Sunny Friend Environmental Technology Co., Ltd. and Subsidiaries
Consolidated Financial Statements and Independent Accounting Auditors' Review Report
Six Months Ended June 30, 2025 and 2024
(Stock Code: 8341)

Company : No. 1-20, Yuandong Road, Yuanchang
Address Township, Yunlin County
Telephone : (05) 788-5788

Notice to Readers:
For the convenience of readers and for information purpose only, the auditors’ report and the accompanying financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. In the event of any discrepancy between the English version and the original Chinese version or any differences in the interpretation of the two versions, the Chinese-language auditors’ report and financial statements shall prevail.

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Sunny Friend Environmental Technology Co., Ltd. and Subsidiaries
Six Months Ended 2025 and 2024 Consolidated Financial Statements and Accounting Auditors' Review Report
Table of Contents

Items	Page
I. Cover Page	1
II. Table of Contents	2 ~ 3
III. Independent Auditors' Review Report	4 ~ 5
IV. Consolidated Balance Sheet	6 ~ 8
V. Consolidated Statement of Comprehensive Income	9 ~ 10
VI. Consolidated Statement of Changes in Equity	11 ~ 12
VII. Consolidated Cash Flow Statement	13 ~ 14
VIII. Notes to the Consolidated Financial Statements	15 ~ 65
(I) Company history	15
(II) Date and procedures for passing the financial report	15
(III) Application of new and revised international financial reporting standards	15 ~ 16
(IV) Summary of significant accounting policies	16 ~ 21
(V) Critical accounting judgments and key sources of estimation and uncertainty	21
(VI) Statements of major accounting items	21 ~ 51

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Items	Page
(VII) Related-party transactions	52 ~ 54
(VIII) Pledged or mortgaged assets	54
(IX) Material contingent liabilities and unrecognized contractual commitments	54 ~ 55
(X) Losses due to major disasters	55
(XI) Major subsequent issues	55
(XII) Others	55 ~ 63
(XIII) Additional disclosures	63 ~64
(XIV) Operating segments information	64 ~ 65

Independent Auditors' Review Report
(2025) Cai-Shen-Bao-Zi No. 25001496

Sunny Friend Environmental Technology Co., Ltd.

Introduction

We have reviewed the accompanying consolidated balance sheets as of June 30, 2025 and 2024 and the consolidated statements of comprehensive income for the three months ended June 30, 2025 and 2024 and for the six months ended June 30, 2025 and 2024, changes in equity and cash flows for the years starting January 1 and ending on June 30, 2025 and 2024, as well as the notes to the consolidated financial statements (including the summary of major accounting policies), for Sunny Friend Environmental Technology and subsidiaries (known as Sunny Friend). The management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and IAS 34: Interim financial reporting endorsed and issued into effect by the Financial Supervisory Commission. The CPA is responsible for making conclusions on the consolidated financial statements based on the review results.

Scope of Review

The CPA performs the audit in accordance with the Statement on TWSRE No. 2410 Review of financial statements. The procedures performed when reviewing the consolidated financial statements include inquiries (mainly inquiring personnel responsible for financial and accounting tasks), analytical procedures and other review procedures. The scope of review is obviously smaller than that of an audit. Therefore, the accountant may not be able to detect all the major matters that can be identified through audit, so it is impossible to express an audit opinion.

Conclusion

According to our results of the review, the consolidated financial position of Sunny Friend Environmental Technology as of June 30, 2025 and 2024, and the results of the consolidated operations and the consolidated cash flows from January 1 to June 30, 2025 and 2024 in conformity with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and IAS 34: Interim financial reporting endorsed by the Financial Supervisory Commission.

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PricewaterhouseCoopers, Taiwan
Chin-Lien Huang
Accountant
Chih-Fan Yu
Financial Supervisory Commission
Approval Document Number: Jin-Guan-Zheng-Shen-Zi. 1100348083
Approval Document Number: Jin-Guan-Zheng-Shen-Zi. 1110349013
August 7, 2025

Sunny Friend Environment Technology Co., Ltd. and Subsidiaries
Consolidated Balance Sheet
June 30, 2025 and December 31 and June 30, 2024

| Asset | Notes | June 30, 2025 | | December 31, 2024 | | Unit: NT$1,000
June 30, 2024 | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | Amount | % | Amount | % | Amount | % | |
| Current assets | | | | | | | | |
| 1100 | Cash and cash equivalents | VI (I) | $ 679,737 | 7 | $ 741,113 | 7 | $ 1,041,984 | 10 |
| 1110 | Financial assets at fair value through profit or loss - Current | VI (II) | 166,531 | 2 | 280,440 | 3 | - | - |
| 1136 | Financial assets at amortized cost - Current | VI (I) (III) and VIII | 155,480 | 1 | 191,164 | 2 | 195,778 | 2 |
| 1140 | Contract assets - Current | VI (XX) and XII(II) | 71,242 | 1 | - | - | - | - |
| 1150 | Notes receivable, net | VI (IV) and XII (II) | 30,234 | - | 43,947 | 1 | 32,866 | - |
| 1170 | Accounts receivable, net | VI (IV) and XII (II) | 373,155 | 4 | 561,698 | 5 | 526,606 | 5 |
| 1180 | Accounts receivable- Related parties | VI (IV) · VII and XII (II) | 1,128 | - | 810 | - | 609 | - |
| 1200 | Other receivables | | 3,413 | - | 4,546 | - | 2,946 | - |
| 130X | Inventories | | 27,542 | - | 26,150 | - | 27,046 | - |
| 1410 | Prepayments | | 196,364 | 2 | 205,749 | 2 | 209,592 | 2 |
| 1470 | Other current assets | | 11,339 | - | 10,334 | - | 12,277 | - |
| 11XX | Total Current Assets | | 1,716,165 | 17 | 2,065,951 | 20 | 2,049,704 | 19 |
| Non-current assets | | | | | | | | |
| 1535 | Financial assets at amortized cost - Non-current | VI (I) (III) and VIII | 23,898 | - | 32,494 | - | 40,186 | - |
| 1600 | Property, plant and equipment | VI (V) and VIII | 6,494,327 | 66 | 6,793,271 | 64 | 6,870,172 | 64 |
| 1755 | Right-of-use assets | VI (VI) and VII | 663,375 | 7 | 689,589 | 6 | 703,469 | 7 |
| 1780 | Intangible assets | VI (VII) | 589,927 | 6 | 665,745 | 6 | 787,055 | 7 |
| 1840 | Deferred income tax assets | | 64,436 | 1 | 70,681 | 1 | 21,861 | - |
| 1900 | Other non-current assets | VI (V)(VIII) | 265,559 | 3 | 269,597 | 3 | 267,004 | 3 |
| 15XX | Total Non-current Assets | | 8,101,522 | 83 | 8,521,377 | 80 | 8,689,747 | 81 |
| 1XXX | Total Assets | | $ 9,817,687 | 100 | $ 10,587,328 | 100 | $ 10,739,451 | 100 |

(Continued on next page)

Sunny Friend Environment Technology Co., Ltd. and Subsidiaries
Consolidated Balance Sheet
June 30, 2025 and December 31 and June 30, 2024

| | Liabilities and Stockholders’ Equity | Notes | June 30, 2025 | | December 31, 2024 | | Unit: NT$1,000
June 30, 2024 | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | Amount | % | Amount | % | Amount | % |
| Current liabilities | | | | | | | | |
| 2100 | Short-term debts | VI (IX) and VIII | $ 32,000 | - | $ 43,448 | - | $ 67,222 | 1 |
| 2110 | Short-term notes payable | VI (X) | 29,964 | - | - | - | - | - |
| 2130 | Contract liabilities - Current | VI (XX) | 145,805 | 2 | 222,000 | 2 | 171,619 | 2 |
| 2150 | Notes payable | | 12,169 | - | 8,675 | - | 8,786 | - |
| 2170 | Accounts payable | | 151,580 | 2 | 155,732 | 2 | 168,155 | 2 |
| 2180 | Accounts payable - Related parties | VII | 870 | - | 1,428 | - | 355 | - |
| 2200 | Other payables | VI(XI) | 1,011,433 | 10 | 479,852 | 5 | 958,330 | 9 |
| 2230 | Current income tax liabilities | | 125,833 | 1 | 139,636 | 1 | 79,806 | 1 |
| 2250 | Provisions - Current | VI(XIV) | 10,877 | - | 20,707 | - | 27,327 | - |
| 2280 | Lease liabilities - Current | VI (VI) and VII | 31,176 | - | 27,336 | - | 26,605 | - |
| 2320 | Long-term liabilities - Current portion | VI(XII)(XV) and VIII | 263,344 | 3 | 113,227 | 1 | 255,634 | 2 |
| 2399 | Other current liabilities - Others | VI(IV) | 48,281 | 1 | 48,011 | 1 | 31,123 | - |
| 21XX | Total Current Liabilities | | 1,863,332 | 19 | 1,260,052 | 12 | 1,794,962 | 17 |
| Non-current liabilities | | | | | | | | |
| 2527 | Contract liabilities - Non current | VI(XX) | 7,790 | - | 4,675 | - | 6,977 | - |
| 2540 | Long-term borrowings | VI (XII) and VIII | 2,219,500 | 23 | 2,981,500 | 28 | 2,886,347 | 27 |
| 2550 | Provisions - Non current | VI (XIV) | 51,027 | 1 | 48,003 | 1 | 40,763 | - |
| 2570 | Deferred income tax liabilities | | 118,546 | 1 | 145,753 | 1 | 185,625 | 2 |
| 2580 | Lease liabilities - Non current | VI (VI) and VII | 338,785 | 3 | 333,918 | 3 | 345,641 | 3 |
| 2600 | Other non-current liabilities | VI (IV)(XV) | 97,978 | 1 | 110,988 | 1 | 139,326 | 1 |
| 25XX | Total Non-current Liabilities | | 2,833,626 | 29 | 3,624,837 | 34 | 3,604,679 | 33 |
| 2XXX | Total liabilities | | 4,696,958 | 48 | 4,884,889 | 46 | 5,399,641 | 50 |
| Equity attributable to shareholders of the parent company | | | | | | | | |
| | Capital | VI (XVII) | | | | | | |
| 3110 | Capital stock | | 1,300,000 | 13 | 1,300,000 | 12 | 1,300,000 | 12 |
| | Capital surplus | VI (XVIII) | | | | | | |
| 3200 | Capital surplus | | 2,588,427 | 27 | 2,588,427 | 25 | 2,586,698 | 24 |
| | Retained earnings | VI (XVIX) | | | | | | |
| 3310 | Legal reserve | | 824,947 | 9 | 776,927 | 7 | 776,927 | 7 |
| 3320 | Special reserve | | 25,922 | - | 115,699 | 1 | 115,699 | 1 |
| 3350 | Unappropriated earnings | | 324,880 | 3 | 488,803 | 5 | 200,205 | 2 |
| | Other equity interests | | | | | | | |
| 3400 | Other equity interests | | ( 374,601) | ( 4) | ( 25,922) | - | ( 45,499) | - |

(Continued on next page)

Sunny Friend Environment Technology Co., Ltd. and Subsidiaries
Consolidated Balance Sheet
June 30, 2025 and December 31 and June 30, 2024
Unit: NT$1,000

	Liabilities and Stockholders’ Equity	Notes	June 30, 2025		December 31, 2024		June 30, 2024
			Amount	%	Amount	%	Amount	%
31XX	Equity attributable to shareholders of the parent company		4,689,575	48	5,243,934	50	4,934,030	46
36XX	Non-controlling Interests	IV (III) and VI (XXVIII)	431,154	4	458,505	4	405,780	4
3XXX	Total stockholders’ equity		5,120,729	52	5,702,439	54	5,339,810	50
	Material contingent liabilities and unrecognized contractual commitments	IX
	Major Subsequent Issues	XI
3X2X	Total Liabilities and Equity		$ 9,817,687	100	$ 10,587,328	100	$ 10,739,451	100

Please refer to the accompanying notes to the financial statements as they are an integral part of the consolidated financial report.

Chairman: Fang-Cheng Chang
Managerial Officer: Fang-Cheng Chang
Principal Accounting Officer: Ming-Hung Hsieh

Sunny Friend Environment Technology Co., Ltd. and Subsidiaries
Consolidated Statement of Comprehensive Income
January 1 to June 30, 2025 and 2024
(In Thousands of New Taiwan Dollars Except Earnings Per Share)

	Items	Notes	Three Months Ended June 30				Six Months Ended June 30
			2025		2024		2025		2024
			Amount	%	Amount	%	Amount	%	Amount	%
4000	Operating revenue	VI (XX), VII and IX	$ 914,497	100	$ 948,909	100	$ 1,879,802	100	$ 1,712,210	100
5000	Operating costs	VI (VII) (XXV)(XXVI) + VII and IX	( 525,591)	( 57)	( 539,510)	( 57)	( 1,066,150)	( 57)	( 1,041,871)	( 61)
5900	Gross profit		388,906	43	409,399	43	813,652	43	670,339	39
	Operating expenses	VI (VII) (XXV)(XXVI)
6100	Marketing expenses		( 44,309)	( 5)	( 70,169)	( 7)	( 98,392)	( 5)	( 124,043)	( 7)
6200	General and administrative expenses		( 132,427)	( 15)	( 147,400)	( 16)	( 271,407)	( 14)	( 278,662)	( 16)
6300	Research and development expenses		( 885)	-	( 650)	-	( 885)	-	( 729)	-
6450	Expected loss on credit impairment	XII (II)
			( 2,297)	-	( 10,322)	( 1)	( 2,376)	-	( 14,707)	( 1)
6000	Total operating expenses		( 179,918)	( 20)	( 228,541)	( 24)	( 373,060)	( 19)	( 418,141)	( 24)
6900	Operating profit		208,988	23	180,858	19	440,592	24	252,198	15
	Non-operating income and expenses
7100	Interests income	VI (III) (XXI)	2,356	-	2,779	-	3,451	-	4,385	-
7010	Other income	VI (XXII)	5,044	1	6,882	1	12,250	1	12,993	1
7020	Other benefits and losses	VI (II)(XXIII)	( 29,090)	( 3)	11,267	1	4,619	-	28,680	2
7050	Financial cost	VI (VI) (XXIV) and VII	( 7,789)	( 1)	( 11,825)	( 1)	( 17,665)	( 1)	( 23,575)	( 2)
7000	Total operating income and expenses		( 29,479)	( 3)	9,103	1	2,655	-	22,483	1
7900	Profit before income tax		179,509	20	189,961	20	443,247	24	274,681	16
7950	Income tax expense	VI (XXVII)	( 33,872)	( 4)	( 45,080)	( 5)	( 107,856)	( 6)	( 64,522)	( 4)
8200	Profit for the year		$ 145,637	16	$ 144,881	15	$ 335,391	18	$ 210,159	12
	Items that will not be re-classified to profit or loss
8361	Exchange differences arising on the translation of foreign operations		($ 400,730)	( 44)	$ 22,484	3	($ 348,679)	( 19)	$ 71,352	4
8300	Comprehensive income for the year (Net)		($ 400,730)	( 44)	$ 22,484	3	($ 348,679)	( 19)	$ 71,352	4

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Sunny Friend Environment Technology Co., Ltd. and Subsidiaries

Consolidated Statement of Comprehensive Income

January 1 to June 30, 2025 and 2024

(In Thousands of New Taiwan Dollars Except Earnings Per Share)

	Items	Notes	Three Months Ended June 30				Six Months Ended June 30
			2025		2024		2025		2024
			Amount	%	Amount	%	Amount	%	Amount	%
8500	Total comprehensive income for the year		($ 255,093)	( 28)	$ 167,365	18	($ 13,288)	( 1)	$ 281,511	16
	Net income attributable to:
8610	Shareholders of the parent company		$ 120,524	13	$ 131,488	14	$ 288,320	15	$ 191,605	11
8620	Non-controlling interest		$ 25,113	3	$ 13,393	1	$ 47,071	3	$ 18,554	1
	Total of comprehensive income attributable to:
8710	Shareholders of the parent company		($ 280,206)	( 31)	$ 153,366	17	($ 60,359)	( 4)	$ 261,805	15
8720	Non-controlling interest		$ 25,113	3	$ 13,999	1	$ 47,071	3	$ 19,706	1
	Earnings per share	VI (XXIX)
9750	Basic earnings per share		$	0.93	$	1.01	$	2.22	$	1.47
9850	Diluted earnings per share		$	0.92	$	1.01	$	2.21	$	1.47

Please refer to the accompanying notes to the financial statements as they are an integral part of the consolidated financial report.

Chairman: Fang-Cheng Chang

Managerial Officer: Fang-Cheng Chang

Principal Accounting Officer: Ming-Hung Hsieh

Sunny Friend Environment Technology Co., Ltd. and Subsidiaries

Consolidated Statement of Changes in Equity

January 1 to June 30, 2025 and 2024

	Equity attributable to shareholders of the parent company								Unit: NT$1,000
	Retained earnings					Other equity interests		Non-controlling interest
	Capital stock	Capital surplus	Legal reserve	Special reserve	Unappropriated earnings	Exchange differences arising on the translation of foreign operations	Total
January 1 to June 30,2024
Balance January 1, 2024	$ 1,300,000	$ 2,558,820	$ 736,071	$ 65,986	$ 463,169	($ 115,699)	$ 5,008,347	$ 258,968	$ 5,267,315
Profit for the year	VI (XXVIII)	-	-	-	191,605	-	191,605	18,554	210,159
Other comprehensive income for the year	VI (XXVIII)	-	-	-	-	70,200	70,200	1,152	71,352
Total comprehensive income for the year	-	-	-	-	191,605	70,200	261,805	19,706	281,511
Appropriation of 2023earnings:	VI (XIX)
Legal reserve		-	-	40,856	-(40,856)	-	-	-	-
Special reserve		-	-	-	49,713 (49,713)	-	-	-	-
Cash dividends		-	-	-	-(364,000)	-(364,000)	-(364,000)	-(364,000)	-(364,000)
Distribution of cash from capital surplus	VI (XVIII)	-(130,000)	-	-	-	-(130,000)	-(130,000)	-(130,000)	-(130,000)
Share-based payment	VI (XVI)	3,735	-	-	-	3,735	3,735	7,470
The net difference between the fair value of the consideration paid or received from acquiring or disposing of subsidiaries and the carrying amounts of the subsidiaries	IV(III) - VI(XVIII)	-	27,098	-	-	-	27,098 (27,189)(91)
Cash dividends paid to non-controlling interests	VI(XXVIII)	-	-	-	-	-	-(31,924)(31,924)
Changes in ownership interests in subsidiaries	VI(XXIII)	-	127,045	-	-	-	127,045	182,484	309,529
Balance June 30, 2024	$ 1,300,000	$ 2,586,698	$ 776,927	$ 115,699	$ 200,205 ($ 45,499)	$ 4,934,030	$ 405,780	$ 5,339,810
January 1 to June 30,2025
Balance January 1, 2025	$ 1,300,000	$ 2,588,427	$ 776,927	$ 115,699	$ 488,803 ($ 25,922)	$ 5,243,934	$ 458,505	$ 5,702,439
Profit for the year	VI (XXVIII)	-	-	-	288,320	-	288,320	47,071	335,391
Other comprehensive income for the year	-	-	-	-	-(348,679) (348,679)	-(348,679)	-(348,679)	-(348,679)	-(348,679)
Total comprehensive income for the year	-	-	-	-	288,320(348,679) (60,359)	47,071(13,288)

Sunny Friend Environment Technology Co., Ltd. and Subsidiaries
Consolidated Statement of Changes in Equity
January 1 to June 30, 2025 and 2024

	Equity attributable to shareholders of the parent company								Unit: NT$1,000
			Retained earnings			Other equity interests
	Notes	Capital stock	Capital surplus	Legal reserve	Special reserve	Unappropriated earnings	Exchange differences arising on the translation of foreign operations	Total	Non-controlling interest	Total stockholders’ equity
Appropriation of 2024earnings:	VI (XIX)
Legal reserve		-	-	48,020	-(	48,020)	-	-	-	-
Reversal Special reserve		-	-	-(	89,777)	89,777	-	-	-	-
Cash dividends		-	-	-	-(	494,000)	-(	494,000)	-(	494,000)
Cash dividends paid to non-controlling interests	VI(XXVIII)	-	-	-	-	-	-	-(	74,422)(	74,422)
Balance June 30, 2025		$1,300,000	$2,588,427	$824,947	$25,922	$324,880(	$374,601)	$4,689,575	$431,154	$5,120,729

Please refer to the accompanying notes to the financial statements as they are an integral part of the consolidated financial report.

Chairman: Fang-Cheng Chang
Managerial Officer: Fang-Cheng Chang
Principal Accounting Officer: Ming-Hung Hsieh

Sunny Friend Environment Technology Co., Ltd. and Subsidiaries
Consolidated Cash Flow Statement
January 1 to June 30, 2025 and 2024

	Notes	Six Months Ended June 30
		2025	2024
Cash Flow from Operating Activities
Profit before income tax		$ 443,247	$ 274,681
Adjustment
Adjustments to reconcile profit (loss)
Net gain on financial assets at fair value through profit and loss	VI(II)(XXIII)	( 2,178 )	-
Expected loss on credit impairment	VI(XXV)and XII(II)	2,376	14,707
Loss on disposal of property, plant and equipment	VI (XXIII)	388	11,552
Loss on disposal of subsidiary	VI (XXIII)	2,066	-
Depreciation expense	VI (V) (VI)(XXV)	310,131	289,995
Amortization expense	VI (VII)(XXV)	39,151	33,876
Interests income	VI (XXI)	( 3,451 )	( 4,385 )
Interest expenses	VI (XXIV)	17,665	23,575
Employee share options expense	VI(XVI)(XXVI)	-	7,470
Changes in operating assets and liabilities
Changes in operating assets
Financial assets at fair value through profit or loss		116,087	-
Contract assets - Current		( 71,242 )	-
Notes receivable		11,855	( 3,388 )
Accounts receivable		170,390	11,265
Accounts receivable - Related parties		( 318 )	( 362 )
Other receivables		1,072	9,969
Inventories		( 2,126 )	( 1,844 )
Prepayments		1,379	( 6,225 )
Other current assets		( 1,848 )	( 2,401 )
Changes in operating liabilities
Contract liabilities - Current and Non current		( 67,968 )	12,009
Notes payable		3,494	( 1,668 )
Accounts payable		279	37,783
Accounts payable - Related parties		( 558 )	( 13 )
Other payables		( 67,395 )	( 30,300 )
Provisions - Current and Non current	VI (XIV)	3,024	3,308
Other current liabilities		4,770	1,544
Other non-current liabilities		( 4,816 )	( 4,845 )
Cash flow from operating activities		905,474	676,303
Interest received		2,951	4,576
Interest paid		( 17,934 )	( 23,459 )
Income tax paid		( 140,148 )	( 81,528 )
Net cash generated by operating activities		750,343	575,892

(Continued on next page)

Sunny Friend Environment Technology Co., Ltd. and Subsidiaries
Consolidated Cash Flow Statement
January 1 to June 30, 2025 and 2024
Unit: NT$1,000

	Notes	Six Months Ended June 30
		2025	2024
Cash Flow from Investing Activities
Acquisition of financial assets at amortized cost		($ 152,119 )	($ 114,226 )
Disposal of financial assets at amortized cost		182,610	99,504
Acquisition of property, plant and equipment	VI (XXX)	( 160,198 )	( 294,848 )
Proceeds from disposal or property, plant and equipment		190	764
Acquisition of intangible assets	VI (XXX)	( 8,614 )	( 9,214 )
Refundable deposits paid (listed in “Other non-current assets”)		( 19,212 )	( 17,582 )
Refundable deposits refunded (listed in “Other non-current assets”)		11,686	8,057
Increase in other non-current assets		( 36,642 )	( 42,455 )
Net cash used in investing activities		( 182,299 )	( 370,000 )
Cash Flow from Financing Activities
Decrease in short-term loans	VI (XXXI)	( 11,439 )	( 12,995 )
Increase in short-term notes payable	VI (XXXI)	30,000	-
Increase in long-term borrowings	VI (XXXI)	-	200,000
Re-payment in long-term borrowings	VI (XXXI)	( 612,000 )	( 337,850 )
Increase in guarantee deposits received (listed in “Other current liabilities” and “Other non-current liabilities”)	VI (XXXI)	21,426	12,473
Decrease in guarantee deposits received (listed in “Other current liabilities” and “Other non-current liabilities”)	VI (XXXI)	( 19,400 )	( 14,440 )
Re-payment of principal of lease liabilities	VI (XXXI)	( 14,891 )	( 13,788 )
Cash dividends distributed by subsidiaries	VI(XXVIII)	-	( 31,924 )
Cash capital increase in subsidiary	VI(XXVIII)	-	309,529
Acquisition of subsidiary’s equity	VI(XXVIII)	-	( 91 )
Net cash (used in) generated by financing activities		( 606,304 )	110,914
Effect of exchange rate changes on cash and cash equivalents		( 23,116 )	( 33,891 )
Net increase in cash and cash equivalents		( 61,376 )	282,915
Beginning of year cash and cash equivalents		741,113	759,069
End of year cash and cash equivalents		$ 679,737	$ 1,041,984

Please refer to the accompanying notes to the financial statements as they are an integral part of the consolidated financial report.

Chairman: Fang-Cheng Chang
Managerial Officer: Fang-Cheng Chang
Principal Accounting Officer: Ming-Hung Hsieh

Sunny Friend Environmental Technology Co., Ltd. and Subsidiaries
Notes to Consolidated Financial Statement
For The Six Months Ended June 30, 2025 And 2024
(Reviewed, Not Audited)
Unit: NT$1,000
(Unless otherwise specified)

I. Company history

Sunny Friend Environmental Technology Co., Ltd. (hereinafter referred to as the “Company”) was established in Taiwan on November 29, 1994. Originally named as “Sunny Friend Waste Treatment Co., Ltd.,” the Company was renamed to the current name at the shareholders; meeting in May 2001. The main areas of business of the Company and the subsidiaries (collectedly referred to as the Corporate Group) cover:

Medical waste incineration.
Treatment of hazardous business waste, infectious medical waste, general waste and general business waste.
Installation engineering for waste cleaning equipment. Environmental engineering consulting.
Manufacturing of pollution control equipment.
Specialized construction for environmental protection engineering.
Manufacturing and sales of plastic building materials.

The Company's stock has been listed in the Taiwan Stock Exchange since March 23, 2015.

II. Date and Procedures for Passing the Financial Report

The accompanying consolidated financial statements were approved and authorized for issuance by the Board of Directors on August 7, 2025.

III. Application of New and Revised International Financial Reporting Standards

(I) The impact from adopting the newly released and revised International Financial Reporting Standards recognized by the Financial Supervisory Commission.

The following table summarizes the applicable newly released, corrected and amended standards and interpretations of the International Financial Reporting Standards recognized by the Financial Supervisory Commission in 2025:

Newly released / corrected / amended standards and interpretations	Effective Date Issued by IASB
Amendment to IAS No. 21 “Lack of Convertibility”	January 1, 2025

The Corporate Group believes that the adoption of aforementioned IFRSs will not have a significant effect on financial position and performance.

(II) Impact of the newly released and amended IFRS recognized by the FSC not yet adopted by the Company

-15-

-16-

Newly released / corrected / amended standards and interpretations	Effective Date Issued by IASB
Amendments to IFRS 9 and IFRS 7 "Amendments to the Classification and Measurement of Financial Instruments"	January 1, 2026
Amendment to IFRS 9 and IFRS 7 regarding "Contracts Referencing Nature-dependent Electricity"	January 1, 2026
IFRS 17 - Insurance contracts	January 1, 2023
Amendment to IFRS 17 - Insurance contracts	January 1, 2023
Amendment to IFRS 17 “Initial Application of IFRS 17 and IFRS 9 - Comparative Information”	January 1, 2023
Annual Improvements to IFRS Accounting Standards - Volume 11	January 1, 2026

(III) IFRSs issued by the IASB but not yet recognized by the FSC

The following table summarizes the applicable newly released, corrected and amended standards and interpretations of the International Financial Reporting Standards issued by the IASB but not yet recognized by the FSC:

Newly released / corrected / amended standards and interpretations	Effective Date Issued by IASB
IFRS 10 and IAS 28 amendments, Sale or contribution of assets between an investor and its associate or joint venture	To be determined by the IASB
IFRS 18 “Presentation and Disclosures in Financial Statements” Amendments to IFRS 19 "Subsidiaries without Public Accountability: Disclosure"	January 1, 2027
January 1, 2027

Except for the following, the Corporate Group believes that the adoption of aforementioned IFRSs will not have a significant effect on the financial position and performance.

IFRS 18 “Presentation and Disclosures in Financial Statements”

IFRS 18 “Presentation and Disclosures in Financial Statements” replaces IAS 1 and updates the structure of the statement of comprehensive income, adds disclosures on management performance measurement, and strengthens the summary and segment principles applied to the main financial statements and notes.

IV. Summary of Significant Accounting Policies

Significant accounting policies are the same as those in Note IV of the 2024 consolidated financial statements, except for the compliance statements, basis of preparation, basis of consolidation, and explanations of additions. These policies have been consistently applied to all the periods presented, unless otherwise stated.

(I) Compliance statement

The consolidated financial report is prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and the IAS 34: Interim financial reporting endorsed and issued into effect by the Financial Supervisory Commission.
The consolidated financial report should be read in conjunction with the 2024 consolidated financial report.

(II) Basis of preparation

These consolidated financial statements have been prepared under the historical cost convention.
The preparation of financial statements in conformity with the IFRS, IAS, interpretations and

announcements endorsed by the Financial Supervisory Commission requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Group's accounting policies. The areas involving a higher degree of judgment or complexity or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note V.

(III) Basis of consolidation

The basis for the preparation of consolidated financial statements

The principles for preparing the consolidated financial report are the same as those of the 2024 consolidated financial report.

Subsidiaries included in the consolidated financial statements:

Name of Investor	Name of Subsidiary	Main Business Activity	Ownership (%)			Description
			June 30, 2025	December 31, 2024	June 30, 2024
The Company	Chin Hsin
Environmental Engineering Co., Ltd.
(Chin Hsin)	Disposal of medical waste	57.42	57.42	57.42	Note 1
"	Full Giant Resources Ltd. (Full Giant)	Holding company	100.00	100.00	100.00
Chin Hsin	Liang Wei
Environmental Engineering Co., Ltd.
(Liang Wei)	Disposal of medical waste	100.00	100.00	100.00
"	Cheng Shin
Environmental Engineering Co., Ltd.
(Cheng Shin)	Disposal of medical waste	100.00	100.00	100.00
"	Huan Hsin Precision Co., Ltd. (Huan Hsin)	Manufacturing of building materials	-	100.00	66.67	Note 2
Full Giant	Arise Profits Ltd.(Arise)	Investment	100.00	100.00	100.00
"	Langfang Ruentex Environmental Technology (Langfang Ruentex)	Environmental sanitation and pollution control service	-	100.00	100.00	Note 3
"	Yuncheng Ruentex Environmental Technology Co., Ltd.
(Yuncheng Ruentex)	Environmental sanitation and pollution control service	63.35	-	-	Note 6
"	Rizhao Panyue Environmental Technology Co., Ltd.
(Rizhao Panyue)	Environmental sanitation and pollution control service	-	-	10.00	Note 4、5

Name of Investor	Name of Subsidiary	Main Business Activity	Ownership (%)			Description
			June 30, 2025	December 31, 2024	June 30, 2024
Arise	Jiangsu Suqian Ruentex Environmental Technology Co., Ltd. (Suqian Ruentex)	Environmental sanitation and pollution control service	48.05	-	-	Note 6
	Beijing Ruentex Environmental Technology (Beijing Ruentex)	Environmental sanitation and pollution control service	100.00	100.00	100.00	Note 6
	Suqian Ruentex	Environmental sanitation and pollution control service	51.95	100.00	100.00	Note 6
"	Yuncheng Ruentex	Environmental sanitation and pollution control service	36.65	100.00	100.00	Note 6
	Rizhao Panyue	Environmental sanitation and pollution control service	100.00	100.00	90.00	Note 4、5

Note 1 For the purpose of issuing new shares for public underwriting before the IPO, the board resolution of the meeting held on March 28, 2024 approved a cash capital increase by issuing 6,000 thousand shares at NT$45 per share for the Group's subsidiary, Chin Hsin Environmental Engineering. All shares are ordinary shares. June 14, 2024 is the base date of capital increase, and the change registration is completed on July 11, 2024. The company did not subscribe to the shares in proportion to the shareholding percentage, so the shareholding dropped to 57.42%, and recognized a change of NT$127,045 in ownership interest, capital reserves - recognized changes in ownership interests in the subsidiary. For details on transactions with non-controlling interests, please refer to Note VI (XXVIII).
Note 2 Chin Hsin, a subsidiary of the Group, purchased 1,000 thousand shares of Huan Hsin at NT$5 in December 2024, increasing the shareholding from 66.67% to 100%. The relevant change registration procedures have been completed. The board resolution on December 27, 2024 approved the subsidiary Chin Hsin's short-form merger with Huan Hsin in accordance with the Business Mergers and Acquisitions Act in order to strengthen its business management. The merger record date is February 3, 2025. The process has been completed.
Note 3 The Group resolved to withdraw from the investment project of its subsidiary, Langfang, as the project could not proceed due to the lack of suitable land and overall planning considerations. The cancellation procedure was completed on March 13, 2025. On July 22, 2025, the Ministry of Economic Affairs Investment Commission approved the revocation of the aforementioned investment (Approval No. Jing-Shou-Shen-Zi 11420125170). The investment funds have been repatriated to Full Giant.

Note 4 The Company's third-tier subsidiary Beijing Ruentex signed an equity transfer agreement with an unrelated party in January 2024. The Group purchased 10% of the equity of Rizhao Panyue for RMB 20,000. Beijing Ruentex's shareholding increased from 80% to 90%, and the Company's direct and indirect holdings of Rizhao Panyue's equity increased from 90% to 100%. The capital surplus - difference between the fair value of the consideration paid or received from acquiring or disposing of subsidiary and the carrying amounts of the subsidiary of NT$27,098 was recognized. For details on transactions with non-controlling interests, please refer to Note VI (XXVIII).

Note 5 In order to improve the group's operating synergy, management costs and operational efficiency, the Group's subsidiary Full Giant conducted organizational restructuring of its holding of Rizhao Panyue and Beijing Ruentex, held by the Group's second-tier subsidiary Arise. The restructuring has been approved by the board resolution of the Company's 4th tier subsidiary Rizhao Panyue on October 1, 2024, with Beijing Ruentex acquiring 10% equity of Rizhao Panyue held by Full Giant for RMB 20,000.

Note 6 The resolution of the Company's Board at the meeting held on September 24, 2024 approved the subsidiary Full Giant's capitalization of debt from its funds lent to its subsidiary in China. It is estimated that the capitalization amount for Suqian Ruentex will be USD 13,500 thousand, that for Yuncheng Ruentex will be USD 8,500 thousand and RMB 175,950 thousand, and that for Beijing Ruentex will be USD 3,800 thousand.

Regarding the conversion of debts into equity for Beijing Ruentex, the matter is still in progress. For Suqian Ruentex, the capitalization of debts was approved by the Ministry of Economic Affairs Investment Commission on November 28, 2024, with the capital increase base date set as April 25, 2025. Follow-up matters have been proceeding according to the investment plan and were still ongoing as of August 7, 2025. For Yuncheng Ruentex, the capitalization of debts was approved on November 28, 2024, with the capital increase base date set as March 18, 2025, and the change registration was completed on May 15, 2025.

Subsidiaries not included in the consolidated financial statements: None.
Adjustments for subsidiaries with different balance sheet dates: None.
Materiality constraint: None.
Subsidiaries that have non-controlling interests that are material to the Corporate Group:

(1) As of June 30, 2025, December 31, 2024 and June 30, 2024 the non-controlling interest amounted to $431,154, $458,505 and $405,780, respectively. The information on noncontrolling interest and respective subsidiaries is as follows:

Name of Subsidiary	Main location of business	Non-controlling Interests
		June 30, 2025		December 31, 2024
		Amount	Ownership in %	Amount	Ownership in %
Chin Hsin	Taiwan	$431,154	42.58%	$458,505	42.58%
				Non-controlling Interests
Name of Subsidiary	Main location of business			June 30, 2024
				Amount	Ownership in %
Chin Hsin	Taiwan			$397,405	42.58%

(2) Aggregate financial information of subsidiaries:

Balance Sheet

	Chin Hsin
	June 30, 2025	December 31, 2024	June 30, 2024
Current assets	$ 722,898	$ 840,847	$ 808,396
Non-current assets	930,928	702,560	619,754
Current liabilities	( 601,110)	( 410,066)	( 412,940)
Non-current liabilities	( 40,161)	( 56,530)	( 73,520)
Total net assets	1,012,555	1,076,811	941,690
Non-controlling interest	-	-	( 8,375)
Shareholders of the parent	$ 1,012,555	$ 1,076,811	$ 933,315
Comprehensive Income
	Chin Hsin
---	---	---
	For the three months ended June 30, 2025	For the three months ended June 30, 2024
Revenue	$ 188,000	$ 157,748
Profit before income tax	73,141	51,447
Income tax expense	( 14,165)	( 10,715)
Income for the year	58,976	40,732
Total comprehensive income for the year	$ 58,976	$ 40,732
Total of comprehensive income attributable to Non-controlling interest	$ 25,113	$ 14,315
Dividends paid to non-controlling interests	$ 74,422	$ 31,924
	Chin Hsin
	For the six months ended June 30, 2025	For the six months ended June 30, 2024
Revenue	$ 360,693	$ 288,532
Profit before income tax	137,719	88,353
Income tax expense	( 27,175)	( 18,501)
Income for the year	110,544	69,852
Total comprehensive income for the year	$ 110,544	$ 69,852
Total of comprehensive income attributable to Non-controlling interest	$ 47,071	$ 24,075
Dividends paid to non-controlling interests	$ 74,422	$ 31,924

Cash Flow Statement

	Chin Hsin
	For the six months ended June 30, 2025	For the six months ended June 30, 2024
Net cash generated by operating activities	$ 250,098	$ 92,551
Net cash used in investing activities	( 277,453)	( 61,587)
Net cash generated by financing activities	18,365	229,445
(Decrease) increase in cash and cash equivalents	( 8,990)	260,409
Beginning of year cash and cash equivalents	328,264	315,491
End of year cash and cash equivalents	$ 319,274	$ 575,900

(IV) Income taxes

Income tax expenses of the interim period are calculated based on the estimated annual average effective tax rate applied to the pre-tax profit and loss of the interim period, and the relevant information shall be disclosed in accordance with the policies of the 2024 consolidated financial reports.

V. Critical Accounting Judgments and Key Sources of Estimation and Uncertainty

There are no major changes, please refer to Note V of the 2024 consolidated financial statements.

VI. Statements of Major Accounting Items

(I) Cash and cash equivalents

	June 30, 2025	December 31, 2024	June 30, 2024
Cash on hand and working capital	$ 996	$ 1,286	$ 1,264
Checking accounts and demand deposits	487,655	451,462	461,499
Time deposits	191,086	288,365	579,221
	$ 679,737	$ 741,113	$ 1,041,984

The Group associates with a variety of financial institutions, all with high credit quality, to disperse credit risk, so it expects that the probability of counterparty default is remote.
The Group pledged cash and cash equivalents of $11,386, $3,195 and $895, on June 30, 2025, December 31, 2024 and June 30, 2024, respectively, to “Financial assets at amortized cost - Current” and amounts of $23,898, $32,243 and $39,935 on June 30, 2025, December 31, 2024 and June 30, 2024, respectively to “Financial assets at amortized cost - Non-current,” based on their liquidity. Please see Note VI (III) and VIII for description.
The Group recognized time deposits of $144,094, $187,969 and $194,883 with a maturity of more than three months on June 30, 2025, December 31, 2024 and June 30, 2024, respectively, in “Financial assets at amortized cost - Current,” and the amounts of $0, $251 and $251 are recognized in “Financial assets at amortized cost - Non-current.” Please see Note VI (III) for description.

-22-

(II) Financial assets at fair value through profit or loss-current

Items	June 30, 2025	December 31, 2024	June 30, 2024
Current items:
Financial assets mandatorily measured at fair value through profit or loss
Beneficiary certificates	$ 165,000	$ 280,000	$ -
Valuation adjustment	1,531	440	-
	$ 166,531	$ 280,440	$ -

Financial assets at fair value through profit and loss is detailed as follows :

	For the three-month periods ended June 30,
	2025	2024
Financial assets mandatorily measured at fair value through profit or loss
Beneficiary certificates	$ 1,092	$ -
	For the six-month periods ended June 30,
	2025	2024
Financial assets mandatorily measured at fair value through profit or loss
Beneficiary certificates	$ 2,178	$ -

Please see Note XII (II) for the credit risk information related to financial assets at fair value through profit or loss.
The Group has no financial assets at fair value through profit or loss pledged to others.

(III) Financial assets at fair value through profit and loss

Items	June 30, 2025	December 31, 2024	June 30, 2024
Current items:
Time deposits with a maturity of more than three months	$ 144,094	$ 187,969	$ 194,883
Pledged time deposits	11,386	3,195	895
	$ 155,480	$ 191,164	$ 195,778
Non-current items:
Time deposits with a maturity of more than 1 year	$ -	$ 251	$ 251
Pledged time deposits	23,898	32,243	39,935
	$ 23,898	$ 32,494	$ 40,186

Financial assets at amortized cost is recognized in the profit or loss shown as follows:

	For the three-month periods ended June 30,
	2025	2024
Interests income	$ 682	$ 1,076
	For the six-month periods ended June 30,
	2025	2024
Interests income	$ 1,354	$ 1,863

While not considering the collaterals or other credit enhancements, the financial assets at amortized cost held by the Group had the maximum exposure of credit risk at $179,378, $223,658 and $235,964 as of June 30, 2025, December 31, 2024 and June 30, 2024, respectively.
Please see Note XII (II) for the credit risk information related to financial assets at amortized cost. The Group's investment in time deposit certificates involves a transaction counterparty who is a financial institution with good credit quality, and the probability of default is expected to be low.
Please see Note VIII on how the Group provides financial assets at amortized cost as a pledged collateral.

(IV) Notes and accounts receivable

	June 30, 2025	December 31, 2024	June 30, 2024
Notes receivable	$ 30,249	$ 43,961	$ 32,877
Less: Loss allowance	( 15)	( 14)	( 11)
	$ 30,234	$ 43,947	$ 32,866
Accounts receivable	$ 418,845	$ 608,667	$ 558,412
Less: Loss allowance	( 45,690)	( 46,969)	( 31,806)
Sub-total	373,155	561,698	526,606
Accounts receivable- related parties	1,128	810	609
Total	$ 374,283	$ 562,508	$ 527,215

The Group held guarantee deposits received of $48,553, $46,904 and $47,509 on June 30, 2025, December 31, 2024 and June 30, 2024, respectively, for accounts receivable, which are recognized under “Other current liabilities” and “Other non-current liabilities.”
Aging of notes and accounts receivable are as follows:

	June 30, 2025		December 31, 2024		June 30, 2024
	Notes receivable	Accounts receivable	Notes receivable	Accounts receivable	Notes receivable	Accounts receivable
Not past due	$ 30,249	$ 358,314	$ 43,961	$ 552,891	$ 32,877	$ 518,165
Past due
Up to 30 days	-	2,996	-	7,538	-	5,322
31-90 days	-	6,083	-	8,982	-	7,580
more than 91 days	-	52,580	-	40,066	-	27,954
	$ 30,249	$ 419,973	$ 43,961	$ 609,477	$ 32,877	$ 559,021

The above is an aging report based on the number of days past due.

-24-
3. As of June 30, 2025, December 31, 2024 and June 30, 2024, notes receivable and accounts receivable were from contracts with customers. The balances of notes receivable and accounts receivable as of January 1, 2024 were $28,979 and $545,232, respectively.

While not considering collaterals or other credit enhancements held, the notes receivable held by the Group had a maximum exposure of credit risk at $30,234, $43,947 and $32,866, respectively, as of June 30, 2025, December 31, 2024 and June 30, 2024; the accounts receivable held by the Group had a maximum exposure of credit risk at and $374,283, $562,508 and $527,215, respectively, as of June 30, 2025, December 31, 2024 and June 30, 2024.
Please see Note XII (II) for the information related to credit risk.

(V) Property, plant and equipment

	Land	Buildings	Machinery and equipment	Transportation equipment	Office equipment	Other equipment	Unfinished construction and equipment to be inspected	Total
January 1
Cost	$ 1,054,765	$ 3,462,910	$ 2,771,859	$ 529,977	$ 80,094	$ 1,317,568	$ 669,904	$ 9,887,077
Accumulated depreciation	-	( 690,155)	( 1,422,150)	( 306,691)	( 54,861)	( 619,949)	-	( 3,093,806)
	$ 1,054,765	$ 2,772,755	$ 1,349,709	$ 223,286	$ 25,233	$ 697,619	$ 669,904	$ 6,793,271
January 1	$ 1,054,765	$ 2,772,755	$ 1,349,709	$ 223,286	$ 25,233	$ 697,619	$ 669,904	$ 6,793,271
Additions	-	9,435	13,769	18,395	3,191	5,067	132,012	181,869
Disposals-Cost	-	( 964)	( 4,773)	( 1,108)	( 1,052)	( 1,733)	( 15)	( 9,645)
Disposals-accumulated depreciation	-	964	4,495	1,013	1,042	1,553	-	9,067
Re-classification	-	300	85,779	339	298	4,783	( 56,569)	34,930
Depreciation expense	-	( 84,042)	( 106,288)	( 28,328)	( 3,932)	( 67,382)	-	( 289,972)
Capitalization of interest	-	-	-	-	-	-	11,990	11,990
Net exchange differences	-	( 152,194)	( 73,732)	( 2,718)	( 1,397)	( 5,844)	( 1,298)	( 237,183)
June 30	$ 1,054,765	$ 2,546,254	$ 1,268,959	$ 210,879	$ 23,383	$ 634,063	$ 756,024	$ 6,494,327
June 30
Cost	$ 1,054,765	$ 3,287,859	$ 2,737,580	$ 540,259	$ 79,452	$ 1,316,660	$ 756,024	$ 9,772,599
Accumulated depreciation	-	( 741,605)	( 1,468,621)	( 329,380)	( 56,069)	( 682,597)	-	( 3,278,272)
	$ 1,054,765	$ 2,546,254	$ 1,268,959	$ 210,879	$ 23,383	$ 634,063	$ 756,024	$ 6,494,327

	2024
	Land	Buildings	Machinery and equipment	Transportation equipment	Office equipment	Other equipment	Unfinished construction and equipment to be inspected	Total
January 1
Cost	$1,058,526	$3,226,775	$2,699,366	$494,824	$77,192	$1,259,534	$562,218	$9,378,435
Accumulated depreciation	-	(510,406)	(1,245,977)	(263,994)	(46,672)	(511,447)	-	(2,578,496)
	$1,058,526	$2,716,369	$1,453,389	$230,830	$30,520	$748,087	$562,218	$6,799,939
January 1	$1,058,526	$2,716,369	$1,453,389	$230,830	$30,520	$748,087	$562,218	$6,799,939
Additions	-	11,241	8,868	22,831	2,431	5,433	171,920	222,724
Disposals-Cost	-	(2,244)	(43,099)	(3,275)	(515)	(644)	(5,140)	(54,917)
Disposals-accumulated depreciation	-	2,244	36,178	3,225	474	480	-	42,601
Re-classification	-	109,070	45,839	150	-	34,638	(146,636)	43,061
Depreciation expense	-	(94,997)	(105,086)	(26,559)	(4,384)	(39,841)	-	(270,867)
Capitalization of interest	-	-	-	-	-	-	9,819	9,819
Net exchange differences	-	49,709	23,898	1,120	554	1,556	975	77,812
June 30	$1,058,526	$2,791,392	$1,419,987	$228,322	$29,080	$749,709	$593,156	$6,870,172
June 30
Cost	$1,058,526	$3,399,691	$2,748,865	$516,776	$80,038	$1,301,085	$593,156	$9,698,137
Accumulated depreciation	-	(608,299)	(1,328,878)	(288,454)	(50,958)	(551,376)	-	(2,827,965)
	$1,058,526	$2,791,392	$1,419,987	$228,322	$29,080	$749,709	$593,156	$6,870,172

Capitalization of borrowing costs of property, plant and equipment and interest rate range:

	For the three-month periods ended June 30
	2025	2024
Capitalized amount	$ 6,131	$ 4,889
Capitalized interest rate range	1.97%~2.20%	1.80%~1.85%
	For the six months ended June 30
	2025	2024
Capitalized amount	$ 11,990	$ 9,819
Capitalized interest rate range	1.81%~2.20%	1.65%~1.87%

Information on property, plant and equipment pledged to others as collateral is provided in Note VIII.
Please see the 2024 consolidated financial reports Note IV (XIII) for the depreciation method and service life of the Group's property, plant and equipment.
Please refer to Note VI (XXX) for the number of transfers from January 1 to June 30 in 2025 and 2024.
To meet operational development planning needs, the Company’s subsidiary Ching Hsin, with Board resolution dated December 27, 2024, intended to sign a land and building lease contract and sales contract with a non-related party for land and buildings on Dougong 3rd Road, Douliu City, Yunlin County. The contracts were signed on March 3, 2025, with a total sales contract amount of NT$208,571 (pre-tax). As of March 31, 2025, NT$9,932 had been prepaid for the land and building (recorded under "Other Non-current Assets"); the remaining payment will be made in accordance with the contract.

(VI) Leasing arrangements - lessee

The Group leases various assets such as land and houses. The lease contract periods usually cover 1 to 50 years. Lease contracts are negotiated individually and contain a variety of terms and conditions. Leased assets shall not be subleased, lend out, transferred or used by others in any ways and there are no other restrictions.
The lease periods of part of the land, houses and transportation equipment leased by the Group during the periods between January 1 and June 30, 2025 and 2024 did not exceed 12 months and the leased assets were photocopiers and dumpsters of low value.

-27-

Information of right-of-use assets:

	2025
	Land - China	Land - Taiwan	Buildings	Machinery and equipment	Total
January 1
Cost	$ 399,126	$ 502,899	$ 12,394	$ 843	$ 915,262
Accumulated depreciation	( 52,680)	( 167,145)	( 5,418)	( 430)	( 225,673)
	$ 346,446	$ 335,754	$ 6,976	$ 413	$ 689,589
January 1	$ 346,446	$ 335,754	$ 6,976	$ 413	$ 689,589
Additions- Add lease	-	-	6,686	648	7,334
Revaluation of lease liabilities	-	16,355	-	-	16,355
Depreciation expense	( 4,256)	( 13,491)	( 2,187)	( 225)	( 20,159)
Net exchange differences	( 29,655)	-	( 89)	-	( 29,744)
June 30	$ 312,535	$ 338,618	$ 11,386	$ 836	$ 663,375
June 30
Cost	$ 364,632	$ 519,254	$ 18,957	$ 1,491	$ 904,334
Accumulated depreciation	( 52,097)	( 180,636)	( 7,571)	( 655)	( 240,959)
	$ 312,535	$ 338,618	$ 11,386	$ 836	$ 663,375
	2024
---	---	---	---	---	---
	Land - China	Land - Taiwan	Buildings	Machinery and equipment	Total
January 1
Cost	$ 385,667	$ 485,284	$ 15,214	$ 843	$ 887,008
Accumulated depreciation	( 42,506)	( 141,414)	( 7,316)	( 149)	( 191,385)
	$ 343,161	$ 343,870	$ 7,898	$ 694	$ 695,623
January 1	$ 343,161	$ 343,870	$ 7,898	$ 694	$ 695,623
Revaluation of lease liabilities	-	17,615	-	-	17,615
Depreciation expense	( 4,282)	( 12,865)	( 1,841)	( 140)	( 19,128)
Net exchange differences	9,326	-	33	-	9,359
June 30	$ 348,205	$ 348,620	$ 6,090	$ 554	$ 703,469
June 30
Cost	$ 396,184	$ 502,899	$ 15,338	$ 843	$ 915,264
Accumulated depreciation	( 47,979)	( 154,279)	( 9,248)	( 289)	( 211,795)
	$ 348,205	$ 348,620	$ 6,090	$ 554	$ 703,469

The information on lease liabilities related to lease contracts is as follows:

	June 30, 2025	December 31, 2024	June 30, 2024
Total lease liabilities	$ 369,961	$ 361,254	$ 372,246
Less: Mature within one year
(Listed as Lease liabilities - Current)	( 31,176)	( 27,336)	( 26,605)
	$ 338,785	$ 333,918	$ 345,641

The information on profit or loss items related to lease contracts is as follows:

	For the three-month periods ended June 30
	2025	2024
Items affecting current profit and loss
Interest expenses on lease liabilities	$ 1,737	$ 1,741
Expenses for short-term lease contracts	685	1,392
Lease of low-value assets	21	42
	For the six-month periods ended June 30
	2025	2024
Items affecting current profit and loss
Interest expenses on lease liabilities	$ 3,485	$ 3,513
Expenses for short-term lease contracts	1,859	2,965
Lease of low-value assets	49	81

The Group's total cash outflow on leases for the six months ended June 30, 2025 and 2024, was $20,284 and $20,347, respectively.
In January 2025 and 2024, the Group, in accordance with contracts, adjusted the right-of-use asset – land – Taiwan region and lease liabilities based on changes in announced land value. The revaluation adjustment amounts were $16,355 and $17,615, respectively.

(VII) Intangible assets

	2025
	Goodwill	Concession	Customer relationship	Computer software	Total
January 1
Cost	$ 171,028	$ 967,878	$ 85,856	$ 20,826	$ 1,245,588
Accumulated amortization	-	( 475,938)	( 17,171)	( 5,312)	( 498,421)
Accumulated impairment	( 81,422)	-	-	-	( 81,422)
	$ 89,606	$ 491,940	$ 68,685	$ 15,514	$ 665,745
January 1	$ 89,606	$ 491,940	$ 68,685	15,514	665,745
Additions	-	-	-	1,547	1,547
Derecognize - Cost	-	-	-	( 601)	( 601)
Derecognize - Accumulated amortization	-	-	-	601	601
Amortization expense	-	( 34,572)	( 2,862)	( 1,717)	( 39,151)
Net exchange differences	( 7,744)	( 29,385)	-	( 1,085)	( 38,214)

	2025
	Goodwill	Concession	Customer relationship	Computer software	Total
June 30	$ 81,862	$ 427,983	$ 65,823	$ 14,259	$ 589,927
June 30
Cost	$ 156,648	$ 967,878	$ 85,856	$ 20,510	$ 1,230,892
Accumulated amortization	-	( 539,895)	( 20,033)	( 6,251)	( 566,179)
Accumulated impairment	( 74,786)	-	-	-	( 74,786)
	$ 81,862	$ 427,983	$ 65,823	$ 14,259	$ 589,927
	2024
---	---	---	---	---	---
	Goodwill	Concession	Customer relationship	Computer software	Total
January 1
Cost	$ 165,685	$ 967,878	$ 85,856	$ 20,194	$ 1,239,613
Accumulated amortization	-	( 420,106)	( 11,447)	( 3,491)	( 435,044)
	$ 165,685	$ 547,772	$ 74,409	$ 16,703	$ 804,569
January 1	$ 165,685	$ 547,772	$ 74,409	$ 16,703	$ 804,569
Additions	-	-	-	1,470	1,470
Derecognize - Cost	-	-	-	( 1,334)	( 1,334)
Derecognize - Accumulated amortization	-	-	-	1,334	1,334
Amortization expense	-	( 29,342)	( 2,862)	( 1,672)	( 33,876)
Net exchange differences	4,518	10,007	-	367	14,892
June 30	$ 170,203	$ 528,437	$ 71,547	$ 16,868	$ 787,055
June 30
Cost	$ 170,203	$ 967,878	$ 85,856	$ 20,330	$ 1,244,267
Accumulated amortization	-	( 439,441)	( 14,309)	( 3,462)	( 457,212)
	$ 170,203	$ 528,437	$ 71,547	$ 16,868	$ 787,055

Breakdown of intangible assets amortization:

	For the three-month periods ended June 30
	2025	2024
Operating costs	$ 18,335	$ 16,938
Operating Expensive	718	707
	$ 19,053	$ 17,645

-31-

For the six-month periods ended June 30

	2025	2024
Operating costs	$ 37,714	$ 32,485
Operating Expensive	1,437	1,391
	$ 39,151	$ 33,876

The Company participated in the public bidding for RSEA Engineering Corporation in October 2012 and acquired all the plants, machinery, other equipment and concessions of the company in Changhua Coastal Industrial Park for $1,116,392. The concession enabled the Company to conduct disposal of general business waste and hazardous business waste based on approval document #10120426390 issued by the Ministry of Economic Affairs. The Company recognized the fair value of plant, machinery and other equipment at $617,976 as the acquisition cost. The fair value of concession is $498,416 and the amortization adopts production quantity method.
The Group acquired 90% of Rizhao Panyue's equity in December 2020. The fair value of the concession identified of the intangible asset after evaluation analysis based on the purchase price allocation report was RMB 107,257 thousand (equivalent to NT$469,479 thousand) and the concession is amortized by using the straight-line method based on the service life.
In order to expand the scale of operation, the Group signed a contract with two waste removal and transportation companies in January 2022 to obtain the list of their customers. The total contract price is $90,257, and the Group will make the monthly installment over 5 to 9 years. The total contract price is $85,856 at the present value of discounted effective interest, and the customer relationship is amortized based on the straight-line method over its remaining useful life of 15 years.
Goodwill is allocated to the Group's cash-generating units identified by operating segments :

	June 30, 2025	December 31, 2024	June 30, 2024
Subsidiary in China - Rizhao Panyue	$ 81,862	$ 89,606	$ 170,203

The impairment test of the Group's goodwill is carried out by allocating goodwill to the Group's cash-generating units and calculating the recoverable amount based on the value in use. The value in use is estimated based on the cash flows of the five-year financial budget already prepared by management. Cash flows beyond the five-year period are extrapolated using the estimated growth rates stated below. The main assumptions used in the calculation of value in use are as follows:

	2024
Discount rate	9.53%
Growth	2.00%

The discount rate reflects the expected risks of the estimated operating income and assets, and is determined by the weighted average cost of capital. The growth rate is calculated based on the growth rate forecast of the relevant industry and shall not exceed the average long-term growth rate of the relevant industry. Other key assumptions in the calculation of value

in use relate to the estimation of cash inflows and outflows, including budgeted sales and gross margins, which are determined by management based on experience and its expectations of market developments. As the business growth of the cash-generating units was below expectation, the recoverable amount for the Group was assessed to be less than the carrying amount. Therefore, a goodwill impairment loss of $81,422 was recognized in 2024.

(VIII) Other non-current assets

	June 30, 2025	December 31, 2024	June 30, 2024
Refundable deposit	$ 116,691	$ 110,022	$ 108,224
Pre-payments for equipment	39,009	39,613	37,795
Prepayments for land	9,932	-	-
Others	99,927	119,962	120,985
	$ 265,559	$ 269,597	$ 267,004

(IX) Short-term debts

Type of borrowings	June 30, 2025	Range of interest rate	Collateral
Bank borrowings
Secured borrowings	$ 32,000	1.90%	Property, plant and equipment
Type of borrowings	December 31, 2024	Range of interest rate	Collateral
Bank borrowings
Secured borrowings	$ 40,000	1.90%	Property, plant and equipment
Credit loan	3,448	1.90%~3.60%	None
	$ 43,448
Type of borrowings	June 30, 2024	Range of interest rate	Collateral
Bank borrowings
Secured borrowings	$ 40,000	1.95%	Land, property, plant and equipment
Credit loan	27,222	1.95~3.60%	None
	$ 67,222

Please see Note VIII for the collaterals provided by the Company for the borrowings.

(X) Short-term notes payable

	June 30, 2025	December 31, 2024	June 30, 2024
Face value of commercial paper	$ 30,000	$ -	$ -
Less: Unamortized premium discount	(36)	-	-
	$ 29,964	$ -	$ -
Loan interest rate	2.00%	-	-

(XI) Other payables

	June 30, 2025	December 31, 2024	June 30, 2024
Dividends payable	$ 568,422	$ -	$ 494,000
Payroll and bonus payable	98,655	143,685	98,574
Payable on equipment	87,586	65,915	103,948
Employees' bonuses and directors' remuneration payable	53,568	72,185	35,246
Commission payable	23,871	30,694	49,804
Others	179,331	167,373	176,758
	$ 1,011,433	$ 479,852	$ 958,330

(XII) Long-term borrowings

	June 30, 2025	December 31, 2024	June 30, 2024
Secured borrowings	$ 318,500	$ 330,500	$ 677,057
Credit loan	2,150,000	2,750,000	2,450,000
	2,468,500	3,080,500	3,127,057
Less: Long-term borrowings maturing within one year	( 249,000)	( 99,000)	( 240,710)
	$ 2,219,500	$ 2,981,500	$ 2,886,347
Range of interest rate	1.85%~1.92%	1.85%~2.08%	1.72%~2.43%

The Group signed a new credit agreement with Chang Hwa Bank on July 27, 2023. The loan period is from August 1, 2023 to September 29, 2026, with a total credit limit of NT$300,000. As of June 30, 2025, the facility has been fully utilized. Ratification topics are as follows:

The Company should maintain a total average balance of demand deposits of more than NT$8,000 every three months. The balance is reviewed every three months after the loan. If the balance is not achieved, an additional 0.39% will be added to the interest rate originally approved.

The Group entered into a credit agreement with First Commercial Bank of Taiwan on October 27, 2023. The credit period was from October 27, 2023 to October 27, 2025, and the total credit amount was NT$800,000. The loan was repaid in September and October 2024. On October 21, 2024, a new credit agreement was signed with First Commercial Bank. The credit period was from October 18, 2024 to October 18, 2026, and the total credit amount was NT$800,000, which had been fully drawn as of June 30, 2025. Ratification topics are as follows:

The Company and its subsidiaries Chin Hsin and second-tier subsidiary Liang Wei and Cheng Shin, should maintain a total average balance of demand deposits of more than $50,000 every six months. The balance is reviewed every half a year after the loan. If the balance is not achieved, an additional 0.05% will be added to the interest rate originally approved.

Please see Note VIII for the collaterals provided by the Company for the long-term borrowings.

(XIII) Pensions

The Company and its domestic subsidiaries have established a defined contribution pension plan (hereinafter referred to as the “New Plan”) under the Labor Pension Act (hereinafter referred to as the “Act”), covering all regular employees with domestic citizenship. Under the New Plan, the Company and its domestic subsidiaries contribute monthly based on 6% of the employees’ monthly salaries and wages to the employees’ individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in a lump sum upon the termination of employment.
Beijing Ruentex, Suqian Ruentex, Langfang Ruentex, Yuncheng Ruentex and Rizhao Panyue adopted a defined contribution plan to allocate monthly contributions to an independent fund administered by the government in accordance with the pension regulations in the People’s Republic of China (PRC). They are based on a certain percentage of employees’ monthly salaries and wages. The contribution percentage for the three months ended June 30, 2025 and 2024 was 16%. Other than the monthly contributions, the Group has no further obligations.
For the three months ended June 30, 2025 and 2024, and for the six months ended June 30, 2025 and 2024, the pension costs recognized by the Corporate Group in accordance with the abovementioned pension measures were $13,772, $13,442, $27,705 and $26,583, respectively.

(XIV) Provisions - Non-current

	2025		2024
Balance on January 1	$	68,710	$	73,379
Provision added this period		3,024		3,308
Realized for the period	(	9,830)	(	8,597)
Balance on June 30	$	61,904	$	68,090
	June 30, 2025		December 31, 2024
Current	$	10,877	$	20,707
Non-current	$	51,027	$	48,003

The provision recognized by the Group is in accordance with the officially announced policies and the applicable contracts or regulatory requirements and is detailed below:

The Group is obliged to rehabilitate the landfill location of waste treatment plants of the Changhua Coastal Industrial Park, Wenxi Economic and Technological Development Zone of Yuncheng in Shanxi and Siyang Economic Development Zone in Jiangsu; the latter two are provincial development zones. Therefore, the present value of the cost expected to rehabilitate the location is recognized as a provision. For the three months ended June 30, 2025 and 2024 and for the six months ended June 30, 2025 and 2024, the costs recognized by the Group were ($1,394), $1,671, $3,024 and $3,308, respectively.

(XV) Other non-current liabilities

	June 30, 2025	December 31, 2024	June 30, 2024
Deferred revenue:
Beijing Ruentex	$ 18,980	$ 22,130	$ 23,312
Yuncheng Ruentex	49,903	58,188	61,295
Sub-total	68,883	80,318	84,607
Long-term accounts payable:
Long-term accounts payable	33,615	41,006	49,216
Long-term liabilities due within one year	( 14,344)	( 14,227)	( 14,924)
Unrealized interest expense	( 921)	( 1,228)	( 1,598)
Sub-total	18,350	25,551	32,694
Guarantee deposit received	10,745	5,119	22,025
Total	$ 97,978	$ 110,988	$ 139,326

Deferred revenue

(1) Beijing Ruentex, a second-tier subsidiary of the Company, originally established a medical waste disposal plant in Beijing Yongle Economy Development Zone. In accordance with the overall urban planning and environmental considerations of the Beijing Municipal Government, the subsidiary was requested to move to Sanfa Tsun East area of Tongzhou District in 2010. The part of the compensation payment exceeding the fair value of the land and plant is the subsidy from the Beijing government to have Beijing Ruentex continue the same operations in Tongzhou District. The total is RMB 12,102,000 (approximately NT$ 58,757,000), which can be deferred, and it has been amortized for 20 years starting 2013. As for June 30, 2025, a total of RMB 7,463,000 (approximately NT$ 32,733,000) has been amortized.

(2) The Company's second-tier subsidiary Yuncheng Ruentex signed an investment agreement with Wenxi Economic and Technological Development Zone Management Committee in 2019. According to the support policies for industrial enterprises, Yuncheng Ruentex's investment in the conversion and disposal of local industrial solid wastes exceeding US$35,000,000 was eligible for investment grant upon approval. Yuncheng Ruentex received the grant of RMB15,911,000 (approximately NT$69,117,000) in February 2021, which will be amortized evenly over 10 years from the date of operation of main operating equipment. As for June 30, 2025, a total of RMB 3,712,000 (approximately NT$ 16,283,000) has been amortized.

Long-term accounts payable

In order to expand the scale of operation, the Group signed a contract with two waste removal and transportation companies in January 2022 to obtain the list of their customers. The Group will make the monthly installment over 5 to 9 years. Please refer to Note VI (VII) for detailed explanations.

(XVI) Share-based payment

The Company’s share-based payment in 2024 is agreed upon as follows:

The Group's subsidiary, Chin Hsin, issued 6,000 thousand new shares through a cash capital increase approved by the board on March 28, 2024. It retained 15% of the shares to be subscribed by employees of controlled or affiliated companies meeting certain criteria. Therefore, 900 thousand shares were allocated to the Group's employees, and the subscription price was NT$45 per share. The share-based payment is agreed as follows:

Type of arrangement	Grant date	Total quantity granted (shares)	Contract period	Vesting conditions
Cash capital increase reserved for employee subscription	2024.06.14	900,000	None	Immediate vesting

All of the above share-based payment arrangements are settled in equity.

The detailed information of the above share-based payment is as follows:

	2025
	Number of options (shares)	Weighted average exercise price (NT$)
Options outstanding as of January 1	-	$ -
Share options granted this period	900,000	45
Share options exercised this period	( 733,000)	45
Share options foregone this period	( 167,000)	45
Options outstanding as of June 30	-	-
Options exercisable as of June 30	-	-

The share-based payment transactions use the Active open market quotes, and consider the liquidity discount to calculate the fair value per share. Then the Black-Scholes option evaluation model is applied to estimate the fair value of the stock option. The relevant information is shown as follows:

Type of arrangement	Grant date	Net worth per share (NT$)	Exercise price (NT$)	Expected volatility	Expected duration	Expected dividend	Risk-free rate	Fair value per unit (NT$)
Cash capital increase reserved for employee subscription	2024.06.14	$53.3	$45	26.56%	0.02year	-	1.30%	$8.3

The expenses recognized by the Group for share-based payments from April 1 to June 30, 2025 and 2024 and January 1 to June 30, 2025 and 2024 are $7,470, and $7,470, respectively.

(XVII) Capital

As of June 30, 2025, the Company’s authorized capital was $1,500,000, consisting of 130,000 thousand shares of ordinary stock, and the paid-in capital was $1,300,000 with a par value of $10 (in dollars) per share. All proceeds from shares issued have been collected.
The number of outstanding common stock at the beginning and the end of the period is as follows:

	2025	2024
January 1/ June 30	130,000 thousand shares	130,000 thousand shares

(XVIII) Capital surplus

In accordance with the Company Act, any capital surplus arising from paid-in capital in excess of the par value on issuance of common stocks and donations can be used to cover accumulated deficit or to issue new stocks or cash to shareholders in proportion to their share ownership, provided that the Company has no accumulated deficit. In addition, the Securities and Exchange Act requires that the amount in capital surplus to be capitalized should not exceed $10\%$ of paid-in capital each year. Capital surpluses should not be used to cover accumulated deficit unless the legal reserve is insufficient.
Changes in capital surpluses:

	2025
	Issuance of ordinary shares	Fair value of the consideration paid or received from acquiring or disposing of subsidiaries and the carrying amounts of the subsidiaries	Changes in ownership interests in subsidiaries recognized	Employee share option	Others - Unclaimed dividends of shareholders	Total
January 1 /June 30	$ 2,397,186	$ 52,690	$ 137,835	$ -	$ 716	$ 2,588,427
	2024
	Issuance of ordinary shares	Fair value of the consideration paid or received from acquiring or disposing of subsidiaries and the carrying amounts of the subsidiaries	Changes in ownership interests in subsidiaries recognized	Employee share option	Others - Unclaimed dividends of shareholders	Total
January 1	$ 2,523,451	$ 23,863	$ 10,790	$ -	$ 716	$ 2,558,820
Distribution of cash from capital surplus	( 130,000)	-	-	-	-	( 130,000)
Changes in shareholders' equity of subsidiaries not recognized according to shareholding ratio	-	-	127,045	-	-	127,045
Cash capital increase reserved for employee subscription	-	-	-	3,735	-	3,735
Share options exercised	3,735	-	-	( 3,735)	-	-
Changes in non-controlling interest	-	27,098	-	-	-	27,098
June 30	$ 2,397,186	$ 50,961	$ 137,835	$ -	$ 716	$ 2,586,698

(XIX) Retained earnings

In accordance with the Company’s Articles of Incorporation, the current year’s earnings, if any, shall first be used to offset prior years’ operating losses and pay all taxes. Then 10% of the remaining amount shall be set aside as legal reserve until the legal reserve equals the paid-in capital. The Company shall set aside or reverse special reserve in accordance with the related laws or competent authority. The appropriation of the remaining earnings, along with the beginning unappropriated earnings, shall be proposed by the Board of Directors and resolved by the shareholders as dividends to shareholders.
Pursuant to Article 240 of The Company Act, the Company may authorize the board of directors to distribute dividends, profit-sharing, legal reserve and capital reserve (subject to compliance with Article 241 of The Company Act) wholly or partially in cash. Such decisions must be approved in a board meeting with at least two-thirds of directors present and supported by more than half of attending directors, and reported during a shareholder meeting afterwards.
Except for covering accumulated deficit or issuing new stocks or cash to shareholders in proportion to their share ownership, the legal reserve shall not be used for any other purpose. The use of the legal reserve for the issuance of stocks or cash to shareholders in proportion to their share ownership is permitted. The distribution of the reserve is limited to the portion in excess of 25% of the Company’s paid-in capital.
In accordance with the regulations, the Company shall set aside special reserve from the debit balance on other equity items at the balance sheet date before distributing earnings. When the debit balance on other equity items is reversed subsequently, the reversed amount could be included in the distributable earnings.
The Company distributed dividends in the amount of NT$494,000 in cash per the board resolution at the meeting held on February 27, 2025; on May 27, 2025, the shareholder meeting reaching the threshold for electronic voting resolved to approve the 2024 earning distribution. Details are summarized below:

	2024
	Amount	Dividends per share (in dollars)
Provisions for legal reserve	$ 48,020	$ -
Reversal Provisions for special reserve	( 89,777)	-
Cash dividends	494,000	3.80
Total	$ 452,243

6.(1) The Company distributed dividends in the amount of NT$364,000 in cash per the board resolution at the meeting held on February 23, 2024; on May 24, 2024, the shareholder meeting reaching the threshold for electronic voting resolved to approve the 2023 earning distribution. Details are summarized below:

	2023
	Amount	Dividends per share (in dollars)
Provisions for legal reserve	$ 40,856	$ -
Reversal for special reserve	49,713	-
Cash dividends	364,000	2.80
Total	$ 454,569

(2)As proposed by the Board of Directors on February 23, 2024, the Company distributed cash dividend of NT$1 per share based on capital surplus – issue premium, totaling NT$130,000, and reported it to the shareholders' meeting on May 24, 2024.

(XX) Operating revenue

	For the three-month periods ended June 30
	2025	2024
Revenue from contracts with customers	914,497	948,909
	For the six-month periods ended June 30
	2025	2024
Revenue from contracts with customers	1,879,802	1,712,210

Segmentation of revenue from contracts with customers

The Group's revenue can be divided into the following major categories and geographical areas by service and product:

	Taiwan			China			total
For the three months ended June 30, 2025	Waste transportation	Waste disposal	other	Waste transportation	Waste disposal	other
Segment revenue	$ 228,345	$ 546,783	$ 19,231	$ 27,011	$ 145,772	$ 3,924	$ 971,066
Revenue from internal transactions	( 51,816)	( 585)	( 4,168)	-	-	-	( 56,569)
Revenue from contracts with external customers	$ 176,529	$ 546,198	$ 15,063	$ 27,011	$ 145,772	$ 3,924	$ 914,497
Revenue recognition timing
Revenue recognized at a specific point in time	$ -	$ -	$ 3,999	$ -	$ -	$ -	$ 3,999
Revenue recognized progressively over time	$ 176,529	$ 546,198	$ 11,064	$ 27,011	$ 145,772	$ 3,924	$ 910,498
	$ 176,529	$ 546,198	$ 15,063	$ 27,011	$ 145,772	$ 3,924	$ 914,497
	Taiwan			China
For the three months ended June 30, 2024	Waste transportation	Waste disposal	other	Waste transportation	Waste disposal	other	total
Segment revenue	$ 155,394	$ 535,286	$ 6,010	$ 32,635	$ 267,428	$ 1	$ 996,754
Revenue from internal transactions	( 43,787)	( 392)	( 3,666)	-	-	-	( 47,845)
Revenue from contracts with external customers	$ 111,607	$ 534,894	$ 2,344	$ 32,635	$ 267,428	$ 1	$ 948,909
Revenue recognition timing
Revenue recognized at a specific point in time	$ -	$ -	$ 1,120	$ -	$ -	$ -	$ 1,120
Revenue recognized progressively over time	$ 111,607	$ 534,894	$ 1,224	$ 32,635	$ 267,428	$ 1	$ 947,789

-40-

For the six months ended June 30, 2025	Taiwan			China			total
	Waste transportation	Waste disposal	other	Waste transportation	Waste disposal	other
Segment revenue	$ 449,373	$ 1,085,314	$ 29,162	$ 55,428	$ 370,698	$ 3,924	$ 1,993,899
Revenue from internal transactions	( 99,694)	( 5,140)	( 9,263)	-	-	-	( 114,097)
Revenue from contracts with external customers	$ 349,679	$ 1,080,174	$ 19,899	$ 55,428	$ 370,698	$ 3,924	$ 1,879,802
Revenue recognition timing
Revenue recognized at a specific point in time	$ -	$ -	$ 6,185	$ -	$ -	$ -	$ 6,185
Revenue recognized progressively over time	$ 349,679	$ 1,080,174	$ 13,714	$ 55,428	$ 370,698	$ 3,924	$ 1,873,617
	$ 349,679	$ 1,080,174	$ 19,899	$ 55,428	$ 370,698	$ 3,924	$ 1,879,802
For the six months ended June 30, 2024	Taiwan			China			total
	Waste transportation	Waste disposal	other	Waste transportation	Waste disposal	other
Segment revenue	$ 280,770	$ 984,767	$ 14,555	$ 66,262	$ 452,498	$ 146	$ 1,798,998
Revenue from internal transactions	( 79,342)	( 642)	( 6,804)	-	-	-	( 86,788)
Revenue from contracts with external customers	$ 201,428	$ 984,125	$ 7,751	$ 66,262	$ 452,498	$ 146	$ 1,712,210
Revenue recognition timing
Revenue recognized at a specific point in time	$ -	$ -	$ 6,799	$ -	$ -	$ -	$ 6,799
Revenue recognized progressively over time	$ 201,428	$ 984,125	$ 952	$ 66,262	$ 452,498	$ 146	$ 1,705,411

2. Contract assets and contract liabilities

(1) As of June 30, 2025, December 31, 2024, June 30, 2024 and January 1, 2024, the Group has not recognized contract assets related to revenue from contracts with customers. The Group has recognized the following contract liabilities:

	June 30, 2025	December 31, 2024	June 30, 2024	January 1, 2024
Contract assets - Current	$ 71,242	$ -	$ -	$ -
Contract liabilities- Current	$ 145,805	$ 222,000	$ 171,619	$ 151,090
Contract liabilities- Non-current	7,790	4,675	6,977	13,757
	$ 153,595	$ 226,675	$ 178,596	$ 164,847

(2) Contract liabilities at the beginning of the period recognized as revenue of the period

	For the three-month periods ended June 30
	2025	2024
Opening balance of contract liabilities
Recognized as revenue this period	$ 40,801	$ 40,950
	For the six-month periods ended June 30
	2025	2024
Opening balance of contract liabilities
Recognized as revenue this period	$ 172,764	$ 97,693

Please see Note XII (II) for the information related to credit risk.
The Group has recognized the revenue from bills that have the waste quantity, commissioned by clients to conduct disposal, multiplied by the contract unit price. Due to the expedient measures taken, there is no need to disclose the remaining contract performance obligations.

(XXI) Interests income

	For the three-month periods ended June 30
	2025	2024
Interest from bank deposits	$ 1,674	$ 1,703
Interest income from financial assets measured at amortized cost	682	1,076
Total	$ 2,356	$ 2,779
	For the six-month periods ended June 30
	2025	2024
Interest from bank deposits	$ 2,097	$ 2,522
Interest income from financial assets measured at amortized cost	1,354	1,863
Total	$ 3,451	$ 4,385

(XXII) Other income

	For the three-month periods ended June 30
	2025	2024
Revenue from government subsidies	$ 2,339	$ 4,610
Revenue from sales of scraps	862	576
Other income - Others	1,843	1,696
Total	$ 5,044	$ 6,882

(XXIII) Other benefits and losses

	For the three-month periods ended June 30
	2025	2024
Revenue from government subsidies	$ 4,816	$ 7,011
Revenue from sales of scraps	1,640	1,336
Other income - Others	5,794	4,646
Total	$ 12,250	$ 12,993
	For the three-month periods ended June 30
---	---	---
	2025	2024
Net (loss) gain on foreign currency exchange	($ 27,771)	$ 13,734
Loss on disposal of property, plant and equipment	( 70)	( 1,977)
Gain on disposal of property, plant and equipment	1,092	-
Loss on disposal of subsidiary	( 2,066)	-
Other losses	( 275)	( 490)
Total	($ 29,090)	$ 11,267
	For the six-month periods ended June 30
	2025	2024
Net gain on foreign currency exchange	$ 5,672	$ 43,884
Loss on disposal of property, plant and equipment	( 388)	( 11,552)
Gain on disposal of property, plant and equipment	2,178
Loss on disposal of subsidiary	( 2,066)
Other losses	( 777)	( 3,652)
Total	$ 4,619	$ 28,680

(XXIV) Financial cost

	For the three-month periods ended June 30
	2025	2024
Interest expenses:
Bank borrowings	$ 12,037	$ 14,763
Interest expenses on lease liabilities	1,737	1,741
Long-term accounts payable interest expenses	146	210
Less: amount of capitalization of assets that meet the requirements	( 6,131)	( 4,889)
Financial cost	$ 7,789	$ 11,825

	For the six-month periods ended June 30
	2025	2024
Interest expenses:
Bank borrowings	$ 25,863	$ 29,447
Interest expenses on lease liabilities	3,485	3,513
Long-term accounts payable interest expenses	307	434
Less: amount of capitalization of assets that meet the requirements	( 11,990)	( 9,819)
Financial cost	$ 17,665	$ 23,575

(XXV) Expenses by nature

	For the three-month periods ended June 30
	2025	2024
Employee benefits expenditure	$ 246,891	$ 244,080
Depreciation charges on property, plant and equipment	142,546	132,187
Consumables	50,510	64,787
Repairs expense	48,744	47,030
Disposal expense	42,154	55,378
Water, electricity and gas utilities	38,646	38,577
Commission expenses	12,187	39,348
Amortization expense	19,053	17,645
Depreciation expenses for right-of-use assets	10,206	9,590
Service charge	9,144	17,971
Change in inventory	2,246	1,471
Expected loss on credit impairment	2,297	10,322
Other expenses	80,885	89,665
Operating costs and operating expenses	$ 705,509	$ 768,051

(XXVI) Employee benefits expenditure

	For the three-month periods ended June 30
	2025	2024
Payroll expenses	$ 194,558	$ 184,662
Employee stock option compensation expense	-	7,470
Labor and health insurance fees	17,345	17,394
Pension costs	13,772	13,442
Directors' remuneration	3,800	4,834
Other personnel expenses	17,416	16,278
	$ 246,891	$ 244,080
	For the six-month periods ended June 30
	2025	2024
Payroll expenses	$ 395,303	$ 359,923
Employee stock option compensation expense	-	7,470
Labor and health insurance fees	34,539	33,348
Pension costs	27,705	26,583
Directors' remuneration	8,482	7,363
Other personnel expenses	33,699	31,433
	$ 499,728	$ 466,120

According to the Articles of Incorporation of the Company, a portion of the distributable profit of the current year, after covering accumulated losses, shall be allocated as employees' compensation and directors' and supervisors' remuneration. Employees' compensation shall be 7% of the distributable profit, and directors' remuneration shall not exceed 1.4%. On May 27, 2025, the shareholders' meeting resolved to amend the Articles of Incorporation, stipulating that at least 30% of the employee bonus allocation shall be distributed to entry-level employees. The aforementioned employee compensation may be distributed in the form of shares or cash, and recipients may include employees of subsidiaries who meet certain criteria.
For the three months ended June 30, 2025 and 2024 and for the six months ended June 30, 2025 and 2024, employee compensation was estimated to be $11,268, $12,098, $28,461 and $17,708, respectively, and remunerations for directors for the two years were estimated to be $2,036, $2,186, $5,143 and $3,200, respectively. The abovementioned remunerations for directors are recognized as directors' remunerations under the employee benefit expenses.

The employees' compensation and directors' remuneration were estimated and accrued based on 7% and 1.265% of the profit of the current year distributable for the six months ended June 30, 2025 and 2024, respectively.

The employee compensation and directors' remuneration resolved by the Board of Directors for 2024 were $44,187 and $7,985, respectively, consistent with the amount recognized in the 2024 financial report. All issued in cash. Employee remuneration was paid in cash in June 2025.

Information about employees' compensation and directors' remuneration of the Company as resolved by the Board of Directors and shareholders will be posted in the "Market Observation Post System" at the website of the Taiwan Stock Exchange.

(XXVII) Income taxes

Income tax expense

(1) Components of income tax expense:

	For the three-month periods ended June 30
	2025	2024
Current tax:
Current tax on profits for the year	$ 55,099	$ 48,962
Additional tax on undistributed earnings	1,398	-
(Over)under the provision of prior year's income tax	(1,293)	6,819
Total current tax	55,204	55,781
Deferred income tax:
Origination and reversal of temporary differences	(21,332)	(10,701)
Total deferred income tax	(21,332)	(10,701)
Income tax expense	$ 33,872	$ 45,080

Beijing Ruentex is an enterprise established in the People's Republic of China. According to the relevant provisions of the Enterprise Income Tax Law of the People's Republic of China, companies that engage in environmental protection, energy-saving and water conservation businesses are eligible for income tax reductions. Beijing Ruentex phase 2 plant has met the abovementioned requirements for income tax reduction due to the equipment it uses and started to use these reductions in 2020.
Rizhao Panyue and Yuncheng Ruentex are companies established in the People's Republic of China. According to the local regulations, it is exempted from income tax from its first to third year of operation and is subject to paying half of the income tax from the fourth to sixth year. Rizhao Panyue has started using the abovementioned income tax deduction in 2019. Yuncheng Ruentex has started using the abovementioned income tax deduction in 2022.
The Company's income tax returns through 2023 have been assessed and approved by the tax authority.

(XXVIII) Non-controlling interest

Non-controlling Interests shown as follows:

	2025	2024
January 1	$ 458,505	$ 258,968
Net income for the period	47,071	18,554
Translation of foreign operations	-	1,152
Decrease in cash dividends received	( 74,422)	( 31,924)
Purchase of equity interests in subsidiaries	- (	27,189)
Cash capital increase in subsidiary	-	182,484
Share-based payment	-	3,735
June 30	$ 431,154	$ 405,780

The Group did not subscribe to the shares in the subsidiary's cash capital increase in proportion to the shareholding percentage.

The Group's subsidiary, Chin Hsin, conducted a cash capital increase on March 28, 2025 to issue new shares. The Group did not subscribe to the new shares in proportion to the shareholding percentage, which reduced the comprehensive shareholding in Chin Hsin from 66.04% to 57.42%. The transaction increased non-controlling interest of $182,484, and equity attributable to owners of the parent has increased by $127,045.

	January 1 to June 30, 2025
Cash	$ 309,529
Increase in carrying amount of non-controlling interest.	( 182,484)
Capital surplus - Changes in ownership interests in subsidiaries recognized	$ 127,045

Acquisition of additional interests in subsidiaries

(1) On April 22, 2024, the Group purchased 10% of the equity of third-tier subsidiary Rizhao Panyue, for RMB 20,000. The carrying amount of the non-controlling interests of Rizhao Panyue, on the date of purchase was $27,189. The transaction decreased the non-controlling interests by $27,189, and the equity attributable to the owners of the parent increased by $27,098.

	2024
Carrying amount of non-controlling interest purchase	$ 27,189
Consideration paid for non-controlling interests	( 91)
Capital surpluses - Difference between the carrying amount of the consideration paid or received from acquiring or disposing of subsidiaries and the carrying amounts of the subsidiaries	$ 27,098

(2) In December 2024, the Group purchased an additional 33.33% of the issued shares of its subsidiary Huan Hsin from an unrelated party for NT$5,000 in cash. The carrying amount of the non-controlling interests of Huan Hsin, on the date of purchase was NT$8,011. The transaction decreased the non-controlling interests by NT$8,011, and the equity attributable to the owners of the parent increased by NT$3,011.

	2024
Carrying amount of non-controlling interest purchase	$ 8,011
Consideration paid for non-controlling interests	( 5,000)
Capital surpluses - Difference between the carrying amount of the consideration paid or received from acquiring or disposing of subsidiaries and the carrying amounts of the subsidiaries	$ 3,011

(XXIX) Earnings per share

	For the three-month period ended June 30, 2025
	Amount after tax	Number of ordinary shares outstanding at the end of period (thousand)	Earnings per share ($)
Basic earnings per share
Profit attributable to ordinary shareholders of the parent	$ 120,524	130,000	$ 0.93
Diluted earnings per share
Profit attributable to ordinary shareholders of the parent	$ 120,524	130,000
Employees’ bonus assumed conversion of all dilutive potential ordinary shares.	-	414
Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares	$ 120,524	130,414	$ 0.92
	For the three-month period ended June 30, 2024
	Amount after tax	Number of ordinary shares outstanding at the end of period (thousand)	Earnings per share (NT$)
Basic earnings per share
Profit attributable to ordinary shareholders of the parent	$ 131,488	130,000	$ 1.01
Diluted earnings per share
Profit attributable to ordinary shareholders of the parent	$ 131,488	130,000
Employees’ bonus assumed conversion of all dilutive potential ordinary shares.	-	188
Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares	$ 131,488	130,188	$ 1.01
	For the six-month period ended June 30, 2025
	Amount after tax	Number of ordinary shares outstanding at the end of period (thousand)	Earnings per share ($)
Basic earnings per share
Profit attributable to ordinary shareholders of the parent	$ 288,320,	130,000	$ 2.22
Diluted earnings per share
Profit attributable to ordinary shareholders of the parent	$ 288,320	130,000
Employees’ bonus assumed conversion of all dilutive potential ordinary shares.	-	577
Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares	$ 288,320	130,577	$ 2.21

-49-

For the six-month period ended June 30, 2024

	Amount after tax	Number of ordinary shares outstanding at the end of period (thousand)	Earnings per share (NT$)
Basic earnings per share
Profit attributable to ordinary shareholders of the parent	$ 191,605	130,000	$ 1.47
Diluted earnings per share
Profit attributable to ordinary shareholders of the parent	$ 191,605	130,000
Employees’ bonus assumed conversion of all dilutive potential ordinary shares.	-	298
Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares	$ 191,605	130,298	$ 1.47

(XXX) Supplemental cash flow information

Investing activities with partial cash payments:

	For the six-month periods ended June 30
	2025	2024
(1) Purchase of property, plant and equipment	$ 181,869	$ 222,724
Add: Opening balance of payables on equipment	65,915	176,072
Less: Ending balance of payables on equipment	( 87,586)	( 103,948)
Cash paid during the year	$ 160,198	$ 294,848
	For the six-month periods ended June 30
---	---	---
	2025	2024
(2) Acquisition of intangible assets	$ 1,547	$ 1,470
Add: Opening long-term accounts payable - Current	14,227	15,613
Add: Opening long-term accounts payable - Non-current	25,551	39,778
Less: Ending long-term accounts payable - Current	( 14,344)	( 14,923)
Less: Ending long-term accounts payable - Non-current	( 18,350)	( 32,694)
Less: Other payables	( 17)	( 30)
Net cash outflow from acquisition of subsidiaries	$ 8,614	$ 9,214

Business and investment activities that do not affect cash flow:

	For the three-month periods ended June 30
	2025	2024
(1) Other non-current assets transfer to Property, plant and equipment	$ 37,611	$ 48,116
(2) Inventory transfer to Property, plant and equipment	$ -	$ 1,054
(3) Property, plant and equipment transfer to Other non-current assets	$ 869	$ 4,659
(4) Property, plant and equipment transfer to Inventories	$ 96	$ -
(5) Property, plant and equipment transfer to Operating expenses	$ -	$ 62
(6) Property, plant and equipment transfer to Prepayments	$ 1,716	$ 1,388

Financing activities with no cash flow effects:

	For the three-month periods ended June 30
	2025	2024
The declared cash dividends of the period that have not been paid	$ 494,000	$ 494,000
Subsidiary declares that cash dividends not yet distributed to non-controlling interests	74,422	-
	$ 568,422	$ 494,000

(XXXI) Changes in liabilities arising from financing activities

	2025
	Short-term debts	Short-term notes payable	Lease liabilities - Current and non-current	Guarantee deposit received- Non-current and current liabilities	Long-term loan (current portion)	Dividends Payable	Total liabilities arising from financing activities
January 1	$ 43,448	$ -	$ 361,254	$ 47,031	$ 3,080,500	$ -	$ 3,532,233
Change in cash flow from financing activities	( 11,439)	30,000	( 14,891)	2,026	( 612,000)	-	( 606,304)
Change in discounts on short-term notes payable	-	( 36)	-	-	-	-	( 36)
Revaluation of lease liabilities	-	-	16,355	-	-	-	16,355
Additions to non-cash payments	-	-	7,334	-	-	-	7,334
Dividends declared but not yet paid	-	-	-	-	-	568,422	568,422
Net exchange differences	( 9)	-	( 91)	( 377)	-	-	( 477)
June 30	$ 32,000	$ 29,964	$ 369,961	$ 48,680	$ 2,468,500	$ 568,422	$ 3,517,527
	2024
	Short-term debts	Short-term notes payable	Lease liabilities - Current and non-current	Guarantee deposit received- Non-current and current liabilities	Long-term loan (current portion)	Dividends Payable	Total liabilities arising from financing activities
January 1	$ 79,652	$ -	$ 368,394	$ 47,767	$ 3,264,907	$ -	3,760,720
Change in cash flow from financing activities	( 12,995)	-	( 13,788)	( 346)	( 137,850)	-	( 164,979)
Revaluation of lease liabilities	-	-	17,615	-	-	-	17,615
Dividends declared but not yet paid	-	-	-	-	-	494,000	494,000
Net exchange differences	565	-	25	88	-	-	678
June 30	$ 67,222	$ -	$ 372,246	$ 47,509	$ 3,127,057	$ 494,000	4,108,034

-52-

VII. Related-Party Transactions

(I) Name and relationship of the related parties

Name	Relationship with the Group
Long-Wei Lin
Ruentex Materials Co., Ltd. (Ruentex Materials)	Key management personnel
Second-tier subsidiary of the company which invests in the Company by using the equity method
Shung Shing Enterprise Co., Ltd. (Shung Shing)	Other related party

(II) Key management compensation

1. Operating revenue

	For the three-month periods ended June 30
	2025	2024
Sales of labor services:
Other related parties	$ 4,428	$ 1,332
	For the six-month periods ended June 30
	2025	2024
Sales of labor services:
Other related parties	$ 7,442	$ 1,927

The transaction price of product sales is negotiated with the related parties, and the payment term is net 40 days.

2. Operating costs

	For the three-month periods ended June 30
	2025	2024
Transportation cost:
Ruentex Materials	$ 956	$ 1,038
Other related parties	551	-
Total	$ 1,507	$ 1,038
	For the six-month periods ended June 30
	2025	2024
Transportation cost:
Ruentex Materials	$ 1,461	$ 1,203
Other related parties	1,332	-
Total	$ 2,793	$ 1,203

The removal and transportation cost of the Group is negotiated with the parties and the payment term is negotiated separately.

-53-

3. Related party receivables

	June 30, 2025	December 31, 2024	June 30, 2024
Accounts receivable
Other related parties	$ 1,128	$ 810	$ 609
4. Related party payables
	June 30, 2025	December 31, 2024	June 30, 2024
Accounts payable:
Ruentex Materials	$ 136	$ 183	$ 355
Other payable	734	1,245	-
	$ 870	$ 1,428	$ 355

5. Leasing arrangements - lessee

(1) The Group rented the employee dormitory in Yunlin from Long-Wei Lin, one of the key management personnel. The lease period is January 1, 2022 to December 31, 2026. The cash payment value calculated by the aforementioned lease period and discount rate is $1,460. As of June 30, 2025, accumulated depreciation of $1,022 has been recognized.

(2) The information on lease liabilities related to lease contracts is as follows:

	June 30, 2025	December 31,2024	June 30, 2024
Total of lease payments	$ 447	$ 595	$ 741
Less: Mature within one year (Listed as Lease liabilities - Current)	( 297)	( 296)	( 294)
Total	$ 150	$ 299	$ 447

(3) The information on interest expenses related to lease contracts is as follows:

	For the three-month periods ended June 30
	2025	2024
Key management personnel	$ 2	$ 2
	For the six-month periods ended June 30
	2025	2024
Key management personnel	$ 3	$ 4
(III) Key management compensation
	For the three-month periods ended June 30
	2025	2024
Short-term employee benefits	$ 18,710	$ 16,399
Employment retirement benefits	390	352
Share-based payment	-	2,283
	$ 19,100	$ 19,034

-54-

	For the six-month periods ended June 30
	2025	2024
Short-term employee benefits	$ 40,237	$ 31,199
Employment retirement benefits	777	703
Share-based payment	-	2,283
	$ 41,014	$ 34,185

VIII. Pledged or Mortgaged Assets

Assets pledged by the Company and its subsidiaries as collateral are as follows:

Asset Name	Book value			Purpose
	June 30, 2025	December 31, 2024	June 30, 2024
Property, plant and equipment	$ 328,363	$ 476,655	$ 481,519	Secured borrowings
Time deposit (Recognized as “Financial assets at amortized cost - Current assets”)	11,386	3,195	895	Performance guarantee
Time deposit (Recognized as “Financial assets at amortized cost - Non-current assets”)	23,898	32,243	39,935	Performance guarantee
	$ 363,647	$ 512,093	$ 522,349

IX. Material contingent liabilities and unrecognized contractual commitments

Other than VI (V) $\cdot$ (VI) $\cdot$ (VII) and (XII), the rest are described as follows:

Beijing Ruentex, a third-tier subsidiary of the Company, has been entrusted by the Beijing Municipal Government to manage the disposal of medical waste since 2013. The price required review by the Environmental Protection Bureau of Beijing City, and for the three months ended June 30, 2025 and 2024 and for the six months ended June 30, 2025 and 2024, the income recognized is RMB 12,301,000, RMB 11,871,000, RMB 24,197,000 and RMB 22,092,000, respectively.

Beijing Ruentex, a third-tier subsidiary of the Company, started to manage the cleaning and disposal of medical waste in 2017. It has been approved by the Beijing Environmental Protection Bureau to be eligible for using the abovementioned contracted disposal price starting March 2020. The recognized income for the three months ended June 30, 2025 and 2024 and for the six months ended June 30, 2025 and 2024, is RMB 15,829,000, RMB 18,540,000, RMB 31,189,000 and RMB 37,749,000, respectively.

The Company leased a land lot in Changhua Coastal Industrial Park by Xi-Xing Section of Xianxi Township on February 8, 2018. The lease period was from February 10, 2018 to February 9, 2038, for a total of 20 years. During the lease period, the land would only be used for the construction and operations of a comprehensive processing center. The land rent was to be paid from the date of signing, and will be paid monthly, twelve times a year and the rent for each period was $1\%$ of the land price announced for the year.
The Company signed a reward contract with Shengang Township Office and Xianxi Township Office of Changhua County in November 2012. The contract period was effective from the date of signing to the end of operations of the plant in Changhua Coastal Industrial Park. The subsidy reward is calculated based on the actual quantity of waste in ton processed by the plant multiplied

by the unit price per ton. For the three months ended June 30, 2025 and 2024 and for the six months ended June 30, 2025 and 2024, amounts of $3,461, $3,319, $6,662 and $6,207 were recognized, respectively.

In order to expand the scale of operation, the Company's subsidiary Chin Hsin signed a contract with a waste removal and transportation companies in November 2021 to obtain the list of its customers. Chin Hsin will make the monthly installment over 9 years according to the contract. As the valuation needs to take into account the operating results and is calculated based on a certain proportion, it is a variable consideration. The Group recognized the operating costs of $191, $319, $365 and $695 for the three months ended June 30, 2025 and 2024 and for the six months ended June 30, 2025 and 2024, respectively.
As of June 30, 2025, December 31, 2024 and June 30, 2024, the total of contract construction signed but not yet completed and the prepaid equipment contract were $1,354,655, $1,393,139 and $2,028,394, respectively. $1,159,576, $1,097,620 and $1,583,175 had been paid toward the contract, and the remaining balance will be paid according to the progress of the project.

X. Losses Due to Major Disasters

None.

XI. Major Subsequent Issues

Please refer to Note VI(III).

XII. Others

(I) Capital management

There are no major changes, please refer to Note XII of 2024 consolidated financial statements.

(II) Financial instruments

Types of financial instrument

	June 30, 2025	December 31,2024	June 30, 2024
Financial assets
Financial assets at fair value through profit or loss
Financial assets mandatorily measured at fair value through profit or loss	$ 166,531	$ 280,440	$ -
Financial assets measured at amortized cost
Cash and cash equivalents	679,737	741,113	1,041,984
Financial assets at amortized cost - Current	155,480	191,164	195,778
Notes receivable	30,234	43,947	32,866
Accounts receivable (Including related parties)	374,283	562,508	527,215
Other receivables	3,413	4,546	2,946
Financial assets at amortized cost - Non-current	23,898	32,494	40,186
Refundable deposit (Recognized as “Other non-current assets”)	116,691	110,022	108,224
	$ 1,550,267	$ 1,966,234	$ 1,949,199

	June 30, 2025	December 31,2024	June 30, 2024
Financial liabilities
Financial assets measured at amortized cost
Short-term debts	$ 32,000	$ 43,448	$ 67,222
Short-term notes payable	29,964	-	-
Notes payable	12,169	8,675	8,786
Accounts payable-(Related parties)	152,450	157,160	168,510
Other payables	1,011,433	479,852	958,330
Long-term loan (including due within one year)	2,468,500	3,080,500	3,127,057
Long-term payables (including due within one year)	32,694	39,778	47,618
Guarantee deposit received (Recognized as “Other current liabilities” and “Other non-current liabilities”)	48,680	47,031	47,509
	$ 3,787,890	$ 3,856,444	$ 4,425,032
Lease liabilities - Current and non-current	$ 369,961	$ 361,254	$ 372,246

2. Risk management policies

(1) The Group’s activities expose it to a variety of financial risks, including market risk (exchange rate, interest rate and price), credit risk and liquidity risk. The Group does not undertake derivative trading.

(2) Risk management is carried out by a central finance department (Group finance) under policies approved by the Board of Directors. Group finance identifies, evaluates and hedges financial risks in close collaboration with the Group’s operating units. The Board provides written principles for overall risk management, as well as written policies covering specific areas and matters, such as currency exchange risk, interest rate risk, credit risk, the use of derivatives and non-derivative financial instruments and investment of excess liquidity.

3. Significant financial risks and degrees of financial risks

(1) Market risk

Foreign exchange risk

A. The Group is a multinational operation and therefore is subject to exchange rate risk arising from transactions between the different currencies of the Company and its subsidiaries, mainly in US dollars and RMB. The related exchange risk from future business transactions have been recognized in assets and liabilities.

B. The Group's operations involve certain non-functional currencies (the Company’s and certain subsidiaries’ functional currency is the New Taiwan dollar (NTD). For other certain subsidiaries, the functional currency is the Renminbi (RMB)), so it is subject to the impact of exchange rate fluctuation. The details of assets and liabilities denominated in foreign currencies whose values that would be materially affected by exchange rate fluctuations are as follows:

	June 30, 2025
	Foreign currency (in thousand)	Exchange rate	Book value (NTD)
(Foreign currency: Functional currency)
Financial assets
Monetary items
USD : NTD	$ 4,946	29.30	$ 144,918
RMB : NTD	5,751	4.09	23,522
USD:RMB	16	7.17	469
Financial liabilities
Monetary items
USD : RMB	3,800	7.17	111,340
	December 31, 2024
	Foreign currency (in thousand)	Exchange rate	Book value (NTD)
(Foreign currency: Functional currency)
Financial assets
Monetary items
USD : NTD	$ 26,027	32.79	$ 853,425
RMB : NTD	181,700	4.48	814,016
USD:RMB	770	7.30	25,248
Financial liabilities
Monetary items
USD : RMB	25,800	7.30	845,982
	June 30, 2024
	Foreign currency (in thousand)	Exchange rate	Book value (NTD)
(Foreign currency: Functional currency)
Financial assets
Monetary items
USD : NTD	$ 26,035	32.45	$ 844,836
RMB : NTD	182,549	4.45	812,343
USD:RMB	770	7.27	24,987
Financial liabilities
Monetary items
USD : RMB	25,800	7.27	837,210

C. Total exchange gain, including realized and unrealized gains from significant foreign exchange variations on monetary items held by the Group, amounted to a (loss) gain of ($27,771), $13,734, $5,672 and $43,884 for the three months ended June 30, 2025

and 2024 and for the six months ended June 30, 2025 and 2024, respectively.

D. The analysis of foreign currency risk due to significant exchange rate fluctuation is as follows:

	For the six-month periods ended June 30, 2025
	Sensitivity Analysis
	Fluctuation	Profit and loss affected
(Foreign currency: Functional currency)
Financial assets
Monetary items
USD : NTD	1%	$ 1,449
RMB : NTD	1%	235
USD:RMB	1%	5
Financial liabilities
Monetary items
USD:RMB	1%	1,113
	For the six-month periods ended June 30, 2024
	Sensitivity Analysis
	Fluctuation	Profit and loss affected
(Foreign currency: Functional currency)
Financial assets
Monetary items
USD : NTD	1%	$ 8,448
RMB : NTD	1%	8,123
USD:RMB	1%	250
Financial liabilities
Monetary items
USD:RMB	1%	8,372

Price risk

A. The Company is exposed to price risk from debt instruments classified as financial assets at fair value through profit or loss. To manage the price risk of debt instrument investments, the Company diversifies its investment portfolio according to limits set by the Company.

B. The Company primarily invests in open-ended funds, and the prices of these debt instruments are affected by uncertainties in the future value of the investment targets. If the prices of these debt instruments were to increase or decrease by 1%, with all other factors remaining constant, the after-tax net income for the six-month periods ended June 30, 2025 and 2024 would increase or decrease by $1,665 and $0, respectively, due to gains or losses from debt instruments at fair value through profit or loss

Cash flow and fair value interest rate risk

A. The Group's interest rate risk mainly comes from long-term borrowings issued at

floating rates, which exposes the Group to cash flow interest rate risk. For the three months ended June 30, 2025 and 2024, the Group's borrowings issued at floating rates were mainly denominated in New Taiwan dollars and Chinese yuan.

B. If the interest rates of borrowing NTD and USD increases or decreases by 1%, while all other factors remain constant, the net income after tax for the three months ended June 30, 2025 and 2024, is a decrease or increase of $9,874 and $12,776, respectively, mainly due to the interest expense changes caused by the floating interest rate.

C. If the interest rates of borrowing RMB increases or decreases by 1%, while all other factors remain constant, the net profit after tax for the three months ended June 30, 2025 and 2024 is a decrease or increase of $0 and $1, respectively, mainly due to the interest expense changes caused by the floating interest rate.

(2) Credit risk

A. Credit risk refers to the risk of financial loss to the Group arising from default by the clients or counterparties of financial instruments under contract obligations, and the defaults are notes receivable, accounts receivable, debt instruments measured at amortized cost or at fair value through profit and loss and other financial assets.

B. The management of credit risk is established with a Group perspective. According to the Group's credit policy, each local entity in the Group is responsible for managing and analyzing the credit risk for each of their new clients before standard payment and delivery terms and conditions are offered. Internal risk control assesses the credit quality of the customers, taking into account their financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by the Board of Directors. The utilization of credit limits is regularly monitored.

C. The Group uses IFRS 9 to provide an assumption that if a contract payment is overdue for more than 90 days in accordance with the agreed payment terms, it is considered a breach of contract.

D. The Group uses IFRS 9 to provide the following assumption as a basis for determining whether there is a significant increase in the credit risk of financial instruments after the original recognition:

(A) If the contract payment is overdue for more than 30 days in accordance with the agreed payment terms, the credit risk of the financial asset is significantly increased since the original recognition.

(B) If any external rating agency rates it as an investment grade on the balance sheet date, the credit risk of the financial asset are considered low.

E. The Group uses the following indicators to determine the status of credit impairments of debt instruments:

(A) The issuer has suffered significant financial difficulties or is likely to enter bankruptcy or other financial restructuring.

(B) The issuer experiences a disappearance of the active market for such financial assets due to financial difficulties.

(D) Unfavorable changes in the national- or regional-level economic situation

-59-

resulting in the issuer's default.

F. The Group categories the accounts receivable from customers based on their types and collection methods. The loss ratio method is adopted as the basis for estimating the expected credit loss.
G. The Group may write off the amount in financial assets that cannot be reasonably expected to be recovered after recourse. However, the Group will continue the recourse to protect the rights of the claims. As of June 30, 2025, December 31, 2024 and June 30, 2024, the Group has $1,900, $2,496 and $451, respectively, that have been written off but are involved in recourse.
H. The Group has included the economic indicators and signals of the National Development Council and composite leading indicators of the OECD and estimated the loss allowance for accounts receivable based on the loss rates built according to historical and current data. The loss rates as of June 30, 2025, December 31, 2024 and June 30, 2024 are shown as follows:

June 30, 2025	Not past due	30 days past due	31 to 90 days past due	91 days past due (and more)	Total
Expected loss rate	0.06%	21,79%~78.72%	27.63%~81.26%	43.43%~100%
Total book value	$ 459,805	$ 2,996	$ 6,083	$ 52,580	$ 521,464
Loss allowance	$ 381	$ 1,700	$ 3,734	$ 39,890	$ 45,705
	Not past due	30 days past due	31 to 90 days past due	91 days past due (and more)	Total
December 31, 2024
Expected loss rate	0.03%	20.53%~49.77%	30.79%~71.97%	48.06%~100%
Total book value	$ 596,852	$ 7,538	$ 8,982	$ 40,066	$ 653,438
Loss allowance	$ 173	$ 3,120	$ 5,712	$ 37,978	$ 46,983
	Not past due	30 days past due	31 to 90 days past due	91 days past due (and more)	Total
June 30, 2024
Expected loss rate	0.03%	21.40%~48.95%	29.97%~77.38%	43.33%~100%
Total book value	$ 550,433	$ 5,322	$ 7,580	$ 27,954	$ 591,289
Loss allowance	$ 167	$ 2,391	$ 5,325	$ 23,934	$ 31,817

I. The Group adopts a simplified method in which the loss allowance for the accounts receivable is shown below:

	2025
	Notes receivable	Accounts receivable	Total
January 1	$ 14	$ 46,969	$ 46,983
Recognize impairment loss	6	10,217	10,223
Reversal of impairment loss	(4)	(7,843)	(7,847)
Amounts reversed due to recovery	-	594	594
Impact from the exchange rate	(1)	(4,247)	(4,248)
June 30	$ 15	$ 45,690	$ 45,705

	2024
	Notes receivable	Accounts receivable	Total
January 1	$ 24	$ 16,528	$ 16,552
Recognize impairment loss	5	25,995	26,000
Reversal of impairment loss (Impact from the exchange rate	18) (	11,275) (	11,293)
	-	558	558
June 30	$ 11	$ 31,806	$ 31,817

The impairment losses of accounts receivable recognized for the six months ended June 30, 2025 and 2024, are $2,376 and $14,707, respectively, which were generated by client contracts.

J. The Group recognizes financial assets measured at amortized cost, which are time deposits with a maturity period of within three months and longer than three months. The Group associates with a variety of financial institutions, all with high credit quality to disperse credit risks, so it expects that the probability of counterparty default is remote.

K. The Group recognizes financial assets measured at amortized cost, which are time deposits with a maturity period of longer than three months. The Group associates with a variety of financial institutions, all with high credit quality to disperse credit risks, so it expects that the probability of counterparty default is remote.

(3) Liquidity risk

A. Cash flow forecasting is performed by the operating entities of the Corporate Group and aggregated by the Group's treasury department. It monitors rolling forecasts of liquidity requirements to ensure the Group has sufficient cash to meet operational needs, so that the Group does not breach borrowing limits or covenants on any of its borrowing facilities. Such forecasting takes into consideration the Group's debt financing plans, covenant compliance, and compliance with internal balance sheet ratio targets.

B. The Company's unutilized borrowings are shown as follows:

	June 30, 2025	December 31,2024	June 30, 2024
Floating rate
Mature within one year	$ 2,754,213	$ 2,506,962	$ 2,808,000
More than 1 year	1,300,000	650,000	600,000
	$ 4,054,213	$ 3,156,962	$ 3,408,000

C. The table below analyses the Group's non-derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date for non-derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows.

Non-derivative financial liabilities:

June 30, 2025	Less than 1 year	1 to 3 years	More than 3 years
Short-term debts	$ 32,000	$ -	$ -
Short-term notes payable (Note)	30,000	-	-
Notes payable	12,169	-	-
Accounts payable	151,580	-	-
Accounts payable - Related party	870	-	-
Other payables	1,011,433	-	-
Lease liabilities - Current and non-current(Note)	37,757	70,264	305,471
Long-term loan (include mature within one year) (Note)	293,473	2,002,424	252,955
Long-term payables (include mature within one year) (Note)	14,783	12,703	6,129
Guarantee deposits	37,935	10,745	-

Non-derivative financial liabilities:

December 31, 2024	Less than 1 year	1 to 3 years	More than 3 years
Short-term debts	$ 43,448	$ -	$ -
Notes payable	8,675	-	-
Accounts payable	155,732	-	-
Accounts payable- Related parties	1,428	-	-
Other payables	479,852	-	-
Lease liabilities - Current and non-current (Note)	33,791	64,847	307,357
Long-term loan (include mature within one year) (Note)	157,217	2,728,367	267,331
Long-term accounts payable (include mature within one year) (Note)	14,782	18,869	7,354
Guarantee deposits	41,192	5,119	-

Non-derivative financial liabilities:

June 30, 2024	Less than 1 year	1 to 3 years	More than 3 years
Short-term debts	$ 67,222	$ -	$ -
Notes payable	8,786	-	-
Accounts payable	168,131	-	-
Accounts payable - Related party	355	-	-
Other payables	958,330	-	-
Lease liabilities - Current and non-current(Note)	33,261	64,931	322,104
Long-term loan (include mature within one year) (Note)	296,795	2,903,730	5,212
Long-term payables (include mature within one year) (Note)	15,601	24,217	9,397
Guarantee deposits	25,484	22,025	-

Note: The amount includes the interest expected to be paid in the future.

D. The Group does not expect that the cash flow analyzed for the maturity date will be significantly earlier or the actual amount will be significantly different.

(III) Fair value information

The different levels that the inputs to valuation techniques are used to measure fair value of financial and non-financial instruments have been defined as follows:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. A market is regarded as active, where a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The fair value of the Group's investment in beneficiary certificates is included in Level 1.

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3: Unobservable inputs for the asset or liability.

The Group has financial instruments not measured at fair value, including cash and cash equivalents, financial assets at amortized cost, notes receivable, accounts receivable(including related parties), other receivables, other financial assets, short-term borrowings, short-term bills payable, notes payable, accounts payable(including related parties), other payable, other financial liabilities and book value of long-term borrowings as a reasonable approximation of fair value.
The related information for financial and non-financial instruments measured at fair value by level on the basis of the nature, characteristics and risks of the assets is as follows:

(1) The Group classifies its assets according to their nature, and the relevant information is as follows:

June 30, 2025	Level 1	Level 2	Level 3	Total
Assets
Recurring fair value measurements
Financial assets at fair value through profit or loss
Beneficiary certificates	$ 166,531	$ -	$ -	$ 166,531
December 31, 2024	Level 1	Level 2	Level 3	Total
Assets
Recurring fair value measurements
Financial assets at fair value through profit or loss
Beneficiary certificates	$ 280,440	$ -	$ -	$ 280,440

(2) The methods and assumptions used by the Group to measure fair value are as follows: The Group adopts market price as the fair value input (Level 1), and the market price is the closing price.

-64-

XIII. Additional Disclosures

(I) Significant transactions information

Loans to others: Please refer to Table I.
Provision of endorsements and guarantees to others: Please refer to Table II.
Holding marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): Please refer to Table III.
Purchases or sales of goods from or to related parties reaching $100 million or 20% of paid-in capital or more: None.
Receivables from related parties reaching $100 million or 20% of paid-in capital or more: Please see Table IV.
Significant inter-company transactions during the reporting periods: Please refer to Table V.

(II) Information on investees

Names, locations and other information of investee companies (not including investees in China): Please refer to Table VI.

(III) Information on investments in China

Basic information: Please refer to Table VII.
Significant transactions, either directly or indirectly through a third area, with investee companies in China: Please see Table IV and V.

XIV. Operating Segments Information

(I) General information

Management has determined the reportable operating segments based on reports reviewed by the chief operating decision-maker and used to make strategic decisions. The chief operating decision-maker considers the business from labor service and product classification perspectives and evaluates the performance of organizational units based on the perspectives. Currently, the Group focuses on transportation and disposal of medical waste. The remaining operating results are consolidated and demonstrated in other operating units.

(II) Information on segment profit and loss, assets and liabilities

Information on the reporting segments provided to the chief operating decision maker is shown as follows:

For the six-month period ended June 30, 2025

	Transportation	Disposal	Others	Adjustment and Write-off	Grand Total
Revenue from external clients	$ 405,107	$ 1,450,872	$ 28,823	$ -	$ 1,879,802
Inter-segment transactions	99,694	5,140	9,263	( 114,097)	-
Segment revenue	$ 504,801	$ 1,456,012	$ 33,086	($ 114,097)	$ 1,879,802
Net profit of segment	$ 137,719	$ 291,256	$ 2,275	$ 11,997	$ 443,247
Segment assets	$ 1,653,825	$ 12,556,566	$ -	($ 4,392,704)	$ 9,817,687
Segment margin include:
Depreciation expense	$ 27,841	$ 282,290	$ -	$ -	$ 310,131
Amortization expense	$ 3,381	$ 35,770	$ -	$ -	$ 39,151

For the six-month period ended June 30, 2024

	Transportation	Disposal	Others	Adjustment and Write-off	Grand Total
Revenue from external clients	$ 267,690	$ 1,436,623	$ 7,897	$ -	$ 1,712,210
Inter-segment transactions	79,342	642	6,804	( 86,788)	-
Segment revenue	$ 347,032	$ 1,437,265	$ 14,701	($ 86,788)	$ 1,712,210
Net profit of segment	$ 88,353	$ 128,630	$ 146	$ 57,552	$ 274,681
Segment assets	$ 1,428,149	$ 14,173,899	$ -	($ 4,862,597)	$ 10,739,451
Segment margin include:
Depreciation expense	$ 22,968	$ 268,566	$ -	($ 1,539)	$ 289,995
Amortization expense	$ 3,340	$ 30,536	$ -	$ -	$ 33,876

(III) Reconciliation of segment income (loss), assets and liabilities

Revenue from external customers and segment income (loss) reported to the chief operating decision-maker are measured using the same method as for revenue and profit before tax in the financial statements. Thus, no reconciliation is needed.

Sunny Friend Environmental Technology Co., Ltd. and Subsidiaries

Loans to Others

January 1 to June 30, 2025

Unit: NT$1,000

(Unless otherwise specified)

Table I

Code (Note 1)	Company that lent funds	Borrowing party	General ledger account (Note 2)	Related party?	Maximum balance of the period (Note 3)	Balance at the end of period (Note 8)	Actual amount drawn down	Range of interest rate	Nature of loan (Note 4)	Amount in transactions with the borrower (Note 5)	Reason for short-term financing (Note 6)	Amount in recognized impairment loss	Guarantee name	Value	Limit on loans granted to a single party (Note 7)	Ceiling on total loan granted (Note 7)	Remarks
1	Full Giant Resources Ltd.	Yuncheng Ruentex Environmental Technology Co., Ltd.	Accounts receivable - Related party	Yes	$ 1,072,856	$ -	$ -	0%	Short-term financing	$ -	Business operations	$ -	-	$ -	$ 3,608,042	$ 3,608,042	Note 9
1	Full Giant Resources Ltd.	Beijing Ruentex Environmental Technology Co., Ltd.	Accounts receivable - Related party	Yes	199,260	175,800	111,340	0%	Short-term financing	-	Business operations	-	-	-	3,608,042	3,608,042	Note 9 and Note 12
1	Full Giant Resources Ltd.	Jiangsu Suqian Ruentex Environmental Control Co., Ltd.	Accounts receivable - Related party	Yes	448,335	-	-	0%	Short-term financing	-	Business operations	-	-	-	3,608,042	3,608,042	Note 9
2	Beijing Ruentex Environmental Technology Co., Ltd.	Yuncheng Ruentex Environmental Technology Co., Ltd.	Accounts receivable - Related party	Yes	320,110	286,370	237,278	0-4%	Short-term financing	-	Business operations	-	-	-	477,357	954,714	Note 10 and Note 13
2	Beijing Ruentex Environmental Technology Co., Ltd.	Rizhao Panyue Environmental Technology Co., Ltd.	Accounts receivable - Related party	Yes	365,840	327,280	298,643	0-4%	Short-term financing	-	Business operations	-	-	-	477,357	954,714	Note 10 and Note 14
2	Beijing Ruentex Environmental Technology Co., Ltd.	Jiangsu Suqian Ruentex Environmental Control Co., Ltd.	Accounts receivable - Related party	Yes	91,460	81,820	70,365	4%	Short-term financing	-	Business operations	-	-	-	477,357	954,714	Note 10 and Note 15

Table I, Page 1

Note 1: The explanation of the Code column is as follows:

(1) Issuer fills in 0.
(2) The subsidiaries are numbered in order starting from 1.

Note 2: Accounts receivable from affiliates and related parties, shareholders' transactions, prepayments, temporary payments and others must be filled in this field if they are considered loans in nature.

Note 3: Maximum balance of funds loaned to others in the current year.

Note 4: The nature of the loan should be listed as business transactions or those that have the needs for short-term financing.

Note 5: If the nature of the loans is business transactions, the amount in transactions should be filled in. The amount in transactions refers to the amount between the company which provides the loans and the borrower.

Note 6: If the nature of the loans is short-term financing, the reasons for borrowing and the purposes of the loans must be specified, such as repayment of loans, purchase of equipment, business operations and others.

Note 7: The limits for separate borrowers and the total amount in loans lent out should be specified in accordance with the Company's regulations on loans to others, and the remark box should explain the calculation of limits for separate borrowers and the total amount in loans available.

Note 8: If a publicly traded company wishes to propose the entries of loans to the board for resolution in accordance with Paragraph 1, Article 14 of the Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies, the amounts determined by the board shall be listed in the announced balance before the disbursement of loans to disclose the risks the company undertakes. The remaining balances after repayments should also be disclosed to reflect the adjustment of risks. According to Paragraph 2, Article 14 of the Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies, once the board authorizes the chairman to issue the loans in multiple disbursements at a specific amount within a year or in a revolving credit line, the limit of the loan authorized by the board should still be put in the public announcement. This is in consideration of the fact that loans may be given out again after the repayments, so the amounts determined by the board shall be listed in the announced balance.

Note 9: The overseas company Full Giant Resources Ltd., in which the Company directly holds 100% of the voting shares, should not disburse loans totaling more than 100% of the net value of loan recipients, and the amount in loan to a single party should not exceed 100% of the net value of loan recipient.

Note 10: The overseas company Beijing Ruentex, in which the Company indirectly holds 100% of the voting shares, should not disburse loans totaling more than 40% of the net value of loan recipients, and the amount in loan to a single party should not exceed 20% of the net value of loan recipient.

Note 11: The aforementioned net value is based on the net value of the Company's most recent consolidated financial report audited by an accountant.

Note 12: The ending balance is US$6,000,000, which is converted into an amount in New Taiwan Dollar according to the spot exchange rate from the Bank of Taiwan on June 30, 2025 at 29.3.

Note 13: The ending balance is RMB$70,000,000, which is converted into an amount in New Taiwan Dollar according to the spot exchange rate from the Bank of Taiwan on June 30, 2025 at 4.091.

Note 14: The ending balance is RMB$80,000,000, which is converted into an amount in New Taiwan Dollar according to the spot exchange rate from the Bank of Taiwan on June 30, 2025 at 4.091.

Note 15: The ending balance is RMB$20,000,000, which is converted into an amount in New Taiwan Dollar according to the spot exchange rate from the Bank of Taiwan on June 30, 2025 at 4.091.

Table I, Page 2

Sunny Friend Environmental Technology Co., Ltd. and Subsidiaries

Provision of endorsements and guarantees to others

January 1 to June 30, 2025

Table II
Unit: NT$1,000
(Unless otherwise specified)

Code(Note 1)	Party being endorsed/guaranteed			Limit onendorsements/guaranteesprovided for asingle party(Note 3)	HighestEndorsementBalance of thePeriod (Note 4)	Outstandingendorsement/guarantee balance(Note 5)	Actual amountdrawn down(Note 6)	Amount ofendorsements/guaranteessecured withcollateral	Ratio ofaccumulatedendorsement/guaranteeamount to net assetvalue of theendorsement/guarantorcompany	Ceiling on totalamount ofendorsements/guarantees byparent companyto subsidiary(Note 7)	Provision ofendorsements/guarantees bysubsidiary toparentcompany(Note 7)	Provision ofendorsements/guarantees to theparty in China(Note 7)	Remarks
	Endorser/guarantor	Company Name
0	Sunny Friend EnvironmentalTechnology Co., Ltd.	Yuncheng RuentexEnvironmental TechnologyCo., Ltd.	2	$ 1,875,830	$ 41,590	$ 40,910	$ -	$ -	0.87%	$ 4,689,575	Y	N	Y
0	Sunny Friend EnvironmentalTechnology Co., Ltd.	Rizhao PanyueEnvironmental TechnologyCo., Ltd.	2	1,875,830	87,320	81,820	-	-	1.74%	4,689,575	Y	N	Y
0	Sunny Friend EnvironmentalTechnology Co., Ltd.	Jiangsu Suqian RuentexEnvironmental ControlCo., Ltd.	2	1,875,830	87,320	81,820	-	-	1.74%	4,689,575	Y	N	Y
0	Sunny Friend EnvironmentalTechnology Co., Ltd.	Beijing RuentexEnvironmental TechnologyCo., Ltd.	2	1,875,830	83,180	81,820	-	-	1.74%	4,689,575	Y	N	Y

Note 1: The explanation of the Code column is as follows:
(1) Issuer fills in 0.
(2) The subsidiaries are numbered in order starting from 1.

Table II, Page 1

Note 2: There are the following seven types of relationships between the endorser/guarantor and the party being endorsed/guaranteed:

(1) A company with business relations.

(2) The Company directly or indirectly holds more than 50% of the voting shares of the other company.

(3) The other company directly or indirectly holds more than 50% of the voting shares of the Company.

(4) The Company directly or indirectly holds more than 90% of the voting shares of the other company.

(5) Companies that are mutual protected due to mutual endorsement between industry partners or joint construction builders based on the needs of the project.

(6) A company endorsed or guaranteed by all contributing shareholders in the order of their shareholding proportion for a co-investment relationship.

(7) Industry partners who are engaged in the sales of pre-construction homes and conduct joint guarantee for the performance of contract based on Consumer Protection Act.

Note 3: Fill in the amount limit of endorsement guarantee for individual counterparty and the total amount limit of endorsement guarantee specified in accordance with the Company's regulations on provision of endorsements and guarantees to others, and explain the calculation of limits for each individual counterparty and the total amount limit in the remark box.

Note 4: The maximum balance guaranteed for others during the year.

Note 5: The amount approved by the board of directors. However, if the board of directors authorize the chairperson for resolution in accordance with Subparagraph 8 or Article 12 of the "Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies", then this refers to the amount determined by the chairperson.

Note 6: Shall enter the actual amount used by the endorsed company within the balance limit of the endorsement.

Note 7: Fill in Y if it is an endorsement of a subsidiary by its parent company that is publicly listed or an OTC, or an endorsement of a parent company that is publicly listed or an OTC, by its subsidiary, or an endorsement in China.

Note 8: The ceiling amount of endorsement guarantees by the Company to others is limited to no more than 100% of the Company's net worth, and the ceiling of endorsement guarantees for a single enterprise is limited to no more than 40% of the Company's net worth.

Table II, Page2

Sunny Friend Environmental Technology Co., Ltd. and Subsidiaries
Holdings of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures)
June 30, 2025

Table III

Unit: NT$1,000

(Unless otherwise specified)

	Marketable securities	Relationship with the securities issuer		End of Period
Company name of the shareholding	(Note 1)	(Note 2)	General ledger account	Number of units	Carrying amount (Note 3)	Ownership	Fair value	Remarks (Note4)
Chin Hsin	UPAMC James Bond	-	Financial assets at fair value	9,500,827.38	$ 166,531	-	$ 166,531
Environmental Engineering	Money Market Fund		through profit and loss - Current

Note 1: Marketable securities in the table refer to stocks, bonds, beneficiary certificates and other related derivative securities within the scope of IFRS 9, Financial Instruments
Note 2: The box is exempt if the issuer of the negotiable securities is not a related person.
Note 3: Fair value is determined based on fair value less accumulated impairment for marketable securities measured at fair value. Fair value is determined based on the acquisition cost or amortized cost less accumulated impairment for marketable securities not measured at fair value.
Note 4: If the listed negotiable securities are restricted due to being used as a guarantee, pledge or other agreements, the remark box shall be filled with a description to clarify the number of shares as guarantee or borrowings or the amount and restrictions.
Note 5: The Company determines which securities shall be disclosed based on the principle of materiality.

Table III, Page 1

Sunny Friend Environmental Technology Co., Ltd. and Subsidiaries
Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more
January 1 to June 30, 2025

Table IV

Unit: NT$1,000
(Unless otherwise specified)

Company in accounts receivable	Counterparty	Relationship with the endorser/guarantor	Balance of AR from related party (Note 1)	Turnover rate	Overdue receivables		Amount collected subsequent to the balance sheet date	Amount of recognized impairment loss
					Amount	Actions Taken
Sunny Friend Environmental Technology Co., Ltd.	Chin Hsin Environmental Engineering	Subsidiary	$ 102,566	Note 3	$ -	-	$102,538-	$ -
Full Giant Resources Ltd.	Beijing Ruentex Environmental Technology Co., Ltd.	Subsidiary	111,422	Note 4	-	-	-	-
Beijing Ruentex Environmental Technology Co., Ltd.	Yuncheng Ruentex Environmental Technology Co., Ltd.	Subsidiary	259,348	Note 5	-	-	-	-
	Rizhao Panyue Environmental Technology Co., Ltd.	Subsidiary	314,750	Note 5	-	-	-	-

Note 1: Fill out accounts receivable, notes and other receivables in the corresponding columns.
Note 2: Paid-in capital refers to the amount in paid-in capital of the parent company. In the event the issuer's shares have no par value or a par value other than NT$10, the calculation of transaction amounts of 20% of paid-in capital will be substituted by the 10% of equity attributable to owners of the parent company.
Note 3: Actual dividends receivable and other receivables.
Note 4: Actual expenditure amount of loan and other receivables.
Note 5: Actual expenditure amount of loan and interest receivable.

Table IV, Page 1

Sunny Friend Environmental Technology Co., Ltd. and Subsidiaries

Significant inter-company transactions during the reporting periods

January 1 to June 30, 2025

Table V

Unit: NT$1,000

(Unless otherwise specified)

Code (Note 1)	Company Name	Counterparty	Relationship	Status of transaction
				General ledger account	Amount	Transaction terms	Percentage of consolidated total operating revenues or total assets (Note 3)
0	Sunny Friend Environmental Technology Co., Ltd.	Chin Hsin Environmental Engineering Co., Ltd.	1	Account receivables	$ 87,628	Note 9	0.89%
		Liang Wei Environmental Engineering Co., Ltd.	2	Account receivables	6,352	Note 9	0.06%
		Chin Hsin Environmental Engineering Co., Ltd.	1	Other receivables	102,566	Note 5	1.04%
1	Chin Hsin Environmental Engineering Co., Ltd.	Sunny Friend Environmental Technology Co., Ltd.	3	Transportation revenue	86,103	Note 6	4.58%
2	Full Giant Resources Ltd.	Beijing Ruentex Environmental Technology Co., Ltd.	5	Other receivables	111,422	Note 7	1.13%
3	Cheng Shin Environmental Engineering Co., Ltd.	Sunny Friend Environmental Technology Co., Ltd.	6	Transportation revenue	10,151	Note 6	0.54%
4	Liang Wei Environmental Engineering Co., Ltd.	Sunny Friend Environmental Technology Co., Ltd.	6	Transportation revenue	11,340	Note 6	0.60%
5	Beijing Ruentex Environmental Technology Co., Ltd.	Yuncheng Ruentex Environmental Technology Co., Ltd.	7	Other receivables	259,348	Note 8	2.64%
		Rizhao Panyue Environmental Technology Co., Ltd.	7	Other receivables	314,750	Note 8	3.21%
		Jiangsu Suqian Ruentex Environmental Control Co., Ltd.	7	Other receivables	75,347	Note 8	0.77%
		Rizhao Panyue Environmental Technology Co., Ltd.	7	Account receivables	6,039	Note 6	0.06%

Table V, Page 1

Note 1: The numbers filled in for the transaction company in respect of inter-company transactions are as follows:

(1) Parent company is "0".

(2) The subsidiaries are numbered in order starting from "1".

Note 2: Relationship between transaction company and the counterparty is classified into the following three categories; fill in the number of categories each case belongs to (If transactions between the parent company and subsidiaries or between subsidiaries refer to the same transaction, it is not required to disclose it twice. For example, if the parent company has already disclosed its transaction with a subsidiary, then the subsidiary is not required to disclose the transaction; for transactions between two subsidiaries, if one of the subsidiaries has disclosed the transaction, then the other is not required to disclose the transaction):

(1) Parent company to subsidiary.

(2) Parent company to second-tier subsidiaries.

(3) Subsidiary to parent company.

(4) Subsidiary to second-tier subsidiaries.

(5) Subsidiary to third-tier subsidiaries.

(6) Second-tier subsidiary to parent company.

(7) Third-tier subsidiary to fourth-tier subsidiaries.

Note 3: Regarding the percentage of the transaction amount to consolidated total operating revenues or total assets, it is computed based on the period-end balance of the transaction to the consolidated total assets for balance sheet accounts and based on accumulated transaction amount for the period to the consolidated total operating revenues for income statement accounts.

Note 4: A transaction amount in more than $6,000 will be disclosed. It will be disclosed in the asset and revenue aspects.

Note 5: Actual dividends receivable

Note 6: There are no major abnormalities in the transaction terms and prices of the related party than non-related parties.

Note 7: Loans to Others.

Note 8: Loans to others and interests receivable.

Note 9: It is the payment entrusted to be collected by the removal and transportation company according to the waste management contract, so it is recognized as accounts receivable.

Table V, Page 2

Sunny Friend Environmental Technology Co., Ltd. and Subsidiaries

Names, locations and other information of investee companies (not including investees in China)

January 1 to June 30, 2025

Table VI

Name of Investor	Investee (Note 1 and 2)	Location	Main business activities	Initial investment amount		Shares held as of the end of the period			Net profit (loss) of the investee for the current period (Note 2 (2))	(Unless otherwise specified) Investment income (loss) recognized by the Company for the current period (Note 2(3))	Remarks
				Balance at the end of the period	End of the previous year	Number of Shares	percentage %	Book value
Sunny Friend Environmental Technology	Chin Hsin Environmental Engineering Co., Ltd.	Yunlin	Disposal of medical waste	$ 288,534	$ 288,534	26,415,300	57.42	$ 520,246	$ 110,544	$ 63,474	Subsidiary
	Full Giant Resources Ltd.	British Virgin Islands	Holding company	3,681,311 (US$ 125,642,000)	4,119,801 (US$ 125,642,000)	126,100,000	100.00	3,608,042	(75,471)	(75,471)	"
Chin Hsin Environmental Engineering Co., Ltd.	Liang Wei Environmental Engineering Co., Ltd.	Taoyuan	Disposal of medical waste	64,041	64,041	5,500,000	100.00	106,483	29,771	-	Second-tier subsidiary
	Cheng Shin Environmental Engineering Co., Ltd.	Tainan	Disposal of medical waste	34,357	34,357	2,000,000	100.00	66,086	7,722	-	"
	Huan Hsin Precision Co., Ltd.	Yunlin	Manufacturing of building materials	-	25,000	3,000,000	-	-	(121)	-	"
Full Giant Resources Ltd.	Arise Profits Ltd.	British Virgin Islands	Investment	953,129 (USD 32,530,000)	1,066,659 (USD 32,530,000)	44,650,000	100.00	2,384,929	(45,909)	-	"

Note 1: If the publicly listed company has an overseas holding company and uses the consolidated financial report as the main financial report in accordance with the local laws and regulations, the disclosure of the overseas invested company may only disclose the relevant information of the holding company.
Note 2: Those that are not as described in Note 1 shall be filled in accordance with the following rules:
(1) "Investee," "Location," "Main business activities," "Initial investment amount," and "End-of-year shareholdings" are to be filled on order of the Company (publicly listed) and its re-investment and all investees either directly or indirectly invested and the further reinvestment. The relation (either subsidiaries or second-tier subsidiaries) between investees and the Company (publicly listed) are to be specified in the remarks field.
(2) The field of "Net profit (loss) of the investee for the year ended" shall have the profit or loss of each investee filled in.
(3) The field of "Investment income (loss) recognized by the Company for the year ended" only requires the Company (publicly listed) to recognize the directly-invested subsidiaries and the profit or loss incurred by adopting the equity method, and the rest can be omitted. When filling in "Recognition of profit or loss in directly-invested subsidiaries for the year," make sure that the profit or loss of subsidiary have included their own profit or loss incurred in their re-investment.

Unit: NT$1,000

Table VI, Page 1

Sunny Friend Environmental Technology Co., Ltd. and Subsidiaries

Information on investments in China - Basic information

January 1 to June 30, 2025

Unit: NT$1,000

(Unless otherwise specified)

Table VII

Investee in China	Main business activities	Paid-in capital	Investment method (Note 1)	Accumulated amount of remittance from Taiwan to China as of January 1, 2025	Remitted to	Remitted back	Accumulated amount of remittance from Taiwan to China as of June 30, 2025	Net profit (loss) of the investee for the current period	Ownership held by the Company (direct or indirect)	Investment income (loss) recognized by the Company for the current period (Note 2)	Book value of investments in China as of June 30, 2025	Accumulated amount in investment income remitted back to Taiwan as of the end of the period	Remarks
Beijing Ruentex Environmental Technology Co., Ltd.	Environmental sanitation and pollution control service	$ 1,671,624 (USD 53,950,000)	(2)	$ 237,975 (USD 8,122,000)	$-	$-	$ 237,975 (USD 8,122,000)	($ 45,796)	100.00	($ 45,796)	$ 2,386,786	$-	Note 2 (2) B and Note 3
Jiangsu Suqian Ruentex Environmental Technology Co., Ltd.	Environmental sanitation and pollution control service	885,860 (RMB 198,490,000)	(2)	439,500 (USD 15,000,000)	-	-	439,500 (USD 15,000,000)	( 18,370)	100.00	( 18,370)	649,124	-	Note 2 (2) B + Note 4 + Note 5 and Note 6
Langfang Ruentex Environmental Technology Co., Ltd.	Environmental sanitation and pollution control service	- (USD 0)	(2)	43,950 (USD 1,500,000)	-	-	43,950 (USD 1,500,000)	( 308)	100.00	( 308)	-	-	Note 2 (2) B + Note 5 and Note 8
Yuncheng Ruentex Environmental Technology Co., Ltd.	Environmental sanitation and pollution control service	1,679,436 (RMB 367,813,000)	(2)	586,000 (USD 20,000,000)	-	-	586,000 (USD 20,000,000)	( 25,051)	100.00	( 25,051)	1,198,499	-	Note 2 (2) B + Note 5 + Note 6 and Note 7
Rizhao Panyue Environmental Technology Co., Ltd.	Environmental sanitation and pollution control service	306,390 (RMB 70,000,000)	(2)	751,108 (RMB 183,600,000)	-	-	751,108 (RMB 183,600,000)	( 50,333)	100.00	( 63,493)	175,255	-	Note 2 (2) B and Note 5

Note 1: Investment methods are classified into the following three categories; fill in the number of categories each case belongs to:
(1) Directly invest in a company in China.
(2) Through investing in an existing company in the third area (please specify the company), which then invested in China.
(3) Others.
Note 2: Net profit (loss) of the investee for the year:
(1) If it is still under preparation with no actual gain or loss, it shall be indicated in the box.
(2) The basis for recognition of the investment gains or losses is divided into the following three which shall be indicated in the box,
A. Financial statements audited and validated by an international accounting firm that has a collaborative relationship with CPA firms in Taiwan.

Table VII, Page 1

B. Financial statements audited and validated by a certified accountant or accounting firm who work with the parent company in Taiwan.

C. Financial statement completed in-house during the same period that has not been audited by a certified accountant.

Note 3: Through Full Giant Resources Ltd. an investment is made to Arise Profits Ltd, which then conducts another re-investment.

Note 4: On September 24, 2024, the Board of Directors resolved that the subsidiary Full Giant convert its loan to the Chinese subsidiary Suqian Ruentex into equity in the amount of US$13,500 thousand.

Approval was obtained from the Department of Investment Review, Ministry of Economic Affairs on November 28, 2024. The capital increase base date was April 25, 2025, and as of August 7, 2025, the relevant procedures were still in progress.

Note 5: Through Full Giant Resources Ltd. an investment is made to Arise Profits Ltd. Beijing Ruentex Environmental Technology Co., Ltd. which then conducts another re-investment.

Note 6: Invest through Full Giant Resources Ltd.

Note 7: On September 24, 2024, the Company's Board of Directors resolved to approve that the subsidiary Full Giant convert its loan to the Chinese subsidiary Yuncheng Ruentex into equity, in the amount of US$8,500 thousand and CNY¥175,950 thousand.

Note 8: The Group resolved to withdraw from the investment project of its subsidiary, Langfang, as the project could not proceed due to the lack of suitable land and overall planning considerations. The cancellation procedure was completed on March 13, 2025.

On July 22, 2025, the Ministry of Economic Affairs Investment Commission approved the revocation of the aforementioned investment (Approval No. Jing-Shou-Shen-Zi 11420125170). However, as of August 7, 2025, the funds had not yet been repatriated.

Table VII, Page 2

Company Name	Accumulated amount of remittance from Taiwan to China as of June 30, 2025	Investment amount approved by the Investment Commission of the Ministry of Economic Affairs (MOEA)	Ceiling on investments in China imposed by the Investment Commission
Beijing Ruentex Environmental Technology	$237,975	$1,580,735	(Note 9)
Co., Ltd.	(USD 8,122,000)	(USD 53,950,000)
Jiangsu Suqian Ruentex Environmental Technology Co., Ltd.	$439,500	$819,832	(Note 9)
	(USD 15,000,000)	(RMB 200,399,000)
Langfang Ruentex Environmental Technology Co., Ltd.	$43,950	$0	(Note 9)
	(USD 1,500,000)	(USD 0)
Yuncheng Ruentex Environmental Technology Co., Ltd.	$586,000	$1,520,747	(Note 9)
	(USD 20,000,000)	(RMB 371,730,000)
Rizhao Panyue Environmental Technology Co., Ltd.	$751,108	$751,108	(Note 9)
	(RMB 183,600,000)	(RMB 183,600,000)

Note 9: The limits are specified in accordance with the "Review for Conducting Investment or Technological Collaboration in China" by the Investment Commission of the Ministry of Economic Affairs. The Company has obtained an operating headquarters certificate from the Industrial Development Bureau of the Ministry of Economic Affairs, and the limit will not be applicable.

Table VII, Page3

AI assistant

SF — Interim / Quarterly Report 2025

52735_rns_2026-04-17_64e658bc-10c4-4a2c-a062-6a760d768849.pdf

Introduction

Scope of Review

Conclusion

Sunny Friend Environment Technology Co., Ltd. and Subsidiaries

Consolidated Statement of Comprehensive Income

Sunny Friend Environment Technology Co., Ltd. and Subsidiaries

Consolidated Statement of Changes in Equity

(VIII) Other non-current assets

(IX) Short-term debts

(X) Short-term notes payable

(XVIII) Capital surplus

2. Contract assets and contract liabilities

(XXVIII) Non-controlling interest

VII. Related-Party Transactions

(I) Name and relationship of the related parties

(II) Key management compensation

1. Operating revenue

2. Operating costs

3. Related party receivables

5. Leasing arrangements - lessee

VIII. Pledged or Mortgaged Assets

IX. Material contingent liabilities and unrecognized contractual commitments

2. Risk management policies

3. Significant financial risks and degrees of financial risks

(1) Market risk

Price risk

Cash flow and fair value interest rate risk

(3) Liquidity risk

XIII. Additional Disclosures

(I) Significant transactions information

(II) Information on investees

(III) Information on investments in China

XIV. Operating Segments Information

(I) General information

(II) Information on segment profit and loss, assets and liabilities

Loans to Others

Sunny Friend Environmental Technology Co., Ltd. and Subsidiaries

Names, locations and other information of investee companies (not including investees in China)

More from SF

SF Interim / Quarterly Report 2025