelines" stipulate that the dedicated unit shall hold an internal advocacy session once a year and arrange for the chairman, general manager or other executives to convey the importance of ethics to the directors, employees and assignees. Sunny Friend arranges for	(V) No difference.

Issues to be Assessed	Implementation Status
	Yes	No	Explanation
			internal and external education and training (including the prohibition of unethical conduct, regulatory compliance, prevention measures, corporate conduct and ethics in business activities, assessment and others) courses at least once a year.
III. Operations of the Company's grievance reporting system
(I) Does the Company establish specific complaint and reward procedures, set up conveniently accessible complaint channels and designate responsible individuals to handle the complaint received?	☑		(I) Sunny Friend has established the "Operating Procedures for Handling the Grievances Filing" to serve as a channel where complainants can report their findings of any illegal or unethical behaviors, and the identity of complainants and the content of reports are kept confidential. Sunny Friend in its internal report reveals the position title and name of the violators, the date of violation, description and the status on the processing of the case.
Sunny Friend has established the "Operating Procedures for Handling the Grievances Filing" to serve as a channel where internal and external personnel can file grievances unethical or inappropriate behaviors. If the reported case is proven true and legitimate, it will be handled with the related reward policy. In the event where the internal personnel file false reports or malicious allegations, they are imposed a	(I) No difference.

138

Issues to be Assessed	Implementation Status
	Yes	No	Explanation
			disciplinary punishment and may be dismissed from their jobs. The handling of the report, investigation process and results shall be recorded in written documents which are kept for five years and the preservation can be done in electronic format. In the event where lawsuits related to the content of the reports occur before the expiration date of the safekeeping of documents, the related information shall be kept and preserved until the end of the lawsuits.
1. Reporting channels
(1) If the counterparty to a complaint is a director, chairman, chairman taking a concurrent position as the general manager, managerial officers, other employees or those who have control over the complainant, the channel for filing grievances shall be properly provided and it can be done in written notes, telephone calls (02-25795580, Ext: 202), fax (02–25794015) and email ([email protected]). The Audit Office manages the hotline and email box, handles the related matters and fill out the "Grievances Handling Form", with the assistance from the Personnel Office and the Public Relations and Legal Department. The

139

Issues to be Assessed	Implementation Status
	Yes	No	Explanation
			Audit Office presents the complaints to the convener of the responsible unit to conduct investigation and offers assistance.
(2) If the counterparty to a complaint is the general manager or the head of the Audit Office, the channel for filing grievances shall be properly provided and it can be done in written notes, telephone calls (05–7885788, Ext: 622), fax (05–7887933) and email ([email protected]). The Personnel Office manages the hotline and email box, handles the related matters and fill out the "Grievances Handling Form" with assistance from the Public Relations and Legal Department. The Personnel Office presents the complaints to the convener of the responsible unit to conduct investigation and offers assistance.
(3) The two abovementioned reporting shall be conducted in a way of which the complainants provide their real names, contact information and the issues to be reported, and they shall sign a "Consent Form for Collection, Handling and Use of Personal Information." If the information provided is incomplete and can be corrected or supplemented, the complainant shall be notified to provide additional information with 7 days of

140

Issues to be Assessed	Implementation Status
	Yes	No	Explanation
			the reporting. If no further information is provided before the deadline, the reported case will not be processed. However, if the reported issues seem to require further investigation, they can be considered as separate cases to be used as the reference materials for internal review. The unit handling the case shall investigate and verify the identity of the complainant.
(4) Unnamed reported cases that provide solid evidence may not be subject to the restrictions set forth in the preceding paragraph.
2. Responsible unit
(1) Upon receiving grievance reports, the Company forms appropriate "Grievances Investigation Team" based on the identity of the counterpart to conduct investigation.
(2) If the counterparties are the directors, the chairman shall assign proper personnel to assist in investigation upon receiving grievance reports.
(3) If the counterparty is the chairman or chairman taking a concurrent position as the general manager, the independent directors will review the case and shall assign proper personnel to assist in investigation upon receiving grievance reports.

141

Issues to be Assessed	Implementation Status			Differences from the Code of Business Integrity for the Listed Companies and reasons for discrepancies
	Yes	No	Explanation
(II) Does the Company establish standard operating procedures for investigating the complaints received, follow-up measures to be adopted and the related confidentiality measures after investigation?	☑		(II)Sunny Friend's "Operating Procedures for Handling the Grievances Filing" has specified the standard operating procedure of investigation. The Company maintains the confidentiality and a rigorous attitude when processing the grievance reporting and the follow-up investigation. Please refer to the "Operating Procedures for Handling the Grievances Filing" for more details.

Measures for handling investigation
The investigation process shall be handled in accordance with the following measures:
(1) The responsible unit shall start its investigation within 30 days of the acceptance date, and the investigation shall be recorded.
(2) The investigation results shall be made into resolutions, with the reasons attached, and they may be used as recommendations for disciplinary punishment or other treatment responses.
(3) The investigation should be conducted based in a way to give the involved parties opportunities to fully present their opinions and defenses.
(4) Complainants may withdraw their reporting before the responsible unit makes a decision on the cases. If the reported cases are proven false after investigation, the responsible unit may not | (II) No difference. |

Issues to be Assessed	Implementation Status
	Yes	No	Explanation
			accept the same cases in the future.
(5) The personnel responsible for the investigation shall abide by the principles of confidentiality and not disclose the information related to the investigation.
2. Investigation results and appeal
After the investigation is completed, the case is handled in accordance with the following investigation and appeal principles.
(1) If the investigation finds that the reported allegation is false, the responsible unit shall close the case and discuss with the managers of the related departments to decide on an improvement measure which is submitted to the general manager for approval. If the counterparty is a director, the improvement measure shall also be submitted to chairman for approval. If the counterparty to a complaint is the general manager or the head of the Audit Office, the improvement measure shall also be submitted to chairman for approval. If the counterparty is the chairman or chairman taking a concurrent position as the general manager, the improvement measure shall be submitted to the board for approval.

143

Issues to be Assessed	Implementation Status			Differences from the Code of Business Integrity for the Listed Companies and reasons for discrepancies
	Yes	No	Explanation
			(2) To prevent indiscriminate filing of grievances, the responsible unit may propose to punish the internal employees who make the false accusations and claims and fabricate evidence, and the proposal is to be submitted to the general manager for approval.

(3) If the investigation finds that the reported allegation is true, the responsible unit shall prepare an investigation report and recommendation which are submitted to the general manager for approval. If the counterparty is a director, the chairman will review the case and submit it to the board to discuss the responsive measures. If the counterparty is the general manager or the head of the audit office, the chairman will review the case and submit it to the board to discuss on the responsive measures. If the counterparty is the chairman or chairman taking a concurrent position as the general manager, the independent directors will review the case and submit it to the board to discuss the responsive measures.

(4) The results of the investigation after the case is closed shall be sent to the complainant and the counterparty of the grievances. If the counterparty has any objection to the results, it | |

144

Issues to be Assessed	Implementation Status
	Yes	No	Explanation
			shall file an appeal within 10 days. If there is no objection during the appeal or that the investigation finds that the allegation is untrue, the responsible unit will not accept a repeated filing for the same reason.
(5) If the investigation finds that the reported allegation is true and meets the criteria for the disclosure of internal material information as stipulated by the securities laws and regulations, the case shall be uploaded to the market observation post system within two days for disclosure upon the approval by the chairman.
(6) Any outstanding matters of these measures shall be administrated according to the relevant regulations. The relevant criminal liability shall be pursued and the proceeds from the illegal interests shall also be recovered.
3. The responsible unit shall offer recommendations and improvement measures after summarizing the reports filed for the year and analyzing them.
4.If the counterparty is a director, the Company shall affix the responsibility or take appropriate legal actions for the violations after the investigation. If the investigation finds that the reported allegation meets the criteria for the

145

Issues to be Assessed	Implementation Status			Differences from the Code of Business Integrity for the Listed Companies and reasons for discrepancies
	Yes	No	Explanation
(III) Does the Company adopt proper measures to shield a complainant from retaliation for filing complaints?	☑		disclosure of internal material information as stipulated by the securities laws and regulations, the case shall be uploaded to the market observation post system within two days for disclosure upon the approval by the chairman.
5.If the counterparty is the chairman or chairman taking a concurrent position as the general manager, the Company shall affix the responsibility or take appropriate legal actions for the violations after the investigation. If the investigation finds that the reported allegation meets the criteria for the disclosure of internal material information as stipulated by the securities laws and regulations, the case shall be uploaded to the Market Observation Post System within two days for disclosure upon approval by the audit committee or independent directors.
(III) Sunny Friend has agreed to take measures to protect the complainant from retaliation for filing complaints and is willing to discuss the relevant protection measures.	(III) No difference.
IV. Enhance information disclosure
Does the Company disclose its guidelines on business ethics as well as information about implementation of such guidelines on its website and the Market Observation Post System?	☑		Sunny Friend has disclosed its annual report and prospectus on the Market Observation Post System, which include information about corporate conduct and ethics. The official website (http://www.sunnyfriend.com.tw/) also has a	No difference.

Issues to be Assessed	Implementation Status
	Yes	No	Explanation
			"Corporate Governance" page which includes an "Operations Regulations" disclosing the "Code of Business Integrity." Sunny Friend is actively planning to disclose the related information in the page and providing periodic updates and messages.
V. If the company has established corporate governance policies based on the Code of Business Integrity for the Listed Companies, please describe any discrepancy between the policies and their implementation in the Company: no difference.
VI. Other important information to facilitate better understanding of the Company’s corporate conduct and ethics compliance practices (such as reviewing and amending the Company’s existing Code of Business Integrity). Sunny Friend is aware of the development of regulations for corporate conduct and ethics both at home and abroad and encourages the directors, managerial officers and employees to offer their recommendations and discuss improvements to the Company's Code of Business Integrity, further enhancing the Company's performance in such area.

147

(VIII) Other significant information that will provide a better understanding of the state of the company's implementation of corporate governance may also be disclosed:

The Company's website has added a page dedicated to the stakeholders.
The operating procedures for handling the grievances filing have also been added.
The 2024 Sustainability Report of the Company has been prepared.

(IX) The section on the state of implementation of the Company's internal control system shall furnish the following:

The Statement on Internal Control: Please refer to the MOPS $>$ Single company $>$ Corporate governance $>$ Company regulations / Internal control $>$ Announcement of internal control statement(https://mops.twse.com.tw/mops/#/web/t06sg20).
Where a CPA has been hired to carry out a special audit of the internal control system, furnish the CPA audit report: None.

(X) Material resolutions of a shareholders' meeting or a board of directors' meeting during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report:

Key resolutions from the shareholders' meeting and their implementation:

Date of the Meeting	Summary of Key Discussions
2025.5.27 (Annual General Meeting)	1.Ratification of 2024 Financial Statements. 2.Ratification of 2024 profit distribution. 3.The amendment to the “Articles of Incorporation.”
	Implementation
	1.Distribution of a cash dividend of NT$3.8 per share from earnings was complemented on July 25, 2025. 2. Amendments to the Articles of Incorporation shall be implemented in accordance with the amended provisions after approval by the shareholders' meeting.

2.Key reports and resolutions from the board meeting:

Term and Date of the Meeting	Summary of Key Discussions
12th meeting of the 11th term	1.2024 Performance appraisal of the board of directors. 2.Report on the implementation of GHG inventory. 3.The 2024 financial statements, consolidated financial statements and business report are submitted for
	included in the financial statements and business report.

Term and Date of the Meeting	Summary of Key Discussions
2025.2.27	deliberation.
4.2024 Statement on Internal Control.
5.The amendment to the “Articles of Incorporation.”
6. 2024 remuneration for employees and directors.
7. 2024 annual profit distribution.
8.Determine the date, time and venue for the 2025 shareholders' meeting.
13th meeting of the 11th term
2025.5.9	1. Report on the implementation of GHG inventory.
2. The Company's 2025 Q1 financial report.
3. Appointment, remuneration, independence and competency evaluation of CPAs.
4. Ratification of the Company's audit report.
5. Plan to apply for a guarantee limit of commercial paper from Dah Chung Bills Finance Corporation.
6. The Company plans to apply for short-term and medium-term credit from four financial institutions: Taishin Bank, Far Eastern International Bank, Cathay United Bank and DBS Bank.
14th meeting of the 11th term
2025.6.27	1. The severance pay for the resignation of Officer Wen-Chen Huang.
2. The Company plans to apply for short-term and medium-term credit loans from four financial institutions: Taipei Fubon Commercial Bank, CTBC Bank, Shin Kong Commercial Bank, and Mega International Commercial Bank.
15th meeting of the 11th term
2025.8.7	1. Report on the implementation of GHG inventory.
2. The Company's 2025 Q2 financial report.
3. 2024 Sustainability Report.
4. The Company plans to apply to Ta Ching Bills Finance Corporation for a commercial paper guarantee limit.
5. The Company intends to apply for short- and intermediate-term loan facilities from two financial institutions, namely Chang Hwa Bank and E. Sun Commercial Bank.
16th meeting of the 11th term
2025.11.6	1. Report on the purchase of directors’ liability insurance policies.
2. The Company's 2025 Q3 financial report.
3. Revised the "Budget Management Regulations".
4. Amendment to the Company's "Sustainable Development Best Practice Principles".
5. The Company plans to apply for a commercial paper guarantee facility from Mega Bills Finance Corporation.
6. The Company plans to apply for short-term and medium-term loan

Term and Date of the Meeting	Summary of Key Discussions
	facilities from First Commercial Bank, Land Bank of Taiwan, and Shanghai Commercial & Savings Bank.
17th meeting of the 11th term 2025.12.26	1. Report on the implementation of ethical operations management.
2. Report on the status of communication with stakeholders.
3. Report on the implementation of corporate governance.
4. Report on the implementation of GHG inventory.
5. Report on plans to enhance corporate value.
6. 2026 annual operating budget.
7. The Company intends to apply for a intermediate-term loan facility from KGI Bank.
8. Scope of the Company's entry-level employees.
9. Amended the Company's "Regulations Governing the Distribution of Employees' Compensation".
10. Formulate and implement audit procedures for the Company’s “Detailed Rules for Auditing Employee Compensation Payment Methods”.
11. The 2026 annual audit plan.
12. Reorganization of invested subsidiaries in China.
13. Promotion of AVPs to Vice Presidents.
14. 2025 year-end bonus for the Company's managers.
15. It is proposed to amend the Company's "Distribution of Dragon Boat Festival and Mid-Autumn Festival Bonuses", "Management Regulations for Managers' Remuneration" and "Remuneration Policy, System, Standard and Structure for Management Officers".
16. The percentage of 2025 remunerations to directors of the Company.
18th meeting of the 11th term 2026.3.5	1. 2025 Performance appraisal of the board of directors.
2. Report on the implementation of GHG inventory.
3. The 2025 financial statements, consolidated financial statements and business report are submitted for deliberation.
4. The appointment, remuneration, independence and competency assessment of the Company's certified public accountants.
5. Termination of Hong-Bin Hung’s position as an assistant vice president, as approved by the board.
6. 2025 Statement on Internal Control.
7. Amendment to the "Procedures for Acquisition or Disposal of Assets".
8. The amendment to the “Articles of Incorporation.”
9. 2025 remuneration for employees and directors.
10. 2025 annual profit distribution.
11. 2025 earnings distribution in cash dividends.
12. The re-election of directors at the expiration of the term.
13. Period of nomination of directors (including independent directors), number of candidates and other essential matters.

151

Term and Date of the Meeting	Summary of Key Discussions
	14. List of director (including independent director) candidates.
15. Lift the restrictions on the non-compete clause of newly elected directors.
16. Determine the date, time and venue for the 2026 shareholders' meeting.

IV. Audit Fee of Independent Auditors

(I) Audit fee information:

Unit: NT$ 1000

Name of Accounting Firm	Name of Accountant	Audit Period	Audit Service	Non-Audit Service	Total	Remarks
Pricewaterhouse Coopers, Taiwan	Chin-Lien Huang	2025/1/1~2025/12/31	4,160,000	570,000	4,730,000	The debt-to-equity swap for the China subsidiary amounted to NT$ 240 thousand, and business tax audit and certification - NT$330 thousand.
	Chih-Fan Yu

When the Company changes its accounting firm and the audit fees paid for the fiscal year in which such change took place are lower than those for the previous fiscal year, the amounts of the audit fees before and after the change and the reasons shall be disclosed: none.
When the audit fees paid for the current fiscal year are lower than those for the previous fiscal year by ten percent or more, the reduction in the amount of audit fees, reduction percentage, and reason(s) therefor shall be disclosed: none.

V. Change of Auditors:

(I) About former CPAs: Not applicable.
(II) About successor CPAs: : Not applicable.
(III) The Reply of Former CPAs on Article 10.6.1 and Article 10.6.2.3 of the Standards: Not applicable.

VI. If the chairman, general managers, and managerial officers in charge of its finance and accounting operations held any positions within the company's independent audit firm or its affiliates during

the past one year, the name, title and the period of the employment shall be disclosed: None.

VII. Any transfer of equity interests and/or pledge of or change in equity interests (during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report) by a director, supervisor, managerial officer or shareholder with a stake of more than 10 percent during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report.

Any transfer of equity interests and/or pledge of or change in equity interests by a director, supervisor, managerial officer, or shareholder with a stake of more than 10 percent.

Share transfer: Please refer to MOPS > Single Company > Equity Changes/Securities Issuance > Insider Shareholding Change

Report.(https://mops.twse.com.tw/mops/#/web/query6_1) ;

Changes in the pledge of shares: Please refer to the MOPS website > Single Company > Shareholding Changes/ Securities Issuance > Insider Pledge/Release of Pledge > Announcement of Insider Pledge/Release of Pledge.

(https://mopsov.twse.com.tw/mops/web/STAMAK03_1)

Stock trade with a related party: None.
Stock pledge with a related party: None.

152

VIII. Information on top ten shareholders and their mutual relationship as spouse or blood relative within the second degree according to the Accounting Standards 6.

March 30,2026 - Unit: Share; %

Name (Note 1)	Current Shareholdings		Shareholdings of Spouse and Minor Children		Shares Held in the Name of Others		Title, name and relationship of the top ten shareholders who have mutual relationship as spouse or blood relative within the second degree (Note 3)
	Number of Shares	Shareholdings Percentage	Number of Shares	Shareholdings Percentage	Number of Shares	Shareholdings Percentage	Title (or name)	Relationship with the endorser/ guarantor
Ruentex Development Co., Ltd.. Representative: Tsang-Tsun Jian	33,370,156	25.67%	0	0	0	0	Ruentex Industries Limited	Interested person
Yuan-Ting Investment Co., Ltd. Representative: Ming-Yuan Cheng	9,643,750	7.41%	0	0	0	0	-	-
Ren-Ying Industrial Co., Ltd. Representative: Samuel Yin	4,367,574	3.36%	0	0	0	0	Ying-Jia Investment Co.,Ltd..	Interested person
Ruentex Industries Limited Representative: Sheng-Yu Hsu	3,994,233	3.07%	0	0	0	0	Ruentex Development Co.,Ltd..	Interested person
Cheng-Chi Investment Co., Ltd. Representative: Hui-Min Chung	3,766,000	2.90%	0	0	0	0	-	-
Ta Luen Investment Co., Ltd. Representative: Ji-Fu Chen	1,259,929	0.97%	0	0	0	0	-	-
Ying-Jia Investment Co., Ltd. Representative: Kun-Long Chang	1,117,692	0.86%	0	0	0	0	Ren-Ying Industrial Co.,Ltd..	Interested person
Commercial Bunk as Custodian for Vanguard Emerging Markets Stock Index Fund Managed by Vanguard Group	1,007,497	0.78%	0	0	0	0	-	-

Name (Note 1)	Current Shareholdings		Shareholdings of Spouse and Minor Children		Shares Held in the Name of Others		Title, name and relationship of the top ten shareholders who have mutual relationship as spouse or blood relative within the second degree (Note 3)
	Number of Shares	Shareholdings Percentage	Number of Shares	Shareholdings Percentage	Number of Shares	Shareholdings Percentage	Title (or name)	Relationship with the endorser/ guarantor
Jing Chia Mei Investment Management Consulting Co., Ltd. Representative: Ming Wang	989,428	0.76%	0	0	0	0	Yuan-Ting Investment Co., Ltd. Representative: Ming-Yuan Cheng	Second degree kinship
Business Department of Standard Chartered International Commercial Bank as Custodian for Vanguard Total International Stock Index Fund - Series Fund of Vanguard Starlight Fund.	929,675	0.72%	0	0	0	0	-	-

Note 1: All the top ten shareholders shall be listed, with the legal person shareholders listing the name of the legal person and the representative separately.
Note 2: The calculation of shareholding percentage refers to the shares owned under one's name, the spouse or minor children or held in the name of others.
Note 3: The shareholders listed in the previous disclosure, including the legal persons and natural persons, shall disclose their mutual relationship in accordance with the "Regulations Governing the Preparation of Financial Reports by Securities Issuers."

March 30, 2026. Unit: shares; %

| Investee
(Note 1) | Ownership by the Company | | Ownership by directors, supervisors, managerial officers, and directly/ indirectly owned subsidiaries | | Total Ownership | |
| --- | --- | --- | --- | --- | --- | --- |
| | Number of Shares | Ownership | Number of Shares | Ownership | Number of Shares | Ownership |
| Chin Hsin Environ Engineering Co., Ltd. | 26,415,300 | 57.42% | - | - | 26,415,300 | 57.42% |
| Liang Wei Environmental Engineering Co., Ltd. | - | - | 5,500,000 | 100% | 5,500,000 | 100% |
| Cheng Shin Environmental Engineering Co., Ltd. | - | - | 2,000,000 | 100% | 2,000,000 | 100% |
| Full Giant Resources Ltd. | 126,100,000 | 100% | - | - | 126,100,000 | 100% |
| Arise Profits Ltd. | - | - | 44,650,000 | 100% | 44,650,000 | 100% |
| Beijing Ruentex Environmental Technology Co., Ltd. | - | - | Note 2 | 100% | Note 2 | 100% |
| Jiangsu Suqian Ruentex Environmental Control Co., Ltd. | - | - | Note 2 | 100% | Note 2 | 100% |
| Yuncheng Ruentex Environmental Technology Co., Ltd. | - | - | Note 2 | 100% | Note 2 | 100% |
| Rizhao Panyue Environmental Technology Co., Ltd. | - | - | Note 2 | 100% | Note 2 | 100% |

Note 1: Long-term investment by the Company by using the equity method.
Note 2: Limited company established in China, and there are no shares.

Three. Financing Activities

I. Capital and Shares

(I) Source of capital

March 31, 2026. Unit: 1,000 shares, NT$1,000

Year / Month	Issue Price	Authorized Share Capital		Paid-in Capital		Remarks
		Number of Shares	Amount	Number of Shares	Amount	Source of capital	Capital Increase by Assets Other than Cash	Others
1994/11/29	10	5,000	50,000	5,000	50,000	$50,000 in cash	-	Approval Document No.: November 29, 1994. 83Jian-San-Geng-Zhi #469169
1997/02/24	10	10,100	101,000	10,100	101,000	-	Creditor's rights as payment for shares, 51,000	Approval Document No.: February 24, 1997. Jin 86 Shang-Zhi #102881
1999/01/07	10	19,800	198,000	19,800	198,000	Including cash capital increase of $79,200. 17,800 for capitalization of profit	-	Approval Document No.: January 7, 1999. Jin 87 Shang #087143377
1999/09/01	10	30,600	306,000	30,600	306,000	Including cash capital increase of $40,000 68,000 for capitalization of profit	-	Approval Document No.: September 1, 1999. Jin 88 Shang #088132376
2000/04/25	10	42,600	426,000	33,600	336,000	Cash capital increase of $30,000	-	Approval Document No.: April 25, 2000. Jing 89 Shang #089111459
2000/08/04	10	42,600	426,000	40,320	403,200	$40,320 from capitalization of profit 26,880 from additional paid-in capital	-	Approval Document No.: August 4, 2000. Jing 89 Shang #089125984
2001/07/04	10	60,000	600,000	47,578	475,776	32,256 from capitalization of profit 40,320 from additional paid-in capital	-	Approval Document No.: July 4 2001. Jing 90 Shang #09001252510
2002/07/16	10	60,000	600,000	54,714	547,142	41,868 from capitalization of profit 29,498 from additional paid-in capital	-	Approval Document No.: July 16 2002. Jing 91 Shang #09101273210

157

Year / Month	Issue Price	Authorized Share Capital		Paid-in Capital		Remarks
		Number of Shares	Amount	Number of Shares	Amount	Source of capital	Capital Increase by Assets Other than Cash	Others
2008/10/16	10	100,000	1,000,000	75,000	750,000	Cash capital increase of $202,858	-	Approval Document No.: November 3, 2008. Jing 97 Shang #09701279340
2012/12/21	12	150,000	1,500,000	100,000	1,000,000	Cash capital increase of $250,000	-	Approval Document No.: January 2, 2013. Jing 101 Shang #10101267820
2015/03/30	45	150,000	1,500,000	111,500	1,115,000	Cash capital increase of $115,000	-	Approval Document No.: March 30, 2015. Jing 104 Shang #10401054440
2023/08/02	120	150,000	1,500,000	130,000	1,300,000	Cash capital increase of $185,000	-	Approval Document No.: August 2, 2023. Jing 112 Shang #11230146370

March 31, 2026. Unit: 1,000 shares

Type of Shares	Authorized Share Capital			Remarks
	Shares outstanding	Un-issued Shares	Total
Common Stock	130,000	20,000	150,000	The issued shares of the Company are all publicly traded.

Information on the shelf registration: not applicable.

(II) Main shareholders

Name of shareholders who hold more than 5% of the total shares or are ranked top ten of all shareholders and the number of shares they own and the ownership percentage.

March 30, 2026

| Shares
Name of Main Shareholders | No. of shares held | Ownership |
| --- | --- | --- |
| Ruentex Development Co., Ltd.. | 33,370,156 | 25.67% |
| Yuan-Ting Investment Co., Ltd. | 9,643,750 | 7.41% |
| Ren-Ying Industrial Co., Ltd. | 4,367,574 | 3.36% |
| Ruentex Industries Limited | 3,994,233 | 3.07% |
| Cheng-Chi Investment Co., Ltd. | 3,766,000 | 2.90% |
| Ta Luen Investment Co., Ltd. | 1,259,929 | 0.97% |
| Ying-Jia Investment Co., Ltd. | 1,117,692 | 0.86% |
| Commercial Bank as Custodian for Vanguard Emerging Markets
Stock Index Fund Managed by Vanguard Group | 1,007,497 | 0.78% |
| Jing Chia Mei Investment Management Consulting Co., Ltd. | 989,428 | 0.76% |
| Business Department of Standard Chartered International
Commercial Bank as Custodian for Vanguard Total International
Stock Index Fund - Series Fund of Vanguard Starlight Fund. | 929,675 | 0.72% |

(III) Company's dividends policy and the implementation status:

Dividend policy as stipulated in the Article of Incorporation: Annual profits concluded by the Company are subject to employee remuneration of at least 7%, and of the employee remuneration distributed, no less than 30% shall be distributed to entry-level employees, which the board of directors may decide to distribute in cash or in shares. Employees of subsidiaries may also be entitled to receive remuneration, provided that they meet the criteria specified by the board of directors. Up to 1.4% (inclusive) of the aforementioned profit may be distributed as directors' remuneration at the discretion of the board of directors. Employee's and director's remuneration proposals are to be raised for resolution during the shareholders' meetings. If any, profits must first be taken to offset cumulative losses before the remainder can be distributed as employee/director remuneration in the above percentages. The Company shall determine its dividends policy based on operational plans, budgets and capital requirements of future years. No less than 50% of current net income shall be distributed as dividends and no less than 30% of currently year's total dividends shall be paid in cash.
The resolution for dividend distribution for the year: The board meeting resolved to distribute a cash dividend of NT$4 per share.

(IV) The impact of bonus shares proposed by the shareholders' meeting on the Company's operating performance and earnings per share: None.

(V) Remuneration for employees and directors

Percentage or scope of remuneration for employees and directors as stipulated in the Article of Incorporation: Annual profits concluded by the Company are subject to employee remuneration of at least 7%, and of the employee remuneration distributed, no less than 30% shall be distributed to entry-level employees, which the board of directors may decide to distribute in cash or in shares. Employees of subsidiaries may also be entitled to receive remuneration, provided that they meet the criteria specified by the board of directors. Up to 1.4% (inclusive) of the aforementioned profit may be distributed as directors' remuneration at the discretion of the board of directors. The remuneration for independent directors is restricted in the form of monthly salary and specified amount of transportation allowance. The independent directors will not participate in the distribution of remuneration for directors. The remuneration for the remaining directors is distributed in the form of the specified amount of transportation allowance and the compensation distribution for directors.

158

Determine the procedures for specifying the amount for the remuneration of directors. The remuneration committee provides the proposal for the remuneration percentage based on the Company's operating results, performance, and the appraisal of the board for the year to the board for review. The remuneration is distributed in accordance with the "Guidelines on the Remuneration for Directors Audit Committee and Remuneration Committee Members" to provide the directors with a reasonable amount in remuneration.

Employee’s and director’s remuneration proposals are to be raised for resolution during the shareholders’ meetings. If any, profits must first be taken to offset cumulative losses before the remainder can be distributed as employee/director remuneration in the above percentages.

The basis for estimating the amount of employee and director compensation, calculating the number of shares to be distributed as employee compensation, and the accounting treatment of the discrepancy, if any, between the actual distributed amount and the estimated figure, for the current period.

(1) The basis for estimating the amount of employee and director compensation: Please refer to (VI) 1. Company's dividend policy.

(2) The basis for calculating the number of shares to be distributed as employee compensation: None.

(3) The accounting treatment of the discrepancy, if any, between the actual distributed amount and the estimated figure, for the current period: Considered as a change in the accounting estimates and is included in the profit or loss in the year of the actual distribution.

Distribution of compensation as approved by the board:

(1) The proposed cash disbursement for employees is NT$55,563,233, and NT$10,041,070 for directors, which is no different from the estimated amount in the year of which the expense is recognized.

(2) The amount of any employee compensation distributed in stocks, and the size of that amount as a percentage of the sum of the after-tax net income stated in the standalone financial reports or individual financial reports for the current period and total employee compensation: No employee compensation distributed in stocks.

159

The actual distribution of employee, director, and supervisor compensation for the previous fiscal year:

Distribution Type		Actual Amount Disbursed per the Resolutions of Shareholders’ General Meeting	Amount Proposed for Disbursement Originally Approved by the Board	Difference	Description
Employee Compensation in Stocks	Number of Shares	-	-	-	-
	Total Amount(NT$)	-	-	-	-
Employee Compensation in Cash	Total Amount (NT$)	44,186,800	44,186,800	-	-
Compensation for Directors (NT$)		7,985,186	7,985,186	-	-

(VI) Stock buybacks of the Company: None.

II. Corporate bonds, preferred stocks, global depositary receipts, restricted stock awards and new share issuance in connection with mergers and acquisitions: None.

III. Financing plans and implementation:

(I) Description of plan: With respect to each uncompleted public issue or private placement of negotiable securities, and to such issues and placements that were completed in the most recent 3 years but have not yet fully yielded the planned benefits: None.

(II) Implementation status: Not applicable.

160

Four. Overview of operations

I. Description of Business

(I) Scope of business

Description of main businesses

(1) Biomedical waste incineration.
(2) Non-infectious business waste after sterilization and general medical waste mixture.
(3) Business waste incineration.
(4) Physicochemical treatment of business waste.
(5) Business waste solidification.
(6) Landfill treatment of business waste after solidification.
(7) Composition and consultation of proposal on prevention of pollution for business institution.
(8) Operating waste incineration facilities on behalf of clients.
(9) Operating sewage treatment plant and equipment in the industrial zone on behalf of clients.
(10) Design, planning and construction of small incinerators.
(11) Contract construction of landfill or incineration plants.
(12) Engineering consultation or technical services of the related programs for government agencies.
(13) Environmental inspection and testing services

The proportion of business and processing value in the last two years

Unit: NT$1,000

Services	2025		2024
	Processing Value	Weight	Processing Value	Weight
Disposal and transportation of biomedical waste	1,392,932	34.91%	1,418,976	38.39%
Disposal and transportation of business waste	2,530,107	63.40%	2,254,641	60.99%
Revenue from services and sales	67,511	1.69%	23,075	0.62%
Total	3,990,550	100.00%	3,696,692	100.00%

161

The Company's current main services

(1) Biomedical waste incineration
(2) Business waste incineration
(3) Physicochemical treatment of business waste
(4) Business waste solidification
(5) Landfill treatment of business waste after solidification
(6) Environmental inspection and testing services
(7) Design, planning and construction of small incinerators
(8) Contract construction of landfill or incineration plants

New services under development

(1) Cleaning of non-infectious business waste for medical institutions
(2) Contracting for the business of operating sewage treatment plant and equipment in the industrial zone on behalf of clients
(3) Contracting for the waste disposal of the whole plant of medium and large enterprises
(4) Study other products that can be recycled

(II) Overview of the industry:

Industry status and development

(1) Biomedical waste:

Institution Name	License
Sunny Friend Environmental Technology / Zhangbin Recycling Plant	Class A disposal permit. Establishment under the guidance of the Ministry of Economic Affairs
Katec Creative Resources Corporation	Class A disposal permit
Katec R&D Corporation	Class A disposal permit
Plant #1 of Chung-Tai Resource Technology Corp.	Class A disposal permit
Huan-Wei Medical Waste Disposal	Class A disposal permit
Guo-Ju Environmental Technology	Class A disposal permit
Da Kuo You Li Co., Ltd.	Class A disposal permit
Zhi Huan Co., Ltd.	Class A disposal permit
Kaohsiung Medical Waste Disposal	Permit from the Ministry of Health and Welfare
Hulien County Medical Association (joint disposal)	Permit from the Ministry of Health and Welfare

Institution Name	License
Limited Liability Taichung City Environmental Protection Technology Processing Equipment Cooperative	Permit from the Ministry of Health and Welfare
Shuimei Engineering, Guanyin plant (Guanyin Plant)	Establishment under the guidance of the Ministry of Economic Affairs
Cowin Environmental Resources Limited (Dafa Plant)	Establishment under the guidance of the Ministry of Economic Affairs
Administration Office of the Southern Taiwan Science Park (Tainan science park recycling center), Ministry of Science and Technology	Establishment under the guidance of the Ministry of Science and Technology
Chin Hsin Environ Engineering Co., Ltd.	Recycling permit from the Ministry of Health and Welfare
Gshine Welltech Corp.	Recycling permit from the Ministry of Health and Welfare
Mao-Sheng Resources Technology	Recycling permit from the Ministry of Health and Welfare
Fong Cai Environmental Technology	Recycling permit from the Ministry of Health and Welfare
Fong Wei Environmental Technology	Recycling permit from the Ministry of Health and Welfare
Fong Fan Environmental Technology	Recycling permit from the Ministry of Health and Welfare
Yu Jie Technology	Recycling permit from the Ministry of Health and Welfare
Yi Hui Environmental Protection	Recycling permit from the Ministry of Health and Welfare

(2) Business waste:

The amount of industrial waste is huge, double that of household waste. In addition, factors including the nature of waste generated by different businesses is greatly different, it is difficult to obtain land for industrial waste treatment facilities, environmental protection is getting difficult, business operators illegally dispose of industrial waste, and the economic incentives arising from the low-price competition caused by unscrupulous business operators walking on the edge of the law have

affected the operation of business waste disposal agencies.

According to the statistics report on business waste in the "Business Waste Filing and Management Information System" managed by the Resource Circulation Administration, Ministry of Environmental Protection, the total volume of business waste has been steadily increasing, and the amount of hazardous waste has reached 1.61 million tonnes per year.

Statistics table on business waste volume compiled by the Environmental Protection Administration (in metric tonnes)

Year	Total Volume	General business waste	Hazardous business waste	Recycled resources
2013	18,360,598	14,162,528	1,447,705	2,750,364
2014	18,839,568	14,240,308	1,603,661	2,995,599
2015	19,160,692	14,492,599	1,371,887	3,296,206
2016	18,973,038	14,195,849	1,357,365	3,419,823
2017	19,367,127	14,849,343	1,444,014	3,073,771
2018	22,178,067	17,588,797	1,461,746	3,127,524
2019	19,840,512	15,061,323	1,390,642	3,388,547
2020	20,030,414	15,491,915	1,523,476	3,015,023
2021	21,950,310	16,590,689	1,715,316	3,644,305
2022	21,178,033	15,927,779	1,665,248	3,585,006
2023	20,038,745	15,420,071	1,479,612	3,139,062
2024	19,833,117	15,091,695	1,614,274	3,127,148

According to the statistics compiled by the "Industrial Waste Declaration and Management Information System" by the Resource Circulation Administration of the Environmental Protection Administration, the volume of the contracting or joint disposal of business waste has reached 2.60 million tonnes per year and recycling has reached 16.48 million tonnes per year. This shows that the Environmental Protection Administration commitment in promoting resources recycling has yielded good results and the environmental protection industry is surely an important investment potential for the future.

There are 355 illegal disposal sites reported according to the Environmental Management Administration's waste disposal case management system. According to the statistics compiled by the Resource Circulation Administration of the Ministry of Environment, the country has 113 Class A processing facilities.

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Statistics table on the disposal volume of business waste compiled by the Resource Circulation Administration of the Environmental Protection Administration (in metric tonnes)

Year	Total Volume	Contracting or Joint Disposal	In-house Processing	Reuse	Overseas Disposal
2013	18,245,054	2,468,992	812,418	14,912,871	50,772
2014	18,876,034	2,752,638	865,827	15,208,068	49,501
2015	19,130,207	2,662,871	609,852	15,810,837	46,647
2016	17,926,246	2,587,214	635,845	14,687,364	15,823
2017	18,942,737	2,634,469	654,733	15,638,092	15,444
2018	20,107,847	2,614,892	688,928	16,796,321	7,706
2019	19,845,377	2,456,336	712,946	16,667,858	8,236
2020	20,034,785	2,342,817	744,833	16,938,318	8,816
2021	21,920,938	2,323,947	822,483	18,741,710	32,798
2022	21,488,073	2,301,470	847,958	18,315,751	22,894
2023	20,351,382	2,346,939	877,226	17,113,366	13,851
2024	19,995,739	2,605,667	885,921	16,483,704	20,446

Current status of major domestic processing plants

| Name of Plant | Approved volume
Tonnes / Month | Main Equipment | Remarks |
| --- | --- | --- | --- |
| Shuimei Engineering | 3,390 | Rotary kiln incinerator | Comprehensive processing center for business waste in northern Taiwan |
| Cowin Environmental Resources Limited | 9,780 | Incineration and physicochemical treatment | Comprehensive processing center for business waste in southern Taiwan |
| Sunny Friend | 17,688 | Rotary kiln incinerator, incineration, physicochemical treatment, solidification, landfills | The largest biomedical waste processing plant in the country.
Comprehensive processing center for business waste in central Taiwan. |
| Chung-Tai Resource Technology Corp. | 12,962 | Incineration, physicochemical treatment, solidification | |

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		and washing
Tai Rong Technological Materials	6,727.9	Physical treatment, incineration
Ta-Yuan Cogen	3,100	Physical
CHC Resources	2,970	Solidification
Li Bai Jing Technology	10,260	Physical treatment, incineration
Lu Da Industry	1,800	Incinerator
Cleanway	15,250	Heat treatment、Solidification

Relations between the upstream, midstream and downstream of the industry

(1) Relations in the industry

Upstream	Midstream	Downstream
Cleaning and transportation of medical and business wastes	Incineration, physicochemical treatment and solidification of wastes	Ash treatment, landfill
Cleaning and transportation companies

(2) Vertical integration by Sunny Friend:

Upstream	Midstream	Downstream
Cleaning and transportation of medical and business wastes	Incineration, physicochemical treatment and solidification of wastes	Ash treatment, landfill, waste utilization

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(Chin Hsin, and distributors) → Yunlin Plant 1
Yunlin Plant 3
Zhangbin plant (incineration unit)
Zhangbin plant (physicochemical treatment unit)
Zhangbin plant (solidification unit) → Zhangbin plant (landfill unit)

Development trends and competition of products

(1) Fierce competition between many existing competitors.

(2) The Company has installed a waste liquid concentration system to reduce its cost of processing.

(3) High calorific-value waste such as plastic waste is sorted to reduce volume and volume, and diverted as the material source for SRF fuel conversion.

(4) The government tightens inspection and testing standards and allows other related industries to enter the market.

(5) Low-price competition caused by unscrupulous business operators walking on the edge of the law.

(6) The market is current saturated, and the production capacity is far greater than the market demand.

(7) In recent years, the inflation has intensified and the prices of many materials have continued to rise. The direct operating costs have continued to rise, seriously eroding the profitability.

(III) Overview of technologies, research and development

Technological level and R&D of the business the Company is engaged in: none.
R&D personnel and their education and industry experience: none.
R&D expenses invested in the past five years: none.
Technologies or products successfully developed: none.

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

Short-term business development plan

(1) Maintain market leadership: retain the existing clientele, adopt differentiation, improve the after-sales services, strengthen the allocation of human capital.

(2) Maintain profitability: reduce operating cost, increase cleaning and transportation volume, make prices reflect costs appropriately.

(3) Market integration: as stated in the product development trends, the direct operating costs have continued to rise, which is the pressure shared by all players in the industry. It is expected that all other players in the industry will be invited to form an industry alliance to set reasonable product prices to truly reflect the operating costs, avoiding vicious competition.

Long-term business development plan

(1) Explore the market configuration of joint processing centers and find the markets that can be entered through strategic cluster analysis.

(2) Develop special waste market, such as the business wastes potentially generated by the high-tech electronics industry.

(3) Establishes strategic alliances with recycling operators to have a more complete product offering.

(4) Adopt the business waste policies of the Ministry of Economic Affairs to help the government in solving the cleaning and disposal issues.

(5) Develop partnerships between the industry, the government and academia and expand capabilities to improve the processing of waste generated by various industries.

(6) Use the existing equipment and land resources of the plant in the Zhangbin Plant to expand the investment in recycling industry.

(7) Rooted in Taiwan and expand in China and the world: currently, the Company has a plant in Beijing and Shandong. Already established presence in Beijing, Shandong, Jiangsu and Shanxi.

II. Overview of Market, Manufacturing and Sales

(I) Market analysis

Main service areas

The Company is the first environmental protection technology company specializing in waste disposal and incineration that becomes publicly traded. For more than thirty years since the official establishment of business, the Company has refined its capabilities in waste disposal and incineration, serving counties and cities around the country and the offshore islands. Currently, the main service coverage includes Taiwan,

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Penghu, Kinmen and Matsu. The subsidiary, Beijing Ruentex, has obtained a license for the disposal of medical wastes and begun its operations in 2013, and it is currently serving Beijing City.

2. Market share

According to the statistics from the Resource Circulation Administration of the Environmental Protection Administration, there are 17 medical waste processing plants that have obtained an operating license in Taiwan, and the Company accounts for about 34% of the market share. Due to the increasingly stringent regulations, the output of medical waste also increases. The Company's Yuanchang Plant 1st plant and 3rd plant and the Phase 1 and Phase 2 incinerators in Changhua Coastal Industrial Park have operated smoothly throughout the year; The disposal business of business waste is facing new competition, and it is expected that the Company's overall market share in 2026 will stay the same.

3. Main sources of waste and garbage

The medical and business wastes mainly come from the long-term disposal contracts signed with the subsidiaries through reinvestment, franchisee operators and the public and private hospitals, medical institutes, clinics and organizations in the public and private sectors.

4. Future supply, demand and growth of the market

(1) Growing environmental awareness:

The awareness of environmental protection is a global trend. Due to the government's strong advocacy and the improvement of knowledge, the citizens have generally developed their environmental protection awareness. Therefore, the industry will be able to establish a positive image, and the market planning will also be better and the market scale will expand, making the acquisition of capital easier.

(2) Establishment and implementation of regulatory policies:

The environmental protection laws and regulations have been introduced and implemented one after another, and the requirements for business institutions have also been completed. Such business institutions will abide by the laws to process wastes through legal channels, helping the operations of those that comply with the laws. For the companies that do not meet the standards, they will also be encouraged to conduct an upgrade or retire from the market, making it a fair market competition. This is to prevent the vicious cycle of having bad companies driving good companies

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out of the market, further protecting the operations of legitimate companies.

(3) Policy direction for recycling of resources:

In response to the social trends of resources sustainability and zero-waste, the domestic policy mainly focuses on "Reduction at the sources and recycling of resources". The policy advocates for green manufacturing, green consumption, reduction at the sources, resources recovery, reuse and recycling to effectively recycle resources and gradually achieve the goals of total recycling and zero-waste. Due to the global trends, the government's advocacy and the actual needs, the market for recycling and reuse of resources has reached 16.48 million tonnes per year. The waste solvents used in the high-tech industries and various types of cutting fluids used in all industries present an urgent need. In the future, the environmental protection industry will have more capital invested in the market segment of resources recovery and reuse.

(4) Reduction of business waste:

Due to the limited land resources and dense population of Taiwan, the reduction of business waste has been an important goal. Intermediate treatment by incineration is the most effective way to reduce the amount of waste, for example, solid waste, non-infectious biomedical waste, partial liquid waste, industrial waste liquid and others, and there is still a high demand for processing capacity.

(5) Disposal of various types of hazardous business waste from large-scale industrial activities:

The advancement of technologies and development of a variety of industries can generate many types of hazardous business waste. Heavy metal waste, special waste, soil remediation of polluted sites and others require solidification and landfill treatments.

According to the Ministry of Health and Welfare of the Executive Yuan, there are currently 468 hospitals, 23,800 clinics and a total of 170,659 hospital beds in medical institutions. Hospitals around Taiwan generated about 120,000 tonnes of garbage per year and about 39,000 tonnes of the total volume are hazardous medical waste which requires special treatment. To prevent secondary pollution, the incineration facilities for infectious medical wastes are required to pass the trial burns, and the installation of advanced air pollution and waste water treatments equipment is essential. Sunny Friend's Yunlin Plan 1 had already obtained a Class A incinerator operating license from the Yunlin County government in January 1997. Yunlin Plant

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3 obtained its operating license in August 2017 and had begun its operations. Sunny Friend processes about 39 tonnes of waste per day, accounting for about 45% of the market's contracting and joint processing of infectious business waste.

Competitive niche

(1) Vertical integration capabilities:

The Company has accumulated experience and nurtured talents for a long time. From the front-end of cleaning and transportation channel to the intermediate channel of processing facilities, the Company has completed the foundation and passed long-term tests. Currently, we are actively planning for the last-mile processing facilities. After the successful completion of landfills, the Company becomes the only environmental protection company in the country which displays a upstream, midstream and downstream integration.

(2) Strong management team:

Through years of hard work, the company has established strongholds in the northern, central and southern Taiwan and nurtured outstanding business talents and managerial personnel. The head company also has grown a strong planning team. Under the leadership of the chairman, the company surely will be able to understand the market dynamics and plan the company's future direction in time to meet all types of challenges.

Factors favorable and unfavorable to the development

(1) Favorable factors

A. Growing environmental awareness:

B. Establishment and implementation of regulatory policies:

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making it a fair market competition. This is to prevent the vicious cycle of having bad companies driving good companies out of the market, further protecting the operations of legitimate companies.

C. High-tech waste treatment greater than supply:

Taiwan's industrial structure has changed from agricultural and industrial to technology and service industries. The complex semi-conductor process and the constant improvement of industrial technology have made it necessary to use different chemicals or chemical composition in each process. As a result, the amount of waste has increased and the nature of waste has become more complex.

(2) Unfavorable factors

A. Citizens' rejection of the environmental protection industry:

Citizens generally do not accept the existence of the industry around their living space, believing that it could affect the quality of life or even affecting their physical health. The operators of the industry need to continuously communicate and explain or even give back to the community in response to the continuous protest by social groups. This can result in the large-scale increase in the operating cost, also making it harder to find proper sites for the construction of new plants.

B. New competitors to the market:

New technologies are constantly being developed and introduced to the market for the disposal of waste. More companies are entering the same market, directly affecting the supply and demand and causing the fluctuation in prices.

Countermeasures

(1) Strong customer relationship:

At present, the Company's main service is in the disposal of infectious business waste. Since obtaining its license on January 13, 1997, the Company has been committed to provide the most comprehensive service for clients. The customer loyalty has always been high as they identify with the Company and are willing to accept the services provided. The large customer case will be the biggest advantage the Company has in the future market competition.

(2) Efficient waste clearing team:

The Company has established specialized Class A cleaning companies in northern, central and southern Taiwan by offering counseling to cleaning companies and holding management power through re-investment. Through continuous innovation and improvement, the Company has established a continuous logistics

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network to complete the cleaning and transportation tasks on time. The channel coverage nationwide will be unmatched by other competitors.

(3) In-house intermediate processing equipment:

The Company's first incineration plant, since its inception in 1997, has been in operations for more than 27 years. The Company has accumulated rich processing capabilities and nurtured a group of outstanding technical personnel. The Company now has the capabilities in design, operation and maintenance. Equipment in Yunlin 1st Plant and 3rd plant has been operating properly.

(4) Vertical integration capabilities:

The Company has accumulated experience and nurtured talents for a long time. From the front-end of cleaning and transportation channel to the intermediate channel of processing facilities, the Company is the only environmental protection company in the country which displays an upstream, midstream and downstream integration.

(5) Strong management team:

Through years of hard work, the company has established strongholds in the north and south and nurtured outstanding business talents and managerial personnel. The head company also has grown a strong planning team. Under the leadership of the chairman, the company surely will be able to understand the market dynamics and plan the company's future direction in time to meet all types of challenges.

(6) Modernized information management:

Sunny Friend Group has been using information systems to manage work activities since it first commenced operation. The system was first designed by a software contractor and later taken over by an IT Department that the Company has assembled exclusively for this purpose. The information system is being used from clearing waste, incineration, bookkeeping, material management, reporting, analysis to the building of big data architecture to enable timely and efficient decision-making by the decision makers.

(7) Robust ISO14001 management:

To ensure the most efficient management, promote the ISO 14001 Environmental Management System, formulate environmental policies and continue improvement works.

Sunny Friend Group introduced the most advanced management concepts by

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adopting the ISO14001 system, as good management practices yield the best competitiveness.

(8) Flexible strategic alliance and market interactions to minimize the occurrence of vicious price competition in the market.

(9) Maintain good relationships with the neighboring residents around the waste disposal plants:

The Company is mainly engaged in the disposal of medical and business wastes, and the processing facilities all comply with the laws and regulations to maintain the normal operations of the plants and equipment to prevent the occurrence of secondary pollution. The surrounding areas of the plants are regularly cleaned to maintain good relationships with the neighboring residents in the communities. The plant sites and the surrounding roads also undergo green landscaping and cleaning to reduce the chance of local resistance.

(II) Key uses and production process of main products

Key purposes of main products

The Company is mainly engaged in the contracting of incineration of waste and general garbage. We use the most advanced Japanese-designed incinerators. There are rotary kiln incinerators and fluidized bed incinerators and they both adopt high-temperature incineration to achieve the goals of reducing capacity and volume and minimizing hazards. Ruentex Materials' plant in Dongshan Township, Yilan County was commissioned to start the reuse of bottom slag of incinerator as an alternative raw materials to be used in cement production, or burying the bottom slag after solidification.

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2. Production process

(1) Biomedical and business waste incineration

(2) Physicochemical treatment of business waste

(3) Solidification treatment of business waste

(III) Supply status of main raw materials:

Main Incoming Delivery Items	Suppliers	Status
Heavy crude oil	CPC	Good, steady
Diesel fuel	CPC	Good, steady
Electricity	Taiwan Power Company, Beijing Electric Power Corporation	Good, steady
Sodium hydroxide	Su Da, Jiu Rong	Good, steady
Cement	CHC Resources	Good, steady
Chelating agent	Te Yi	Good, steady

(IV) The amount and percentage of the list of any suppliers accounting for 10 percent or more of the Company's total procurement amount in either of the 2 most recent fiscal years:

Unit: NT$1,000

Items	2024				2025				2026 up to the previous quarter (Note1)
	Title	Amount	% of the net purchase of the year	Relationship	Title	Amount	% of the net purchase of the year	Relationship	Title	Amount	% of the net purchase of the year	Relationship
None of the suppliers during this period exceed 10% of the total purchase					None of the suppliers during this period exceed 10% of the total purchase				None of the suppliers during this period exceed 10% of the total purchase
	Others	2,130,056	100%	-	Others	2,266,822	100%	-	Others	-	-	-
	Net purchase	2,130,056	100%		Net purchase	2,266,822	100%		Net purchase	-	-

(V) The amount and percentage of the list of any customers accounting for 10 percent or more of the Company's total sales (processing) amount in either of the 2 most recent fiscal years:

Unit: NT$1,000

	2024				2025				2026 up to the previous quarter(Note1)
Items	Title	Amount	% of the net sales of the year	Relationship	Title	Amount	% of the net sales of the year	Relationship	Title	Amount	% of the net sales of the year up to the previous quarter	Relationship
1	None of the customers during this period exceed 10% of the total sales				None of the customers during this period exceed 10% of the total sales				None of the customers during this period exceed 10% of the total sales
	Others	3,696,692	100%		Others	3,990,550	100%		Others	-	-
	Net sale	3,696,692	100%		Net sale	3,990,550	100%		Net sale	-	-

Note 1: As of the publication date of the annual report, there is no Q1 2026 financial information to be audited or reviewed by accountants.

Year		2024	2025	2026 (as of 3/31)
Number of Employees	Managerial personnel	254	253	258
	Specialized personnel	226	241	257
	The rank and file	589	560	527
	Total	1,069	1054	1042
Average Age		40.1	40.7	40.7
Average Service Tenure		6.5	7.2	7.4
Distribution of Educational Background	Doctoral degree	2	2	2
	Master’s degree	54	55	55
	College	504	501	494
	Senior High School	275	280	283
	Below High School	234	216	208

IV. Environmental protection expenditure: Total amount of loss (including compensation and violation of environmental regulations discovered by environmental audit, which shall specify the date and document number of penalty, provisions of violation, content of violation and content of penalty) due to pollution as of the most recent year and the date of publication of the annual report. It also discloses the current and future potential estimates and countermeasures. If it cannot be reasonably estimated, please explain the fact: no losses or significant penalty due to environmental pollution have occurred in the most recent year.

V. Labor relations:

(I) Employee benefit plans, continuing education, training, retirement systems and the status of their implementation, as well as the status of labor-management agreements and measures for preserving employees' rights and interests:

Employee benefit measures:

(1) Labor insurance, health insurance, group insurance

Employees are covered by the labor and health insurance policies. The Company also adds NT$10 million in accident insurance, NT$200,000 life insurance and NT$200,000 accidental medical insurance policies for all employees.

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(2) Subsidies for education and training and external courses

In addition to the internal education and training sessions for employees and new hires, the Company also provides opportunities at external training organizations. Subsidies to training expenses will be paid by the Company once the application for the external courses is approved.

(3) Regular health examination

To provide a safe working environment and prevent the occurrence of occupational disasters, the Company conducts free health examination for all members of the Company. The personnel at the plant floor are scheduled to have one free health examination every half a year, drivers and sales staff are given the examination once a year, while the other administrative staff are given the examination once every other year.

(4) An employee welfare committee is established to properly plan for and provide a variety of welfare measures:

A. Four official holidays (Spring Festival, Labor Day, Dragon Boat Festival, Mid-Autumn Festival).

B. Employee weddings, child birth, birthday, death in the family and scholarship.

C. Consolation for employees who are hospitalized due to injury or illness.

D. Employee trip allowance.

(5) Dragon Boat Festival, Mid-Autumn Festival and year-end bonus.

Provide employees with bonus allowance for Dragon Boat Festival, Mid-Autumn Festival and year-end bonus in accordance with the related policies on bonus allowance payment.

(6) Employee compensation

Based on the requirements of the Company Act, allocate 7% of the profit for the year as employees' compensation and disburse it in accordance with the Company's rules on the disbursement.

(7) Cash capital increase and employees' stock options

To build teamwork and synergy and have employees stay engaged with the Company's operations and share the future results, part of the newly issued shares are reserved for employees' stock options, and it is processed in accordance with the Company's "Cash Capital Increase and Employees' Stock Options" policy.

Continuing education: none.
Education and training:

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schedule annual education and training sessions aiming to allow employees to learn new knowledge to improve the working environment and the quality of work through a scientific, systematic and efficient inspirational education. New hires are given separate education and training programs so they can learn more about the Company's history and organizational structure as early as possible.

Retirement system and implementation status:

the Company has established a retirement plan for the employees based on the Labor Standards Act. The Company allocates monthly an amount equal to an appropriate percentage of employees' monthly salaries and wages to a retirement fund at the Bank of Taiwan, the trustee, under the name of the Supervisory Committee of Business Entities' Labor Retirement Reserve. Effective July 1, 2005, the Company has established a defined contribution pension plan under the Labor Pension Act (hereinafter referred to as the "Act"), allocating 6% of employees' monthly salaries and wages to the retirement fund account. On 2021/7/31, the Company negotiated with all employees who were under the old pension system (before July 1, 2005) to settle the amount for service tenure under the old system. The pensions under the old system have been paid in full, and all employees now are under the new system.

Labor agreement and various measurements protecting employees' right and interesting:

(1) The Company holds labor-management meetings in accordance with the Labor Standards Act to coordinate worker-employer relations, promote cooperation and increase work efficiency. The meetings are held regularly in accordance with the rules specified in the "Regulations for Implementing Labor-Management Meeting" to improve the communication and worker-employer relations.

(2) The Company has comprehensive personnel management regulations and has established workplace rules in accordance with the Labor Standards Act. The regulations and rules are publicly disclosed to all employees to follow upon the approval by the authority.

(3) The Company has established grievances filing procedures and disciplinary measures for sexual harassment prevention in accordance with the Act of Gender Equality in Employment. This is to protect employees' rights and interests and provide them a workplace free of sexual harassment.

(4) An employee welfare committee is established in accordance with the regulations and holds regular meetings to properly plan for and provide a variety of welfare measures.

(5) The Company has formed a Supervisory Committee of Labor Retirement Reserve which

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holds regular meeting. The Company allocates monthly an amount equal to an appropriate percentage of employees' monthly salaries and wages to a retirement fund at the Bank of Taiwan. The reserve fund is supervised by the Committee and pensions are distributed in accordance with the Labor Standards Act. On 2021/7/31, the Company negotiated with all employees who were under the old pension system to settle the amount for service tenure under the old system. The pensions under the old system have been paid in full

Other important agreements: None.

(II) Total amount of loss (including violation of the Labor Standards Act discovered by a labor audit, which shall specify the date and document number of penalty, provisions of violation, content of violation and content of penalty) due to labor dispute as of the most recent year and the date of publication of the annual report. It also discloses the current and future potential estimates and countermeasures. If it cannot be reasonably estimated, please explain the fact: None

VI. Information security management:

(I) Describe the information security risk management framework, the information security policy, the specific management plan, and the resources committed to the information security management, etc.

Information security governance organization

Sunny Friend Environmental Technology established the Information Security Policy in 2006. The Information Office coordinates the formulation, implementation, risk management and compliance audit of information security and protection-related policies.

Information security organizational structure

Information security policy:

The Information Office is responsible for promoting and implementing the "information security policy" of the regulations, which includes personnel management and information security education and training, computer system security management, network security management,

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system access control, application system development and maintenance security management, information asset security management, physical and environmental security management, planning and management of business continuity plans, information security audits, etc.

Specific management solutions

Category	Description	Related operations
Access control	Management measures for personnel account, authorization management, and system operation behaviors	Personnel account authorization management and review Regular inventory of personnel account authorization
Access management	Control measures for personnel access to internal and external systems and data transmission channels	Internal/external access control measures Control measures for channels of data leakage Track record analysis of operational behaviors
External threats	Potential vulnerability in internal systems, hacked channels and protective measures	Server/computer vulnerability detection and update measures Virus protection and detection of malware
System availability	System availability status and handling measures when service is interrupted	System/network availability monitoring and notification measures Contingency measures for service interruption Data duplication and backup measures, and local/remote backup measures Regular disaster recovery drills

Resources committed to information security management

Sunny Friend Environmental Technology continues to commit resources to information security affairs every year, including reinforcing information security defense equipment, improving information security management systems and education and training, establishing positions of one

information security manager and one information security specialist. Information security meetings once in 2025. For prevention of incidents, business continuity drills for the aspect of information are run every year focusing on the recovery, safekeeping and testing of key system data every week, which are all included in the information security routine.

(II)List the losses, possible impacts and countermeasures suffered from major information security incidents as of the most recent year and the date of publication of the annual report. For the incidents that cannot be reasonably estimated, describe the facts : None.

VII. Import contracts: Include all supply/sales contracts, technologies cooperation contracts, construction contracts, long-term loan agreements, and all other important contracts which are likely to impact the investors' rights, whether they are currently effective or have expired in the most recent fiscal year, and shall include the parties, major content, restrictive provisions and the commencement and termination dates of the contracts.

Nature of Contract	Counterparty	Contract Period	Important Information	Restrictions
Lease contracts	Industrial Development Bureau, Ministry of Economic Affairs	2018/2/10~2038/2/9 (20 years)	Contract for the lease of land at the Zhangbin plant	None
Cashback Reward Agreement	Shengang Township Office and Xianxi Township Office in Changhua County	November 2012 till the end of operations of Zhangbin plant.	After the acquisition of Zhangbin plant, the cashback reward is provided to Shengang Township Office and Xianxi Township Office and the reward is calculated based on the actual quantity of waste in ton processed by the plant.	None
Construction contract	Jia-Ding Construction	914 calendar days from the signing date to complete the project and submit the application for the use permit	#5 zone landfill construction	None
Construction contract	Yang Ji Construction	914 calendar days from the signing date to complete the project and submit the application for the use permit	#5 zone landfill construction	None
Long-term borrowings contract	First Commercial Bank of Taiwan	2024/11/20~2029/11/20	Mortgage loan	The collaterals are property, plant and equipment.
Long-term borrowings contract	Taiwan Cooperative Bank	2024/09/27~2027/09/27	Credit loan	None

Nature of Contract	Counterparty	Contract Period	Important Information	Restrictions
Long-term borrowings contract	Chang Hwa Bank	2025/08/29~2028/08/29	Credit loan	None
Long-term borrowings contract	First Commercial Bank of Taiwan	2023/02/06~2027/08/22	Credit loan	None
Long-term borrowings contract	First Commercial Bank of Taiwan	2023/03/28~2027/08/22	Credit loan	None
Long-term borrowings contract	First Commercial Bank of Taiwan	2023/12/28~2027/08/22	Credit loan	None
Long-term borrowings contract	First Commercial Bank of Taiwan	2024/06/27~2027/08/22	Credit loan	None
Long-term borrowings contract	First Commercial Bank of Taiwan	2025/12/29~2027/08/22	Credit loan	None
Long-term borrowings contract	Cathay United Bank	2025/08/17~2027/08/17	Credit loan	None
Long-term borrowings contract	Bank of Taiwan	2024/08/30~2027/08/30	Credit loan	None
Long-term borrowings contract	Taipei Fubon Bank	2025/06/13~2027/06/13	Credit loan	None
Long-term borrowings contract	Taipei Fubon Bank	2025/06/13~2027/06/13	Credit loan	None

Note: The contract period covers the most recent year (2025) and up to the date of the publication of the annual report and is the basis for this table.

Five. Review and Analysis of Financial Position and Results of Financial Performance and Risk Management

I. Financial position:

(I) Analysis of the changes in the financial position in the past two years

Unit: NT$ 1000, %

Item\Year\Items	2025	2024	Difference
			Amount	%
Current assets	1,912,459	2,065,951	(153,492)	-7.43%
Financial assets at amortized cost - Non-current	25,158	32,494	(7,336)	-22.58%
Property, plant and equipment	6,590,972	6,793,271	(202,299)	-2.98%
Right-of-use assets	636,677	689,589	(52,912)	-7.67%
Other non-current assets	248,550	269,597	(21,047)	-7.81%
Intangible assets	580,294	665,745	(85,451)	-12.84%
Other assets	64,456	70,681	(6,225)	-8.81%
Total assets	10,058,566	10,587,328	(528,762)	-4.99%
Current liabilities	1,236,456	1,260,052	(23,596)	-1.87%
Long-term borrowings	2,482,500	2,981,500	(499,000)	-16.74%
Other Liabilities	532,608	643,337	(110,729)	-17.21%
Total Liabilities	4,251,564	4,884,889	(633,325)	-12.96%
Capital	1,300,000	1,300,000	0	0.00%
Capital surplus	2,588,427	2,588,427	0	0.00%
Retained earnings	1,470,294	1,381,429	88,865	6.43%
Other equity interests	(41,290)	(25,922)	(15,368)	59.29%
Non-controlling Interests	489,571	458,505	31,066	6.78%
Total Equity	5,807,002	5,702,439	104,563	1.83%
The main reasons contributing to the significant changes (at least 10% between the periods and the amount accounts for more than 1% of the total asset) in assets, liabilities and shareholders' equity in the past two years, the impact and the future responsive measures:1. Long-term borrowings : Mainly due to increased repayment of long-term bank borrowings, resulting in reduction in long-term borrowings.2. Other Liabilities : A decrease in long-term payables - non-current liabilities, leading to a decrease in other liabilities.

(II) Impact: assessment determines that there is no significant impact.
(III) Future responsive measures: not applicable.

II. Financial Performance

(I) Analysis of the changes in the operating results in the past two years

Unit: NT$1,000

Year Items	2025	2024	Difference
			Amount	%
Net operating revenue	3,990,550	3,696,692	293,858	7.95%
Operating costs	(2,266,822)	(2,130,056)	(136,766)	6.42%
Gross profit	1,723,728	1,566,636	157,092	10.03%
Operating expenses	(775,780)	(849,180)	73,400	-8.64%
Operating profit	947,948	717,456	230,492	32.13%
Other income	27,712	49,564	(21,852)	-44.09%
Other benefits and losses	(28,479)	(47,227)	18,748	-39.70%
Financial cost	(36,393)	(48,521)	12,128	-25.00%
Net profit before tax from continuing operations	910,788	671,272	239,516	35.68%
Income tax expense	(222,435)	(113,119)	(109,316)	96.64%
Net income	688,353	558,153	130,200	23.33%
The main reasons contributing to the significant changes (at least 10% between the periods and the amount accounts for more than 1% of the total asset) in operating revenue, profit and earnings before taxes in the past two years, the impact and the future responsive measures: 1. Gross profit : Mainly due to an increase in operating revenue, resulting in an increase in gross profit from operations for 2025. 2. Operating profit : Mainly due to an increase in revenue, resulting in an increase in net operating income. 3. Net profit before tax from continuing operations : Mainly due to an increase in revenue, resulting in an increase in profit before tax. 4. Income tax expense : Mainly due to an increase in revenue, resulting in an increase in tax expense. 5. Net income : Mainly due to an increase in revenue, resulting in an increase in profit after tax.

(II) Expected sales and its bases: not applicable.
(III) Possible impact on the Company's future financials and business: assessment determines that there is no significant impact.
(IV) Future responsive measures: not applicable.

III. Cash flow

(I) Analysis of the changes in the cash flow in the past two years:

Unit: NT$1,000

Items	2025	2024	Difference(%)
Cash flow ratio (%)	118.25	86.18	37%
Cash flow adequacy ratio (%)	81.78	69.34	18%
Cash flow reinvestment ratio (%)	7.18	7.12	1%
Analysis of changes in the cash flow ratio: 1. Cash flow ratio : Mainly due to an increase in profit after tax, resulting in an increase in net cash inflow from operating activities and thus a rise in cash flow ratio in 2025 compared to 2024. 2. Cash flow adequacy ratio: Mainly due to an increase in profit after tax, resulting in an increase in net cash inflow from operating activities and thus a rise in Cash flow adequacy ratio in 2025 compared to 2024.

(II) Cash flow analysis for the coming year:

Unit: NT$1,000

Opening Balance (1)	Estimated cash flow from operating activities (2)	Estimated cash outflow for the year (3)	Estimated cash balance (shortfall) amount (1)+(2)-(3)	Remedy for insufficient cash
				Investment plan	Financing plan
655,554	1,403,933	(1,486,935)	572,552	-.	-.
1. Analysis of the changes in cash flow for the coming year: (1) Operating activities: Estimated net cash inflow of NT$1,403,933,000 from operating activities in 2026. (2) Investment activities: Estimated capital expenditure of NT$888,588,000 for new plant construction and equipment in 2026, resulting in the outflow of net cash from investment activities. (3) Financing activities: Estimated cash outflow of NT$598,347,000 from bank borrowings and cash dividend in 2026, resulting in the net cash inflow for financing activities. 2. Remedy and flow analysis for the estimated cash shortfalls: not applicable.

(III) Improvement plan for liquidity shortfall: not applicable.

IV. Effect upon financial operations of any major capital expenditures during the most recent fiscal year:

The sources of capital for major capital expenditures of the Company in recent years are mainly the Company's own funds and bank borrowings. There is no significant impact on the finances.

V. The Company's reinvestment policy for the most recent fiscal year, the main reasons for the generated profits/losses, the plan for improving re-investment profitability and investment plans for the coming year:

(I) Re-investment policy for the most recent fiscal year

Sunny Friend's re-investment is conducted in accordance with the "Measures for Handling Acquisition or Disposal of Assets" and the assessed benefits are submitted to the

board for approval first before being implemented.

(II) Main reasons contributing to the profit or loss, and the improvement plan

Unit: NT$1,000

Investee	Investment Policy	Direct or indirect Shareholding Percentage (%)	Recognized 2025 Investment Profit and Loss from Investee	Main Reasons Contributing to the Profit or Loss	Improvement Plan
Full Giant Resources Ltd.	Investment holdings	100%	(256,633)	Recognition of loss from subsidiary	-
Chin Hsin Environ Engineering Co., Ltd.	Clean and transportation of wastes	57.42%	142,251	Profit from cleaning and transportation of wastes	-
Cheng Shin Environmental Engineering Co., Ltd.	Cleaning and transportation of wastes	100%	15,559	Profit from cleaning and transportation of wastes	-
Liang Wei Environmental Engineering Co., Ltd.	Cleaning and transportation of wastes	100%	61,707	Profit from cleaning and transportation of wastes	-
Huan Hsin Precision Co., Ltd.	Manufacturing of building materials	0%	(121)	Still in the early stage of the Company's establishment, so the production has not yet reached the economy of scale.	The dissolution due to merger was completed on March 5, 2025.
Arise Profits Ltd.	Investment Business	100%	(156,809)	Recognition of loss from subsidiary	-
Beijing Ruentex Environmental Technology Co.,	Waste incineration	100%	(159,229)	Recognition of loss from subsidiary	-

Investee	Investment Policy	Direct or indirect Shareholding Percentage (%)	Recognized 2025 Investment Profit and Loss from Investee	Main Reasons Contributing to the Profit or Loss	Improvement Plan
Ltd.
Jiangsu Suqian Ruentex Environmental Control Co., Ltd.	Landfilling of waste	100%	(38,966)	The economy has not yet recovered, and that there are declines in the price and volume of waste.	Improve utilization
Langfang Ruentex Environmental Technology Co., Ltd.	Waste incineration	0%	(308)	Loss from foreign currency exchange	Completed the deregistration on March 13, 2025
Yuncheng Ruentex Environmental Technology Co., Ltd.	Incineration, physicochemical treatment and solidification and landfilling of wastes	100%	(124,077)	The economy has not yet recovered, and that there are declines in the price and volume of waste.	Improve utilization
Rizhao Panyue Ruentex Environmental Technology Co., Ltd.	Incineration and physicochemical of wastes	100%	(111,695)	The economy has not yet recovered, and that there are declines in the price and volume of waste.	Improve utilization

(III) Investment plan for the coming year:

The Company's investment strategy aims to comprehensively enhance the depth and breadth of waste treatment and resource services. The Company will carefully evaluate potential waste disposal markets to strengthen its overall market position and expand its service offerings, ensuring investment returns meet expectations and maximizing operational synergy and value.

VI. Analysis and assessment of risks in the most recent fiscal year and up to publication date (2026.3.31) of the annual report

(I) Impact of interest rate, exchange rate fluctuation and inflation on the Company's profit and loss and the future responsive measures:

The Company's infectious waste treatment and clean and transportation operations mainly serve the domestic market, so the receivables and payables are all denominated in NT$ and exchange rate fluctuations have no impact on the Company. The Company mainly uses own funds for its operations, and the they are allocated in short-term investments, certificate of deposits and demand deposits. Bank deposit rates have risen slightly in response to the central bank's interest rate hike, but bank deposit rates will remain low so the proportion of income from interest stays small. The Company has a sound financial structure, so the impact from changes in interest rates is not significant. Although bank lending rates have risen in recent years, inflation has slowed down slightly. In the future, the central bank will not raise the interest rate significantly, so changes in interest rate will not have much impact on the Company. If the interest rates experience a larger fluctuation in the future and the Company has the need for loans, the other financing tools in the capital market may be considered. The Company will also closely monitor the trends of interest rates and consider to borrow either at a fixed rate or floating rate to avoid the risk of interest rate fluctuations. The Company has not experienced significant impact on its profit and loss cause by inflation.

(II) The Company's policy regarding high-risk investments, highly leveraged investments, loans to other parties, endorsements, guarantees and derivatives transactions is the main reason contributing to its profits and losses and the response measures to be taken in the future:

(1) Based on its business philosophy emphasizing stability and prudence, the Company focuses on its specialized fields and does not become involved in high-risk and highly leveraged investments.

(2) The Company has formulated the "Operating Procedures for Endorsement Guarantee" and the "Operating Procedures for Loans to Others" as the reference for providing guarantee and loans to others. The loans can only be given to the subsidiaries.

(3) The Company has specified regulations regarding the trading of derivatives in its

190

"Measures for Handling Acquisition or Disposal of Assets." As of the publication date of the annual report, the Company has no derivatives transactions.

We have not yet engaged in derivatives trading as of the date of the publication of annual report.

(III) Research and development programs in the future and the expenditures expected: None.

(IV) Effect on the Company's financial operations of important policies adopted and changes in the legal environment at home and abroad, and measures to be taken in response:

The daily operations of the Company are handled in accordance with the domestic laws and regulations. The Company also pays attention to the development trends of the domestic and overseas policies and regulatory changes and provide information to the management for decision to adjust the Company's operations strategy. As of the publication date of the annual report, the Company has not been experienced any effect to the financial operations caused by changes in major policies or regulations both at home and abroad.

(V) Effect on the Company's financial operations of developments in science and technology as well as industrial change (including information security risks), and measures to be taken in response:

The Company is constantly monitoring the evolution of technologies in the industry and at the same time grasping the industry dynamics and market information of other players in the same industry to assess their impact to the Company's operations and make corresponding adjustments. The Company is currently adopting a sound financial management strategy and business operations, and as of the publication date of the annual report,

Impact of information system damage:

Impact: information system damage leads to downtime and affects the normal operations.

Response measures: to ensure uninterrupted operations, we have a backup server and conduct automatic data backup on a daily basis, and we also have dedicated personnel responsible for the monitoring of the operations.

Impact of malicious virus attack on the Internet and computers:

Impact: malicious attacks from destructive software may interfere with the Company's operations or lead to substantial expenses needed for remediation.

Response measures: (1) Daily automatic backup of data.

(2) Strengthen the Company's network security system, establish an email filtering system and install anti-virus software.

(3) Prepare information backup equipment.

191

the Company has not experienced a material impact to its operations caused by changes in technologies and the industry.

(VI) Effect on the Company's crisis management from changes in the Company's corporate image and measures to be taken in response:

We are in the environmental service industry and have been committed to communicating and maintaining good a corporate image since the establishment. We also comply with the requirements of various laws and regulations. As of the publication date of the annual report, we have not experienced any crisis from changes in the corporate image.

(VII) Expected benefits and possible risks associated with any merger and acquisitions, and mitigation measures being or to be taken:

We have not had any plans for merger and acquisition during the most recent fiscal year up to the date of publication of the annual report.

(VIII) Expected benefits and possible risks associated with any plant expansion, and mitigation measures being or to be taken:

The company's expansion plan was carefully evaluated based on the necessity of waste treatment market demand, and comprehensively considered investment benefits, capital expenditure recovery, and potential risk factors. Relevant costs were included in the overall decision-making process to improve the actual rate of return and reduce investment risks.

(IX) Risks associated with any consolidation of sales or purchasing operations, and mitigation measures being or to be taken:

Purchase:

We are engaged in the processing of medical and business wastes. We mainly collect wastes from our clients and then process them by using incineration, solidification, physicochemical treatment and landfills. The raw materials required are cement, chelating agent, heavy crude oil, diesel, liquid alkali and activated carbon and we have maintained close partnerships with our suppliers for many years. Our supplies have been stable and abundant the past two years and we have diversified our sourcing, keeping the purchases of materials from a single supplier under 25%. To diversify the sources, we always keep a certain level of collaborative relationships with other suppliers, so we have not experienced any problems in the supply of raw materials. Overall, the suppliers of raw materials have worked with us for years and they all provide quality products at a consistent delivery schedule. Each type of raw materials has several suppliers, so there is no risk of supplier concentration.

Sales:

We are engaged in the incineration, solidification, physicochemical treatment and landfilling after solidification of biomedical and business wastes. We maintain a stable

192

working relationship with our clients through our technologies, quality and services. We mainly serve the well-known domestic firms and medical institutions and have experienced a steady increase in revenue with our key clients. The proportion of sales may differ due to the status of business development and changes in strategies; however, there is not a single customer exceeding 30% of our total revenue, indicating that there is no customer concentration risk.

(X) Effect upon and risk to the Company in the event a major quantity of shares belonging to a director, supervisor, or shareholder holding greater than a 10 percent stake in the Company has been transferred or has otherwise changed hands, and mitigation measures being or to be taken: None.

(XI) Effect upon and risk to Company associated with any change in governance personnel or top management, and mitigation measures being or to be taken: None.

(XII) Litigation or non-litigation incidents:

Major litigation, non-litigation or administrative incidents that involve the Company and/or any director, supervisor, the general manager, any person with actual responsibility for the firm, any major shareholder holding a stake of greater than 10 percent and/or any other company or companies controlled by the Company and of which the results may have a significant impact on the Company's shareholders' interests or the securities prices:

The Company received one property tax notice for 2025 from Changhua County Local Taxation Bureau, and the amounts of tax payable were NT$1,559,562. However, the pollution control facilities constructed (using pollution control technology, with a waterproof roof above and dust-proof nets enclosed around to suppress the escape of particulate pollutants) in the Company's third burial area - No. 2, Zhangbin West 5th Road, Xianxi Township, Changhua County (subject to housing tax for the first time) were not houses, and the Company did not agree with the approved penalties of NT$1,559,562 for housing tax, and applied for a review, but the review initiated by the Company was rejected by the decision of the Changhua County Local Taxation Bureau after the review. The Company then filed a lawsuit with the Changhua County Government, which made a decision to reject the Company's lawsuit. The Company did not agree with the decision and filed an administrative lawsuit with the Taichung High Administrative Court's Local Administrative Litigation Division. The Company has appointed a lawyer to handle this case, and the rights have been properly claimed and requested, and the case is not detrimental to the Company and its shareholders.

(XIII) Other important risks, and mitigation measures being or to be taken: None

VII. Other important matters: None.

193

Six. Special Items to be Included

I. Information related to the company's affiliates

(I) Consolidated Report on Affiliated Companies Please refer to the MOPS > Single company
> Electronic document download
> Affiliates' Statements (https://mopsov.twse.com.tw/mops/web/t57sb01_q10).

(II) Consolidated financial statements of affiliates: Please refer to the MOPS > Single company
> Electronic document download
> Financial report
> Consolidated financial statement for 2025 (https://doc.twse.com.tw/serverjava/t57sb01?step=1&colorchg=1&seamon=&mtype=A&co_id=8341&year=114); The affiliates that are required to be included in the consolidated financial statements are the same as those included in the consolidated financial statements prepared in conformity with the Accounting Standards 7. Consequently, we do not prepare a separate set of consolidated financial statements.

(III) Affiliation report: We are not a subsidiary of other companies, so there is no need to prepare an affiliation report.

II. Status of private placement of securities during the most recent fiscal year or up to the date of publication of the annual report: None.

III. Other matters that require additional description: None.

VII. If any of the situations listed in Article 36, paragraph 2, subparagraph 2 of the Securities and Exchange Act, which might materially affect shareholders' equity or the price of the company's securities, have occurred during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report, such situations shall be listed: None.

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AI assistant

SF Annual Report 2025

52735_rns_2026-05-28_d286ae1d-722c-4821-a1ea-781d8dc5c557.pdf

SUNNY FRIEND ENVIRONMENTAL TECHNOLOGY CO.,LTD.

Table of Contents

One. Letter to Shareholders

I. 2025 Business Results

(I) Results of the business plan:

(II) Budget implementation:

IV. Impacts of the Competitive, Regulatory and Macroeconomic Environmental Factors

(I) Biomedical waste:

(II) Business waste:

Two. Corporate Governance Report

2. Majority corporate shareholders who are representatives of corporate shareholders

2. Operations of the Compensation Committee

II. Current year's results of sustainable development

(III) Clean coast adoption

(IV) Assist the government to improve social and environmental issues

1-2 Greenhouse Gas Assurance Information

1-2 Greenhouse gas reduction goals, strategies and concrete action plans

Three. Financing Activities

I. Capital and Shares

2. Market share

3. Main sources of waste and garbage

4. Future supply, demand and growth of the market

(1) Growing environmental awareness:

(2) Establishment and implementation of regulatory policies:

2. Production process

Five. Review and Analysis of Financial Position and Results of Financial Performance and Risk Management

I. Financial position:

II. Financial Performance

III. Cash flow

Six. Special Items to be Included

AI assistant

SF — Annual Report 2025

52735_rns_2026-05-28_d286ae1d-722c-4821-a1ea-781d8dc5c557.pdf

SUNNY FRIEND ENVIRONMENTAL TECHNOLOGY CO.,LTD.

Table of Contents

One. Letter to Shareholders

I. 2025 Business Results

(I) Results of the business plan:

(II) Budget implementation:

IV. Impacts of the Competitive, Regulatory and Macroeconomic Environmental Factors

(I) Biomedical waste:

(II) Business waste:

Two. Corporate Governance Report

2. Majority corporate shareholders who are representatives of corporate shareholders

2. Operations of the Compensation Committee

II. Current year's results of sustainable development

(III) Clean coast adoption

(IV) Assist the government to improve social and environmental issues

1-2 Greenhouse Gas Assurance Information

1-2 Greenhouse gas reduction goals, strategies and concrete action plans

Three. Financing Activities

I. Capital and Shares

2. Market share

3. Main sources of waste and garbage

4. Future supply, demand and growth of the market

(1) Growing environmental awareness:

(2) Establishment and implementation of regulatory policies:

2. Production process

Five. Review and Analysis of Financial Position and Results of Financial Performance and Risk Management

I. Financial position:

II. Financial Performance

III. Cash flow

Six. Special Items to be Included

More from SF

SF Annual Report 2025