Stock Code: 1409

新光合成纖維股份有限公司

SHINKONG SYNTHETIC FIBERS CORPORATION

2024

Annual Report

Annual report available at: http://mops.twse.com.tw
Printed on April 15, 2025

I. Name, designation, contact number, and e-mail of the spokesperson and acting spokesperson:

Spokesperson: Yu-Lin Hsu

Title: Senior Specialist

Tel: (02)2507-1259

E-mail: [email protected]

Deputy Spokesperson: Hao-Ning Ho

Title: Manager

Tel: (02)2507-1259

E-mail: [email protected]

II. Address and contact number of the headquarters, branches, and factory sites

Head office: 5F, No. 136, Section 3, Ren'ai Road, Da'an District, Taipei City

Tel: (02)2507-1259

Zhongli Plant: No. 223, Section 3, Yenping Road, Pingzhen District, Taoyuan City

Tel: (03)493-2131

Guanyin Plant: No. 9, Guojian 3rd Road, Guanyin Industrial Park, Taoyuan City

Tel: (03)483-6745

III. Stock transfer agent

Name: Share Administration Department, Shinkong International Securities Co., Ltd. (SKIS)

Address: 11F, No. 66-1, Section 1, Chongqing South Road, Taipei City

Website: www.skis.com.tw

Tel: (02)2311-8787

IV. Audit of the latest financial statements

CPAs: Wen-Hsiang Chen, Wen-Yea Shyu

Accounting firm: Deloitte & Touche

Address: 20F., No. 100, Songren Rd., Taipei City 110

Website: www.deloitte.com.tw

Tel: (02)2725-9988

V. Name of overseas exchanges where securities are listed, and method of inquiry: N/A

VI. Company website

www.shinkong.com.tw

Contents

Page

One. Letter to Shareholders ... 1
Two. Corporate Governance Report ... 19
I. Directors, Supervisors, Presidents, Vice presidents, Assistant Managers, Supervisors of all Departments and Branches ... 19
II. Implementation of Corporate Governance ... 48
III. Information About the Company’s Audit Fee ... 139
IV. Change of CPA: ... 139
V. The Company’s Chairperson, General Manager, or any managers involved in financial or accounting affairs being employed by the accounting firm or any of its affiliated company within the most recent year: None. ... 140
VI. Details of shares transferred or pledged by directors, managers, or shareholders with more than 10% ownership interest in the last year up until the publication date of this annual report: ... 140
VII. Relationships among top-10 shareholders: ... 141
VIII. Aggregate shareholding percentage ... 145

Three. Capital Overview ... 147
I. Capital and Shares ... 147
II. The Company's Handling of Corporate Bonds: ... 152
III. Preferred shares ... 153
IV. Global depository receipts ... 153
V. Employee stock options ... 153
VI. New issuance of employee restricted shares ... 153
VII. Names of managers having acquired employee stock options and names of employees ranking top ten in convertible shares ... 153
VIII. Status of new shares issuance in connection with mergers and acquisitions. ... 153
IX. Financing plans and implementation: ... 153

Four. Operating Highlights ... 155
I. Business Activities ... 155
II. Market and Sales Overview ... 173
III. Human Resources ... 193
IV. Environmental Protection Expenditures ... 193
V. Labor Relations ... 195
VI. Information security Management ... 201
VII. Important Contracts ... 204

Five. Review of financial position, business performance, and risk issues ... 205
I. Analysis of Financial Status ... 205

II. Analysis of Operation Results ... 207
III. Analysis of Cash Flow ... 210
IV. Major Capital Expenditure Items ... 210
V. Investment Policy in the Last Year, Main Causes for Profits or Losses,
Improvement Plans and the Investment Plans for the Coming Year ... 211
VI. Analysis of Risk Management ... 211
VII. Other important disclosures ... 219

Six. Special remarks ... 220
I. Information on Affiliates ... 220
II. Private Placement Securities in the Most Recent Year and as of Publication
Date of the Annual Report: ... 220
III. Other supplementary information ... 220

Letter to the Shareholders

One. Letter to Shareholders

Since the establishment of the Company, Shinkong Synthetic Fibers Corporation (hereinafter “Shinkong Synthetic Fibers”) has been committed to the differentiation of products and development of high value-added products based on our profound core polyester technology. In the face of the challenge of drastic changes in the global economy and industry structure, we uphold our corporate value and continue to promote business transformation and innovation development to ensure the sustainable operation of the enterprise.

Looking back on the past two years, the global economic environment is full of uncertainties, such as high inflation, high interest rates, and the severe overcapacity in China and global dumping, causing an oversupply in the international market, which further affected the fair competition in the industry. The U.S. Fed continues to adjust its monetary policy, the economic growth of the Euro Zone has slowed down, the economic recovery in China is weak, geopolitical factors such as the Russo-Ukrainian War and the Middle East conflict as well as rising energy costs continue to make the market fluctuate, and such situations have posed a huge challenge to the global fiber and plastic industry.

Under these circumstances, thanks to the efforts of the management team and all employees, the Company has made significant progress in 2024 compared to that in 2023. With our outstanding technology and market deployment advantages, we operate steadily and strengthen our market response strategies to ensure the stability of the Company's operations and enhance our competitiveness.

In terms of operating results, the Company's overall revenue in 2024 is steadily growing compared to that in the previous year, mainly due to the expansion of market demand for environmental protection and high-functional products. We are actively expanding the international market, especially in Southeast Asia and North America, to diversify our market risks. In addition, we reduce inventory and increases capacity utilization rate through refined management to improve the overall operating efficiency.

However, since the United States announced the implementation of the Equal Tariff Policy on April 2, it has brought huge uncertainty to global trade. The

international economic situation has been heating up rapidly, and the US-China trade war has become a global focus again. The economic entities of various countries immediately took defensive measures. In addition to the tariff negotiation with the United States, the export strategy is discussed, and the pace of supply chain diversification is accelerated, in order to avoid potential high tariff risks. In the past, the proportion of direct sales of Shinkong Synthetic Fibers' products to the US was not high, and the main product was also exempted from import tariffs. However, in the face of the economic market changes brought about by the equal tariffs imposed by the US, and the possible restructuring of the supply chain, the Company will still take active measures to respond, actively expand new markets, and ensure its long-term competitiveness and operational resilience through the adjustment of export strategies.

In recent years, the global market has increased the demand for sustainable products, and ESG (environment, society, and corporate governance) has become an important issue for corporate management. The Company has set the reduction targets for greenhouse gas emissions at all stages through the supervision and governance of the Board of Directors and the Sustainable Development Promotion Committee, and the net zero carbon target for 2050 (2050) to strengthen and actively respond to the international carbon emission standards, including responding to the European Union's carbon border adjustment mechanism (CBAM) and the possible carbon tariff policy of the United States, conducting organization greenhouse gas inventory and product carbon footprint inventory, and using low-carbon products to improve energy efficiency and use renewable raw materials, in order to reduce greenhouse gas emissions and product carbon footprint.

I. The Company has deeply cultivated the environmental protection material technology, promoted the deeply cultivated environmental protection material technology, and promoted a number of circular economy plans, including:

Garment recycling (T2T):
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Letter to the Shareholders

Through cooperation with international brands, the Company is developing the recycling technology for waste textile. For example, in collaboration with Celanese, a global special material and chemical company, the Company has developed the NEOLAST™ fiber, which is a recyclable flexible polymer, aiming to achieve the vision of full-garment recycling. This technology not only improves the flexibility and durability of fibers, but also reduces environmental impact during the recycling process. The Company has also invested in Ambercycle, the US-based high-end material science company, to be devoted in the recycling of waste textile and re-produce high-quality native polyester fiber. The Company plans to cooperate with Ambercycle to build a new advanced factory for a closed-loop and sustainable cycle of 30,000 tons per year in Indonesia, and the production is expected to start in 2026. This factory will use the regenerative technology of Ambercycle and the Company's extensive experience in the production of high-quality polyacrylate fibers and rich market experience to jointly produce regenerated cycora™ yarn, so that the recycled waste textile can be returned to the textile market, thus reducing the reliance on raw materials and waste generation, and achieving the sustainable goal.

Environmental protection polyacrylate (r-PET):

The Company actively invests in the recycling of materials in response to environmental protection and carbon reduction. In addition to providing quality and stable products that are certified as 100% reusable for food and beverage containers, the Company has expanded the recycling capacity of its PET bottles. The advanced FTR (Flake to Resin) technology is used to improve the quality of recycled materials, thus reducing the mixing procedure of customers in the supply chain, reducing production costs, and simplifying inventory management. The Company has successfully produced the environmental protection epoxy particles with a 50% recycled additive ratio.

R&D of bio-based materials:

The Company has participated in the Taiwan Bio and Sustainable Materials Association (TBSM) to expand industry exchange. The Company

has developed green polyacrylate, a green product that is mainly derived from biological sources, to reduce dependence on petrochemical materials. We have also passed the International Sustainability and Carbon Certification (ISCC) to show that we are internationally recognized for our efforts in sustainable development and green economy. The Company has also demonstrated the transparency of the supply chain and reduction of carbon footprint, and ensures sustainable use of environmental protection resources.

4. Smart manufacturing:

The Company has been active in the promotion of smart manufacturing, and this is the ninth year of the Company’s promotion of smart manufacturing. The Company is committed to improving production efficiency and environmental protection performance through intelligent production technology, optimizing energy management and deepening personnel occupational safety and occupational safety education systems, in order to respond to market challenges on quality, safety and environmental protection. These measures not only help to improve the competitiveness of products, but also meet the global requirement for sustainable development.

II. In response to geopolitical risks and market changes, the Company is actively expanding the global market:

1. Southeast Asian market:

Thai Shinkong Industry has expanded its r-PET production capacity to satisfy the needs of the local, European, U.S. and Japanese markets with high recycling and addition ratio and certified quality. The Company will continue its cooperation and deepen its business in Vietnam, and operate in the market with a trading company. The Company has also made investment plans in Indonesia, and combines the upstream, midstream and downstream supply chain to actively seek investment cooperation, and expand the recycling of materials and diversify the sources of raw materials.

2. North American market:

Letter to the Shareholders

The Company cooperates with international brands to provide environmental protection materials and produce high value-added products. In addition, the Company has established shipping warehouses and locations to expand storage and transportation capacity to strengthen the operation in the North American market.

New energy application market:

In response to the domestic demand policy in China, the Company is expanding the capacity of engineering plastics and applications for the electric vehicle industry, and developing high-temperature and high-impact resistant materials, in order to capture the niche market with the strategy of high quality and flexible response.

III. Diversified Development of Finance and New Businesses

In terms of financial business, Taipei Star Bank adopts a prudent and cautious business strategy to pursue profitability under the principle of safety and liquidity, maintains good asset quality, continues to improve operation processes, and launches diversified products. On the other hand, Shin Kong Securities maintains a steady profit and upholds the business philosophy of professionalism, ethics, and dedication to work. It expects to be a pioneer in electronic order placement, and is committed to providing customers with safe, convenient, and humanized financial services. Driven by both policies and the market, Taiwan's financial industry is moving towards the direction of digital transformation, inclusive finance, and sustainable development. In addition to complying with policies and laws, the Company, with customers as the center, continues to explore innovative applications of financial technology to create smarter and more personalized investment services, and works with customers for better wealth in the future.
On semiconductor industry materials, Shinsol Advanced Chemicals Corporation, a joint venture of the Company with Solvay of Belgium, is actively expanding the electronic chemical market. The Company has currently completed the quality certification requested by target customers, and passed the certification of ISO 9001, ISO 14001 and ISO 45001 to

respond to the urgent demand for high-purity electronic-grade oxidized hydrogenation by the advanced process of the semiconductor industry, making the Company able to further enhance the value contributed to the supply chain of the semiconductor industry.

Shinkong Youth Industrial Park (Shinkong InnovHUB), an innovative entrepreneurial base established in collaboration with the local government and compliance with policies, is planning a startup accelerator center that integrates innovation and practical applications with its superior geographical location and in response to the national vision of "innovative economy, smart country". It expects to build the largest base in northern Taiwan for the production, R&D, and test flight for drones and license examination.

In addition, the Company combines AI, big data and other digital technologies to promote industrial transformation, actively participates in the industrial net-zero emission initiative, and sets the net-zero emission target for 2050. In the face of global supply chain restructuring and the acceleration of technology development, we will continue to deepen ESG green operation, and enhance corporate competitiveness through technological innovation and digital transformation. We believe that only by actively innovating and market deployment, can we stand out in the ever-changing environment.

Finally, the Company would like to express sincere thanks to all shareholders, employees and partners of the supply chain for their support, which enables the Company to continue to maintain a flexible and agile attitude in a fiercely competitive market. The Company hopes to stay in tune with the market environment which is full of changes in the future, grasp business opportunities, create more value for shareholders, and contribute to the sustainable development of the society.

2024 Business Report

The global economy was still in a post-pandemic era of recovery and adjustment in 2024, and faced a slowdown of growth. The US-China trade war continues to cause structural adjustments to the global supply chain due to

Letter to the Shareholders

geopolitical risks, and the expansion of disasters caused by abnormal climate also accelerates the opportunity for energy transformation. The shift of US dollar monetary policy and the rapid development of AI is also affecting the global economic outlook. The Group has demonstrated its diversified strategies for operational recovery, production capacity improvement, active investment and sustainable development.

I. Operation Result:

The Company continues to expand its scale of circular-economy production, and expands product applications and develops new materials at the same time. The sales of the main divisions and operation results are as follows:

(I) Polyester Division

The sales of this division in the year was NT$31,382,598 thousand, which was a increase compared to 2023 by NT$3,185,469 thousand or about 11.30%. The profit before-tax of this division in the year was NT$597,282 thousand, which was a increase compared to 2023 by NT$342,605 thousand or about 134.53%.

(II) Optoelectronics Business Group

The sales of this division in the year were NT$6,530,399 thousand, which was a increase compared to 2023 by NT$679,413 thousand or 11.61%. The loss before-tax of this division in the year was NT$450,198 thousand which was a increase compared to 2023 by NT$55,772 thousand or about 14.14%.

(III) Financial Business Group

The sales of this division in the year were NT$6,993,231 thousand, which was a increase compared to 2023 by NT$1,557,649 thousand or 28.66%. The profit before-tax of this division in the year was NT$2,258,482 thousand, which was a increase compared to 2023 by NT$625,652 thousand or about 38.32%.

II. Analysis on Financial Position and Performance:

(I) Financial Position

The net cash outflow from the consolidated operating activities in the year was NT$6,547,249 thousand, net cash outflow from investing activities was NT$3,133,478 thousand and net cash inflow from financing activities was NT$8,843,071 thousand. The cash and cash equivalents for this year decreased by NT$582,948 thousand. The year-end cash and cash equivalents amounted to NT$ 9,916,370 thousand.

(II) Profitability

The consolidated sales of the year was NT$46,149,165 thousand, which was a increase compared to 2023 by NT$6,584,025 thousand or about 16.64%. Total expenditure was NT$43,026,906 thousand, which was a increase compared to 2023 by NT$4,962,597 thousand or about 13.04%. The profit before-tax from continuing operations was NT$3,122,259 thousand, which was ahead of year 2023 by NT$1,621,428 thousand or about 108.04%. Net income was NT$2,422,574 thousand, which was a increase compared to 2023 by NT$1,253,000 thousand, or about 107.13%. Earnings per share was NT$1.06, which was a increase compared to 2023 by NT$0.59 per share or 125.53%.

III. Research and Development status:

The Group's R&D Department upholds the original spirit of "Holding on to the status quo means falling behind. Progress needs research and development" to constantly invest in new product development and technological innovation. At present, the Group's products include synthetic fibers, plastic ester pellets, polyester films, polyester sheets, PET bottles, 3D printing materials and various types of optical films. The wide range of applications not only covers clothing, shoe materials, and packaging materials, but also extends to high-tech industries such as optoelectronics, automotive, and medical. In addition, the Group's products are developing towards the direction of environmental protection and carbon reduction, and the Group is committed to providing innovative materials that meet the trend of sustainable development.

Letter to the Shareholders

The major research and development in recent years include:

(I) Plastic products

Optical-film grade epoxy particles, high-performance biodegradable polyacrylate, low melting-point polyacrylate particles, TPEE for waterproof and moisture films, transparent TPEE, and supercritical fluid physical foaming-grade TPEE.

(II) Fiber products

Temperature and humidity management polyacrylate, TPEE, CD-TPEE, T/TPEE packing products, waste-fabric recycled polyacrylate, T2T clothing chemical recycled polyacrylate, Sigma series high-function mechanical polyacrylate, BIO-TPEE flexible fiber, etc.

(III) New optronics products

Ultra-high luminance traditional brightness enhancement film for NB/plate/vehicle-mounted products, ultra-high luminance double-sided brightness enhancement film for NB/tablet products, full-size LCD vehicle-mounted low-cadmium quantum dot film, NB/tablet/vehicle-mounted no-cadmium quantum dot film, and full-size mini-LED uniform light film.

IV. Environment, Social and Governance (ESG):

The Group strongly believes that the achievement of sustainable development and steady profit requires not only good business strategies, but also the proactive practice of corporate governance and corporate social responsibility. We adhere to the core value of "seek truth from facts and follow procedures step by step; fairness and transparent, and a team of mutual trust" and commit ourselves to continuously giving back to the society with the spirit of "take from the society, and giving back to the society" to realize the common growth of the enterprise and the society.

Shinkong Synthetic Fibers has demonstrated a high level of emphasis and proactive actions towards sustainable development in terms of ESG (environmental, social and corporate governance) implementation. Through the establishment and implementation of the ESG sustainability policy, we not only

strive to fulfill our corporate social responsibility, promote sustainable development projects, but also promote economic prosperity, protect the ecological environment, and care for the community and the neighborhood, in order to contribute to a better future.

The Company has established the position of Corporate Governance Officer to be in charge of the overall planning of corporate governance affairs, and continue to improve the Company's corporate governance level. In addition to assisting directors in continuing education, ensuring compliance with laws and regulations, providing information required for business decision-making, the Corporate Governance Officer's responsibilities also include accelerating the provision of shareholder information, regularly purchase director's liability insurance, introducing a performance evaluation mechanism for directors and the Board of Directors, and strengthening the communication of the head of operations with directors and CPAs. In order to implement equal treatment to shareholders, the Company's Board of Directors passed in 2024 amendments to part of the articles of the "Regulations for Prevention of Insider Trading" and "Corporate Governance Best Practice Principles". The Company has implemented the prohibition of insider trading of the Company's issued securities in 30 days prior to the announcement of the annual financial report, and 15 days prior to the announcement of the quarterly financial report.

In terms of information security, the Company has set up an Information Security Committee in charge of planning, monitoring and implementation of information security management operations. We receive an external audit every year, and have obtained ISO 27001 certification. In addition, relevant employees have obtained ISO 27001:2022 management specialist certification to further protect information security.

In terms of environmental protection and carbon reduction, the Company proactively comply with the environmental protection policy of international brands, and focuses on carbon reduction and material recycling. The expansion of the production capacity for 100% recycled r-PET production line and addition of FTR (Flake to Resin) eco-friendly ester pellets not only improve the stability of product quality, but also promote the reuse of eco-friendly raw materials globally.

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Letter to the Shareholders

In addition, the Company has developed the recycling and reuse technology of waste textile through cooperation with international brands in response to the environmental protection trend of T2T. For example, the Company cooperated with the global special material and chemical company, Celanese to develop NEOLASTTM fiber. The Company also plans to cooperate with Ambercycle to build in Indonesia an advanced factory with closed-loop sustainable circulation, which is expected to start production in 2026, so that the recovered waste textile can be returned to the textile market, thus reducing the reliance on raw materials and waste generation, and achieving the goal of sustainability.

In the R&D of bio-based green polyacrylate, the Company has developed bio-based green polyacrylate to reduce dependence on petrochemical materials, and has successfully passed the International Sustainability and Carbon Certification (ISCC) to demonstrate the transparency of the supply chain for environmental protection, reduce the carbon emission footprint, and ensure the sustainable use of circular economy resources. In the future, the Company will continue to promote the energy conservation and carbon reduction plan, establish a green business model, support the promotion of the sustainability concept, and continue to develop new eco-friendly products including the Recycle series of polyester, bio-based polyester, and functional polyester products, and expand their scope of applications.

In terms of corporate social responsibility, we have actively complied with government policies to set the goal of achieving net zero carbon emission by 2050 (2050). To achieve this vision, we will upgrade our manufacturing process, update our public facilities, and actively participate in the development of the green energy industry. Last year, the Company completed several major equipment upgrades, and the results of power conservation exceeded 9,245 KWH; the cumulative carbon reduction exceeded 80,000 metric tons. Meanwhile, we have made significant progress in the R&D of renewable and bio-polyester products, and invested in the green energy industry to support the government's green energy policy.

Our efforts have won a wide range of praise, including multiple international certifications, including ISO 9000, ISO 14001, ISO 45001, ISO 22000, ISO 50001,

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HACCP, HALAL and TS16949 certification. We have also completed the entire-field ISO 14064 greenhouse gas emission inventory and certification. At present, we have also obtained the ISO 14067 product carbon footprint inventory (including the v-PET/r-PET and PBT series inventory verification) for major products. The Company continues working hard in environmental protection procurement, such as winning the Green Procurement Performance Excellency Award from the Environmental Protection Administration, and winning the Green Procurement Excellence Award from the Environmental Protection Bureau of Taoyuan City for 11 consecutive years, and various awards from the Ministry of Economic Affairs.

We believe that employee care and a friendly workplace are the key to our business operation policy. We build a friendly workplace by adjusting salary, increasing benefits, strengthening talent cultivation, and respecting union operations. In addition, the Company has established diversified communication channels, and has been awarded the "Happy Enterprise Award" for four consecutive years. We have introduced a training system that provides comprehensive training plans for new recruits and managers, and are awarded a bronze award of TTQS Talent Development Quality Management. Meanwhile, to extend care for the employees' families, the Company also provides various scholarships, family days, employee trips, club activities and other welfare activities. The Company has adopted a system that exceeds the statutory requirement for gender equality and foreign workers, such as providing more flexible maternity leaves and childbirth examination leaves, recreational health leaves, and birthday leaves, etc., and is the leader in promoting the zero-pay policy.

In terms of safety and health, the Company has formulated the safety and health policy and set up a dedicated department. The Company organizes the safety concern meeting every week to enhance employees' safety awareness and ensure the safety in workplace. In addition, we actively participate in local public welfare activities, support cultural development, and perform corporate social responsibility through sponsorship of schools and neighborhood activities.

We also promote the sustainable development policy to the supply chain, and uphold the concept of sustainable operation. In the life cycle of products and

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Letter to the Shareholders

services, we also consider the impact on the environment, society, and economy, and implement sustainable procurement actions. The Company has formulated a sustainable procurement policy, sustainable development policy and action commitment statement, and supplier code of conduct to urge suppliers to comply with various relevant regulations, including ethics, environment, labor rights, health and safety, etc. The Company is also committed to environmental protection and promotion of business ethics and fair operation, in order to enhance procurement performance, improve competitive advantages of the supply chain, and move towards a sustainable supply chain.

V. Looking to the future:

Shinkong Synthetic Fibers will continue to deepen the policies and actions of ESG sustainable development. We believe that sustainable development is not just a corporate responsibility, but also a key to creating common good value. We will continue to uphold the concept of "take from the society, and giving back to the society", and work closely with employees, shareholders, customers, suppliers, and partners in the society to establish a closer partnership. Through innovative technology, green manufacturing, talent cultivation and social care, we inject new energy into Taiwan's industrial development, and contribute to global sustainable development to build a better sustainable future together.

Overview of the business plans in 2025

I. Business strategy in 2025

Sustainable improvement and talent cultivation.
Intelligent transformation and smart manufacturing.
Green energy for environmental protection and circular economy.

II. Operation targets and the important policies for production and sales in 2025

(I) Operation targets

The Group constantly adjusts the product mix and sales strategy. The expected operational targets are as follows: over 710,000 tons of polyester chips, 44,000 tons of polyester filaments, 16,000 tons of industrial yarn, 90,000 tons of engineering plastics, 42,000 tons of polyester film, 31 million square meters of optical films, and 72 million square meters of TAC film.

The above is the estimated sales volume based on the estimated demand provided by customers.

(II) The important policies for production and sales

Strengthen the energy of research and development, mastering key technologies, and constantly developing competitive advantages.
Optimize product features, improve production flexibility, and strengthen risk management.
Simplify operation management, improve quality standards, and deepen brand value.

The Company's future development strategy and the impact of the external competitive environment, regulatory environment and overall business environment

In the face of the global economic changes and rapid industrial evolution, 2025 will be an important year for the key transformation and competition deployment of enterprises. As the Russia-Ukrainian war, Israeli-Palestinian conflict and Red Sea crisis are expected to ease, the energy price volatility, soaring transportation costs and supply chain pressure are expected to gradually relieve. However, the new tariff policy brought about by Trump 2.0 in his second term and the policy adjustment related to the Panama Canal may cause a new wave of cost increase, and cause the rise of inflation risk and add to the uncertainty of geopolitical risks. Enterprises should pay close attention to the impact of the US-China war on the supply chain and shipping costs, and prepare for possible changes in the policy to flexibly respond to market changes, and ensure competitive advantages.

In addition, with the popularity of AI, pending levy of domestic carbon fee,

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Letter to the Shareholders

and net-zero carbon emission issue, enterprises must adopt a forward-looking strategy to ensure market competitiveness and sustainable development. First, technological innovation and intelligent transformation will become the core competitiveness. AI and smart manufacturing have gradually changed the traditional industry model. The Company's introduction of digital technology into new fibers will accelerate to improve R&D efficiency and production flexibility, in order to ensure product technology leadership. The Company also improves decision-making efficiency and market forecast via big data analysis and automation applications, in order to further optimize the supply chain's management and production processes. The learning curve is shortened through intelligent industrial integration of upstream and downstream sectors. Effort is made in cost control, quality improvement, energy consumption reduction, and production efficiency improvement to strengthen competitiveness and create maximum benefits.

In addition, green economy and circular development are the key to the sustainable operation of enterprises in the future. As the world is moving towards the net-zero carbon emission policy, enterprises need to actively respond to ESG regulations. Therefore, the Company has established ESG sustainable policies in the four aspects of low-carbon transformation, circular economy, water resource management, and strengthening of corporate social responsibility, and developed low-carbon and environment-friendly materials, and reduced environmental footprint through resource recycling and green production. The introduction of renewable energy and energy-saving technology not only satisfies market demand, but also improves the Company's long-term competitiveness. In terms of achieving the net-zero carbon emission target, the Group has declared that the net-zero carbon emission will be achieved by 2050. In 2030, the carbon reduction target will be more than $22\%$ lower than the base year of 2021. As of 2030, NTD750 million has been planned for related carbon reduction projects, including energy saving improvement, fuel transformation, energy conversion, green renewable energy development, and CO2 recycling and reuse. Through diversified carbon reduction measures, the environmental footprint will be reduced, and the global net-zero trend will be responded to proactively.

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In 2024, the Company eliminated old machines, introduced permanent magnetic motors, process conditions and workflow optimization, low-level heat energy recovery and air compressor energy saving, and reduced carbon emissions by NTD30 million. In 2025, the Company will further invest NTD130 million to add new carbon reduction projects such as adding coal to gas conversion and wastewater anaerobic systems.

ESG Sustainability Policy:

Low-carbon transformation: To be implemented by carbon inventory, energy saving and carbon reduction, green innovation, and clean energy.
Circular economy: Promote the development of circular economy with resource management and source management such as waste reduction, recycling, and promotion of green supply chain.
Water Resource Management: Actively reduce water resource consumption, increase recycling and wastewater reduction to promote it.
Strengthening corporate social responsibility: Enhance employees' awareness of sustainable development, ensure their safety and health, pay attention to environmental issues, and adhere to integrity and ethics to implement corporate social responsibility.

However, market development and supply chain resilience will be the keys to responding to external challenges. In the face of market uncertainty, enterprises need to flexibly adjust their sales and production strategies, strengthen global deployment and regional supply chain management, to ensure stable operations. Through the cooperation of international strategic alliances, the Company will explore opportunities in emerging markets and improve its ability to withstand risks. In 2025, the Company will focus on the business strategy of "retaining the strong and eliminating the weak" and concentrate resources in other more competitive products or industries. In the meantime, the Company will continue to increase new niche products or actively seek external resources and technologies, such as cooperation with the internationally renowned enterprise Ambercycle to promote 100% clothing recycling and create a complete textile circulation system, and collaboration with Celanese to focus on the development

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Letter to the Shareholders

of high-value green materials. Through strengthening product features and improving production flexibility, the Company is committed to providing innovative and sustainable textile solutions in order to consolidate its competitive advantages in the global market. On operating bases, we are actively looking for expansion opportunities. In addition to the completed expansion in Thailand to stably mass produce 50% cr-PET, the U.S. subsidiary will soon be established, and we are evaluating and developing markets in Southeast Asian countries such as Vietnam, India, and Indonesia, in order to actively increase the overall growth capacity of the Company and achieve the goal of instant market response and customer services.

In the meantime, Shinkong Synthetic Fibers will steadily develop new businesses. With the rise of global smart technology, the wafer and semiconductor markets continue to expand, and the customer demand for advanced semiconductor manufacturing processes continues to grow. Shinsol Advanced Chemicals Corporation, a joint venture with the Belgian chemical company Solvay Group, is committed to local investment and quality improvement and provision of high-purity electronic grade hydrogen peroxide. This is also part of the diversification of the our business in different fields. Investment returns will be gradually generated. In order to promote the Company's transformation and upgrade, the Company is committed to building the "New Innovation HUB Park" in the new light source Inovation HUB Park as the "New Innovation/Qin Innovation, smart wearables, and 3D printing, among other things, as the key development base. The park is established to promote innovation, boost economic prosperity, provide local children with employment and start-up opportunities, and to undertake the vision of "innovation economy, smart country" to build a new creative and practical acceleration center. In the future, the Company will also focus on the development of smart, unmanned, and wearable industries, in order to become the largest R&D, production, test flight, and reference base in northern Taiwan, and attract new teams to move to the area, to promote industrial innovation. At the same time, combining AI smart manufacturing, green material technology, and circular economy, the Company will attract domestic and foreign innovative talent and partners to work together, and actively promote industry-academia cooperation, in order to promote the development of high-value

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industrial chain. The new Shinkong Fiber Optic Park will not only become the new engine of Shinkong Fiber Optic Co., Ltd., but also drive the industry's upgrade, strengthen international competitiveness, and achieve the goal of corporate sustainable development.

Looking ahead to 2025, enterprises can only stay ahead of the competition and create higher value by focusing on innovation, sustainability, and flexibility. Our team pursues the business goals of "sustainable growth, green energy, environmental protection and sincere care" with sustainable and innovative thinking and the business strategy of satisfying consumer needs, and move towards the corporate vision of "people-oriented and environment friendly in an intelligent way".

Chairperson

吴东兴

Yours sincerely

Two. Corporate Governance Report

I. Directors, Supervisors, Presidents, Vice presidents, Assistant Managers, Supervisors of all Departments and Branches

(I) Directors and independent directors

Directors' and independents' background
March 29, 2025

Title	Nationality or place of registration	Name	Gender Age	Date elected	Service term	Date first elected	Shareholding when elected		Current number of shareholding		Shares held by spouse and underage children		Shares held by proxy		Main career (academic) achievements	Concurrent duties in the Company and in other companies	Spouse or relatives of second degree or closer acting as directors, supervisors, or department heads			Remarks
							Shares held	Shareholdings percentage (%)	Shares held	Shareholdings percentage (%)	Shares held	Shareholdings percentage (%)	Shares held	Shareholdings percentage (%)			Title	Name	Relationship
Chairperson	The Republic of China	Shin Kong Development Co., Ltd.	Male	2023.6.2.	3 years	2008.6.13	2,794,213	0.17	2,794,213	0.17	3,514,692	0.22	7,800,000	0.48	PhD in Law, Harvard University, USA	Note 1	Vice Chairperson	Hsin-Chieh Wu	Father and son	None
		Representative: Tong-Sheng Wu	71~80				10,934,919	0.68	3,431,596	0.21
Vice Chairperson	The Republic of China	Shin Kong Development Co., Ltd.	Male	"	"	2008.6.13	2,794,213	0.17	2,794,213	0.17	562,111	0.03			Department of Psychology/Department of Economics, Columbia University, USA	Note 2	Chairperson	Tong-Sheng Wu	Father and son	None
		Representative: Hsin-Chieh Wu	41~50				55,102	0.00	135,869	0.01
Director	The Republic of China	Shin Kong Development Co., Ltd.	Female	"	"	2008.6.13	2,794,213	0.17	2,794,213	0.17	—	—	—	—	LLM, Northwestern University	Note 3	-	-	None
		Representative: Shi-Fen Lin	41~50				—	—	—	—
"	The Republic of China	Ji Zhen Co., Ltd.	Male	"	"	2023.6.2	24,137	0.00	24,137	0.00	—	—	—	—	Master of Department of Applied Physics and Materials Science, California State University, Los Angeles	Note 4	-	-	None
		Representative: Hsing-En Wu	41~50				—	—	—	—
"	The Republic of China	Shinkong Co., Ltd.	Male	"	"	1984.5.8	84,414,691	5.21	84,414,691	5.21	—	—	—	—	Department of Information, University of Minnesota	Note 5	-	-	None
		Representative: Steve Hong	51~60				—	—	—	—

图

Title	Nationality or place of registration	Name	Gender Age	Date elected	Service term	Date first elected	Shareholding when elected		Current number of shareholding		Shares held by spouse and underage children		Shares held by proxy		Main career (academic) achievements	Other companies	Spouse or relatives of second degree or closer acting as directors, supervisors, or department heads			Remarks
							Shares held	Shareholdings percentage (%)	Shares held	Shareholdings percentage (%)	Shares held	Shareholdings percentage (%)	Shares held	Shareholdings percentage (%)			Title	Name	Relationship
"	The Republic of China	Tay Way Enterprise Co., Ltd.	Male	"	"	2008.6.13	1,200,043	0.07	1,200,043	0.07	—	—	—	—	Master, International Management, University of St. Thomas, USA	Note 6	-	-	-	None
		Representative: Ching-Chun Chiu	71~80				—	—	—	—
"	The Republic of China	Tay Way Enterprise Co., Ltd.	Male	"	"	"	1,200,043	0.07	1,200,043	0.07	6,000	0.00	—	—	Department of International Trade, Feng Chia University	Note 7	-	-	-	None
		Representative: Hueo-Tzuu Shih	71~80				66,849	0.00	66,849	0.00
"	The Republic of China	Mian Hao Enterprise Co., Ltd.	Male	"	"	2002.6.20	1,226,456	0.08	1,226,456	0.08	—	—	—	—	Department of Mechanical Engineering, National Cheng Kung University	Note 8	-	-	-	None
		Representative: Sun-Mo Ni	71~80				41,489	0.00	68,489	0.00
Director	The Republic of China	Shin Kong Wu Ho-Su Culture and Education Foundation	Male	"	"	2005.6.20	60,442	0.00	60,442	0.00	11,040	0.00	—	—	Department of Administration, National Chung Hsing University	Note 9	-	-	-	None
		Representative: Jung-Chi Liu	81~90				1,633	0.00	1,633	0.00
Independent Director	The Republic of China	Hsien-Der Chiu	Male	2023.6.2.	3 years	2014.5.29	—	—	—	—	1,290	0.00	—	—	Department of Law, National Taiwan University	Note 10	-	-	-	None
			71~80
Independent Director	The Republic of China	Huei-Huang Lin	Male	"	"	2020.5.28	—	—	—	—	—	—	—	—	Juris Doctor, Duke University, USA	Note 11	-	-	-	None
			71~80
Independent Director	The Republic of China	Yung-Ching Tsai	Male	"	"	2014.5.29	—	—	—	—	—	—	—	—	Department of Insurance and Financial Management, Takming University of Science and Technology	Note 12	-	-	-	None
			71~80

Note: 1. Shinkong Materials Technology Co., Ltd. - Chairperson; UBright Optronics Corporation - Director; TacBright Optronics Corporation - Chairperson; Shinkong Insurance Co. Ltd. - Director; Shinkong Mitsukoshi Department Store Co., Ltd. - Chairperson; Shinkong International Leasing Corp. - Director; Shinkong Technologies Corporation - Chairperson.
2. UBRIGHT OPTRONICS CORPORATION - Chairperson; Shinkong Materials Technology Co., Ltd. - Director; Zacros Taiwan Co., Ltd - Director.

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Corporate Governance Report
Tung-Ming Wu was relieved from the position of the representative of Shin Kong Development Co., Ltd. on May 30, 2024, and Shi-Fen Lin took over the position on the same day. Director of Koenig Foods Co., Ltd., Director of Optimax Technology Corporation.
Shinkong Textile Co., Ltd. - Chairperson; Shinkong Asset Management Co., Ltd. - Chairperson, Worthy Textile Industry Co., Ltd. - Director.
Han Ling Construction Co., Ltd. - Director; Han Shan Construction Co., Ltd. - Director.
The World Hakka Federation - Chairman; Hsinchu County Gas Co., Ltd - Director; Taiwan Flower Biotechnology Co., Ltd. - Director.
TacBright Optronics Corporation - Chairperson; UBright Optronics Corporation - Director.
Shin Kong Wu Ho-Su Memorial Hospital - Consultant.
Shin Kong Wu Ho-Su Memorial Hospital - Consultant.
Xin Hong Construction Co., Ltd. - Chairperson.
Adjunct Professor at the Law School of Soochow University, Chairperson of Hefeng Media Investment Co., Ltd., Director of Asia Satellite TV Co., Ltd.
Shin Kong Chao Feng Co., Ltd. - Consultant; Chia Pang Investment Co., Ltd. - Vice President.

Major shareholders of corporate shareholders

March 29, 2025

Name of juristic shareholder	Major shareholders of juristic shareholders
	Name	Shareholding percentage
Shin Kong Development Co., Ltd.	Teh Liang Co., Ltd.	49.86%
	Teh Shih Enterprise Co., Ltd.	49.81%
	Tong-Sheng Wu	0.33%
Ji Zhen Co., Ltd.	Cheng Cheng Co., Ltd.	41.55%
	Cheng Qian Co., Ltd.	40.20%
	Ci Qing Co., Ltd.	18.25%
	Ruo-Nan Sun	0.00%
	Tung-Hsien Wu	0.00%
	Hsin-Hung Wu	0.00%
	Hsing-En Wu	0.00%
Shinkong Co., Ltd.	Ner Victory Company Ltd.	42.65%
	Taiwan Union Corporation	4.75%
	Swiss Grand Hotel Co., Ltd.	4.66%
	Lin Teng Shan Social Welfare Foundation	3.94%
	Hsin Cheng Investment Co., Ltd.	3.51%
	Ji Zhen Co., Ltd.	3.39%
	Tung Hsing Investment Co., Ltd.	3.37%
	Hung Family Enterprise Co., Ltd.	3.34%
	C. International Co., Ltd	2.88%
	Chi Jian Industrial Co., Ltd.	1.99%
Tay Way Enterprise Co., Ltd.	Hung Chieh Investment Co., Ltd.	99.72%
	Hsin-Yue Wu	0.18%
	Zhao-Chen Wu	0.05%
	Zhao-Ti Wu	0.05%
Mien Hao Enterprise Co., Ltd.	Tung-Chin Wu	26.58%
	Tung Yue Enterprise Co., Ltd.	19.80%
	Hsin Yun Enterprise Co., Ltd.	19.80%
	Hsin Lung Chemical Co., Ltd.	19.80%
	Peng Lai Co., Ltd.	11.67%
Shin Kong Wu Ho-Su Culture & Education Foundation	Not applicable	-

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Corporate Governance Report

Key shareholders of major corporate shareholders
March 29, 2025

Name of Juristic Persons	Major shareholders of juristic persons
	Name	Shareholding percentage
Teh Liang Co., Ltd.	Tay Jay Enterprise Co., Ltd.	90.88%
	Hsing-Hua Ho	0.33%
	Hsin-Chieh Wu	5.82%
	Hsin-Yue Wu	0.33%
	Zhao-Hung Wu	1.15%
	Zhao-Wei Wu	1.15%
	Ming-Ting Lin	0.34%
Teh Shih Enterprise Co., Ltd.	Tay Way Enterprise Co., Ltd.	90.24%
	Hsin-Yue Wu	9.52%
	Zhao-Chen Wu	0.12%
	Zhao-Ti Wu	0.12%
Cheng Cheng Co., Ltd.	Yong Le Co., Ltd.	33.33%
	Quan Neng Co., Ltd.	33.33%
	Huan Song Co., Ltd.	33.33%
Cheng Qian Co., Ltd.	Fully Fabric Co., Ltd.	50.00%
	Foryote Fabric Co., Ltd.	50.00%
Tzi Ching Co., Ltd.	Ruo-Nan Sun	92.59%
	Tung-Hsien Wu	7.41%
Ner Victory Company Ltd.	Hsin Cheng Investment Co., Ltd.	10.80%
	Yi Kuang Enterprise Co., Ltd.	10.38%
	Taiwan Union Corporation	8.44%
	Ji Zhen Co., Ltd.	7.92%
	Steve Hong	7.17%
	Shin Kong International Investment Co., Ltd.	7.03%
Taiwan Union Corporation	Hsin-Yen Wu	18.32%
	Mei-Fen Lu	15.01%
	Tung-Sheng Wu	12.12%
	Hsin-Mao Wu	14.03%
	Hsin-Tung Wu	7.97%
	Hsin-Rong Wu	7.83%
	Ming-Ying Wu Wang	7.18%
	Tung-Chuan Wu	6.60%
	Li-Fang Wei	6.21%
	Xin-Ni Wu	2.92%

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Name of Juristic Persons	Major shareholders of juristic persons
	Name	Shareholding percentage
Swiss Grand Hotel Co., Ltd.	Tung Hsing Investment Co., Ltd.	16.32%
	Yuan Hao Industrial Co., Ltd.	12.64%
	Yuan Chi Investment Co., Ltd.	12.63%
	Hsin Ming Enterprise Co., Ltd.	12.11%
	Hsin Pei Corp.	12.11%
	Ru-Hsing Wu	8.04%
	Ru-Hsueh Wu	8.04%
	Ru-Shu Li Wu	8.04%
	Hsing Yuan Investment Co., Ltd.	2.63%
	Hsing Yun Investment Co., Ltd.	2.63%
	Hsing Chi Investment Co., Ltd.	2.63%
Lin Teng Shan Social Welfare Foundation	Not applicable	-
Hsin Cheng Investment Co., Ltd.	Tung-Chin Wu	99.93%
	Hsin-Tung Wu	0.07%
Ji Zhen Co., Ltd.	Cheng Cheng Co., Ltd.	41.55%
	Cheng Qian Co., Ltd.	40.20%
	Tzi Ching Co., Ltd.	18.25%
	Ruo-Nan Sun	0.00%
	Tung-Hsien Wu	0.00%
	Hsin-Hung Wu	0.00%
	Hsing-En Wu	0.00%
Tung Hsing Investment Co., Ltd.	Hsing Yuan Investment Co., Ltd.	18.77%
	Hsing Yun Investment Co., Ltd.	18.77%
	Hsing Chi Investment Co., Ltd.	18.77%
	Crown Tree Enterprise Co., Ltd.	11.78%
	Xinxing Industrial Co., Ltd.	9.46%
	Xin Li Industrial Co., Ltd.	7.57%
	Xin Cheng Industrial Co., Ltd.	7.57%
Hung Family Enterprise Co., Ltd.	Wenshi Business Consulting Co., Ltd.	51.00%
	Shih-Ching Hung	10.00%
	Jia-Xi Hong	10.00%
	Chi Yu Co., Ltd.	19.00%
C. International Co., Ltd	Wenshi Business Consulting Co., Ltd.	70.10%
	Value International Co., Ltd.	29.90%
Chi Jian Industrial Co., Ltd.	Qi Sheng Enterprise Co., Ltd.	100.00%
Hung Chieh Investment Co., Ltd.	Teh Shih Enterprise Co., Ltd.	90.14%
	Tong-Sheng Wu	1.75%
	Hsin-Chieh Wu	1.23%
	Hsin-Yue Wu	2.82%
	Zhao-Chen Wu	2.03%
	Zhao-Ti Wu	2.03%

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Corporate Governance Report

Name of Juristic Persons	Major shareholders of juristic persons
	Name	Shareholding percentage
Tung Yue Enterprise Co., Ltd.	Hsin Yun Enterprise Co., Ltd.	19.95%
	Mian Hao Enterprise Co., Ltd.	19.95%
	Star Thomas Corporation	19.95%
	Po Feng Enterprise Co., Ltd.	9.34%
	Hung Tai Investment Co., Ltd.	10.61%
	Po Wei Investment Co., Ltd.	12.63%
	Ying Ying Investment Co., Ltd.	7.57%
Hsin Yun Enterprise Co., Ltd.	Tung-Chin Wu	19.86%
	Star Thomas Corporation	19.80%
	Hsin Lung Chemical Co., Ltd.	19.80%
	Hung Hsin Enterprise Co., Ltd.	19.80%
	Peng Lai Co., Ltd.	17.20%
	Thomas T.L. Wu	2.00%
	Ji Zhen Co., Ltd.	0.94%
	Tung-Ming Wu	0.60%
Hsin Lung Chemical Co., Ltd. (HLC)	Pan Asian Plastics Corp.	93.80%
	Chao-Nan Ku	6.20%
Peng Lai Co., Ltd.	Ying Ying Investment Co., Ltd.	99.91%
	Tung-Chin Wu	0.09%

Disclosure of professional qualifications of directors and independent directors and independence of independent directors

Criteria Name	Professional qualifications and experience	Independence situation	Number of positions as independent director in other public companies
Chairperson Tong-Sheng Wu	He has a PhD in Law from Harvard University, USA, and is deeply involved in the fields of optoelectronic materials, finance, securities, and department stores, and is committed to promoting the Company's innovative development and global deployment. Chairperson Wu has an international market perspective, leadership skills, decision-making ability, crisis management ability, operational judgment ability, and business management practice ability.	1. Chairman Wu is the representative of Shin Kong Development Co., Ltd., a corporate director of the Company.
2. He is concurrently the director of the Company's affiliate.	0

Criteria	Name	Professional qualifications and experience	Independence situation
Vice Chairperson Hsin-Chieh Wu	Graduated from Columbia University, USA, with majors in Psychology and Economics. Vice Chairperson Wu is currently the Chairperson of Ubright Optronics Corporation, Director of Shinkong Materials Technology Co., Ltd., and Director of Zacros Group. He has profound professional knowledge and influence in the optoelectronics and technology industries, and promotes related companies’ technological innovation and market expansion. He has operations judgment ability, accounting and financial analysis ability, crisis management ability, industry knowledge, international market perspective, and decision-making ability.	1. Chairman Wu is the representative of Shin Kong Development Co., Ltd., a corporate director of the Company.
2. He is concurrently the director of the Company's affiliate.	0
Director Shi-Fen Lin	She has a master of law degree from Northwestern University, USA, and is currently an Executive Director of Konig Foods Co., Ltd. with extensive practical experience in the food industry, and has a sharp insight into market trends, product development and supply chain management. As a Director of Optimax Technology Corporation, she is also involved in business management in the technology industry. Director Lin, combining his professional knowledge and experience in law, food industry and technology industry, has demonstrated the integration ability across different fields, and offers long-term support for legal compliance, business management, and long-term strategic development. She has operations judgment ability, business management ability, international market perspective, and decision-making ability.	Direct Lin is the representative of Shin Kong Development Co., Ltd., the Company’s corporate director.	0
Director Hsing-En Wu	Graduated from University of California, Los Angeles, USA, and has a master's degree from its Institute of Material Science. He is currently the Chairperson of Shinkong Textile Co., Ltd. and Shinkong Asset Management Co., Ltd., and also the Director	1. Director Wu is the representative of the Company’s Corporate Director Chi-Chen Co., Ltd.	0

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Corporate Governance Report

Criteria	Professional qualifications and experience	Independence situation	Number of positions as independent director in other public companies
Name	of Worthy Textile Industry Co., Ltd. Director Wu has demonstrated his ability in industrial development, business management and asset management. He has operations judgment ability, business management ability, industry knowledge, international market perspective, leadership skills, and decision-making ability.	2. He is concurrently the Director of the Group's affiliates.
Director Steve Hong	He graduated from the Department of Information Engineering, University of Minnesota, with a professional background in information technology. He is currently the Director of Han Lin Construction Co., Ltd. and Han Shan Construction Co., Ltd. Director Hung's strategic planning and promotion of enterprises' steady development in terms of construction development and business operations has injected innovative energy to the diversity of the industry. He possesses operations judgment ability, business management ability, crisis management ability, international market outlook, leadership skills, and decision-making ability.	1. Director Hung is the representative of the Company's Corporate Director Shinkong Co., Ltd.
2. He is concurrently the Director of the Group's affiliates.	0
Director Ching-Chun Chiu	He has a master's degree in international management from University of St. Thomas, USA, and was the County Chief of Hsinchu County twice (16th and 17th terms). He was also elected as a legislator. At present, he is the President of the World Hakka Federation, Director of Hsinchu Gas Co., Ltd., and Director of Taiwan Flower Biotechnology Co., Ltd. Director Chiu can link the government, enterprises, and international society with his experience in politics, and provides benefits to the diversification of director structure and provide multi-level decision-making opinions. He possesses crises management ability, international market insights, leadership skills, and decision-making ability.	Director Chiu is the representative of the Company's Corporate Director Tay Way Enterprise Co., Ltd.	0

27 -

Criteria	Name	Professional qualifications and experience	Independence situation	Number of positions as independent director in other public companies
Director Huoo-Tzau Shih		He graduated from the Department of International Trade, Feng Chia University. He has excellent management ability and professional insights in composite fiber and optoelectronic technologies, and is committed to promoting technological innovation, operational optimization, and market development. He provides the business view in the market with fierce competition based on his diverse industrial experience. He possess operational judgment ability, accounting and financial analysis ability, business management ability, industry knowledge, leadership skills, and decision-making ability.	1. Director Shih is the representative of the Company’s Corporate Director Tay Way Enterprise Co., Ltd.
2. He is concurrently the director of the Company's affiliate.	0
Director Jung-Chi Liu		He graduated from the Department of Administrative Management, National Chung Hsing University, with professional background in administrative management and organizational operation ability. He served as an Assistant Vice President of the Company, focusing on the optimization of corporate operation and strategic planning. He also served as the General Manager of the Company’s subsidiary Hangzhou Huachun Chemical Fiber Co., Ltd. (HZC) and currently serves as an consultant of the Shin Kong Wu Ho-Su Memorial Hospital. He offers experience in business management and development, and possesses operations judgement ability, accounting and financial analysis ability, business management ability, crisis management ability, industry knowledge, and decision-making ability.	Director Liu is the representative of the Company’s Corporate Director Shin Kong Wu Ho-Su Cultural & Educational Foundation.	0
Director Sun-Mo Ni		He graduate from the Mechanical Engineering Department of National Cheng Kung University, with a solid professional engineering background and technical ability to solve problems. He served as Manager of the Company and President of the Company’s subsidiary Tai Shin Industrial Co., Ltd.. Mr. Wu is currently a consultant of	Director Ni is the representative of the Company’s Corporate Director Mian Hao Enterprise Co., Ltd.	0

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Corporate Governance Report

Criteria	Professional qualifications and experience	Independence situation	Number of positions as independent director in other public companies
Name	Shin Kong Wu Ho-Su Memorial Hospital, contributing to the diversification of directors and providing cross-industry management experience. He has the operational judgment ability, business management ability, crisis management ability, industry knowledge, and decision-making ability.
Independent Director
Hsien-Der Chiu	He graduated from the Department of Law, National Taiwan University, has profound legal professional knowledge, and has accumulated abundant practical experience in law as a professional attorney. Director Chiu not only specializes in the legal field, but also combines his legal expertise with business intelligence to work cross-filed in corporate management. He is currently the Chairperson of Xin Hong Construction Co., Ltd., and has management ability, crisis management ability, leadership skills, and decision-making. ability Although he has served as an Independent Director for three terms (9 years), he has not violated any conditions specified in Article 30 of the Company Act.	The three Independent Directors listed on the left have met the qualifications set forth in the "Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies" and Article 14-2 of the Securities and Exchange Act during the two years prior to being elected and during the term of office. The Independent Directors have also been granted the right to participate in decision-making and express opinions in accordance with Article 14-3 of the Securities and Exchange Act, in order to perform their duties independently.	0
Independent Director
Huei-Huang Lin	Juris Doctor, Duke University, USA. He was Deputy Minister of the Ministry of Justice, Director of the Supreme Prosecutor Office, Professor of Soochow University College of Law, Chairperson of He Feng Media Investment Co., Ltd., and Director of Asia Satellite Television Co., Ltd. Director Lin provides a diversified background in legal practice, legal administration, media management and academic education, which will improve the quality of corporate governance and compliance of the Board of Directors. He has the ability to handle crises, international market insights, leadership ability, and decision-making ability. The current term of office of the independent director is the second term, less than three terms, and no violation of Article 30 of the Company Act.		0

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Criteria	Name	Professional qualifications and experience	Independence situation	Number of positions as independent director in other public companies
Independent Director
Yung-Ching Tsai		He graduate from the Department of Banking and Insurance, Takming University of Science and Technology, with professional knowledge in accounting and finance. He worked as the Manager of Finance Department, Shin Kong Life Insurance, a Consultant of Shin Kong Chao Feng Co., Ltd., Deputy General Manager of Chia-Bang Investment Co., Ltd., and Director of Shining Human Resource Consulting Co., Ltd. He has the analysis and management ability in finance, accounting, business affairs, investment, and human resources, which will improve the quality of corporate governance of the Board of Directors and the supervisory function of the Audit Committee. He has the operations judgment ability, accounting and financial analysis ability, business management ability, crisis management ability, and decision-making ability. Although he has served as an Independent Director for three terms (9 years), he has not violated any conditions specified in Article 30 of the Company Act.		0

Note: None of the Company’s directors have been found to have any circumstances in Article 30 of the Company Act.

Diversity and independence of the board of directors

(1) Diversity of the board of directors:

A. The Company has established a policy of board diversity and specific management goals: Article 20 (Capabilities that the Board of Directors should have as a whole) of the Company's “Corporate Governance Best-Practice Principles” states:

The composition of the board of directors shall take

Corporate Governance Report

diversity into consideration. Except that the number of the directors serving concurrently as the managerial officers of the Company shall not exceed one-third of the number of director seats. the board shall develop an appropriate policy for diversification in consideration of its operation, business pattern, and development needs. It is advisable to include, but not limited to, the standards for the following two major aspects:

a. Basic conditions and values: gender, age, nationality and culture, etc.
b. Professional knowledge and skills: professional background (such as law, accounting, industry, finance, marketing, or technology), professional skills, and industrial experience.

B. The specific management objectives of the Company's diversification policy and the achievements are as follows:

Management Goals	Status of Achievement
The number of Independent Directors shall not be less than one-third of the total number of Directors.	Additional seats will be elected in 2026 and 2029
At least one of the board members shall be a director of a different gender.	Achieved
The Board of Directors is composed of at least one-third of the members of different genders.	Female director seats will be increased in the 2026 and 2029 re-elections.
The majority of the independent directors shall not be re-elected for more than 3 terms in a row.	Achieved in the re-election in 2026
None of the Independent	Achieved in the re-election

Management Goals	Status of Achievement
Directors shall serve for more than 3 terms of office consecutively.	in 2029
Among the independent directors, at least one holds the qualifications of certified public accountant, finance, or business administration	Achieved
The number of directors who also serve as the Company's managerial officers does not exceed one-third of the total number of directors	Achieved

(2) Members of the board of directors shall generally possess the necessary knowledge, skills, and literacy to perform their duties. In order to achieve the ideal goal of corporate governance, the board of directors as a whole shall have the following capabilities:

(1) Operational judgment ability (2) accounting and financial analysis ability (3) operation and management ability (4) crisis management ability (5) industry knowledge (6) international market outlook (7) leadership ability (8) decision-making ability.

(3) Current achievement status of board diversity:

A. Basic conditions and values: gender, age, nationality and culture

The Company’s Board of Directors consists of 12 seats, including 3 independent directors and 9 non-independent directors. All directors hold esteemed reputations within the industry. The Company values the gender equality of the composition of the Board of Directors. There is currently one female director, and the

Corporate Governance Report

Company continues to actively recruit female directors. However, there are not many female directors in the Group's diversified industries, and it is not easy to find suitable female candidates who are female directors of the Group, or who also serve as directors or independent directors.

To achieve the goal of diversification of directors, the goal of the Company's next director re-election in 2026 is to have female directors accounting for more than 17% (2 seats) of the total directors, and the Company will actively strive to achieve female directors accounting for more than one-third of the Board of Directors in 2029.

B. Professional knowledge and skills: professional background, professional skills and industrial experience

a. General board members:

PhD in Law, Harvard University, USA; Department of Psychology/Economics, Columbia University, USA.; Master of Accounting, Western Illinois State University.; Master of Department of Applied Physics and Materials Science, California State University, Los Angeles; Department of Information, University of Minnesota; Master of International Business Management, University of St. Thomas, USA; Department of International Trade, Feng Chia University; Department of Mechanical Engineering, National Cheng Kung University; Department of Public Administration, National Chung Hsing University; and other professional backgrounds, professional skills and industrial experience.

b. Independent directors:

Consisted of members with professional backgrounds and professional skills, such as the Department of Law, National Taiwan University; Juris Doctor, Duke University, USA; and Department of Insurance and Financial Management, Takming University of Science and Technology.

c. Please refer to the following table for the board members’ achievement in diversification.

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March 29, 2025

Diversified core Name of director		Basic composition	Industry experience	Professional ability
Nationality	Gender	Age	Term of office and seniority as an independent director	Manufacturing
40 ~ 50 years old	51 ~ 60 years old	61 ~ 80 years old	81 ~ 90 years old	3 ~ 6 years
Chairman Tong-Sheng Wu	The Republic of China	Male
Vice Chairperson Hsin-Chieh Wu	The Republic of China	Male	√
Director Shi-Fen Lin	The Republic of China	Female	√
Director Steve Hong	The Republic of China	Male		√
Director Ching-Chun Chiu	The Republic of China	Male
Director Hsing-En Wu	The Republic of China	Male	√
Director Huo-Tzau Shih	The Republic of China	Male
Director Jung-Chi Liu	The Republic of China	Male
Director Sun-Mo Ni	The Republic of China	Male

36 -

| Diversified core
Name of director | | Basic composition | | | | | | | | Industry experience | | | | | | Professional ability | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | Nationality | Gender | Age | | | | Term of office and seniority as an independent director | | | Manufacturing | Finance | Purchase and marketing | Banking, insurance and real estate | Business management | Information and technology | Law | Finance and accounting | Risk management |
| | | | 40 ~ 50 years old | 51 ~ 60 years old | 61 ~ 80 years old | 81 ~ 90 years old | 3 ~ 6 years | 6 ~ 9 years | 9 years and above | | | | | | | | | |
| Independent Director
Hsien-Der Chiu | The Republic of China | Male | | | √ | | | | √ | √ | | | √ | √ | | √ | | √ |
| Independent Director
Huei-Huang Lin | The Republic of China | Male | | | √ | | | √ | | | | | | √ | | √ | | √ |
| Independent Director
Yung-Ching Tsai | The Republic of China | Male | | | √ | | | | √ | | √ | | √ | √ | | | √ | √ |

(4) Independence of the board of directors:

Among the board members, except for Chairperson Tong-Sheng Wu and Vice Chairperson Hsin-Chieh Wu who are father and son, there are three independent directors, which meets the requirement in paragraph 1, Article 14-2 and paragraph 3, Article 26-3 of the Securities and Exchange Act that the number of independent directors shall not be less than two or one-fifth of the total number of directors. In addition, no more than half of the directors shall have a relationship of spouse or relative within the second degree of kinship.

(II) Information of President, Vice Presidents, Senior Managers and Supervisors of all departments and branches
March 29, 2025

Title	Nationality	Name	Gender	Date onboard	Shares held		Shares held by spouse and underage children		Shares held by proxy		Main career (academic) achievements	Other companies	Spouse or relatives of second degree or closer acting as managers			Remarks
					Shares held	Shareholding percentage	Shares held	Shareholding percentage	Shares held	Shareholding percentage			Title	Name	Relationship
Vice Chairman of Operations Decision Committee	The Republic of China	Shyr Shyuan Luo	Male	2022.03.14	2,264,759	0.14%	—	—	—	—	Department of Chemical Engineering, Feng Chia University	Note 1	-	-	-	None
President and Director of Corporate Planning & Management Department	The Republic of China	Chin-Ta Ou	Male	2022.03.14	253,000	0.02%	—	—	—	—	Master of Mechanical Engineering, National Central University	Note 2	-	-	-	None
Vice President of Investment Division	The Republic of China	Chih-Lung Hsiao	Male	2016.02.01	2,528	0.00%	—	—	—	—	MBA in Finance, National Taipei University	Note 3	-	-	-	None
CTO, Chairperson's Office	The Republic of China	Kou-Tai Tsou	Male	2016.02.16	198,135	0.01%	—	—	—	—	Doctor in School of Polymer Science and Textile, Clemson University	-	-	-	-	None
Vice President of Operation Headquarters	The Republic of China	Yao-Ding Lee	Male	2015.01.01	640,614	0.04%	5,277	0.00%	—	—	Master of Human Resource Development, Pittsburg State University	Note 4	-	-	-	None
Assistant Vice President, Procurement Division	The Republic of China	Chao-Jung Hsu	Male	2015.01.01	181,920	0.01%	—	—	—	—	MBA, University of Mississippi	-	-	-	-	Note 5
Head of Financial Department	The Republic of China	Hsin-Chang Lin	Male	2023.03.01	43,243	0.00%	—	—	—	—	Bachelor of Money and Banking, National Kaohsiung First University of Science And Technology	Note 6	-	-	-	None
Senior Specialist Officer of the Corporate Planning & Management Department concurrently serving as the head of the Public Relations and General Affairs Group.	The Republic of China	Yu-Lin Hsu	Male	2020.05.01	169,094	0.01%	—	—	—	—	Master of Business Administration, Chung Yuan Christian University	-	-	-	-	None
Chief Factory Director of the	The Republic of	Chun-Shu Peng	Male	2022.03.14	155,008	0.01%	—	—	—	—	Bachelor of Chemical	-	-	-	-	None

Corporate Governance Report

Title	Nationality	Name	Gender	Date onboard	Shares held		Shares held by spouse and underage children		Shares held by proxy		Main career (academic) achievements	Other companies	Spouse or relatives of second degree or closer acting as managers			Remarks
					Shares held	x percentage	Shares held	x percentage	Shares held	x percentage			Title	Name	Relationship
Corporate Engineering Division	China										Engineering, National Taiwan University
Senior Assistant Vice President, Fiber Division, Operation Headquarters	The Republic of China	Ping-Yi Hu	Male	2022.05.05	105,289	0.01%	—	—	—	—	Bachelor, Fiber Department, Feng Chia University	Note 7				None
Senior Assistant Vice President, Solid Aggregation Division and Assistant Vice President, Advanced Materials Division, Operation Headquarters	The Republic of China	Hsing Yao	Male	2022.05.05	117,853	0.01%	—	—	—	—	Bachelor of Chemical Engineering, National Central University	Note 8				None
Assistant Vice President, Procurement Division	The Republic of China	Chun-Feng Hsieh	Female	2024.05.01	—	—	—	—	—	—	Department of Business Mathematics, Soochow University	-				Note 9

Note 1: Retired on June 30, 2024, and the shareholding is as of June 30, 2024.

Note 2: Pan Asian Plastics Corp. - Chairperson; Pan Asian Plastics Industry Corporation - Chairperson; Shinkong Engineering Co., Ltd. - Chairperson; Thai Shinkong Industry Corporation Ltd. - Director; Shinpont Industry Inc. - Director.

Note 3: Director, UBright Optronics Corporation; Director, Far Trust International Finance Co., Ltd; Director, JEDCOM LTD.; Director, Hsinghong Investment Co., Ltd; Director, Hsinshin Asset Management Co., Ltd.; Chairperson, Shinkong International Leasing Corp.; Director, Shin Chiun Industrial Co., Ltd.; Supervisor, Hsin Lung Chemical Co., Ltd.; Chairperson, Otobuy Co., Ltd.; Chairperson, Shinkong Power Technology Co., Ltd.; Chairperson, Chi Teng Construction Co., Ltd.; Chairperson, Shinkong Energy Corporation; Chairperson, Jin Liang Power Service Co., Ltd.; Chairperson, Shin Kong Fintech Co., Ltd., Chairperson of He Chuang Energy Technology Co., Ltd., and Chairperson of iMedical Data Co., Ltd.

Note 4: Thai Shinkong Industry Corporation Ltd. - Director; Pan Asian Plastics Industry Corporation - Director; Shinkong Applied Materials (Jiangsu) Co. Ltd. - Chairperson; Shinpont Industry Inc. - Chairperson.

Note 5: On October 1, 2024, he transferred from Assistant Vice President of the Solid Aggregation Business Department to Assistant Vice President of the Procurement Division.

Note 6: Shinkong Applied Materials Co., Ltd. - Supervisor; Shin Chiun Industrial Co., Ltd. - Director; Hsin Chien Industrial Co., Ltd. - Supervisor; Hsinshin Asset Management Co., Ltd. - Supervisor; Hsinghong Investment Co., Ltd - Supervisor; Hsin Lung Chemical Co., Ltd. - Director; Shinkong Technologies Corporation - Supervisor; Shinkong Innovations Co., LTD - Director; Shinkong International Leasing Corp. - Supervisor; Shinpont Industry Inc. - Supervisor; Overseas Investment & Development Corp. - Director.

Note 7: President of Shinpont Industry Inc.; Chairperson of SHINKONG VIETNAM ENTERPRISE COMPANY LIMITED. Promoted to Senior Manager of Long Fiber Business Department on April 1, 2025.

Note 8: Director of Shinkong Applied Materials (Jiangsu) Co. Ltd. of China: Promoted to Senior Manager and Manager of Advanced Materials Department on October 1, 2024. As of April 1, 2025, the Assistant Vice President of the Solid Business Department, who concurrently served as the Director of the High-End Materials Business Department and Manager of the Solid Business Section, was promoted to Senior Assistant Vice President of the Solid Business Department, while concurrently serving as Assistant Vice President of the High-End Materials Business Department and Manager of the Solid Business Section.

Note 9: He was promoted to Assistant Vice President on May 1, 2024, and retired on September 30, 2024, and the shareholding is as of September 30, 2024.

(III) Remuneration paid to directors, independent directors, the President, and vice presidents in the last year

Remuneration of general directors and independent directors

December 31, 2024; Unit: NTS thousand; %

Title	Name	Director remuneration							The total amount of items A, B, C and D and their proportion in net profit after tax	Remuneration received as an employee who is serving concurrently								The total amount of items A, B, C, D, E, F and G and their proportion in net profit after tax
		Remuneration (A)		Pension (B)		Director remuneration (C)		Fees for services rendered (D)			Salaries, bonuses, special allowances etc (E)		Pension (F)		Employee remuneration (G)
		The Company	The Company	All companies included in the financial statements	The Company	All companies included in the financial statements	The Company	All companies included in the financial statements	All companies included in the financial statements	The Company	All companies included in the financial statements	The Company	All companies included in the financial statements	The Company		All companies included in the financial statements		The Company		All companies included in the financial statements
														Amount paid in shares	Amount paid in cash	Amount paid in shares	Amount paid in shares	Amount paid in shares
Director	Shin Kong Development Co., Ltd. Representative: Tong-Sheng Wu, Hsin-Chieh Wu, Shi-Fen Lin, Tung-Ming Wu (Note 1) and Hsiu-Mei Wang Chen (Note 2)	4,076	4,076	199	199	-	-	348	420	4,623/0.2709	4,695/0.2752	5,181	13,202	292	400	209	-	209	-	10,306/0.6041	18,506/1.0848	None
	Representative of Tay Way Enterprise Co., Ltd.: Huoo-Tzau Shih, Ching-Chun Chiu
	Representative of Ji Zhen Co., Ltd.: Hsing-En Wu
	Taiwan Shinkong Co., Ltd.: Representative: Steve Hong
	Representative of Mian Hao Enterprise Co., Ltd.: Sun-Mo Ni
Shin Kong Wu Ho-Su Cultural & Educational Foundation Representative: Jung Chi Liu
Independent Director	Hsien-Der Chiu	1,170	1,170	-	-	-	-	90	90	1,260/0.0739	1,260/0.0739	-	-	-	-	-	-	-	-	1,260/0.0739	1,260/0.0739	None
	Yung-Ching Tsai
	Huei-Huang Lin
1. Please describe the independent directors' remuneration policy, system, standards, and structure, and explain the factors including the independent directors' duties, risks, and invested time connecting to the remuneration amount:

Title	Name	Director remuneration	The total amount of items A, B, C and D and their proportion in net profit after tax	Remuneration received as an employee who is serving concurrently	The total amount of items A, B, C, D, E, F and G and their proportion in net profit after tax	Remuneration from invested businesses other than subsidiaries or the parent company
Remuneration (A)	Pension (B)	Director remuneration (C)	Fees for services rendered (D)	Salaries, bonuses, special allowances etc (E)	Pension (F)	Employee remuneration (G)
The Company	All companies included in the financial statements	The Company	All companies included in the financial statements	The Company	All companies included in the financial statements	The Company
The Company sets remuneration to our general directors and independent directors based on operating conditions, and we take reference of the peers and the risks of their duties. Except as disclosed in the table above, the remuneration received by the Company's directors for their services (such as serving as consultants for non-employees of all companies/reinvestment enterprises of the parent company/in the financial report) in the most recent year: No such situation for general directors and independent directors.

Note 1: Tung-Ming Wu was relieved from the position of the representative of Shin Kong Development Co., Ltd. on May 30, 2024, and Shi-Fen Lin took over the position on the same day.
Note 2: Hsiu-Mei Wang Chen relieved of his duty on June 2, 2023.
Note 3: The compensation paid to three drivers was NT$2,738 thousand.

1-1. Remuneration bracket table

Range of remuneration paid to the Company's directors	Name of director
	Sum of the first 4 items (A + B + C + D)		Sum of the first 7 items (A + B + C + D + E + F + G)
	The Company	All companies included in the financial statements (H)	The Company	All companies included in the financial statements (I)
Below NT$1,000,000	Tong-Sheng Wu, Shi-Fen Lin, Tung-Ming Wu, Hsiu-Mei Wang Chen, Huo-Tzau Shih, Ching-Chun Chiu, Sun-Mo Ni, Shing-En Wu, Steve Hong, Rong-Chi Liu, Hsien-Der Chiu, Yung -Ching Tsai, Huei-Huang Lin	Tong-Sheng Wu, Shi-Fen Lin, Tung-Ming Wu, Hsiu-Mei Wang Chen, Huo-Tzau Shih, Ching-Chun Chiu, Sun-Mo Ni, Shing-En Wu, Steve Hong, Rong-Chi Liu, Hsien-Der Chiu, Yung -Ching Tsai, Huei-Huang Lin	Shi-Fen Lin, Tung-Ming Wu, Hsiu-Mei Wang Chen, Huo-Tzau Shih, Ching-Chun Chiu, Sun-Mo Ni, Shing-En Wu, Steve Hong, Rong-Chi Liu, Hsien-Der Chiu, Yung -Ching Tsai, Huei-Huang Lin	Shi-Fen Lin, Tung-Ming Wu, Hsiu-Mei Wang Chen, Ching-Chun Chiu, Sun-Mo Ni, Shing-En Wu, Steve Hong, Rong-Chi Liu, Hsien-Der Chiu, Yung -Ching Tsai, Huei-Huang Lin
NT$1,000,000 (inclusive) - NT$2,000,000 (non-inclusive)
NT$ 2,000,000 (inclusive) ~ NT$ 3,500,000 (non-inclusive)	Hsin-Chieh Wu	Hsin-Chieh Wu	Hsin-Chieh Wu
NT$ 3,500,000 (inclusive) ~ NT$ 5,000,000 (non-inclusive)				Hsin-Chieh Wu
NT$ 5,000,000 (inclusive) ~ NT$ 10,000,000 (non-inclusive)			Tong-Sheng Wu	Tong-Sheng Wu, Huoo-Tzau Shih
NT$ 10,000,000 (inclusive) ~ NT$ 15,000,000 (non-inclusive)
NT$ 15,000,000 (inclusive) ~ NT$ 30,000,000 (non-inclusive)
NT$ 30,000,000 (inclusive) ~ NT$ 50,000,000 (non-inclusive)
NT$ 50,000,000 (inclusive) ~ NT$ 100,000,000 (non-inclusive)
NT$ 100,000,000 and above
Total	14	14	14	14

Corporate Governance Report

2. Remuneration to the President and vice presidents

December 31, 2024; Unit: NT$ thousand; %

Title	Name	Salary (A)		Pension (B)		Bonuses and allowances (C)		Employee remuneration (D)				The total amount of items A, B, C and D and their proportion in net profit after tax (%)		Remuneration from invested businesses other than subsidiaries or the parent company
		The Company	All companies included in the financial statements	The Company	All companies included in the financial statements	The Company	All companies included in the financial statements	The Company		All companies included in the financial statements		The Company	All companies included in the financial statements
								Amount paid in cash	Amount paid in shares	Amount paid in cash	Amount paid in shares
CEO	Tong-Sheng Wu	13,071	13,311	1,109	1,109	7,133	13,433	642	-	1,162	-	21,955/1.2870	29,015/1.7009	None
President	Chin-Ta Ou
Vice Chairman	Shyr-Shyuan Luo (Note 1)
Vice President	Yao-Ding Lee
Vice President	Chih-Lung Hsiao
CTO	Kou-Tai Tiou
Executive Vice President	Chin-Chang Cheng (Note 2)

Note 1: Shyr-Shyuan Luo retired on June 30, 2024.
Note 2: Chin-Chang Cheng retired on November 12, 2023.
Note 3: The compensation paid to three drivers was NT$3,669 thousand.

2-1. Remuneration bracket table

Range of remuneration to the Company's President and vice presidents	Name of President and vice presidents
	The Company	All companies included in the financial statements
Below NT$1,000,000	Chin-Chang Cheng	Chin-Chang Cheng
NT$ 1,000,000 (inclusive) ~ NT$ 2,000,000 (non-inclusive)
NT$ 2,000,000 (inclusive) ~ NT$ 3,500,000 (non-inclusive)	Shyr-Shyuan Luo, Chih-Lung Hsiao, Kou Tai, Tiou	Shyr-Shyuan Luo, Kou-Tai Tsou
NT$ 3,500,000 (inclusive) ~ NT$ 5,000,000 (non-inclusive)	Chin-Ta Ou, Yao-ding Lee	Chin-Ta Ou, Yao-ding Lee
NT$ 5,000,000 (inclusive) ~ NT$ 10,000,000 (non-inclusive)	Tong-Sheng Wu	Tong-Sheng Wu, Chih-Lung Hsiao
NT$ 10,000,000 (inclusive) ~ NT$ 15,000,000 (non-inclusive)
NT$ 15,000,000 (inclusive) ~ NT$ 30,000,000 (non-inclusive)
NT$ 30,000,000 (inclusive) ~ NT$ 50,000,000 (non-inclusive)
NT$ 50,000,000 (inclusive) ~ NT$ 100,000,000 (non-inclusive)
NT$ 100,000,000 and above
Total	7	7

Corporate Governance Report

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Names of managers who received employee remuneration:

December 31, 2024; Unit: NT$ thousand; %

	Title	Name	Amount paid in shares	Amount paid in cash	Total	Total as a percentage of net income (%)
Managerial Officers	CEO	Tong-Sheng Wu	-	1,302	1,302	0.0763
	President	Chin-Ta Ou
	CTO, Chairperson's Office	Kou-Tai Tiou
	Vice President of Operation Headquarters	Yao-Ding Lee
	Vice President of Investment Division	Chih-Lung Hsiao
	Director of Procurement Department and manager of Procurement Division	Chao-Jung Hsu
	Senior Assistant Vice President, Fiber Division, Operation Headquarters	Ping-Yi Hu
	Senior Assistant Vice President, Solid Aggregation Division and Assistant Vice President, Advanced Materials Division, Operation Headquarters	Hsing Yao
	Chief Factory Director of the Corporate Engineering Division	Chun-Shu Peng
	Senior Specialist Officer of the Corporate Planning & Management Department concurrently serving as the head of the Public Relations and General Affairs Group.	Yu-Lin Hsu
	Head of Financial Department	Hsin-Chang Lin
	Corporate Governance Report Manager	Hao-Ning Ho
	Accounting Department Manager	Hsun-Neng Li (Note 7)

Corporate Governance Report

(IV) Amount of remuneration paid in the last 2 years by the company and all companies included in the consolidated financial statements to the company's directors, supervisors, President, and vice presidents, and their respective percentages to standalone net income, as well as the policies, standards, and packages by which they were paid, the procedures through which remunerations were determined, and their association with business performance:

Remuneration paid to the Company's directors, supervisors, President and vice presidents in the last 2 years, and percentages relative to standalone net income:

	The Company				All companies in the consolidated statements
	20244		2023		2024		2023
	Total	As a percentage of after-tax profit	Total	As a percentage of after-tax profit	Total	As a percentage of after-tax profit	Total	As a percentage of after-tax profit
Director remuneration	5,883	0.34%	6,632	0.87%	5,955	0.35%	6,698	0.88%
Supervisor remuneration	-	-	-	-	-	-	-	-
Remuneration to the President and vice presidents	21,955	1.29%	43,009	5.63%	29,015	1.70%	49,932	6.53
After-tax profit	1,705,920		764,410		1,705,920		764,410

The total remuneration to directors in 2024 slightly decreased from that of 2023, primarily due to a decrease in profits in 2024 which resulted in a decrease in remuneration. The total remuneration for the President and Vice President decreased from that in 2023 due to a decrease in year-end bonus in 2024.

Policies, standards, and packages for payment of remuneration:

(1) In accordance with Article 23 of the Company's Articles of Incorporation, the remuneration to the directors for performance of their duties shall be determined based on the

degree of involvement and contribution of the directors and with reference to the general standards of the industry. If the Company makes a profit in the current year, the Company calculates the remuneration based on the annual operating performance and with reference to the distribution days of the year-end bonus to employees in the current year.

(2) The Company's remuneration to managerial officers follows the principles outlined in the "Regulations Governing Performance Bonus of Managerial Officers," which aim to recognize and reward employees' dedicated efforts in their work. Bonuses are granted based on the Company's annual business performance, financial condition, operational status, and individual job performance. Additionally, in years where the Company generates profits, a provision of no less than one percent is allocated for employee remuneration in accordance with Article 32 of the Company's Articles of Incorporation. Furthermore, the Company conducts performance evaluations based on the "Regulations Governing Employee Annual Performance Evaluations" to serve as a reference for bonus distribution to managerial officers. The evaluation criteria encompass work accomplishments like enhancing customer satisfaction, conducting subordinate rotation training, and improving internal processes. Behavioral indicators such as leadership aptitude and coordination and execution capabilities are also considered. When calculating the remuneration of managerial officers based on business performance, the remuneration system is subject to timely adjustments in line with actual operational conditions. Additionally, the reasonableness of the remuneration is duly reviewed by the Salary and Remuneration Committee and the Board of Directors.

(3) The composition of the remuneration provided by the

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Corporate Governance Report

Company, as stipulated by the "Regulations Governing the Establishment and Exercise of Powers of the Remuneration Committee," includes cash compensation, stock options, bonus shares, retirement benefits or severance pay, various allowances, and other measures with substantial incentives.

Procedure for determining remuneration:

The reasonableness of the remuneration to the Company's managers is regularly evaluated and reviewed by the Remuneration Committee. In addition to individual contributions to the Company, the Company's overall operational performance, the actual operating conditions, and relevant laws and regulations are taken into account for periodical review of the remuneration system. In addition, reasonable remuneration is paid after comprehensively considering the current corporate governance trend to ensure the balance between the corporate sustainability and the risk control. The actual amount of remuneration to managers in 2024 is reviewed by the Remuneration Committee and reported to the board of directors for approval.

Association with operating performance and future risk:

The review of the payment standard and system related to the Company's remuneration policy is mainly based on the overall operation of the Company. The payment standard is approved based on the contribution to the Company, in order to improve the overall efficiency of the teams of each department.

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II. Implementation of Corporate Governance

(I) Functionality of Board of Directors

A total of 9 board meetings (A) were held in the last year. Below are the directors' attendance records:

Title	Name	Actual attendance (B)	Proxy attendance	Attendance in Person (%) [B/A]	Remarks
Chairperson	Shin Kong Development Co., Ltd.
Representative: Tong-Sheng Wu	9	0	100%	Re-elected during the annual general meeting on June 2, 2023.
Vice Chairperson	Shin Kong Development Co., Ltd.
Representative: Hsin-Chieh Wu	5	4	56%	Assumed the position of director after the full re-election at the annual general meeting on June 2, 2023.
Director	Shin Kong Development Co., Ltd.
Representative: Tung-Ming Wu	0	3	-	Re-elected during the annual general meeting on June 2, 2023.
Totally three meetings were held before relief of duty on May 30, 2024.
Director	Shin Kong Development Co., Ltd.
Representative: Shi-Fen Lin	4	2	67%	Re-elected during the annual general meeting on June 2, 2023.
Totally six meetings were held after assumption of duty on May 30, 2024.
Director	Representative of Shinkong Co., Ltd.: Steve Hong	7	2	78%	Re-elected during the annual general meeting on June 2, 2023.
Director	Ji Zhen Co., Ltd.
Representative:	4	5	44%	Assumed the position of director after the full re-election at the annual general meeting on June 2, 2023.

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Corporate Governance Report

Title	Name	Actual attendance (B)	Proxy attendance	Attendance in Person (%) [B/A]	Remarks
	Hsing-En Wu				election at the annual general meeting on June 2, 2023.
Director	Tay Way Enterprise Co., Ltd.
Representative: Ching-Chun Chiu	9	0	100%	Re-elected during the annual general meeting on June 2, 2023.
Director	Tay Way Enterprise Co., Ltd.
Representative: Huoo-Tzau Shih	9	0	100%	Re-elected during the annual general meeting on June 2, 2023.
Director	Mian Hao Enterprise Co., Ltd.
Representative: Sun-Mo Ni	9	0	100%	Re-elected during the annual general meeting on June 2, 2023.
Director	Shin Kong Wu Ho-Su Culture and Education Foundation
Representative: Jung-Chi Liu	9	0	100%	Re-elected during the annual general meeting on June 2, 2023.
Independent director	Hsien-Der Chiu	9	0	100%	Re-elected during the annual general meeting on June 2, 2023.
Independent director	Huei-Huang Lin	9	0	100%	Re-elected during the annual general meeting on June 2, 2023.
Independent director	Yung-Ching Tsai	9	0	100%	Re-elected during the annual general meeting on June 2, 2023.
★ Other relevant details:
I. For Board of Directors’ meetings that meet any of the following descriptions, state the date, session, the discussed motions, independent directors' opinions, and how the company has responded to such opinions:
(I) The listed items on Article 14-3 of the Security and Exchange Act: Approved by

49 -

50 -

Title	Name	Actual attendance (B)	Proxy attendance	Attendance in Person (%) [B/A]	Remarks
all independent directors. (The details refer to page 130-134 in the annual report.)
(II) Any other documented objections or qualified opinions raised by independent directors against board resolutions in relation to matters other than those described above: None
II. For the implementation status of directors' avoidance from conflicts of interests, state the names of the directors, the contents of the motions, reasons for avoidance and participation in the voting process: On January 20, 2025, the board meeting discussed the establishment of "Xinxin Capital Co., Ltd." and the signing of the relevant investment contract on behalf of "Xinxin Capital Co., Ltd. Preparatory Office", and. Director Hsing-En Wu avoided the discussion and did not participate in the voting due to his personal interest in the matter. After the chairperson's consulting with other attending directors, the proposal was passed without objection.
III. TWSE/TPEx Listed Companies should disclose information including the evaluation cycle and period, evaluation scope, method and evaluation content of the board’s self (or peer) evaluation and fill in the Evaluation of the Board of Directors in Appendix 2 (2).
IV. Objectives of strengthening the functions of the Board of Directors in the current year and the past year (e.g. setting up an Audit Committee, improving information transparency, etc.) and evaluation of the implementation status: The objective is to improve the quality of the Board of Directors' decision making and the Board of Directors' participation in the Company's operations to ensure the Company's compliance with relevant laws and regulations, and supervising the Company's handling of risks faced. For the operation of the board of director and the implementation of the resolutions, please refer to page 130 to 134.

2. Evaluation of the Board of Directors

Evaluation cycles	Evaluation periods	Evaluation scope	Evaluation method	Evaluation contents and results
Annually	January 1 to December 31, 2024	Performance evaluation of the board of directors and individual directors	Internal evaluation of the board, self-evaluation by individual board members	1. Performance evaluation of the board: Participation in the operation of the company; improvement of the quality of the Board of Directors' decision making; composition and structure of the Board of Directors; election and continuing education of the directors; and internal control. Items that require improvement in the evaluation results are “Quality of board resolutions” and “Degree of

Corporate Governance Report

Evaluation cycles	Evaluation periods	Evaluation scope	Evaluation method	Evaluation contents and results
				participation in the Company's operations”.
2. Performance evaluation of the board members: alignment of the goals and missions of the company; awareness of the duties of a director; participation in the operation of the company; management of internal relationship and communication; the director's professionalism and continuing education; and internal control. Items that require improvement in the evaluation results include "Alignment of the goals and missions of the Company" and "Participation in the Company's operations.

Implementation status of functional committee evaluation - Implementation status of Audit Committee evaluation

Evaluation cycles	Evaluation periods	Evaluation scope	Evaluation method	Evaluation contents and results
Annually	January 1 to December 31, 2024	Performance evaluation of individual Audit Committee members	Self-evaluation of members	Performance evaluation of the Audit committees: participation in the operation of the company; awareness of the duties of the functional committee; improvement of the quality of decisions made by the functional committee; composition of the functional committee and election of its members and internal control. The item that requires strengthening in the evaluation results is “Awareness of the Audit Committee's responsibilities”.

Implementation status of functional committee evaluation - Implementation status of Remuneration Committee evaluation

Evaluation cycles	Evaluation periods	Evaluation scope	Evaluation method	Evaluation contents and results
Annually	January 1 to December 31, 2024	Performance evaluation of individual Remuneration Committee members	Self-evaluation of members	Performance evaluation of the Remuneration committees: participation in the operation of the company; awareness of the duties of the functional committee; improvement of the quality of decisions made by the functional committee; composition of the functional committee and election of its members and internal control. The most satisfactory item of the evaluation results is "participation in the operation of the company", and the item that should be strengthened is "functional committees' awareness of responsibilities".

(II) Functions of the Audit Committee:

A total of 9 (A) Audit Committee meetings were held in the last year; independent directors' attendance records are summarized below:

Title	Name	Actual attendance (B)	Proxy attendance	Attendance in Person (%) (B/A)
Independent Director	Hsien-Der Chiu	9	0	100%
Independent Director	Huei-Huang Lin	9	0	100%
Independent Director	Yung-Ching Tsai	9	0	100%
Other relevant information: I. For Audit Committee meetings that meet any of the following descriptions, state the date and session of Board of Directors meeting held, the discussed topics, the Audit Committee's resolution, and how the company has responded to Audit Committee's opinions. (I) Items listed on Article 14-5 of the Securities and Exchange Act: Approved by all members of the audit committee (Please refer to the annual report on page 136 to 138).

Corporate Governance Report

(II) Other than those described above, any resolutions not approved by the Audit Committee but passed by more than two-thirds of directors: None.

II. Avoidance of involvements in interest-conflicting discussions by independent directors; state the names of concerned independent directors, the discussions, the nature of conflicting interests, and the voting process: None.

III. Communication between Independent Directors, internal audit manager and CPAs (shall include the significant issues on finance and operation, methods and results, etc): Except for the discussion with CPA s in audit committee meeting, the internal audit managers also irregularly communicate with independent directors relating to the Company's audit status, financial conditions, the impact of accounting bulletin on financial reports or new laws and regulations by the competent authority.. The communication was good ( Please refer to pages 139 to 142 of the annual report.).

IV. Key matters addressed by the Audit Committee during the year included: review of the financial reports audited and certified by the CPAs; assessment of the effectiveness of the internal control system; review of the audit plan; appointment, dismissal, and remuneration of the certifying CPAs; proposals regarding the acquisition or disposal of assets; annual earnings distribution; loaning of funds between the Company and its subsidiaries; and the addition of the definition of grassroots employees. All motions were discussed and approved by the Audit Committee members without objection. (for the content of each Audit Committee meeting, please refer to (pages 136 to 138). of the annual report).

V. Others: The Company has established the "Sustainable Development Promotion Committee" and appointed three independent directors to be the members of the committee in the Board of Directors' report and discussion matters on May 7, 2024 and August 6, 2024, and formulated the "Organizational Regulations of the Sustainable Development Committee" and the "Risk Management Policy and Procedures". The Audit Committee is appointed to supervise the risk management related operation mechanism, and incorporate the functional Risk Management Committee's functions into the Audit Committee's operations. Therefore, the Company's Audit Committee is also the Audit (and Risk Management) Committee.

53 -

(III) Functions of the Salary and Remuneration Committee

Information of Salary and Remuneration Committee members

March 29, 2025

| Criteria
Identity and name | | Professional qualifications and experience | Independence situation | Number of positions as Salary and Remuneration Committee member in other public companies |
| --- | --- | --- | --- | --- |
| Independent Director (Convener) | Hsien-Der Chiu | Professional qualification: Lawyer
Current position: Independent Director of Shinkong Synthetic Fibers Corp.
Chairperson of Xin Hong Construction Co., Ltd.
Experience: practicing lawyer | • Whether the person, his/her spouse or second-tier relatives (or in the name of others) are directors, supervisors or employees of the company or its affiliated enterprises: No.
• Percentage of shareholding in the Company: 0%
• Whether the person is a director, supervisor or employee of a company with a specific relationship with the company: No.
• Amount of remuneration received for providing business, legal, financial, accounting and other services of the Company or its affiliated enterprises in the last two years: None. | 0 |
| Independent Director | Huei-Huang Lin | Professional qualification: Legal Affairs
Current position: Independent Director of Shinkong Synthetic Fibers Corp.
Adjunct Professor, College of Law, Soochow | • Whether the person, his/her spouse or second-tier relatives (or in the name of others) are directors, supervisors or employees of the company or its affiliated enterprises: No.
• Percentage of shareholding in the | 0 |

54 -

Corporate Governance Report

Identity and name	Criteria	Professional qualifications and experience	Independence situation	Number of positions as Salary and Remuneration Committee member in other public companies
		University
Chairperson of Hefeng Media Investment Co., Ltd.
Director of Asia Digital Media Co.Ltd.

Experience:
Political Deputy Minister of the Ministry of Justice Chief prosecutor of supreme prosecutor's office
Dean of the Academy for the Judiciary of the Ministry of Justice
Director of Division of Protection, Ministry of Justice
Prosecutor General of the Prosecutor's office of Hualien District Court, Taiwan
Prosecutor General of the Prosecutor's office of Penghu District Court, Taiwan
Full-time visiting professor of Law School, Shih Hsin University
Adjunct Professor, National Taipei University Department of Law | Company: 0%
• Whether the person is a director, supervisor or employee of a company with a specific relationship with the company: No.
• Amount of remuneration received for providing business, legal, financial, accounting and other services of the Company or its affiliated enterprises in the last two years: None. | |

55 -

Criteria Identity and name		Professional qualifications and experience	Independence situation	Number of positions as Salary and Remuneration Committee member in other public companies
Independent Director	Yung-Ching Tsai	Professional qualification: Finance Current position: Independent Director of Shinkong Synthetic Fibers Corp. Consultant of Shin Kong Chao Feng Co., Ltd. Director of U-P Human Resources Consulting Co., Ltd. Vice-President of Chia Pang Investment Co., Ltd. Experience: Manager of Finance Department of Shin Kong Life Insurance Assistant Vice President of General Affairs Department of Shin Kong Life Insurance Director Independent director of Advanced Green Biotechnology Inc.	• Whether the person, his/her spouse or second-tier relatives (or in the name of others) are directors, supervisors or employees of the company or its affiliated enterprises: No. • Percentage of shareholding in the Company: 0% • Whether the person is a director, supervisor or employee of a company with a specific relationship with the company: No. • Amount of remuneration received for providing business, legal, financial, accounting and other services of the Company or its affiliated enterprises in the last two years: None.	0

56 -

Corporate Governance Report

2. Functions of the Salary and Remuneration Committee

I. The Company's Salary and Remuneration Committee consists of 3 members.

II. The term of the members: from July 3, 2023 to June 1, 2026 The salary and remuneration committee held 7 meetings (A) in the most recent year. The qualification of members and the status of attendance are as follows:

Title	Name	Actual attendance (B)	Proxy attendance	Attendance in Person (%) (B/A)
Convener	Hsien-Der Chiu	7	0	100%
Committee member	Huei-Huang Lin	7	0	100%
Committee member	Yung-Ching Tsai	7	0	100%
Other relevant information:
I. In the event where the Salary and Remuneration Committee's proposal is rejected or amended in a Board of Directors’ meeting, please describe the date and session of the meeting, details of the topics discussed, the board's resolution, and how the company handled the Salary and Remuneration Committee's proposals (describe the differences and reasons, if any, should the Board of Directors approve a solution that was more favorable than the one proposed by the Salary and Remuneration Committee): None.
II. Should any member object or express qualified opinions to the resolution made by the Salary and Remuneration Committee, whether on-record or in writing, please describe the date and session of the meeting, details of the topics discussed, the entire members' opinions, and how their opinions were addressed: None.
III. The annual focus and operation of the Remuneration Committee: The focus of this year's work includes reviewing the distribution of employees’ remuneration and directors’ remuneration, year-end performance bonus payment, the reasonableness of salary adjustment plans, and the revision of the bonus system. After the proposing unit’s explanation to the Remuneration Committee, all committee members agreed to adopt these proposals after discussion.

(IV) Information on members and operation of the nomination committee: None.

(V) Deviation and causes of deviation of the Company’s actual governance from the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies

Assessment items	Actual governance			Deviation and causes of deviation from Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies
	Yes	No	Summary
I. Has the company established and disclosed its corporate governance principles based on Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies?	☑		The Company has established its “Corporate Governance Best Practice Principles”, which serve as the basis for the Company’s corporate governance operations, and will be amended in accordance with laws and regulations of the competent authority. The Principles have been disclosed on the MOPS.	No deviation was found
II. Shareholding structure and shareholders’ interests
(I) Has the company implemented a set of internal procedures to handle shareholders’ suggestions, queries, disputes and litigations?

(II) Is the company constantly informed of the identities of its major shareholders and the ultimate controller?

(III) Has the company established and implemented risk management practices and firewalls for | ☑ | ☑ | (I) The spokesperson of the Company is communication window with shareholders. Shareholders can reach the stock transfer agent or the contact methods disclosed on the Company’s website for any doubts or opinions. The Company does not have any disputes or litigation with shareholders.

(II) The Company monitors its shareholders through the shareholder list provided by the stock transfer agent. The Company also maintains interaction with major shareholders to keep a good relationship with shareholders.

(III) The Company has implemented relevant credit limits on sales activities in accordance with management policies to control risks. | To be established in the future
No deviation was found
No deviation was found |

Assessment items	Actual governance			Deviation and causes of deviation from Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies
	Yes	No	Summary
companies it is affiliated with?

(IV)Has the company established internal policies that prevent insiders from trading securities against non-public information? | ☑ | | The Company also has a "Related Party, Company and Group Transaction Policy" in place to manage activities between related enterprises.

(IV)The Company has formulated the "Management Measures for Preventing Insider Trading" to prohibit related personnel from insider trading of securities, and held training and publicity on "preventing insider trading" for one hour to insiders every year. In addition, to improve the quality of corporate governance and implement equal treatment of shareholders, the Board of Directors has approved the partial amendment to the "Regulations for Prevention of Insider Trading" and "Corporate Governance Best Practice Principles" on August 6, 2024. The requirement that insiders are prohibited from trading the Company's issued securities in 30 days prior to the date of announcement of the annual financial report and 15 days prior to the date of announcement of the quarterly financial report is added. The Company has reminded (is expected to remind) insiders of compliance with relevant regulations by email before the lock-in period of each board | No deviation was found |

Assessment items	Actual governance
	Yes	No	Summary
			meeting in the current year. The Company has reminded/will remind insiders of compliance with relevant regulations by email before the lock-in period of each board meeting in the current year. The Company also plans to conduct internal training on "insider trading prevention" in the year.
III. Assembly and obligations of the Board of Directors
(I) Has the board of directors (Board members) formulated diversification policies, and specific management objectives and implemented them?

(II) Apart from the Salary and Remuneration Committee and Audit Committee, has the company assembled other functional committees at its own discretion? | ☑ | ☑ | (I) According to the Company's "Governance Practice Best Practice Principles", "Procedure for Director Election", while taking into account the Company's operation diversification, the Company formulated diversification policies and set management goals for board members, and is gradually achieving these goals. At present, the board members have different professional backgrounds, genders and work experience, and have the necessary knowledge and professional ability to perform their duties; See p.42~43 for relevant information.

(II) The Company has established the Organizational Regulations of the Sustainable Development Committee, as well as the Sustainable Development Committee | No deviation was found

In the future, the Company may establish other functional committees in response |

Assessment items	Actual governance
	Yes	No	Summary
(III)Has the company established the Regulations Governing the Board Performance Evaluation and its evaluation methods, and does the company perform a regular performance evaluation each year and submit the results of performance evaluations to the Board of Directors and use them as reference in determining remuneration for individual directors, their nomination, and additional office terms?	☑		voluntarily, with 3 Independent Directors as the official members. The Company may establish other functional committees in the future in response to actual structural needs.
(III)1. The Company has established measures for the evaluation of board performance, and a performance evaluation is carried out on an annual basis. The Company's board evaluation scope covers the performance evaluation of the board as a whole, individual directors, and functional committees. Methods of evaluation include internal self-evaluation by the board and self-evaluation by individual board members, and self-evaluation by functional members; the evaluation results after sorting will be submitted to the board meeting.
2. The Company has set remuneration to Directors by referring to the performance evaluation results of the Board of Directors of the Company, the operating performance of the Company, and referring to the industry standard, which will also serve as a reference for future nomination.	to actual needs.

Assessment items	Actual governance			Deviation and causes of deviation from Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies
	Yes	No	Summary
a regular basis?			(IV)The Audit Committee of the Company evaluates the independence and competence of its certifying CPAs annually. In addition to requiring the certifying CPAs to provide a "Detached Independence Statement" and "Audit Quality Indicators (AQIs)", the Audit Committee evaluates them in accordance with the standards in Note 1 and the AQIs. It is confirmed that the CPAs and the Company have no financial interests or business relationships other than the certification and financial and tax case fees. The members of the CPA’s families also have not violated independence requirements, and with reference to the AQI information, it is confirmed that the CPAs and their firm have excellent audit experience and training hours received compared to the industry average. In addition, they have been introducing digital audit tools in the past three years to improve audit quality. The evaluation results for the most recent year have been discussed and approved by the Audit Committee on January 20, 2025, and submitted to the board meeting for approval on January 20, 2025 to evaluate the independence and competence of the	No deviation was found

Assessment items	Actual governance
	Yes	No	Summary
			CPAs.
IV. Is the company a TWSE/TPEX listed company, and has the company designated an appropriate number of personnel that specialize (or are involved) in corporate governance affairs (including but not limited to providing directors/managers with the information needed and assist directors and managers in complying with the laws and regulations to perform their duties, convention of board meetings and shareholders' meetings, preparation of board meeting and shareholders' meeting minutes, etc)?	☑		1. The Company has set up a Corporate Governance Director position based on a resolution by the board meeting in 2019, and allocated appropriate corporate governance personnel in each unit (including Finance and Accounting Department, Information Division, General Management Division, Procurement Division and HR Division) to be in charge of issues regarding corporate governance.
2. The Company’s Corporate Governance Director has work experience in legal affairs, finance and meeting procedures for more than 3 years; the main duties include handling board meeting and shareholders’ meeting related matters, preparing minutes for board meetings and shareholders’ meetings, assisting directors in continuous study, providing the information needed for directors to carry out business, assisting directors in complying with the laws, performance assessment (for directors, the board, audit Committee and salary and remuneration committee), reporting to the board meeting the results of their review of	No deviation was found

Assessment items	Actual governance
	Yes	No	Summary
			whether the qualifications of independent directors during nomination, election, and tenure comply with relevant laws and regulations, handling matters related to the change of directors, and other matters stipulated in the Company's Articles of Association or contracts.
3. In addition to the annual business executed above, the Company provides suggestions on the items that have not yet been achieved in the corporate governance evaluation and additional items due to the law, such as strengthening the diversity of the Board of Directors' gender and age and improving its operational model, continuing to strengthen intellectual property management, improving the performance evaluation of functional committees, improving the Company's website format, continuing to shorten the time to provide financial reports and adding third-party certifications on water reduction and waste reduction, and establishing a risk management mechanism, in order to improve the Company’s corporate governance.
4. The continuing education of the Corporate Governance Director is expected to include

Assessment items	Actual governance			Deviation and causes of deviation from Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies
	Yes	No	Summary
			12 hours of courses in the impact of IFRS disclosure standards on the Company and response strategies, the impact of Donald Trump's new policy on corporate management and investment, analysis of important corporate governance practical judgements, global economic and financial situation, Advocacy on the Prevention of Insider Trading, and how to establish an ethical corporate culture, employee code of conduct, and practical operation and case study of accountability mechanism.
V. Has the company provided proper communication channels and created dedicated sections on its website to address corporate social responsibility issues that are of significant concern to stakeholders (including but not limited to shareholders, employees, customers, and suppliers)?	☑		The Company has established communication channels for stakeholders, and set up a stakeholder section on the Company's website to address corporate social responsibility issues that are of the highest concern to stakeholders, including financial, business, corporate governance, and corporate social responsibility issues in both Chinese and English versions. The Company holds an annual general meeting and publishes complete annual report information, holds two seminars for institutional investors, and uploads the video files of the shareholders' meeting and seminars for institutional investors to the MOPS and the Company's website. In case of material	No deviation was found

Assessment items	Actual governance			Deviation and causes of deviation from Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies
	Yes	No	Summary
			information, the Company will disclose such information on the MOPS and the Company's website in accordance with the regulations. In 2024, the Company has already disclosed 33 important messages in Chinese and English to the public through media, MOPS, and its official website. Aside from the “Sustainability Report” formulated by the Company, the Company’s website also has a dedicated section explaining the communication and response status between the Company and stakeholders’ through various channels.
VI. Does the company engage a share administration agency to handle shareholders' meeting affairs?	☑		We appointed Shinkong International Securities Co., Ltd. (SKIS) to handle the shareholders' meeting affairs.	No deviation was found
VII. Information disclosure
(I) Has the company established a website that discloses financial, business and corporate governance-related information?

(II) Has the company adopted other means to disclose information (e.g. English website, assignment of dedicated personnel to collect and | ☑ | | (I) The Company has established its website to disclose its business performance, financial reports and corporate governance to facilitate investors’ query and review. Dedicated personnel have been appointed to make disclosures according to rules. Information is updated on a regular basis.

(II) The Company has appointed dedicated personnel to be responsible for collecting and disclosing the Company's information, and | No deviation was found |

Assessment items	Actual governance			Deviation and causes of deviation from Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies
	Yes	No	Summary
disclose corporate information, implementation of a spokesperson system, broadcasting of investor conferences via the company website)?

(III)Has the company published and reported its annual financial report within two months after the end of a fiscal year, and published and reported its financial reports for the first, second, and third quarters, as well as its operating status for each month before the specified deadline? | | ☑ | has a company information spokesperson mechanism. The dedicated personnel handle external communication and information disclosure, and place investor briefing related information on the company website.

(III)The Company files its annual financial report 75 days after the end of each fiscal year, and its financial report for the first, second, and third quarters within 45 days after the end of the first, second, and third quarters. | The feasibility will be discussed with the CPA in the future |
| VIII. Does the company have other information that enables a better understanding of the company's corporate governance practices (including but not limited to employee rights, employee care, investor relations, supplier relations, stakeholders' interests, continuing education of directors/supervisors, implementation of risk management policies and risk measurements, implementation of customer policies, and insuring against the liabilities of company directors and supervisors)? | ☑ | | (I) The Company has human resources policies and incentive systems in place, and devotes significant attention to issues such as employees' rights, self-governing organization, and activities. The Company also takes pro-active steps toward realizing its vision of zero accidents, zero hazards, and environmental protection.

(II) The Company has rigorous systems in place to control the procurement process, factory affairs, and finance. Issues such as selection of suppliers, job rotation, and persons of acting duty have all been clearly addressed in internal policies.

(III)All directors have completed their 6-hour | No deviation was found |

Assessment items	Actual governance
	Yes	No	Summary
			training requirement for the year.
(IV)The Company has purchased liability insurance for our Board of Directors, directors, managers, and employees.
IX. Please explain the improvements made, based on the latest Corporate Governance Evaluation results published by TWSE Corporate Governance Center, and propose enhancement measures for any issues that are yet to be rectified.
(I) The information disclosed on the Company's external website has been gradually expanded, and the English annual report, procedural manual, briefing material to institutional investors, intellectual property management, financial report information and ESG zone are provided. In the future, the Company will accelerate the provision of information to shareholders' meetings, strengthen risk awareness, upgrade the information security level, enhance the intellectual property management system, and strengthen the staff's correct concept of intellectual property rights which will be the priority objectives in the next few years.
(II) Enforcement of corporate social responsibilities and enhancement of sustainable business development will be the priority in the Company's future improvement efforts.

Note 1: CPAs' independence assessment criteria

Assessment items	Assessment results	Independence compliance
1. Whether or not the CPAs have directly or indirectly significant financial interest related to the Company.	Yes	Yes
2. Whether the CPAs are involved in any financing or guarantee arrangement with the Company or its directors	Yes	Yes
3. Whether the CPAs consider the possibility of customer loss which may affect the audit on the Company	Yes	Yes
4. Do the CPAs have any close commercial relationship or potential employment relationship with the Company	Yes	Yes
5. Whether the CPAs receive any public fees which relate to the audit?	Yes	Yes
6. Whether the CPAs and audit team members currently or previously assumed a role as the Company's director, manager, or any position that may significantly affect the audit in the last two years	Yes	Yes
7. Whether the material items of the non-audit services provided by the CPAs to the Company have no direct impact on the audit	Yes	Yes
8. Whether or not the CPAs promote or serve as any form of intermediary to the shares or other securities issued by the Company	Yes	Yes
9. Whether or not the CPAs serve as defense attorneys for the Company, or represent the Company in mediating any conflict with a third party	Yes	Yes
10. Whether or not the CPAs are related to the Company's directors, managers, or any person that is significant to the audit task	Yes	Yes
11. Whether there are CPAs within a year of their departure who have served as the Company's directors, managers, or any position that may have a material impact on the audit	Yes	Yes
12. Whether the CPAs engage in regular work on behalf of, or receive regular salaries from the company	Yes	Yes
13. Whether the CPAs are involved in the Company's decision-making management duties	Yes	Yes
14. As of the last certification, there had been 7 years with no changes	Yes	Yes
15. As of now, have the CPAs been disciplined	Yes	Yes

Note 2: Declaration issued by Deloitte and Touche

Deloitte.

勤業眾信

勤業眾信聯合會計師事務所

110016 自北市信義區松仁路100號20樓

Deloitte & Touche

20F, Taipei Nan Shan Plaza

No. 100, Songren Rd.

Xinyi Dist., Taipei 110016, Taiwan

Tel: +886 (2) 2725-9988

Fax: +886 (2) 4051-6888

www.deloitte.com.tw

受文者：新光合成纖維股份有限公司

主旨：本所接受委託查核貴公司民國113年度財務報表，依照中華民國會計師公會全國聯合會「職業道德規範公報第十號正直、公正客觀及獨立性」之規定，審計小組成員聲明已遵守下列規範，未有違反獨立性情事。

說明：

一、審計小組成員及其配偶與受扶養親屬未有下列情事：

(一) 持有貴公司直接或間接重大財務利益。

(二) 與貴公司或其董監事、經理人間，有影響獨立性之商業關係。

二、在審計期間，審計小組成員及其配偶與受扶養親屬未擔任貴公司之董監事、經理人或對審計工作直接且重大影響之職務。

三、審計小組成員與貴公司之董監事或經理人未有配偶、直系血親、直系姻親或二親等內旁系血親之關係。

四、審計小組成員未收受貴公司或其董監事、經理人或主要股東價值重大之鎖贈或禮物（其價值未超越一般社交禮儀標準）。

五、審計小組成員已執行必要之獨立性／利益衝突程序，未發現有違反獨立性情事或未解決之利益衝突。

勤業眾信聯合會計師事務所

會計師陳文香

Corporate Governance Report

Deloitte.

勤業眾信

勤業眾信聯合會計師事務所
110016 台北市信義區松仁路100號20樓

Deloitte & Touche
20F, Taipei Nan Shan Plaza
No. 100, Songren Rd.,
Xinyi Dist., Taipei 110016, Taiwan

Tel: +886 (2) 2725-9588
Fax: +886 (2) 4051-6888
www.deloitte.com.tw

受文者：新光合成纖維股份有限公司

說明：

一、審計小組成員及其配偶與受扶養親屬未有下列情事：

(一) 持有貴公司直接或間接重大財務利益。
(二) 與貴公司或其董監事、經理人間，有影響獨立性之商業關係。

二、在審計期間，審計小組成員及其配偶與受扶養親屬未擔任貴公司之董監事、經理人或對審計工作直接且重大影響之職務。

三、審計小組成員與貴公司之董監事或經理人未有配偶、直系血親、直系姻親或二親等內旁系血親之關係。

四、審計小組成員未收受貴公司或其董監事、經理人或主要股東價值重大之債贈或禮物（其價值未經越一般社交禮儀標準）。

五、審計小組成員已執行必要之獨立性／利益衝突程序，未發現有違反獨立性情事或未解決之利益衝突。

勤業眾信聯合會計師事務所

會計師徐文亞 (簽章)

Deloitte.

勤業眾信

勤業眾信聯合會計師事務所

110016 台北市信義區松仁路100號20樓

Deloitte & Touche

20F, Taipei Nan Shan Plaza

No. 100, Songren Rd.

Xinyi Dist., Taipei 110016, Taiwan

Tel: +885 (2) 2725-9988

Fax: +885 (2) 4051-6888

www.deloitte.com.tw

受文者：新光合成纖維股份有限公司

主旨：本所接受委託查核貴公司民國114年度財務報表，依照中華民國會計師公會全國聯合會「職業道德規範公報第十號查核與核閱之獨立性」之規定，審計小組成員聲明已遵守下列規範，未有違反獨立性情事。

說明：

一、審計小組成員及其配偶與受扶養親屬未有下列情事：

(一) 持有貴公司直接或間接重大財務利益。

(二) 與貴公司或其董監事、經理人間，有影響獨立性之商業關係。

二、在審計期間，審計小組成員及其配偶與受扶養親屬未擔任貴公司之董監事、經理人或對審計工作直接且重大影響之職務。

三、審計小組成員與貴公司之董監事或經理人未有配偶、直系血親、直系姻親或二親等內旁系血親之關係。

四、審計小組成員未收受貴公司或其董監事、經理人或主要股東價值重大之續贈或禮物（其價值未經越一般社交禮儀標準）。

五、審計小組成員已執行必要之獨立性／利益衝突程序，未發現有違反獨立性情事或未解決之利益衝突。

勤業眾信聯合會計師事務所

會計師陳文香

(簽章)

72 -

Corporate Governance Report

Deloitte.

勤業眾信

勤業眾信聯合會計師事務所

110016 台北市雲義區松仁路100號20樓

Deloitte & Touche

20F, Taipei Nan Shan Plaza

No. 100, Songren Rd.,

Xinyi Dist., Taipei 110016, Taiwan

Tel: +886 (2) 2725-9988

Fax: +886 (2) 4051-6888

www.deloitte.com.tw

受文者：斯光合成纖維股份有限公司

說明：

一、審計小組成員及其配偶與受扶養親屬未有下列情事：

(一) 持有貴公司直接或間接重大財務利益。

(二) 與貴公司或其董監事、經理人間，有影響獨立性之商業關係。

二、在審計期間，審計小組成員及其配偶與受扶養親屬未擔任貴公司之董監事、經理人或對審計工作直接且重大影響之職務。

三、審計小組成員與貴公司之董監事或經理人未有配偶、直系血親、直系姻親或二親等內旁系血親之關係。

四、審計小組成員未收受貴公司或其董監事、經理人或主要股東價值重大之饋贈或禮物（其價值未超越一般社交禮儀標準）。

五、審計小組成員已執行必要之獨立性／利益衝突程序，未發現有違反獨立性情事或未解決之利益衝突。

勤業眾信聯合會計師事務所

會計師徐文亞 (簽章)

(VI) Implementation of promoting sustainable development and differences with the Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies and reasons:

Promotion item	Implementation status
	Yes	No	Summary
I. Has the Company established a governance structure to promote sustainable development, and set up a full-time (part-time) unit to promote sustainable development, which is handled by the senior management authorized by the Board of Directors, and the status of	✓	1. In response to its sustainable development policy, the Company has established an Audit (and Risk Management) Committee, a Remuneration Committee, and a Sustainable Development Promotion Committee. Each committee (including functional committees) is composed of three independent directors, with Independent Director Hsien-Der Chiu being the convener and the other two independent directors being members of the committee. The Committee's responsibilities are the policies on sustainable development, risk management, and other issues (including management guidelines, strategy and goal formulation and review), as well as supervision of their implementation. Task forces are established under the committee. At least once a year, the implementation of the sustainable policy, risk assessment results and countermeasures, and communication results with stakeholders are reported to the functional committees and the Board of Directors.
2. Implementation status of sustainable development units in the Company:
(a) Audit (and Risk Management) Committee
Reviewing financial reports, assessing the effectiveness of the internal control system, CPAs’ fees, and reviewing amendments to Procedures for the Acquisition or Disposal of Assets, amendments to Procedures for Endorsements/Guarantees and Procedures for Loaning Funds to Others, annual earnings distribution, and acquisition or disposal of assets. The Audit Committee members passed each	No deviation was found

Promotion item	Implementation status
	Yes	No	Summary
supervision by the Board meeting?			motion without objections after discussion.
The Company's risk management policy and business is supervised by the Audit (and Risk Management) Committee. The Committee consists of three independent directors, and the convener is the Independent Director, Mr. Hsien-Der Chiu. The committee's responsibilities are the policies on sustainable development, risk management, and other issues (including management guidelines, strategy and goal formulation and review), as well as supervision of their implementation. Task forces are established under the committee. At least once a year, the results of risk assessment and response measures are reported to the functional committee and the Board of Directors. According to the Company's "Risk Management Policy and Procedure", the Company's risk identification, and analysis and assessment results were consolidated on November 11, 2024, and the implementation report was submitted to the Committee and the Board of Directors. After the review of the report by the Committee and the Board of Directors, all the motions were approved as proposed without objection.

(b) Sustainable Development Promotion Committee
The Committee consists of three independent directors, and the convener is the Independent Director, Mr. Hsien-Der Chiu. The committee's responsibilities are the policies on sustainable development, risk management, and other issues (including management guidelines, strategy and goal formulation and review), as well as supervision of their implementation. Task forces are established under the committee. At least once a year, the implementation of the sustainable policy, risk | |

Corporate Governance Report

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Promotion item	Implementation status
	Yes	No	Summary
			assessment results and countermeasures, and communication results with stakeholders are reported to the functional committees and the Board of Directors. the Committee reviews the Company's sustainable development policy, annual plan and strategy, implementation of sustainable development, and effectiveness, supervision of sustainable information disclosure, review of the sustainable development report, and supervision of the planning and implementation of the Company's sustainable development business. The proposal unit reported to the Company's sustainable development policy and implementation status, sustainable information disclosure and sustainable report, and communication with stakeholders, etc. to the Sustainable Development Promotion Committee on November 11, 2024, and included the performance of senior managers into the Company's ESG indicator, including ethical management, operating results, carbon reduction and net zero, renewable energy use, and diverse and shared promotion. After the review report by the committee and the Board of Directors, all motions were approved unanimously.
3. The Board of Directors' report on sustainable development and risk management
(a) At least once a year, the implementation of the sustainable policy, risk assessment results and countermeasures, and communication results with stakeholders are reported to the functional committees and the Board of Directors.
(b) The proposing unit reported to the Sustainable Development Promotion Committee and the Board of Directors on November 11, 2024 on the Company's various policies and implementation status of sustainable development,

Promotion item	Implementation status
	Yes	No	Summary
			sustainable information disclosure, risk management, etc., including the formulation and review of management guidelines, strategies and goals. The report on the progress of the sustainable development and the communication results with stakeholders was submitted, and the Board of Directors and the Committee members unanimously approved the motions as proposed after the review and approval of the report.
II. Has the company performed risk assessments on environmental, social, and corporate issues in relation to the Company’s operations according to material principles, and formulated relevant risk management policies or strategies?	☑		The data disclosed covers the Company's sustainability performance at major operating locations in 2024.
The risk assessment boundary primarily encompasses the Company, including its Chungli Plant, Guanyin Plant, and the Taipei Headquarters. Subsidiaries assess risks independently based on their respective operational scale and materiality, and integration planned accordingly.
The Sustainable Development Promotion Committee and its subordinate organizations analyze the sustainability report based on the principle of materiality, and communicate with internal and external stakeholders. With reference to domestic and foreign research reports, literature and integrated evaluation data of each department, they assess the ESG topics of materiality, and formulate risk management policies and specific action plans for effective identification, measurement, evaluation, supervision and control. The risk management execution team regularly reviews the impact, performance and strategic goals every year to reduce the impact of related risks.
The procedures of the risk warning system are as follows:
1. Risk identification and assessment	No deviation was found

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Promotion item	Implementation status
	Yes	No	Summary
			(a) Risk identification
Determine a risk list every year, and classify and define the risks through politics, economy, society, technology, environment and law to draw the annual risk factors.
(b) Risk assessment
Professional personnel from each task group of the risk management execution team will conduct qualitative and quantitative risk assessments.
(c) Response to risks
Develop risk management strategies based on the identified risks and assessment results, and establish corresponding standard operations.
(d) Review and improvement
Management results are regularly tracked, and the members of each task force will give feedback on the corresponding measures and strategies.
2. Areas covered by the risk warning system
(a) Operations
(b) Disasters
(c) Occupational safety and health
(d) Finance
(e) Export risk control and management
Based on the assessed risks, the following risk management strategies are established:
			Material Issues	Risk Assessment Items	Description
			Corporate	Ethical	1. Incorporate the principles of professional ethics

Promotion item	Implementation status
	Yes	No	Summary
			Governance	Management	and anti-corruption within the corporate culture.
2. Eradicate any instances of fraud, corruption, or breaches of ethical conduct.
3. Promote ethical management through education and training courses—continuously practice the "Shinkong Synthetic Fibers Corporation Guidelines for the Adoption of Codes of Ethical Conduct" and Regulations Governing Anti-Corruption" and regularly review the Company's status of compliance.
			Business Performance	1. Improve the Company's overall revenue and net profit to meet budgetary targets.
2. Achieve growth in overall revenue and net profit compared to the previous year.
3. Monthly financial forecasting meetings for Business Groups —review and adjust business targets; expand semi-annual performance presentations—recognize AO sales personnel who meet performance targets; end-of-year budget and strategy meetings—review and formulate next year's budget and business strategies.

Promotion item	Implementation status
	Yes	No	Summary
			Social	Eco-friendly Products	1. Produce products incorporating environmentally friendly recycled materials, increasing its proportion of production and revenue contribution.
2. In 2024, eco-friendly processed yarn products were still the preferred choice of all brands. The Company cooperates with internationally renowned technical companies and brands to develop plans in compliance with T2T recycling.
3. In response to environmental protection and carbon reduction requirements, the Company actively invests in the recycling of materials and supplies, and provides stable-quality and 100% recycled r-PET ester materials that meet production certification for food and beverage containers. r-PET sales reached 26,000 tons in 2024, an increase of 66% compared to that of the previous year. In addition, the company has expanded its production capacity for recycling PET bottle polyester granules at Taixin factory through advanced FTR (Flake to Resin)

Promotion item	Implementation status
	Yes	No	Summary
				technology. Environment-friendly ester granules with a 50% recycling addition ratio can be successfully produced.
4. R&D of bio-based materials: The Company joined the Taiwan Bio-based and Sustainable Materials Association (TBSM) to expand its exchange of industry. The Company has developed green polyacrylate, mainly derived from biological sources, to reduce dependence on petrochemical materials. It has successfully passed the international Sustainability and Carbon Certification (ISCC), demonstrating the transparency of the supply chain for environmental protection, reducing carbon emissions, and ensuring sustainable use of circular economy resources.
5. Complete greenhouse gas inventory and verification for each field each year. The Company also conducts carbon footprint inventory for its major products (including the verification of the inventory of v-PET/r-PET and PBT series).

Promotion item	Implementation status
	Yes	No	Summary
				Safeguard Human Rights	1. Implement the principle of “putting people first,” the Company has formulated "Human Rights Policy", "Measures for Prevention of Sexual Harassment", "Guidelines for Filing of Complaints and Disciplinary Measures", "Guidelines for Anti-discrimination Management", "Guidelines for Anti-slavery and Human Trafficking Management" and other policies to prevent forced labor and prohibit child labor, and regularly educates employees on relevant policies and regulations for enforcement.
2. The Company promotes corporate social responsibility and labor rights advocacy. In 2024, 1,855 person-time (2,414.9 hours) of training was provided on courses including corporate social responsibility, legal governance concepts, and corporate sustainability development.
3. Advocate for human rights related normative content and keep it in training records.
4. In order to encourage employees to go outside,

Promotion item	Implementation status
	Yes	No	Summary
					improve their physical and mental health, and promote work-life balance, employees who have joined the Company for one month are entitled to a special leave and recreational health leave in order to continuously build a happy workplace.
			Occupational safety and health	1. The Company continues to comply with occupational safety and health regulations, eliminates hazard factors, and is committed to the strategy of continuous improvement and prevention of injury and illness, and regularly reviews and improves the implementation of policies.
2. Continue to promote the ISO 45001 Occupational Health and Safety Management System.
3. Implement the ISO 45001 management system following the PDCA model, completing various improvement plans to prevent occupational accidents.
Engaged 3rd party organizations to audit the Company’s ISO 45001 Occupational Health and

Promotion item	Implementation status
	Yes	No	Summary
					Safety Management System.
			Environmental	Energy Management	1. The Company complies with environment-related laws and regulations and international standards, pays attention to the protection of the natural environment, continues the research and improves, and is committed to the innovative concept of energy saving and waste reduction, and focuses on smart industries for a quality environment and environment- friendly and toxic-free green energy manufacturing processes.
2. Innovative thinking, committed to energy conservation and waste reduction. The annual electricity saving rate should reach 1% to ensure the reasonable and efficient use of energy, reduce costs, decrease energy consumption, lower carbon emissions, enhance product competitiveness, and achieve sustainability goals.
3. Departments are required to refer to past case studies (such as insulation improvement, compressed air energy saving, waste heat

Promotion item	Implementation status
	Yes	No	Summary
					recovery, adoption of high-efficiency equipment, water resource recycling, lighting energy saving, energy management, equipment improvement, variable frequency drive energy saving, and power regulation) or propose energy-saving measures with innovative thinking. After review, these measures should be implemented, and their benefits tracked for 12 months thereafter. Results should be reviewed at energy-saving meetings.
			Water Resource Management	1. Understand water, use water wisely, and conserve water for sustainable water resources.
2. Reduce water usage by 10%.
3. Install smart water meters.
			GHG Management	1. Comply with regulations, focus on energy conservation and waste reduction, pollution prevention, and continuous improvement.
2. In 2024. the carbon emissions is reduced by more than 2.38% compared to that in the previous year, and the carbon emission per unit product is reduced by 2.58%. Although the overall production capacity increased, the

Promotion item	Implementation status				Differences with the Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies and reasons
	Yes	No	Summary
				energy efficiency increased, and the unit product consumption demand decreased.
III. Environmental issues
(I) Has the Company developed an appropriate environmental management system based on its industrial characteristics?	☑		(I) Management System
1. The Company has formulated safety, health and environmental protection related management measures in accordance with environmental regulations formulated by the Environmental Protection Administration, such as the Air Pollution Control Act, the Water Pollution Control Act, and the Waste Disposal Act, in order to comply with legal norms, save energy, reduce waste and improve measures for the safety, health and environmental protection management in the factory area. (explained in the special chapter of the Company's sustainability report)
2. Each factory area of the Company has obtained ISO14001 environmental management system verification, and has undergone a three-year verification by Bureau Veritas Certification (Taiwan) Co., Ltd. (Bureau Veritas Certification) to maintain the effective operation of the system. Please refer to the Company's website (http://www.shinkong.com.tw/front/quality) for details on our ISO certification achievements.			No deviation was found
(II) Is the Company committed to achieving efficient use of energy	☑		(II) To facilitate the reduction of energy resource use, in 2023, the Company established relevant reduction targets for energy consumption. Using 2018 as the baseline year, short-term (2022), mid-term (2025), and long-term (2030) targets were set according to specific timeframes. These targets include: Unit energy consumption per unit of output.		No deviation was found

Promotion item	Implementation status
	Yes	No	Summary
resources, and using renewable materials that produce less impact on the environment?			In 2024, the unit energy consumption per unit of production was 3.0639 (TJ/ton), compared to 3.4266 (TJ/ton) in 2018, representing a decrease of 10.58%. This exceeds the targeted reduction of 3%, thus achieving the planned target goal.
Furthermore, we actively promotes industrial intelligence by implementing energy-saving measures and infrastructure upgrades at various production sites. This includes the installation of smart hardware and software, smart metering infrastructure, real-time monitoring dashboard for operational equipment energy consumption, and data analysis to constantly assess and optimize machine efficiency.
Each operation and processing method is as stated:
1. Part of the raw materials of the Company’s products come from circular economy products, e.g. the raw materials for polyester filament and polyester chips both come from recycled granules from PET bottles.
2. For the industrial waste reduction, we strengthen the process of waste polymers and recycling, and cooperate with downstream partners to recycle the packaging materials of the paper boxes and paper tube.
3. For the reduction of VOCs, we pipe the VOCs into the combustion with the boiler equipment. This has obtained a great effect.
4. Environmental protection granulation was added in November 2020.
5. FTR granulation was added in October 2021.
6. In terms of energy efficiency, the Company won excellence awards from 2005 to 2009 from the selection of energy-saving high-quality manufacturers held by the Ministry of Economics Affairs. In 2010, we won the Outstanding Award in the

Promotion item	Implementation status			Differences with the Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies and reasons
	Yes	No	Summary
			Excellent Manufacturer Selection. We also held an energy-saving visit in 2011. In 2013, we again won excellence awards. In 2019, we were awarded as an excellent manufacturer for reducing industrial greenhouse gases voluntarily. Won the Silver Award of Energy Conservation Benchmark in 2020.
7. Low efficiency and old boilers are phased out and the equipment is updated to enhance energy efficiency.
8. Polymerized boiler fuel that originally used heavy oil was changed to using natural gas for clean production.
9. The Company has established an energy management system and obtained the ISO 50001 Energy Management System Certification in 2022. Establish, implement, and maintain energy goals based on the Company's energy policy and significant energy consumption assessment to achieve the commitment of the energy management policy.
10. The second FTR granulation production line was added in November 2023.
(III)Has the Company assessed the potential risks and opportunities for business operations now and in the future regarding climate	✓		(III) With the increasing impact of global climate change and greenhouse effect,, the potential risks can not be underestimated. With the impact of global climate change and the greenhouse effect becoming increasingly worrying, measures must be set forth to face the impact of climate change as well as its potential external risks including water shortages, disruption in water supplies, unstable electricity, disruption in production and supply chains, increased cost of resources and materials, decrease of sales, etc, along with financial risks such as reduced profits, changes in exchange rates and interest rates, as well as drastic situations and rapid market changes. Countermeasure	No deviation was found

Corporate Governance Report

Promotion item	Implementation status
	Yes	No	Summary
change, and will it adopt relevant countermeasures?			1. Develop new products/services/markets and promote the 3330 target. Within three years, the R&D unit will complete three large-scale R&D equipment updates, and the profits of various institutions will grow by 30%. In addition, grasp and adjust to business opportunities and maintain competitiveness.
2. Keep an closer eye on market changes and diversify markets to avoid excessive market concentration.
3. Diverse suppliers, distribution, and logistics alternatives to spread risks.
4. Ensure the process operation conditions to enhance process cooling temperature and reduce energy consumption in order to cope with extreme climates so that the production operation can be maintained.
5. When making decisions regarding investments, factors of climate change must be included and should be approached from the operational and engineering design aspects in order to maintain process capabilities and reduce the impact extreme weather brings.
6. Investment in energy conservation or green energy-related environmental sustainability achievements:
(a) The Company invested NT$791 million in a solar energy company with an asset scale reaching approximately NT$3.445 billion.
2024 Energy Generation Results (MW)
	Energy generation industry	Operations	Installation	Application	Total

Promotion item	Implementation status
	Yes	No	Summary
			22.21	21.16	14.21	22.48	80.06
			(b) To respond to the impacts of climate change, investments in energy-saving equipment and carbon reduction benefits to reduce process energy consumption are as follows:
Results in 2024
(NT$ thousand)
			Item	Category	Investment Amount	Benefits	Carbon emissions reduction (tCO_{2e})
			Energy-saving measures	Energy conservation	21,511	13,422	2,068
			Continuation of the 2024 execution plan
(NT$ thousand)
			Item	Category	Investment Amount	Benefits	Carbon emissions reduction (tCO_{2e})
			Conversion of coal-fired boilers to gas	Environmental	40,000	0	30,000

Implementation status
Yes	No	Summary
			protection
		Installation of anaerobic systems	Environmental protection	70,000	23,000	2,300
		2025 Project Execution Pipeline (NT$ thousand)
		Item	Category	Investment Amount	Benefits	Carbon emissions reduction (tCO2e)
		Energy-saving measures	Energy conservation	38,700	10,207	1,693
		(c) According to the "Regulations for Power Users Reaching a Certain Contract Capacity to install Renewable Energy Power Generation Equipment", the Company installed green energy power generation or energy storage equipment to increase the ratio of renewable energy use, reduce carbon emissions, and accelerate net zero transformation. Based on the contract capacity, the total amount of solar photovoltaic power purchased in 2024 is 6,207,025 KWH, and the total amount of solar photovoltaic power used as of the end of 2024 is 6,375,500 KWH. Achievements in 2024: 1. Chungli and Guanyin Factories replaced 126 high-efficiency motors with

Promotion item	Implementation status
	Yes	No	Summary
			IE4 high-efficiency motors (Phase 2) Ongoing, with a cumulative benefit of NT$298 thousand and a total reduction of 44 ton emissions of CO_{2}e.
2. Supply of low-pressure blowers for the steelmaking plant: The annual profit is NT$1,751 thousand, and the investment expense is NT$3,230 thousand.
3. Adjustment to poly temporary storage tank process steam heating energy-saving: An accumulated benefit of NT$1,146 thousand, a reduction of 465 tons of CO_{2}e.
Plans for 2025:
1. A tube refining system will be added for raw material transportation to save electricity and consumption, which will be completed and tested in 2025.
2. An anaerobic system will be added in Chungli Factory's wastewater plant, which can significantly reduce power and chemical costs, and reduce sludge and waste. The construction is expected to complete in May 2025 for a trial run.
3. Natural gas boilers will be installed at Chungli Factory to reduce carbon emissions by nearly 30,000 tons of CO2 from that in 2021.
4. Raw material transportation will be optimized to reduces air compressor usage and achieve the energy saving effect. The inventory check and discussion of the transportation system of Chungli Factory have been completed. In 2025, pilot tests will be carried out and then expanded and

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Corporate Governance Report

Promotion item	Implementation status	Differences with the Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies and reasons
Yes	No	Summary
(IV)Has the Company calculated the greenhouse gas emissions, water	✓
5. The DRYER energy-saving control system will be upgraded, which can significantly reduce the control pressure and the operation time of regenerative equipment (regeneration/12 hours to regeneration/48 hours). The estimated investment amount is NT$175,000, and the benefit is NT$950,000, which can reduce 148 tons of CO2e.
Equipment replacement in 2025 is detailed as follows:	No deviation was found
	Investment Amount (NT$ thousand)	Estimated benefit (NT$ thousand)
Update of air compressor cooling tower	13,300	1,549
STX-1 refrigeration system update	17,400	4,410
#1 air compressor update	8,000	4,248
Total	38,700	10,207
(IV)Information disclosure and policy formulation
1. The disclosure of the Company’s greenhouse gas emissions, water consumption, and total waste weight are as described:
(a) Greenhouse gas emissions for the past two years

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Promotion item	Implementation status	Differences with the Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies and reasons
Yes	No	Summary
consumption, and total weight of waste in the past two years, and formulated policies on energy conservation and greenhouse gas reduction and water consumption, or other waste management?
Year	Scope 1	Scope 2
2023	36	126
2024	30.9	121
Chungli Plant	Unit: metric tons of CO2e
Year	Scope 1	Scope 2
112	92,771	150,656
113	95,323	153,496
Guanyin Plant	Unit: metric tons of CO2e
Year	Scope 1	Scope 2
2023	13,795	30,317
2024	14,213	31,354
The Company’s 2023 greenhouse emissions have been certified by a third party, and the 2024 greenhouse emissions are under certification. (b) Amount of water used for the past 2 years
Year	2023	2024

Implementation status
Yes	No	Summary
		Unit: Thousand tons		1,875	1,795
		(c) Total weight of waste for the past 2 years Unit: metric tons
		Year	Hazardous waste	Non-hazardous waste	Unit product output (T/T)
		2023	0	7,384.24	0.0078
		1132024	0	10,179.86	0.0102
		2. The Company has established a "Sustainable Net-Zero ESG Strategy" and a dedicated unit (environmental protection unit of Public Utility Division) and personnel to oversee environmental and energy management. The Company has obtained certifications including ISO14001, SO45001, ISO5001 and SONY GP (Green Partner).
		3. In response to climate change, greenhouse gases emission management is a global issue. Energy savings and carbon reduction have been combined with the sustainable environmental development of the Company.
		4. Promote the development of circular economy with resource management and source management such as waste reduction, recycling, and promotion of green supply chain.
		5. The replacement of heat medium boiler fuel was set into action for the whole factory by changing fuel to gas in order to improve the air quality. And we acquired the registration of the “Measures for the Management of Greenhouse Gas

Promotion item	Implementation status
	Yes	No	Summary
			Replacement Projects” from the EPA in February 104.
6. In response to the government's greenhouse gas reduction, in 2024 we voluntarily reported our reduction measures for greenhouse gas emissions. A total of 53 voluntary reductions were reported, with an annual electricity savings of 3,908,200 KWH and a carbon reduction of 1,931 tons.
7. Continue to save energy and reduce waste, introduce new energy-saving technologies to increase energy efficiency in order to meet the 1% power savings required by the Ministry of Economic Affairs. In line with the electricity saving regulation by the Bureau of Energy, the average annual savings in 113 was 1.05%, and the result is under the review of the Bureau of Energy,.
8. Develop emerging and renewable energy resources, such as solar power plants to reduce greenhouse gas emissions. Related initiatives comply with the law and ongoing as of 2025.
9. Process water efficiency will be improved for recycling and reuse to reduce discharge. The reserve water capacity is also improved, such as the recycling and reuse of CP6 material cooling discharge water.
10. In addition to researching, developing and producing environmental protection products, we acquired the green mark, used energy-saving lamps, green and energy-saving products, and promoted the computerization of our document forms for the paperless process in order to achieve the goal of energy-saving and carbon-reduction.
11. The old equipment with heavy energy consumption will continue to be replaced in

Promotion item	Implementation status			Differences with the Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies and reasons
	Yes	No	Summary
			order to achieve the goal of energy-savings.
12. In response to the government's continued promotion of net-zero carbon emission policy and the tightening of air pollution emission standards for boilers, the Company will change coal-fired steam boilers to gas-fired boilers in 2025.
IV. Social issues
(I) Has the company developed its policies and procedures in accordance with laws and International Bill of Human Rights?	☑		(I) Pursuant to the Company's sustainable development and strengthening of corporate social responsibility, the Company has established personnel management measures in accordance with labor laws and the "Universal Declaration of Human Rights", "The United Nations Global Compact", and "The United Nations Guidelines for the Employment, Commerce and Human Rights", including the "Human Rights Policy", "Personnel Recruitment and Management Measures", "Sexual Harassment Prevention Measures", "Complaints and Disciplinary Measures", "Anti-discrimination Management Measures", "Anti-slavery and Human Trafficking Management Measures", "Anti-disciplinary and Forced Labor Management Measures", "Religious Activity Venue Management Measures", and "Measures for Prohibition of Child Labor and Wrongful Trials Management". The Company also promotes human rights policies, as well as company policies and legal concepts in sexual harassment prevention, anti-discrimination, anti-slavery, anti-forced labor, anti-child labor, ethical management, and business ethics to employees every year. In 2024, the Company conducted the training course in “infringement in the workplace” to supervisors at section level or above in response to the change in laws and regulations. In 2024, 1,855 person-times (2,414.9 hours) of training was completed tin social responsibility, legal	No deviation was found

Promotion item	Implementation status			Differences with the Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies and reasons
	Yes	No	Summary
(II) Has the Company established and implemented reasonable measures for employee benefits (including: remuneration, holidays and other benefits), and appropriately reflected the business performance or achievements in the employees’ remuneration?	☑		governance concept, and corporate sustainability.
(II) 1. The Company has signed a group contract with the union to clearly regulate the mechanism of profit sharing and holiday and leave systems, and is committed to protecting the rights and interests of employees and balancing between work and life. In addition, the Employee Welfare Committee actively promotes various employee welfare measures, including club activity subsidies, free employee travel, health examination, birthday and new year/festival bonuses, meal subsidies, wedding and funeral subsidies, hospitalization subsidies, etc. to create a more friendly and caring working environment for employees.
2. The Company upholds the principles of diversity and equality in the workplace, and is committed to establishing a fair and just performance evaluation mechanism to ensure that all employees receive fair and equal treatment under the same standards. The Company insists on not offering differential remuneration based on gender, age or other factors irrelevant to work performance, so as to ensure a fair and full-opportunity workplace, and allow all employees to develop and perform their potential.
3. In 2024, the proportion of female supervisors was 13.27%, and that of female non-supervisors was 16.84%.	No deviation was found
(III) Does the company provide employees with a safe and healthy work	☑		(III) 1. To strengthen the employees' safety and health knowledge and safety awareness, the Company's units conduct a safety care activities at the early meeting time every Wednesday. The employees share their experience on site operations, and remind other colleagues of safety precautions, in order to achieve the effect of mutual	No deviation was found

Corporate Governance Report

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Promotion item	Implementation status
	Yes	No	Summary
environment? Are employees trained regularly on safety and health issues?			safety and care. The senior executives also participate in the care activities regularly to express their support for the activity. On the topic of industrial intelligence, we have added pre-work safety video training, as well as AI recognition of personal protective equipment in the hope that colleagues can work with peace of mind with the help of safer resources.
2. The Company's occupational safety policy: Comply with work safety regulations, eliminate hazard factors, be committed to continuous improvement, and prevent injuries and illnesses.
3. The disabling injury rate in 2024 was 0.28, which improved from 0.816 in the previous year. There was 1 occupational injury, and the number of employees was 1 (accounting for 0.058% of the total number of employees at the end of 2024). In addition, there were 0 fire incidents in 2024 (no incidents). To achieve the zero incident goal, the Company continues to promote the workplace safety culture, regularly organizes employee safety and health training, and improves the operating environment, in order to enhance safety and health performance and prevent disaster incidents.
4. The Company's safety and health training and promotion in the past two years:
Year		Education and training (Number of people)	Education and training (Hour)
2023		3,327	5,324
2024		3,821	5,732
All factories of the Company (except the headquarters in Taipei) and its subsidiaries

Promotion item	Implementation status			Differences with the Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies and reasons
	Yes	No	Summary
(IV)Has the Company implemented an effective training program that helps	✓		have obtained ISO 45001 certification.

In order to improve the health and well-being of employees and prevent major occupational diseases, the Company's plant nurse has imported the single-machine version of the Examine Health System to systematically analyze the health data of employees over the years, and screen the high-risk group with a 20% or more probability of ischemic heart disease within the next 10 years. In 2024, a total of 48 people were tracked for high-risk care. Among them, 10 people have completed the treatment with the cases closed after consultation and health guidance by the resident professional physician. For other cases, regular follow-up visits and tracking will be arranged. In addition, the Company arranges professional specialist physicians and health service doctors to come to the plant every month to perform workplace hazard identification and improvement recommendations, and provide personalized health guidance and health education for employees to strengthen the effectiveness of workplace health promotion. Through the measures above, the Company has effectively strengthened the protection network for workplace health, reduced the risk of occupational diseases, and demonstrated the Company's commitment and responsibility for employee health.

(IV)Actively establish a systematic talent cultivation mechanism to enhance the professional skills of employees through diversified courses, and strengthen competitiveness and innovative energy. Since the establishment of the "Shin Kong Fibers Enterprise University" more than 10 years ago, the Company has continued to | No deviation was found

No deviation was found |

Promotion item	Implementation status			Differences with the Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies and reasons
	Yes	No	Summary
employees develop skills over their career?

(V) Does the Company comply with relevant laws and regulations and international standards on issues such as customer health and safety, customer privacy, marketing and labeling of products and services, and has it formulated | ☑ | | cultivate and train employees, and has also introduced a talent cultivation system in recent years to integrate physical and digital learning resources. The Company has established a mid- and long-term talent cultivation plan, and continues to build a comprehensive learning map, in order to recruit and train potential new-generation talents to ensure that they can quickly integrate with the organizational culture and grasp their professional skills. In addition, the Company will continue to focus on the training of management and their successors, strengthen leadership skills and decision-making capabilities, and improve competitive advantages.

(V) The Company is dedicated to producing products that are heavy metal-free and we deeply value circular-economy products in order to protect the health of customers and consumers. We are building a customer data system and ensuring that there are no data breaches in order to protect their privacy. In terms of market products - we have established our own brand and all of our products have clear labels of their origin, weight and contents, etc, and we also have an after-sales service department for when there is a subsequent problem with the purchased product, rules are specified in the operating management policy regarding customer complaint procedures and handling methods, ensuring the rights of customers. | No deviation was found |

Promotion item	Implementation status
	Yes	No	Summary
relevant policies and complaint procedures to protect the rights and interests of consumers or customers?
(VI)Has the Company established supplier management policies requiring compliance with relevant regulations, and the execution status regarding issues such as environmental protection, occupational	✓		(VI)1. The Company formulated the Sustainable Procurement Policy, Sustainable Development Policy and Action Commitment Statement, and Code of Conduct for Suppliers. The Company also requests suppliers to sign the “Statement of Social Responsibility and Supplier’s Conduct” formulated by the Company, and follow all relevant standards, including ethics, environment, labor rights, and health and safety. Supplier assessment is performed annually, and an email has been set up for complaints.
2. The Company upholds the concept of sustainable operation, and considers the impact on the environment, society and economy when providing the life cycle of products and services, and implements sustainable procurement. The Company and its partners work together to, while pursuing reasonable costs and profits, protect labor rights, be committed to protecting the environment, promote business ethics and fair operations, improve procurement performance, and improve the competitive advantages of the supply chain, in order to move towards a sustainable supply chain.

Promotion item	Implementation status
	Yes	No	Summary
safety, and health or labor rights?			3. In order to pursue sustainable development, the Company believes good supplier relations to be the key element. Only through the diligent efforts of the partners and the Company, can we complement each other's work. We also hope to form an excellent industry chain of mutual benefit and social friendliness with suppliers and contractors. In order to find the most suitable green partners with similar concepts, the Company requires all divisions to conduct a due diligence check on all new suppliers before commencing the business relationship.
4. The Company regularly assesses and evaluates existing suppliers, and the scope covers supplier product quality, price, delivery time, and ESG sustainability, occupational safety, business ethics, human rights related issues (such as child labor, forced labor, freedom of association, discrimination, and harassment), and labor rights. From 2022 to 2024, the target suppliers’ evaluation pass rate was 100%.
V. Has the Company prepared a sustainability report and other reports that disclose the Company's non-financial information with reference to	☑		1. The Sustainability Reports was prepared in compliance with the GRI Standards.
2. The principle of assurance is handled in accordance with the government's regulations, and the third-party assurance (BSIAA 1000AS V3 Guarantee Standard, Type I Moderate Assurance) has been completed.	No deviation was found

Promotion item	Implementation status
	Yes	No	Summary
internationally accepted reporting standards or guidelines? Have the reports mentioned previously obtained the assurance of third party verification?
VI. If the company has its own sustainable development best practice principles in accordance with the “Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies”, please describe the operation and differences: There is no significant deviation between the Company's operation and the content of the Principles, and the Company will continue to improve it.
VII. Other important information which helps promote the sustainable development situation:
1. SSFC university had industry-academy cooperation with Chung Yuan University in EMBA classes and various seminars.
2. The Company offers annual scholarships to economically disadvantaged families in the 4 villages around the plant on a long-term basis.
3. Long-term sponsored the adoption of the "SSFC Dance Team" of Song-Wu Elementary School.
4. We offer long-term sponsorship of the caring base at the Guangren Village and the Yimin Village vigilant team around the factories.
5. We sponsor Mid-Autumn Festival party raffle prizes in nearby neighborhoods, raffle prizes for the elderly, the lantern riddles

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Corporate Governance Report

105 -

Promotion item	Implementation status			Differences with the Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies and reasons
	Yes	No	Summary
event, and religious events.

(VII) Ethical Corporate Management - Implementation Status and Deviations from the Ethical Corporate

Implementation of climate-related information

Item

Implementation status

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

I. 1. Faced with the challenge of climate change, the Company has included climate risk into the scope of its risk management. The Board of Directors is the highest supervisory body of climate change management, and its responsibilities include reviewing the annual risk management report and the implementation report to ensure the implementation effectiveness of the climate-related risk management system. The Sustainable Development Promotion Committee is responsible for identifying climate change risk opportunities on an annual basis, climate action measures and target management, and regularly reports climate-related operational issues to the Board of Directors every year to ensure that the Company has a certain degree of mastery over climate change and will maintain the consistency between sustainability goals and the Company's overall strategy.

2. Report greenhouse gas and environment-related indicators and climate risk monitoring to the management unit every year, and collect climate-related risks and opportunities. The heads of each business management unit determine the

106 -

Item	Implementation status
	"likelihood" and the Company further analyzes and evaluates its impact on the Company's operations and business, and formulates relevant countermeasures to control climate-related risks and grasp business opportunities related to climate.
3. Each unit of the Company will proposes climate risks/opportunities and countermeasures. After detailed discussion by the management with each unit, the priority of each countermeasure is developed based on the amount of resources and urgency, and a proposal is presented to the board meeting.
II. Describe how the identified climate risks and opportunities affect the Company's business, strategy and finance (short-, medium-, and long-term).	II. The Company analyzes the actual and potential climate risks and opportunities that it may encounter, identifies the climate risks and opportunities of different businesses and their financial impacts on the Company according to the climate risk identification procedure, prioritize the climate risks and opportunities, and conduct climate risk matrix identification.
High risk
• Short-term - Regulatory Transformation - Environmental regulations are becoming more stringent - Leads to increased environmental maintenance costs.
Medium risk
• Short-term - Technological Transformation - The introduction of new technologies - Leads to higher research and development costs.
• Short-term - Regulatory Transformation - Carbon Disclosure - Non-compliance with established standards will result in penalties.
• Short-term - Market Transformation - Increase in raw material costs - Leads to higher operating costs.
• Long-term - Physical Long-term - Droughts - Increased costs for water use
• Mid-term - Physical Immediate - Typhoons and heavy rainstorms - Equipment damage leads to operational interruptions
• Mid-term - Physical Immediate - Typhoons and heavy rainstorms - Increased demand for water purification equipment
Low risk
• Short-term - Physical Immediate - Typhoons and heavy rainstorms - Injuries to colleagues
• Long-term - Physical Long-term - Rising average temperatures - Increased demand for

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Item	Implementation status
	cooling and freezing equipment
• Long-term - Physical Long-term - Rising sea levels - Equipment damage leads to operational interruptions
High opportunity
• Short-term - Resource Efficiency - Recycling and reuse of recycled products leads to reduced operating costs
• Mid-term - Market - Development of new markets to increase revenue stream
Medium opportunity
• Mid-term - Resource Efficiency - Increased production efficiency leads to reduced operating costs
• Mid-term - Product - Responding to changes in customer preferences, developing green products leads to increased revenue
Short-term: 1 to 3 years, Medium-term: 3 to 10 years, Long-term: Over 10 years
III. Describe the financial impact of extreme climate events and transformation actions.	III. Climate Change Risk - Transformation Risk
		Risk identification	Operational impact	Countermeasure	Management cost
	Laws and regulations	Revision of environment-related policies	•Rising demand for plant cooling equipment
•Rising demand for refrigeration equipment	•Regulation tracking, identification and response
•Planning of greenhouse gas reduction plans	In 2024, 69 energy-saving improvement proposals were made, with an investment amount of about NT$21.51 million.
	Strengthening of emission reporting obligations	The government has mandated specific industries to take inventory of their greenhouse gas emissions and to be certified by a third party, and this requirement will be	•Continuing greenhouse gas inventory
•Acquisition and use of green electricity
•Receipt of public sector awards for continuous reduction of carbon emissions		GHG inventory third-party verification fee (Taipei Headquarters,

Item	Implementation status
			expanded to other industries in the future. Increased costs due to the payment of fines		Chungli Factory and Guanyin Factory) for NT$340,000
	Technology	Increased investment costs in new technologies	Increased demand for new technologies in response to energy conservation and carbon reduction	•Promote energy conservation and carbon reduction measures
•Introduction of water-saving processes and projects	Purchasing green power certificates (for Chungli Factory and Guanyin Factory) for NT$32,990,000
	Market	Increase in cost of raw materials	In response to the demand for carbon reduction, the demand for environmental protection materials, low-carbon product development, low-carbon equipment and energy efficiency improvement continues to increase, resulting in higher related costs	•Low-carbon alternative fuels
•Improvement in energy efficiency
•Purchase of renewed energy
•Development of low-carbon products
IV. Describe how climate risk identification, assessment, and management processes are integrated into the overall risk management system.	IV. Risk Management
Identification and assessment: The process for identifying, evaluating, and managing climate risks follows a similar framework as various operational risk identification processes. This entails regular procedures for risk identification, assessment, control, and monitoring being employed to manage climate risks effectively. Furthermore, in response to the various climate-related physical risks and transformation risks that may be encountered in the operation process, the Company plans to re-identify and evaluate the

Item	Implementation status
	possible impacts and impacts of these risks and opportunities every year, and discuss the countermeasure for each issue and subsequent control actions, and systematically include them in our sustainability goals.
Management mechanism: The Board of Directors recognizes the impact of climate change as a major risk to the Company. The Sustainable Development Promotion Committee formulates and manages climate-related issues. Through greenhouse gas inventory and third-party external verification, climate-related issues are systematically managed, and management results are reported regularly.
V. If a scenario analysis is used to assess the resilience to climate change risks, the scenarios, parameters, assumptions and analysis factors used as well as main financial impacts shall be described.	V. Scenario analysis is a crucial tool that helps businesses identify and respond to potential financial and operational risks that may arise in the future. It serves as a framework for corporate strategy planning and risk management, enabling businesses to effectively evaluate the impacts of future climate change. The Company has devised plans to utilize scenario analysis to thoroughly assess the risks posed by climate change and their primary impacts on the company's finances. This ensures that our company can maintain resilience amid climate change.
VI. If there is a transformation plan in place to manage climate-related risks, describe the content of the plan, and the indicators and targets used to identify and manage physical risks and transformation risks.	VI. Greenhouse gases are one of the main contributors to global warming. The Company actively participate in initiatives to reduce greenhouse gas emissions, adhering to regulations such as the "Regulations Governing Greenhouse Gas Emissions Reporting and Management" and the "Regulations Governing the Reporting of Greenhouse Gas Emissions from Fixed Pollution Sources in Public and Private Venues." The Company is committed to its responsibility for sustainable operations by consistently working towards reducing greenhouse gas emissions and addressing climate change.
The implementation scope includes:
1. Conduct carbon inventory: Assess the greenhouse gas emissions generated by the entire life cycle of an organization, product, or service in order to formulate emission reduction strategies and promote sustainable consumption and production models.
2. Optimize energy efficiency: Proactively seek ways to save energy and reduce carbon, improve energy efficiency, switch to low-carbon fuels, and reduce carbon emissions. Make energy conservation and carbon reduction a core task, and carry out low-carbon transformation through installation of renewable energy and clean energy installations, and set substantive carbon reduction goals to meet the Group's carbon

Corporate Governance Report

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Item	Implementation status
	reduction policy.
3. Develop carbon reduction products: Research and develop new green products and technologies through technological innovation and application of core polyester technology, and invest in the development of various carbon reduction technologies, such as R&D of low-carbon products such as recycling, bio-based polyester, and carbon capture and reuse. Improve product sustainability, such as recycling technology to produce ester pellets, promote green supply chain management, and promote the development of a circular economy.
4. Continue waste reduction: Reduce, reuse, and actively recycle waste to reduce impact on the environment; promote resource management and source management to reduce our impact on natural resources through recycling, reuse, and source control. to reduce the emission of pollutants.
The Company enhance our product manufacturing processes and adapt our products to withstand climate change, thereby mitigating potential environmental impacts from our operations and upholding our dedication to sustainable environmental practices.
Since the end of 2022, following the issuance of two relevant regulations on greenhouse gas reporting by the Environmental Protection Administration, the Company immediately established a "Greenhouse Gas Inventory Promotion Task Force." This task force conducts inventories of greenhouse gas emissions within our factory plants, verifies related operations, and regularly reports greenhouse gas emission inventory data as required by law. All operations and emission data are conducted in accordance with ISO 14064-1 standards. In order to achieve net zero emissions, the Company has formulated a sustainable net zero and low-carbon transformation strategy, targeting at direct emissions from operating activities (scope 1), indirect emissions from energy use (scope 2) reduction. For the quantification of other indirect emissions (Scope 3), the Company faces challenges in collecting and calculating the relevant data, which poses challenges in ensuring accuracy.
Consequently, we predominantly rely on a qualitative inventory, detailing each item in the annual inventory list and emission source identification table. In accordance with ISO 14064-1 standards, these emissions are excluded from the scope of inventory measurement. This method aligns with current international practices,

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Item	Implementation status
	given the intricate and uncertain nature of data collection and quantification processes.The Company is committed to further reducing emissions. In 2024, it invested approximately NT$21.51 million in continuously improving equipment such as processes, HVAC systems, compressors, and lighting within the factory area to enhance energy efficiency and voluntarily reduce greenhouse gases. These efforts have been recognized by the general public.The indicators and targets employed by the Company to identify greenhouse gas emissions, manage physical risks, and transition risks are described below:1. Transition risk: Using the percentage of greenhouse gas emission reduction as an indicator, taking 2021 as the baseline, it is expected to reduce the emission by 7% in 2025 and gradually reduce the emission by 22% in 119.2. Physical risk: The climate-derived operating cost risk will lead to soaring electricity bills. The Company uses the electricity consumption per unit of production as an indicator and 107 as the base year. the reduction is targeted at 8% in 114, and gradually to 20% by 119.
VII. If internal carbon pricing is used as a planning tool, the basis for setting the price shall be stated.	VII. Use internal carbon pricing as a planning tool to help quantify the cost of climate-related risks, incentivize energy conservation, and assess product carbon footprint. The Company has been investing in energy conservation and emission reduction for many years, and has also successively checked and quantified the carbon footprint of products. In the future, we will further evaluate the introduction of an internal carbon pricing tool to better evaluate the impact of climate risks.
VIII. If climate-related goals are set, the activities covered, the scope of greenhouse gas emissions, the planning period, and the progress of each year shall be described; if using carbon offsets or renewable energy certificates (RECs) to achieve the goals, the source and quantity of the credit to be offset or	VIII. Shinkong Synthetic Fibers actively participates in the reduction greenhouse gases and is committed to mitigating climate change. It has established a "carbon neutrality project team", which takes 2021 as the base year to reduce carbon emissions by 7% in 2025 and 22% in 2030, and reach net zero by 2025. From green procurement, alternative fuels, energy efficiency improvement, waste recycling and reuse and green product development, the Company continuously promotes and transforms to a green business model. In 2024, the carbon emission amount has decreased by 11.33% compared to the base year.According to the "Regulations for the Establishment of Renewable Energy Power
in 2025, the company will be able to identify the new energy sources and the cost of the energy resources to be used. The company will be able to identify the new energy sources and the cost of the energy resources to be used in the future.	The company will be able to identify the new energy sources and the cost of the energy resources to be used in the future.

Item

Implementation status

the quantity of Renewable Energy Certificates (RECs) shall be stated.

Generation Equipment for Power Users with a Contract Capacity of More Than a Certain Threshold", the Company should set up 4965.62KW of renewable energy power generation equipment in 2024, and in practice, the Company should set up 5079.2KW in 2024. The total amount of solar power purchased was 6,375,500 KWH, and the Company obtained 6,349 renewable energy power generation certificates from the Renewable Energy Certification Center, and reported to the Bureau of Energy, MOEA at the end of March 2024.

IX. Greenhouse gas inventory and assurance status as well as reduction goals, strategies, and concrete action plans.

IX. Please refer to the attached table.

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The Company's GHG inventory and assurance in the most recent 2 fiscal years

2-1. Greenhouse Gas Inventory Information

Describe the greenhouse gas emissions (tCO2e), intensity (tCO2e/NTD million) and data coverage in the most recent two fiscal years.
Information coverage: Chungli Plant + Guanyin Plant + Taipei Headquarters
Year	2023	2024
Emission quantity (tCO2e)
Scope 1	106,602	109,567
Scope 2	181,099	184,971
Intensity (tCO2e/NTD million)	13.19	12.78

2-2. Parent Company's Greenhouse Gas Assurance Information

Describe the status of assurance in the most recent 2 fiscal years up to the publication date of this annual report, including the scope of assurance, institutions of assurance, criteria of assurance, and opinions of assurance.
2023	Chungli Plant	Guanyin Plant	Taipei Headquarters
Assurance institutions	DNV	DNV	DNV
Verification opinion	Based on the verification process and procedures executed by the verifier, there is sufficient evidence to show that the greenhouse gas assertion of Shinkong Synthetic Fibers Co., Ltd. Chungli Plant is not materially different, and the greenhouse gas assertion is made in accordance with the	Based on the verification process and procedures executed by the verifier, there is sufficient evidence to show that the greenhouse gas assertion of Shinkong Synthetic Fibers Co., Ltd. Guanyin Plant is not materially different, and the greenhouse gas assertion is made in accordance with the greenhouse gas quantification, monitoring and	DNV conducted an inspection in accordance with the verification guidelines above, and is of the opinion that the greenhouse gas inventory report issued on February 7, 2024 does not contain any significant non-compliance with the abovementioned verification standards. The opinion was determined based on the following methods:1. The reliability of the information in this report has been verified with a reasonable level of assurance for direct greenhouse gas emissions and indirect

| | greenhouse gas quantification, monitoring and reporting standards stipulated in the agreed verification criteria to prepare and fairly present greenhouse gas data and related information. | reporting standards stipulated in the agreed verification criteria to prepare and fairly present greenhouse gas data and related information. | greenhouse gas emissions from energy input.
2. The information related to other indirect greenhouse gas emissions is verified and tested using the limited assurance level. |
| --- | --- | --- | --- |
| 2024 | Chungli Plant | Guanyin Plant | Taipei Headquarters |
| Assurance institutions | DNV | DNV | DNV |
| Verification opinion | Based on the verification process and procedures executed by the verifier, there is sufficient evidence to show that the greenhouse gas assertion of Shinkong Synthetic Fibers Co., Ltd. Chungli Plant is not materially different, and the greenhouse gas assertion is made in accordance with the greenhouse gas quantification, monitoring and reporting standards stipulated in the agreed verification criteria to prepare and fairly present greenhouse gas data and related information. | Based on the verification process and procedures executed by the verifier, there is sufficient evidence to show that the greenhouse gas assertion of Shinkong Synthetic Fibers Co., Ltd. Guanyin Plant is not materially different, and the greenhouse gas assertion is made in accordance with the greenhouse gas quantification, monitoring and reporting standards stipulated in the agreed verification criteria to prepare and fairly present greenhouse gas data and related information. | DNV conducted an inspection in accordance with the verification guidelines above, and is of the opinion that the greenhouse gas inventory report issued on January 23, 2025 ((1st edition)) does not contain any significant non-compliance with the above mentioned verification standards. The opinion was determined based on the following methods:
The reliability of the information in this report has been verified with a reasonable level of assurance for direct greenhouse gas emissions and indirect greenhouse gas emissions from energy input. |

Corporate Governance Report

2-3. Subsidiaries' information on greenhouse gas inventory

Information coverage: Subsidiaries included in the consolidated financial report.

Emission year: 2024

Emission quantity tCO_{2e})		Location of audit	Scope 1	Scope 2	Scope 3	Intensity (tCO_{2e}/NTD million)	Note
1	Pan Asian Plastics Corp. (PAP)	Office	-	-	-	-	Including the owner of the parent company.
2	Hsingshing Investment Co., Ltd. (HSI)	Office	-	-	-	-	Including the owner of the parent company.
3	Shinkong Engineering Co., Ltd. (SKE)	Office	-	-	-	-	Including the Zhongli Plant of the parent company.
4	Shinpont Industry Inc. (SPI)	Office	-	-	-	-	Including the Zhongli Plant of the parent company.
5	Shin Chiun Industrial Co., Ltd. (SEC)	Office	-	-	-	-	Including the owner of the parent company.
6	British Virgin Islands MAXIMA PACIFIC LTD.	Office	-	-	-	-	Including the owner of the parent company.
7	British Virgin Islands SSFC INVESTMENT LTD.	Office	-	-	-	-	Including the owner of the parent company.
8	Pan Asian Plastics Industry Corporation	Plant area	67.993	13,244.561	-	10.701
9	Hsinshin Asset Management Co., Ltd. (HAM)	Office	-	-	-	-	Including the owner of the parent company.
10	SHINKONG VIETNAM	Office	0.447	1.733	-	0.078

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| Emission quantity tCO_{2e}
Company name | | Location of audit | Scope 1 | Scope 2 | Scope 3 | Intensity (tCO_{2e}/NTD million) | Note |
| --- | --- | --- | --- | --- | --- | --- | --- |
| | ENTERPRISE COMPANY LIMITED | | | | | | |
| 11 | Dayspring Ltd. (Dayspring) | - | - | - | - | - | Company processing completed and case closed. |
| 12 | Shin Kong Applied Materials Co., Ltd. | Office | - | - | - | - | Including the owner of the parent company. |
| 13 | Shinkong Youth Co., Ltd. | Office | - | - | - | - | Including the Zhongli Plant of the parent company. |
| 14 | Chi Jian Human Resources & Management Co., Ltd.-2024 | Office | 11.248 | 3.292 | - | 0.933 | |
| | Chi Jian Human Resources & Management Co., Ltd.-2023 | | 11.343 | 3.299 | - | 1.036 | |
| 15 | Hsin Lung Chemical Co., Ltd. (HLC) | Office | - | - | - | - | Including the owner of the parent company. |
| 16 | Shinkong Technologies Corporation | Office | 2.054 | 3.877 | - | 1.349 | |
| 17 | Shinkong Innovations Co., Ltd | Office | - | - | - | - | Including the owner of the parent company. |
| 18 | Shinkong Applied Materials (Jiangsu) Co. Ltd. | Plant area | 16.584 | 2,505.324 | - | 23.398 | |
| 19 | Shinkong Materials Technology Co., Ltd. | Plant area | 10,556.702 | 46,164.893 | - | 26.520 | |
| 20 | Shinkong International Leasing Corp. | Office | 9.625 | 16.367 | - | 0.047 | |

Corporate Governance Report

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Company name	Emission quantity tCO_{2e}	Location of audit	Scope 1	Scope 2	Scope 3	Intensity (tCO_{2e}/NTD million)	Note
21	Otobuy Co., Ltd.	Office	0.017	0.029	-	0.047
22	Shin Kong Fintech Co., Ltd.	Office	0.039	0.066	-	0.047
23	Shinkong Energy Corporation	Solar power plant area	0.018	20.135	-	0.555
24	Shinkong Power Technology Co., Ltd.	Solar power plant area	0.027	14.039	-	0.342
25	Far Trust International Finance Co., Ltd.	Office	41.496	160.131	-	0.359
26	Fartrust International Leasing Co., Ltd.	Office	-	-	-	-	Included in Fartrust Consumer Finance Co., Ltd
27	Fartrust Car Rental Co., Ltd.	Office	-	-	-	-	Included in Fartrust Consumer Finance Co., Ltd
28	Jin Liang Power Service Co., Ltd.	Solar power plant area	2.000	63.322	-	0.498
29	Her Chuang Energy Co.,Ltd.	Solar power plant	0.000	8.923	-	0.386

| Emission quantity tCO_{2e}
Company name | | Location of audit | Scope 1 | Scope 2 | Scope 3 | Intensity (tCO_{2e}/NTD million) | Note |
| --- | --- | --- | --- | --- | --- | --- | --- |
| | | area | | | | | |
| 30 | You-ji Renewable Corp | Solar power plant area | - | - | - | - | The equipment setup is not yet completed. |
| 31 | Qi Teng Construction Co., Ltd. | Office | - | - | - | - | Included in Shinkong International Leasing Corp. |
| 32 | Intelligent Medical Big Data Co., Ltd. (IMBD) | Office | - | - | - | - | Included in Shinkong International Leasing Corp. |
| 33 | TacBright Optronics Corporation (TBO)-2024 | Plant area | 15,602.552 | 23,686.651 | - | 30.298 | |
| | TacBright Optronics Corporation (TBO)-2023 | | 16,011.184 | 22,973.148 | - | 33.199 | The third-party assurance has been completed. |
| 34 | LOFO Holding GmbH | - | - | - | - | - | Company process is completed. |
| 35 | MAXPRO LTD. | - | - | - | - | - | Included in TacBright Optronics Corporation. |
| 36 | Thai Shinkong Industry Corporation Ltd.-2024 | Plant area | 40,558.599 | 37,220.385 | 682,926.791 | 760,705.775 | |
| | Thai Shinkong Industry Corporation Ltd.-2023 | | 35,573.704 | 31,133.005 | 593,531.771 | 660,238.539 | |
| 37 | UBright Optronics Corp. (UBO)-2024 | Plant area | 527.060 | 9,541.303 | - | 4.349 | |

Corporate Governance Report

119 -

| Emission quantity tCO_{2e}
Company name | | Location of audit | Scope 1 | Scope 2 | Scope 3 | Intensity (tCO_{2e}/NTD million) | Note |
| --- | --- | --- | --- | --- | --- | --- | --- |
| | UBright Optronics Corp. (UBO)-2023 | | 517.687 | 9,963.253 | - | 4.916 | |
| | UBright Optronics Corp. (UBO) (Zhunan factory)-2024 | Plant area | 692.924 | 2,868.693 | - | 5.275 | |
| | UBright Optronics Corp. (UBO) (Zhunan factory)-2023 | | 752.487 | 3,824.964 | - | 10.932 | |
| 38 | Rise Concept Enterprises Limited | Office | - | - | - | - | Included in UBright Optronics Corporation. |
| 39 | Suzhou UBright Optronics Corp. | Office | 0.004 | 1.728 | - | - | |
| 40 | Shinkong International Securities Co., Ltd. (SKIS)-2024 | Office | 44.235 | 309.933 | - | 0.114 | |
| | Shinkong International Securities Co., Ltd. (SKIS)-2023 | Office | 54.773 | 301.968 | - | 0.158 | The third-party assurance has been completed. |
| 41 | Shin Kong Investment Consultant Co., Ltd. (SKIC)-2023 & 2024 | Office | - | - | - | - | Included in Shin Kong International Securities Co., Ltd. |
| 42 | Shin Kong Insurance Agent Co., Ltd. (SKIA)-2023 & 2024 | Office | - | - | - | - | Included in Shin Kong International Securities Co., Ltd. |
| 43 | Shin Kong Property Insurance Agency Co., Ltd. (SKPIA)-2023 & 2024 | Office | - | - | - | - | Included in Shin Kong International Securities Co., Ltd. |
| 44 | Taipei Star Bank-2024 | Office | 42.709 | 952.387 | - | 0.423 | |

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| Emission quantity tCO2e)
Company name | | Location of audit | Scope 1 | Scope 2 | Scope 3 | Intensity (tCO2e/NTD million) | Note |
| --- | --- | --- | --- | --- | --- | --- | --- |
| | Taipei Star Bank-2023 | | 43.256 | 975.705 | - | 0.495 | |

3. Greenhouse gas reduction goals, strategies and concrete action plans

Describe the greenhouse gas reduction base year and data, reduction goals, strategies, and concrete action plans and achievement of the reduction goals.

2021 is the base year.

I. Reduce carbon emissions by 7% in 2025 and 22% in 2050, and reach net zero by 2050; from green procurement, alternative fuels, energy efficiency improvement, waste recycling and reuse and green product development, the Company continuously promotes and transforms to a green business model.

II. In response to climate change, greenhouse gases emission management is a global issue. Energy savings and carbon reduction have been combined with the sustainable environmental development of the Company.

III. Promote the development of circular economy with resource management and source management such as waste reduction, recycling, and promotion of green supply chain.

IV. The replacement of heat medium boiler fuel was set into action for the whole factory by changing fuel to gas in order to improve the air quality. And we acquired the registration of the “Measures for the Management of Greenhouse Gas Replacement Projects” from the EPA in February 2015.

V. In response to the government's greenhouse gas reduction, in 2024 we voluntarily reported the reduction measures for greenhouse gas emissions and finished the filing. A total of 53 voluntary reductions were reported, with an annual electricity savings of 3,908,200 KWH and a carbon reduction of 1,931 tons.

VI. Continue to save energy and reduce waste, introduce new energy-saving technologies to increase energy efficiency in order to meet the 1% power savings required by the Ministry of Economic Affairs. In line with the electricity saving regulation by the Bureau of Energy, the average annual savings in 113 was 1.04%, and the result is under the review of the Bureau of Energy. To enhance the

Corporate Governance Report

Company's green image and instill a culture of energy conservation within the organization, we established the "Energy Saving Improvement Incentive Scheme" in 2018. Through the distribution of bonuses and certificates, we aim to increase employee participation and innovation in energy conservation, thus fostering a more energy-efficient environment. "Process improvement," "equipment improvement," and "energy management" are the three main pillars continuously promoted by the Company in 2023. We proposed 69 energy-saving improvement projects in 2023, with an investment of approximately NT$18,454 thousand. After completion, we expect to save 9,370 kWh/year in electricity, conserve 505,538 NM3 of natural gas, and achieve annual benefits of NT$19,568 thousand. In 2024, we completed 56 energy-saving measures, providing benefits worth NT$1,342 thousand, equivalent to saving approximately 4,186 kWh of electricity and avoiding 2,068 tCO₂e of greenhouse gas emissions.

VII. The green house gas reduction totaled 39.67% from 2019 to 2024.

VIII. Develop emerging and renewed energies to reduce greenhouse gas emissions. In 114, the Company purchase green electricity in compliance with laws and regulations to meet the obligatory volume requirements of large power users.

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(VIII) The state of the company's performance in the area of ethical corporate management, any variance from the Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies, and the reason for any such variance:

Assessment items	Actual governance
	Yes	No	Summary
I. Establishment of integrity policies and solutions
(I) Has the company established an ethical management policy that has been passed by its Board of Directors, and clearly specified in its rules and external documents the ethical corporate management policies and the commitment by the Board of Directors and senior management on rigorous and thorough implementation of such policies and methods?
(II) Has the company established a risk assessment mechanism against unethical behavior, analyzed and assessed business activities within their business scope on a regular basis which are at a higher risk of being involved in unethical behavior, and established prevention programs at least	✓		(I) The Board of Directors has passed an "Anti-bribery Policy" and its "Ethical Corporate Management Best Practice Principles" that prohibit employees from committing any dishonest or illegal conduct. Furthermore, a set of "Procedures for Ethical Management and Guidelines for Conduct" has been implemented to serve as compliance guidelines for employees' daily practices.
(II) The Company's "Procedures for Ethical Management and Guidelines for Conduct" regulates the relevant code of conduct, and a specialized unit is designated to oversee the implementation. The Procedures already covers the preventive measures for various acts. The Company completes the "Commercial Ethics and	No deviation was found

Assessment items	Actual governance			Deviation and causes of deviation from Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies
	Yes	No	Summary
covering the preventive measures specified in Paragraph 2, Article 7 “Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies”?(III) Has the company specified operational procedures, behavioral guidelines, disciplines of violations, as well as an appeal system in the program against unethical behavior, and implemented such programs, and reviewed and revised the previous program on a regular basis?	☑		Information Security Evaluation Form” (including overseas sites) every year to assess the operating activities within its business scope that have a high risk of unethical conduct.(III) The Company's “Commercial Ethics Guide” and "Procedures for Ethical Management and Guidelines for Conduct" specifically prohibit employees from offering, promising, requesting or accepting any inappropriate gains, whether personally or through a third party. The Company also has a whistleblowing system in place, and encourages report of dishonest and inappropriate conduct.	No deviation was found
II. Enforcing ethical management(I) Does the company evaluate the integrity of all counterparties it has business relationships with? Are there any integrity clauses in the agreements it signs with business partners?(II) Has the company set up a dedicated	☑		(I) The Company's Anti-bribery Policy contains a "commission prohibition clause”. Ethical Corporate Management Best Practice Principles have also been implemented to guide employees' compliance. The contract signed with the supplier includes the "Code of Conduct for Suppliers", which clearly stipulates the terms of ethical corporate management, and each supplier must sign the “Statement of Social Responsibility and Supplier’s Conduct”.(II) According to the "Ethical Corporate Management	No deviation was found

Assessment items	Actual governance			Deviation and causes of deviation from Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies
	Yes	No	Summary
responsible unit to promote corporate ethical management under the Board of Directors, and has such unit reported its execution in terms of ethical management policy and preventive programs against unethical behaviors and the supervision status to the Board of Directors on a regular basis (at least once a year)?			Procedure and Code of Conduct" established by the Company, the General Administration Division is designated as the Ethical Corporate Management Promotion Team responsible for the operation, including the promotion of the ethical corporate management policy, training on ethical corporate management related issues, and handling of relevant whistle-blowing cases in accordance with the Company's regulations, and reports to the Board of Directors every year. Ethical management training was conducted for all section chiefs on January 16, 2024. A report was made on the implementation and promotion of ethical corporate management at the board meeting on November 11, 2024.	found
(III) Does the company have any policy that prevents conflict of interest, and channels that facilitate the reporting of conflicting interests?	☑		(III) The interest conflict policy is clearly specified in the “Commercial Ethics Guide” and "Procedures for Ethical Management and Guidelines for Conduct" formulated by the Company.	No deviation was found
(IV) Has the company established an effective accounting system and internal control system in order to implement ethical management, and propose relevant audit plans according to the assessment results of	☑		(IV) The Company's accounting policy, internal control system, and internal audits have been carried out according to the rules, and are duly reported to the Board of Directors.	No deviation was found

Assessment items	Actual governance			Deviation and causes of deviation from Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies
	Yes	No	Summary
the risks of unethical behaviors, and review the compliance status of the prevention of unethical behaviors, or entrust an account to carry out the review?
(V) Does the company organize internal or external training on a regular basis to maintain business integrity?	☑		(V) The Company's senior management, supervisors and employees were introduced to the Company's ethical management and insider trading prevention at the annual management meeting. In 2024, 1,855 people (2,419.9 hours) participated in the training on ethical management and compliance (anti-corruption and anti-bullying).	No deviation was found
III. Whistleblowing system
(I) Does the company provide incentives and means for employees to report misconduct? Does the Company assign dedicated personnel to investigate the reported misconduct?	☑		(I) 1. The Company has established the "Business Ethical Management Procedure", "Measures for Corruption Management", "Management Procedures for Reporting, Complaints and Suggestions and Feedback from Employees", and provides the Group with a free complaint and whistle-blowing hotline: 0800-588-100 or email: [email protected]. External parties and the Company's internal personnel may also dial extension 1199 directly.
2. The channel for whistleblowing is publicly disclosed	No deviation was found

Assessment items	Actual governance			Deviation and causes of deviation from Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies
	Yes	No	Summary
(II) Has the company implemented any standard procedures and/or subsequent measures after carrying out an investigation or confidentiality measures for handling reported misconduct?	☑		on the Company's website. At the same time, a dedicated unit is designated according to the content of the report to handle the reported case in accordance with the prescribed procedures. In case of a complaint from the competent authority, internal or external complaint, or any other violation of commercial ethics, the responsible person will gather appropriate personnel to form a team to investigate the matters. (Please refer to the official website of the Company for details: (http://www.shinkong.com.tw/investors)

(II) The Company specifies the procedures for handling whistleblowing cases in the "Management Procedures for Whistleblowing, Complaints and Suggestions and Employee Feedback Procedure". The "Management Procedures for Whistleblower Protection and Anti-Retaliation" is established to keep the identity of the whistleblower and the content of the report confidential. (Please refer to the official website of the Company for details: http://www.shinkong.com.tw/front/investors)

Corporate Governance Report

Assessment items	Actual governance
	Yes	No	Summary
			Protection and Anti-Retaliation" that the identity of the whistleblower and the content of the report shall be kept confidential, and at the same time promises to protect the whistleblower from improper treatment due to the whistleblowing.
2. The number of whistleblowing cases accepted by the Company in 2024 was 0.
IV. Enhancing information disclosure
Has the company disclosed its Ethical Corporate Management Best Practice Principles and progress onto its website and MOPS?	☑		1. The Company has already disclosed ethical corporate management-related information on the internal knowledge exchange platform for employees to review, and on the company website for public inquiries. All employees of the Company have been able to perform duties in compliance with the relevant rules.
2. The Company did not violate the Ethical Corporate Management Best Practice Principles and had no corruption in 2024.	No deviation was found
V. If the Company has established business integrity policies in accordance with "Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies", please describe its current practices and any deviations from the Best Practice Principles: The Company has established a set of "Ethical Corporate Management Best Practice Principles" and "Procedures for Ethical Management and Guidelines for Conduct." Employees' current practices are indifferent from the above principles.
VI. Other information relevant to understanding the Company's business integrity (e.g. review of business integrity principles)
The Company's "Procedures for Ethical Management and Guidelines for Conduct" have outlined the relevant code of conduct and designated a specialized unit to oversee implementation.

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(IX) Other important information materials to the understanding of corporate governance within the Company:

Succession planning for board members and key management personnel:

The Company's board structure is designed to meet the operational needs and shareholding structure of the Company. The succession plan for board members is developed based on specific criteria, and a database of potential board candidates is maintained accordingly. These criteria include:

Basic conditions and values: gender, age, nationality and culture, etc.
Professional knowledge and skills: professional background (such as law, accounting, industry, finance, marketing, or technology), professional skills, and industrial experience.
Demonstrate integrity, responsibility, innovation, and decision-making capabilities, consistent with the core values of the Company and contributing to professional knowledge and skills for Company management.
Relevant experience related to the Company's business operations.

The Company has established the "Regulations Governing the Performance Evaluation of the Board of Directors" to assess the effectiveness of the board's operations and to evaluate the performance of directors. These criteria encompass overseeing company objectives and tasks, understanding responsibilities, engaging in operations, managing internal relationships and communication, professional competency and growth, internal controls, and expressing informed opinions. For the succession planning of key management positions, we aim to strengthen the capabilities of successor candidates in corporate management, industry analysis, new technology, and senior management functions (visionary leadership, cross-team collaboration, developing others, decision-making, strategic thinking, business acumen, etc.). We continuously organize

Corporate Governance Report
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management courses and lectures. Moreover, through internal job rotations, we assist successor candidates in expanding their operational insights, cultivating cross-functional team integration capabilities and teamwork to smoothly execute the succession plan. The current President joined the Company in 1993 and has served in various roles, including factory plant manager of various factories under the Chemical Fiber Business Group, General Manager of overseas subsidiaries (Huachun and Shinkong Industry (Hangzhou)), and Director of the General Engineer's Office. In 2022, he assumed the position of President of the Company.

(X) Internal Control System Execution Status

Please visit the MOPS, and enter the Company's code "1409" to inquire the Internal Control System Statement.
If the internal control system was reviewed by an external CPA, the result of such review must be disclosed: None.

(XI) Significant resolutions made in shareholders' meetings, Board of Directors meetings, and Audit Committee, Salary, and Remuneration Committee meetings.

Shareholders' Meeting

Year of meeting	Time of meeting	Significant resolutions and implementation status
2024	2024/5/30	1. Passing the 2023 business report and financial statement.
2. Passing the earnings appropriation proposals for the year of 2023. Implementation: Cash dividend baseline date was September 2, 2024 and the payment date was September 27 2024 (Cash dividend was NT$0.55 per share).
3. Passed the removal of Article 209 of the Company Act restrictions imposed against the Company's directors and representatives for being involved in competing businesses.

Board of Directors

Meeting session	Time of meeting	Significant resolutions
The 6th meeting of the 19th Board of Directors	2024/1/23	1. Distribution of the 2023 performance bonuses for the managerial staff
2. Distribution of the 2023 year-end bonus
3. To determine the date and venue for the Company's 2024 annual general meeting, and details concerning shareholders' rights of motion proposal
4. Removal of Article 209 of the Company Act on non-competition of directors and their representatives.
5. Invested in the development of "Taoyuan Youth Venture Village and Smart Manufacturing Park".
6. The Company’s 2024 audit fees for CPAs.
7. Change of the Company's stamp safekeeping department
8. Renewal and cancellation of endorsement/guarantee limits.
9. Renewal of bank credit limits
10. Employee salary adjustment for 2024.
Resolution: The independent directors expressed no opinion on the above. Passed unanimously by all attending directors.

Corporate Governance Report

Meeting session	Time of meeting	Significant resolutions
The 7th meeting of the 19th Board of Directors	2024/3/11	1. The Company's 2024 operating budget
2. The 2023 "Internal Control System Self Assessment" report and "Statement of Internal Control System".
3. The Company's 2023 financial reports and consolidated financial reports.
4. Motion for the Company’s 2023 earnings distribution
5. The distribution of the 2023 employees' and directors' remuneration
6. Promotion proposal of the Company’s managers
7. Amendments to the Company’s 2024 Annual General Meeting agenda
8. Renewal and cancellation of endorsement/guarantee limits.
9. Renewal of bank credit limits
Resolution: The independent directors expressed no opinion on the above. Passed unanimously by all attending directors.
The 8th meeting of the 19th Board of Directors	2024/5/7	1. Amendments to the measures of performance bonus for the managerial staff.
2. Discharge from duty of Shyr-Shyuan Luo, Vice Chairman of the Company’s Operations Decision Committee.
3. The Company's Q1 2024 consolidated financial report.
4. Amendments to the Company's "Board of Directors Conference Rules"
5. Amendments to the Company's “Audit Committee Foundation Principles”
6. Renewal of endorsement/guarantee limits.
7. Renewal of bank credit limits
Resolution: The independent directors expressed no opinion on the above. Passed unanimously by all attending directors.
The 9th meeting of the 19th Board of Directors	2024/8/6	1. Amendment to the Company's 2024 operating budget
2. The Company's Q2 2024 consolidated financial report.
3. Distribution of the 2024 first half performance bonus for managerial staff
4. Plan for execution of asset allocation adjustment.
5. The Company has appointed the members of the "Sustainable Development Promotion Committee" and established the "Organizational Regulations for Sustainable Development Committee".
6. Established the "Risk Management Policy and Procedures" of the Company.
7. Setting the 2023 cash dividend baseline date
8. Amendment to the "Measures for Preventing Insider Trading"
9. Establishment of the Company’s “Corporate Governance Best Practice Principles”
10. Provision of a supporting letter for the subsidiary Shinkong International Leasing Corp.
11. Renewal of endorsement/guarantee limits.

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Meeting session	Time of meeting	Significant resolutions
		12. Renewal of bank credit limits
Resolution: The independent directors expressed no opinion on the above. Passed unanimously by all attending directors.
The 10th meeting of the 19th Board of Directors	2024/11/11	1. Partial amendment to the Company’s “Internal Control System”.
2. 2025 audit plan, please discuss.
3. The Company has established the "Measures for Financial and Business Matters Between Related Parties".
4. The Company's Q3 2024 consolidated financial report.
5. Proposed increase of capital for the subsidiary Shinkong Materials Technology Co., Ltd.
6. Proposed increase of capital for the subsidiary Qi Teng Construction Co., Ltd.
7. Discharge from duty of Assistant Vice President Chun-Feng Hsieh of Procurement Department of the Company.
8. Renewal of endorsement/guarantee limits.
9. Renewal of bank credit limits
Resolution: The independent directors expressed no opinion on the above. Passed unanimously by all attending directors.
The Company's report on sustainable development and risk management:
1. At least once a year, the implementation of the sustainable policy, risk assessment results and countermeasures, and communication results with stakeholders are reported to the functional committees and the Board of Directors.
2. The proposing unit reported to the Sustainable Development Promotion Committee and the Board of Directors on November 11, 2024 on the Company's various policies and implementation status of sustainable development, sustainable information disclosure, risk management, etc., including the formulation and review of management guidelines, strategies and goals. The report on the progress of the sustainable development and the communication results with stakeholders was submitted, and the Board of Directors and the Committee members unanimously approved the motions as proposed after the review and approval of the report.
The 11th meeting of the 19th Board of Directors	2024/12/23	1. Proposed increase of capital for the subsidiary Shin Kong International Securities Co., Ltd.
2. Proposed increase of capital for the subsidiary Shinkong Youth Co., Ltd.
Resolution: The independent directors expressed no opinion on the above. Passed unanimously by all attending directors.
The 12nd meeting of the 19th Board of	2025/1/20	1. Distribution of the 2024 performance bonuses for the managerial staff
2. Distribution of the 2024 year-end bonus
3. To determine the date and venue for the Company's 2025

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Corporate Governance Report

Meeting session	Time of meeting	Significant resolutions
Directors		annual general meeting, and details concerning shareholders' rights of motion proposal
4. The Company’s plan to establish "Hsin Hsin Capital Co., Ltd.". Resolution: Director Hsing-En Wu had to avoid the discussion case 4 and not participate in the voting process. The Independent Directors expressed no opinions, and the motion was approved by all other attending directors
5. The Company plans to represent the "Preparation Division of Hsin Hsin Capital Co., Ltd." to negotiate and sign the relevant investment and trading contracts. Resolution: Director Hsing-En Wu had to avoid the discussion case 5 and not participate in the voting process. The Independent Directors expressed no opinions, and the motion was approved by all other attending directors
6. The Company’s appointment of certifying CPAs, their independence evaluation and audit fees for 2025.
7. The Company’s plans to apply for a loan from its subsidiary Shinkong Engineering Co., Ltd.
8. Addition, renewal and cancellation of endorsement/guarantee limits
9. Renewal of bank credit limits
Resolution: The independent directors expressed no opinion on the above. Passed unanimously by all attending directors.
The 13th meeting of the 19th Board of Directors	2025/3/10	1. The Group's 2025 operating budget
2. The 2024 "Internal Control System Self Assessment" report and "Statement of Internal Control System".
3. The Company's 2024 financial reports and consolidated financial reports.
4. Motion for the Company’s 2024 earnings distribution
5. The distribution of the 2024 employees' and directors' remuneration
6. Amendments to the Company’s 2025 Annual General Meeting agenda
7. The Company’s provision of a supporting letter for the subsidiary Shinkong International Leasing Corp.
8. Renewal of endorsement/guarantee limits.
9. Renewal of bank credit limits
Resolution: The independent directors expressed no opinion on the above. Passed unanimously by all attending directors.
The 14th meeting of the 19th Board of Directors	2025/4/8	1. Amendment to parts of the "Articles of Incorporation".
2. Partial amendment to the Company’s “Internal Control System”.
Resolution: The independent directors expressed no opinion on the above. Passed unanimously by all attending directors.

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3. Audit Committee

Meeting session	Time of meeting	Significant resolutions
4th meeting of the 4th Audit Committee	2024/1/23	1. The Company’s 2024 audit fees for CPAs.
2. Invested in the development of "Taoyuan Youth Venture Village and Smart Manufacturing Park".
3. Renewal and cancellation of endorsement/guarantee limits.
Resolution: Passed unanimously by all members of the Audit Committee.
5th meeting of the 4th Audit Committee	2024/3/11	1. The 2023 "Internal Control System Self Assessment" report and "Statement of Internal Control System".
2. The Company's 2023 financial reports and consolidated financial reports.
3. Motion for the Company’s 2023 earnings distribution
4. Renewal and cancellation of endorsement/guarantee limits.
Resolution: Passed unanimously by all members of the Audit Committee.
6th meeting of the 4th Audit Committee	2024/5/7	1. The Company's Q1 2024 consolidated financial report.
2. Renewal of endorsement/guarantee limits.
Resolution: Passed unanimously by all members of the Audit Committee.
7th meeting of the 4th Audit Committee	2024/8/6	1. The Company's Q2 2024 consolidated financial report.
2. Plan for execution of asset allocation adjustment.
3. Formulation of the Company's "Risk Management Policy and Procedures".
4. The Company’s provision of a supporting letter for the subsidiary Shinkong International Leasing Corp.
5. Renewal of endorsement/guarantee limits.
Resolution: Passed unanimously by all members of the Audit Committee.
8th meeting of the 4th Audit Committee	2024/11/11	1. The Company's risk identification, analysis and assessment results.
2. Partial amendment to the Company’s “Internal Control System”.
3. 2025 audit plan.
4. The Company's Q3 2024 consolidated financial report.
5. Proposed increase of capital for the subsidiary Shinkong Materials Technology Co., Ltd.
6. Proposed increase of capital for the subsidiary Shinkong Materials Technology Co., Ltd.
7. Renewal of endorsement/guarantee limits.
Resolution: Passed unanimously by all members of the Audit Committee.
9th meeting of the 4th Audit Committee	2024/12/23	1. Proposed increase of capital for the subsidiary Shinkong Materials Technology Co., Ltd.
2. Proposed increase of capital for the subsidiary Shinkong Materials Technology Co., Ltd.
Resolution: Passed unanimously by all members of the Audit

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Corporate Governance Report

Meeting session	Time of meeting	Significant resolutions
		Committee.
10th meeting of the 4th Audit Committee	2025/1/20	1. The Company’s plan to establish "Hsin Hsin Capital Co., Ltd.".
2. The Company’s plan to represent the "Preparation Office of Hsin Hsin Capital Co., Ltd." to negotiate and sign relevant investment and trading contracts.
3. The Company’s appointment of certifying CPAs, their independence evaluation and audit fees for 2025.
4. The Company’s plans to apply for a loan from its subsidiary Shinkong Engineering Co., Ltd.
5. Renewal and cancellation of endorsement/guarantee limits.
Resolution: Passed unanimously by all members of the Audit Committee.
11th meeting of the 4th Audit Committee	2025/3/10	1. The 2024 "Internal Control System Self Assessment" report and "Statement of Internal Control System".
2. The Company's 2024 financial reports and consolidated financial reports.
3. Motion for the Company’s 2024 earnings distribution
2. The Company’s provision of a supporting letter for the subsidiary Shinkong International Leasing Corp.
3. Renewal of endorsement/guarantee limits.
Resolution: Passed unanimously by all members of the Audit Committee.
12th meeting of the 4th Audit Committee	2025/4/8	1. Partial amendment to the Company’s “Internal Control System”.
Resolution: Passed unanimously by all members of the Audit Committee.

4. The Remuneration Committee

Meeting session	Time of meeting	Significant resolutions
2nd meeting of the 5th Salary and Remuneration Committee	2024/1/23	1. Distribution of the 2023 performance bonuses for the managerial staff
2. Distribution of the 2023 year-end bonus
3. Employee salary adjustment for 2024.
Resolution: Passed unanimously by all members of the Salary and Remuneration Committee.
3rd meeting of the 5th Salary and Remuneration Committee	2024/3/11	1. The distribution of the 2023 employees' and directors' remuneration
Resolution: Passed unanimously by all members of the Salary and Remuneration Committee.
4th meeting of the 5th Salary and Remuneration	2024/5/7	1. Revision of the measures of performance bonus for the managerial staff.
Resolution: Passed unanimously by all members of the Salary

Meeting session	Time of meeting	Significant resolutions
Committee		and Remuneration Committee.
5th meeting of the 5th Salary and Remuneration Committee	2024/8/6	1. Distribution of the 2024 first half performance bonus for managerial staff
Resolution: Passed unanimously by all members of the Salary and Remuneration Committee.
6th meeting of the 5th Salary and Remuneration Committee	2025/1/20	1. Distribution of the 2024 performance bonuses for the managerial staff
2. Distribution of the 2024 year-end bonus
Resolution: Passed unanimously by all members of the Salary and Remuneration Committee.
7th meeting of the 5th Salary and Remuneration Committee	2025/3/10	1. The distribution of the 2024 employees' and directors' remuneration
Resolution: Passed unanimously by all members of the Salary and Remuneration Committee.
8th meeting of the 5th Salary and Remuneration Committee	2025/4/8	1. Partial amendment to the Company's “Articles of Incorporation”, please discuss.
Resolution: Passed unanimously by all members of the Salary and Remuneration Committee.

Communication of independent directors with the head of internal audit and CPAs.

The Company's audit unit regularly provides independent directors with audit reports on the Company's internal audits, and reports the latest audit status through the board of directors. Independent directors may inspect the Company's finance and business implementation at any time. If they have questions about the Company's operations, they can communicate with the supervisors of the relevant units for review and improvement; in terms of communication with CPAs, if an independent director has any questions about the Company's financial or business status, he/she can communicate with the CPAs at any time and instructs the Company's relevant units to conduct review and improvement.

Summary of the communication between the independent directors and the head of internal audit

Corporate Governance Report

Date	Communication Methods	Communication Items	Communication Results	Attendee
2024/5/7	Board of Directors	Internal Audit Report	Independent directors are aware of the internal audit report and key audit items, and have no special comments.	Independent Directors Chiu, Lin, Tsai and the head of audit
2024/8/6	Board of Directors	Internal Audit Report	Independent directors are aware of the internal audit report and key audit items, and have no special comments.	Independent Directors Chiu, Lin, Tsai and the head of audit
2024/11/11	Audit Committee, Board of Directors	114 audit plan.	The independent directors supported the 2025 audit plan, and the motion was adopted as proposed.	Independent Directors Chiu, Lin, Tsai, the head of audit, and CPAs
		Internal Audit Report	Independent directors are aware of the internal audit report and key audit items, and have no special comments.
2025/1/20	Board of Directors	Internal Audit Report	Independent directors are aware of the internal audit report and key audit items, and have no special comments.	Independent Directors Chiu, Lin, Tsai and the head of audit
2025/3/10	Audit Committee, Board of Directors	"Self-Assessment of Internal Control System" and "Statement of Internal Control System" Reports	We communicated with the independent directors regarding the results of the self-assessment of the internal control system for 113. The independent directors are aware of the internal audit report and have no special comments and agreed with the contents of the "Statement on Internal Control System."	Independent Directors Chiu, Lin, Tsai, the head of audit, and CPAs
		Internal Audit Report	Independent directors are aware of the internal audit report and key audit items, and have no special comments.
2025/4/8	Audit Committee, Board of Directors	Revision of the internal system and report on the internal audit	All independent directors agreed on the revision of the internal system, and were aware of the internal audit	Independent Directors Chiu, Lin, Tsai and the

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Summary of the communication between the Independent Directors and the CPAs

Date	Communication Item	Attendee
2024/03/11	1. The CPAs reported the results of the audit and important audit matters on the 2023 consolidated and parent company only financial reports, and communicated with Independent Directors.
2. The attesting CPA provided explanations regarding the financial statements, audit reports, audit quality indicators (AQIs) and key audit matters for 2023.	Independent Directors Chiu, Lin, Tsai and CPAs
2024/05/07	The CPAs reported on the results of the audit and important audit matters of the Q1 2024 consolidated financial report, and communicated with the independent directors.	Independent Directors Chiu, Lin, Tsai and CPAs
2024/08/06	The CPAs reported on the results of the audit and important audit matters of the Q2 2024 consolidated financial report, and communicated with the independent directors.ectors.	Independent Directors Chiu, Lin, Tsai and CPAs
2024/11/11	1. The CPAs reported on the results of the audit and important audit matters of the Q3 2024 consolidated financial report, and communicated with the independent directors.
2. The CPAs reported the key audit matters of the 2024 financial report.	Independent Directors Chiu, Lin, Tsai and CPAs
2024/12/23	The CPAs explained and communicated on the impact of compliance with the IFRS Sustainability Disclosure Standards on the Company's financial report and on the Group.	Independent Directors Chiu, Lin, Tsai and CPAs
2025/3/10	The CPAs explained the financial statements, audit report, and key audit matters for 2024.	Independent Directors Chiu, Lin, Tsai and CPAs

(XII) Documented opinions or written declarations made by directors or supervisors against board resolutions: None.

Corporate Governance Report

III. Information About the Company’s Audit Fee

Unit: NTD thousands

Name of accounting firm	Name of CPA	CPA’s Audit period	Audit fee	Non-audit fee	Total	Remarks
Deloitte & Touche	Wen-Hsiang Chen	2024/01/01~2025/03/31	7,120	1,349	8,469
	Wen-Yea Shyu

(I) Disclose the amount of audit fees and non-audit fees paid to the certifying CPAs, their affiliated firm and affiliated enterprises, and the content of non-audit services. In case of any of the following circumstances, disclose the following matters:

If the accounting firm is changed and the audit fees paid in the year of change are lower than those in the year before the change, disclose the amount of audit fees before and after the change and the reasons: None.
Any reduction in the audit fee by more than 10% compared to the previous year. State the amount, the percentage, and reason of such variation: None

(II) The audit fees referred to in the preceding paragraph are the fees paid by the Company to the certified public accountants for the audit, review and double check of the financial report and the review of financial forecasts.

(III) Service content of non-audit fees

Certification of business tax direct deduction method: NT$190,000.
Tax certification, transfer pricing report and master file report for NT$1.144 million.
Industrial and commercial registration: NT$15,000.

IV. Change of CPA: None.

V. The Company’s Chairperson, General Manager, or any managers involved in financial or accounting affairs being employed by the accounting firm or any of its affiliated company within the most recent year: None.

VI. Details of shares transferred or pledged by directors, managers, or shareholders with more than 10% ownership interest in the last year up until the publication date of this annual report:

Please visit the MOPS, enter the company code "1409" to inquire about changes in the shareholdings of directors, managers, and major shareholders.

140 -

VII. Relationships among top-10 shareholders:

March 29, 2025

Name	Shares held by itself		Shares held by spouse and underage children		Number of shares held under another person's name		Names and Relationship of Top 10 Shareholders who are Related Parties, Spouses or within Second-Degree of Kinship to Each Other.
	Shares held	Shareholdings percentage	Shares held	Shareholdings percentage	Shares held	Shareholdings percentage	Name	Relationship
Shinkong Co., Ltd.	84,414,691	5.21%	-	-	-	-	-	-
Representative: Hsueh-Fen Peng	0	0.00%
Newrise Investment Co., Ltd.	80,883,027	4.99%	-	-	-	-	-	-
Representative: Min-Wei Wu	0	0.00%
Shin Kong Recreation Co., Ltd.	75,428,369	4.66%	3,514,692	0.22%	-	-	1. Yi Guang Industry Co., Ltd. and Yuan Pao Co., Ltd., Gillian Investment Co., Ltd. and Rui Hsing Enterprise Co., Ltd.	Chairperson is the same.
Representative: Tong-Sheng Wu	3,431,596	0.21%

Corporate Governance

Name	Shares held by itself		Shares held by spouse and underage children		Number of shares held under another person's name		Names and Relationship of Top 10 Shareholders who are Related Parties, Spouses or within Second-Degree of Kinship to Each Other.		Remarks
	Shares held	Shareholdings percentage	Shares held	Shareholdings percentage	Shares held	Shareholdings percentage	Name	Relationship
Shinkong Textile Co., Ltd.	56,104,285	3.47%	-	-	-	-	1. Shinkong Insurance Co. Ltd.	Both chairpersons are within second-degree of kinship
Representative: Hsing-En Wu	0	0.00%	-	-	-	-	-	-	-
Shinkong Insurance Co. Ltd.	49,162,144	3.04%	-	-	-	-	1. Shinkong Textile Co., Ltd.	Both chairpersons are within second-degree of kinship
Representative: Hsin-Hung Wu	0	0.00%	-	-	-	-	-	-	-

Name	Shares held by itself		Shares held by spouse and underage children		Number of shares held under another person's name		Names and Relationship of Top 10 Shareholders who are Related Parties, Spouses or within Second-Degree of Kinship to Each Other.
	Shares held	Shareholdings percentage	Shares held	Shareholdings percentage	Shares held	Shareholdings percentage	Name	Relationship
Sourcetek Co., Ltd.	39,839,255	2.46%	-	-	-	-	1. Gilgamesh Investment Co., Ltd., Yi Guang Industry Co., Ltd., Shin Kong Recreation Co., Ltd. and Rui Hsing Enterprise Co., Ltd.	Chairperson is the same.
Representative: Tong-Sheng Wu	3,431,596	0.21%	3,514,692	0.22%	7,800,000	0.48%
Gilgamesh Investment Co., Ltd.	38,152,938	2.36%	-	-	-	-	1. Yi Guang Industry Co., Ltd., Yuan Pao Co., Ltd., Shin Kong Recreation Co., Ltd. and Rui Hsing Enterprise Co., Ltd.	Chairperson is the same.
Representative: Tong-Sheng Wu	3,431,596	0.21%	3,514,692	0.22%	7,800,000	0.48%
Toray Industries, Inc.	35,629,145	2.20%	-	-	-	-	-	-
Yi Kuang	33,673,296	2.08%	-	-	-	-	1. Gilgamesh	Chairperson

Name	Shares held by itself		Shares held by spouse and underage children		Number of shares held under another person's name		Names and Relationship of Top 10 Shareholders who are Related Parties, Spouses or within Second-Degree of Kinship to Each Other.
	Shares held	Shareholdings percentage	Shares held	Shareholdings percentage	Shares held	Shareholdings percentage	Name	Relationship
Enterprise Co., Ltd.							Investment Co., Ltd.,
Yuan Pao Co., Ltd., Shin Kong Recreation Co., Ltd. and Rui Hsing Enterprise Co., Ltd.	is the same.
Representative: Tong-Sheng Wu	3,431,596	0.21%	3,514,692	0.22%	7,800,000	0.48%
Ruixin Investment Co., Ltd.	32,106,538	1.98%	-	-	-	-	1. Gilgamesh Investment Co., Ltd.,
Yuan Pao Co., Ltd., Yi Guang Industry Co., Ltd. and Shin Kong Recreation Co., Ltd.	Chairperson is the same.
Representative: Tong-Sheng Wu	3,431,596	0.21%	3,514,692	0.22%	7,800,000	0.48%

Corporate Governance Report

VIII. Aggregate shareholding percentage

December 31, 2024; Unit: Shares; %

Investment Business (Note 1)	Held by the Company		Held by directors, supervisors, managers, and directly/indirectly controlled entities		Comprehensive investment
	Shares held	Shareholding percentage	Shares held	Shareholding percentage	Shares held	Shareholding percentage
Pan Asian Plastics Corp.	55,179,933	100.00	-	-	55,179,933	100.00
Hsingshing Investment Co., Ltd.	161,900,000	100.00	-	-	161,900,000	100.00
Shinkong Engineering	39,100,000	100.00	-	-	39,100,000	100.00
Shinpont Industry Inc.	25,245,000	49.99	5,000	0.01	25,250,000	50.00
Shin Chiun Industrial Co., Ltd.	83,800,000	100.00	-	-	83,800,000	100.00
British Virgin Islands MAXIMA PACIFIC LTD.	7,578,055	100.00	-	-	7,578,055	100.00
British Virgin Islands SSFC INVESTMENT LTD.	191,471	100.00	-	-	191,471	100.00
UBright Optronics Corporation	40,079,828	49.00	644,596	0.78	40,724,424	49.78
Shinkong Materials Technology Co., Ltd.	169,925,830	100.00	-	-	169,925,830	100.00
Tai Jin Investment Shin Kong	1,111,315	48.57	-	-	1,111,315	48.57
International Securities Co., Ltd.	179,235,993	77.32	-	-	179,235,993	77.32
Pan Asian Plastics Industry Corporation	53,964,955	100.00	-	-	53,964,955	100.00
TacBright Optronics Corporation	263,586,455	56.86	13,829,486	2.98	277,415,941	59.84
Taipei Star Bank Chi Jian Human-Resource & Management Co., Ltd.	84,968,278	27.07	7,588,137	2.42	92,556,415	29.49
Hsinshin Asset Management Co., Ltd.	Note 2	100.00	-	-	Note 2	100.00
Shinkong International Leasing Corp.	5,369,900	100.00	-	-	5,369,900	100.00
	150,000,000	100.00	-	-	150,000,000	100.00

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Investment Business (Note 1)	Held by the Company		Held by directors, supervisors, managers, and directly/indirectly controlled entities		Comprehensive investment
	Shares held	Shareholding percentage	Shares held	Shareholding percentage	Shares held	Shareholding percentage
Shinkong Technologies	3,263,250	100.00	-	-	3,263,250	100.00
Shin Kong Applied Materials	1,100,000	73.33	-	-	1,100,000	73.33
Far Trust International Finance	31,210,006	30.97	20,209,263	20.06	51,419,269	51.03
Otobuy Co., Ltd.	600,000	60.00	400,000	40.00	1,000,000	100.00
Ecofun Lab Corporation	1,840,000	33.33	-	-	1,840,000	33.33
Topbottle Resources Technology Corporation	1,488,000	20.00	-	-	1,488,000	20.00
Shinsol Advanced Chemical Corporation	37,358,859	43.63	-	-	37,358,859	43.63
Shin Kong Fintech Co., Ltd.	5,000,000	100.00	-	-	5,000,000	100.00
Shinkong Youth Co., Ltd.	51,000,000	100.00	-	-	51,000,000	100.00
Thai Shinkong Industry Corporation Ltd.	117,499,997	62.04	-	-	117,499,997	62.04
Qi Teng Construction	81,000,000	100.00	-	-	81,000,000	100.00
SHINKONG VIETNAM ENTERPRISE COMPANY LIMITED	Note 2	100.00	-	-	Note 2	100.00

Note 1: Long-term investment accounted by the Company using the equity method.
Note 2: The entity is a limited liability company. The shareholding percentage is calculated based on capital contribution.

Capital Overview

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Three. Capital Overview

I. Capital and Shares

(I) Source of capital

The formation process of share capital in the most recent year

Year	Month	Issued price (NT$)	Authorized capital stock		Paid-in capital stock		Remarks
			Shares held (thousand shares)	Amount ($ ,000)	Shares held (thousand shares)	Amount ($ ,000)	Source of capital ($ ,000)	Paid in properties other than cash	Others
1967	3	10	9,000	90,000	2,250	22,500	Incorporation	—
2012	09	10	2,300,000	23,000,000	1,760,484	17,604,840	Buyback of the Company's shares and capital reduction by 677,230	—	Note 1
2014	07	10	2,300,000	23,000,000	1,725,797	17,257,970	Buyback of the Company's shares and capital reduction by 346,870	—	Note 2
2014	09	10	2,300,000	23,000,000	1,715,797	17,157,970	Buyback of the Company's shares and capital reduction by 100,000	—	Note 3
2014	12	10	2,300,000	23,000,000	1,663,461	16,634,613	Buyback of the Company's shares and capital reduction by 523,357	—	Note 4
2015	01	10	2,300,000	23,000,000	1,659,282	16,592,823	Buyback of the Company's shares and capital reduction by 41,790	—	Note 5
2015	11	10	2,300,000	23,000,000	1,618,409	16,184,093	Buyback of the Company's shares and capital reduction by 408,730	—	Note 6
2016	12	10	2,300,000	23,000,000	1,618,409	16,184,093	Merger of 100%-owned subsidiaries	—	Note 7
2019	07	10	2,800,000	28,000,000	1,618,409	16,184,093	Increase in authorized share capital	—	Note 8
2022	05	10	2,800,000	28,000,000	1,618,409	16,184,093	Cancellation of 5 shares of treasury stock.	—	Note 9

Note 1: Approved under Letter No. Jing-Shou-Shang-10101189860 dated 2012.09.11.
Note 2: Approved under Letter No. Jing-Shou-Shang-10301148650 dated 2014.07.24.
Note 3: Approved under Letter No. Jing-Shou-Shang-10301195490 dated 2014.09.18.
Note 4: Approved under Letter No. Jing-Shou-Shang-10301247150 dated 2014.12.26.
Note 5: Approved under Letter No. Jing-Shou-Shang-10401018510 dated 2015.01.30.
Note 6: Approved under Letter No. Jing-Shou-Shang-10401250260 dated 2015.11.30.
Note 7: Approved under Letter No. Jing-Shou-Shang-10501287790 dated 2016.12.27.
Note 8: Approved under Letter No. Jing-Shou-Shang-10801072730 dated 2019.07.15.
Note 9: Approved under Letter No. Jing-Shou-Shang-11101083870 dated 2022.05.17.

148 -

2. Share categories

Share categories	Authorized capital stock
	Outstanding shares			Unissued shares	Total
	Listed	Unlisted	Total
Common share	1,618,409,286	-	1,618,409,286	1,181,590,714	2,800,000,000

The Company did not offer securities using the aggregate reporting system.

(II) List of major shareholders

March 29, 2025

Shares Name of major shareholder	Shares held (shares)	Shareholding percentage
Shinkong Co., Ltd.	84,414,691	5.21%
Newrise Investment Co., Ltd.	80,883,027	4.99%
Shin Kong Recreation Co., Ltd.	75,428,369	4.66%
Shinkong Textile Co., Ltd.	56,104,285	3.47%
Shinkong Insurance Co. Ltd.	49,162,144	3.04%
Sourcetek Co., Ltd.	39,839,255	2.46%
Gillian Investment Co., Ltd.	38,152,938	2.36%
Toray Industries, Inc.	35,629,145	2.20%
Yi Kuang Enterprise Co., Ltd.	33,673,296	2.08%
Ruixin Investment Co., Ltd.	32,106,538	1.98%

(III) Dividend policy and execution

1. Dividend policy:

The Company operates in a growing industry, and shall set dividends at levels that conform with the prevailing economic environment and the Company's goals toward sustainability and long-term growth. The board of directors shall emphasize on maintaining stability and growth of dividends when making earnings appropriation proposals. Depending on the availability of capital, dividends can be distributed in cash and (or) in shares, with cash dividends amounting to no less than 20% of total common share dividends for the current year.

Distribution of dividends and profit-sharing can be made wholly or partially in cash, which the board may propose during a meeting with more than two-thirds of the board members present and with more than half of the attending directors voting in favor,

Capital Overview

and raise the issue for discussion during the upcoming shareholders' meeting.

Annual surpluses concluded by the Company are first subject to taxation and reimbursement of previous losses, followed by a 10% provision for legal reserve. However, no further provisioning is needed when legal reserves have accumulated to the same amount as paid-up capital. Any surpluses remaining shall then be subject to provision or reversal of special reserve, as the laws or business activities may require. The remaining balance is then added to undistributed earnings, and the board shall propose a motion of earnings distribution to the shareholders' meeting for the resolution of to distribute dividends of to shareholders.

In order to continue expanding the business scale and increase profitability, while taking care of shareholders' interests, and to be in line with the Company's long-term financial planning, the dividend rate has been over 50% in the past 10 years, and the Company will stick with the dividend policy of increasing profits and sharing them with shareholders.

Execution:

The proposal of the Company's 2024 earnings distribution has been resolved by the board of directors with cash dividends of NT$0.6 per ordinary share and stock dividend NT$0.

A base date for ex-dividend will be set after the resolutions of cash dividends distribution and earnings distribution have been approved by the shareholders' meeting.

Shinkong Synthetic Fibers Corp.
Earnings Appropriation Chart
January 1 to December 31, 2024

Unit: NTD

Item	Amount
Opening undistributed earnings	7,825,110,938
Net income after tax for the period	1,705,920,294
Reversal of special reserve due to first-time adoption of TIFRS	0
Adjustment to retained earnings in relation to equity-accounted investments	14,897,675
Remeasurement of defined benefit plan recognized in retained earnings	17,932,280

Item	Amount
Disposal of equity instruments investment measured at fair value through other comprehensive income - accumulated profit or loss directly transfer to retained earnings	344,572,205
Net income after tax plus the amount of items other than net income for the period included in undistributed earnings for the year	2,083,322,454
10% provision for legal reserve	(208,332,245)
Earnings available for distribution in current period	9,700,101,147
Distributions:
Cash dividend was NT$0.60 per share.	(971,045,572)
Closing undistributed earnings	8,729,055,575

(IV) Impacts of proposed stock dividends on the company's business performance and earnings per share: Not applicable.

(V) Employee and director remuneration

Percentage or range of employee/director remuneration stated in the Articles of Incorporation:

Annual profits concluded by the Company are subject to employee remuneration of no less than 1%, which the Board of Directors may decide to distribute in cash or in shares. Employees of subsidiaries who meet certain criteria are also entitled to receive remuneration. Up to 5% of the aforementioned profit may be distributed as director remuneration at the discretion of the Board of Directors. Employees and director remuneration proposals are to be raised for resolution during shareholders' meetings. Profits must first be taken to offset against cumulative losses, if any, before the remainder can be distributed as employees/directors remuneration in the above percentages.

Basis of calculation for employee/director remuneration and share-based remunerations, and accounting treatments for any discrepancies between the amounts estimated and the amounts paid.

Capital Overview

According to the Articles of Incorporation, the Company provides for employee remuneration at no less than 1% and director remuneration at no more than 5% of the current year's pre-tax profit (before employee and director remuneration). The estimates of NT$17,377 thousand of employee remuneration and NT$0 of director remuneration in 2024 were based on the aforesaid 1% and 0% of profit before-tax respectively.

If the amount changes after the standalone financial statements are approved and announced to the public, the difference will be treated as a change in the accounting estimate and recognized as a gain or loss in the following year.

In 2025, the Board of Directors approved the distribution of the 2024 employee remuneration and director remuneration.

(1) It was resolved to distribute NT$17,377 thousand as remuneration to employees and NT$0 thousand to directors.

(2) Percentage of employee remuneration paid in shares, relative to net income and total employee remuneration shown in the stand alone financial statements: Not applicable.

Allocation of employee and director remuneration from the previous year's earnings:

The 2024 shareholders' meeting resolved to pass the 2023 remuneration of NT$6,721 thousand to employees, which is the same as the employee bonus of NT$6,721 thousand recognized in the financial statements for the year.

(VI) Shares re-purchased by the company: None.

II. The Company's Handling of Corporate Bonds:

Types of Corporate Bonds		2020 First Corporate Bonds of Shinkong Synthetic Fibers Corp.	2020 Second Corporate Bonds of Shinkong Synthetic Fibers Corp.	2021 First Corporate Bonds of Shinkong Synthetic Fibers Corp.
Issue (Processing) Date		2020/11/19	2021/01/14	2021/10/28
Face value		NT$1 million Type One	NT$1 million Type One	NT$1 million Type One
Issue and Trading Location		The Republic of China	The Republic of China	The Republic of China
Issued price		Issued in full by face value	Issued in full by face value	Issued in full by face value
Total		NT$1,500 million	NT$1,500 million	NT$2 billion
Interest Rate		Fixed interest rate of 0.58% per annum	Fixed interest rate of 0.56% per annum	Fixed interest rate of 0.54% per annum
Period		5-year maturity date: November 19, 2025	5-year maturity date: January 14, 2026	5-year maturity date: October 28, 2026
Guarantee Agency		Hua Nan Bank	Hua Nan Bank	Mega International Commercial Bank
Trustee		Bank SinoPac	Bank SinoPac	Bank SinoPac
Underwriter		KGI is the primary underwriter	KGI is the primary underwriter	KGI is the primary underwriter
Certified attorney		Attorney Hui-Chi Kuo of Yi-Cheng Law Firm	Attorney Hui-Chi Kuo of Yi-Cheng Law Firm	Attorney Hui-Chi Kuo of Yi-Cheng Law Firm
Certifying accountant		CPA Wen Hsiang Chen of Deloitte & Touche	CPA Wen Hsiang Chen of Deloitte & Touche	CPA Wen Hsiang Chen of Deloitte & Touche
Repayment		One re-payment of the principal at maturity from the issue date	One re-payment of the principal at maturity from the issue date	One re-payment of the principal at maturity from the issue date
Outstanding principal		NT$1,500 million	NT$1,500 million	NT$2 billion
Redemption or early settlement terms		None	None	None
Restriction		None	None	None
Name of credit rating agency, date of rating, results of corporate bond rating		None	None	None
With other rights	Amount of ordinary shares, overseas depositary receipts or other marketable securities converted (exchanged or	Not applicable	Not applicable	Not applicable

152 -

Capital Overview

Types of Corporate Bonds		2020 First Corporate Bonds of Shinkong Synthetic Fibers Corp.	2020 Second Corporate Bonds of Shinkong Synthetic Fibers Corp.	2021 First Corporate Bonds of Shinkong Synthetic Fibers Corp.
	subscribed) as of publication date of the annual report
	Issuance and conversion (exchange or subscription)	Not applicable	Not applicable	Not applicable
If conversion, exchange, or subscription rights are attached to the bonds, the issuance and conversion, exchange, or subscription rules, possibility of dilution of equity under the terms and conditions of issuance, and effect on shareholder equity		No material adverse effect	No material adverse effect	No material adverse effect
Name of the depository institution of the exchangeable corporate bonds		None	None	None

III. Preferred shares: None.

IV. Global depository receipts: None.

V. Employee stock options: None.

VI. New issuance of employee restricted shares: None.

VII. Names of managers having acquired employee stock options and names of employees ranking top ten in convertible shares: None.

VIII. Status of new shares issuance in connection with mergers and acquisitions: None.

IX. Financing plans and implementation:

(I) Incomplete offering or private placement of securities from previous

periods: None.

(II) Offering or private placement of securities completed in the last 3 years that have yet to achieve significant benefit: None.

154 -

Operational Highlights

Four. Operating Highlights

I. Business Activities

(I) Scope of business

Principal business activities:

I. C301010 Yarn Spinning Mills
II. C302010 Knit Fabric Mills
III. C303010 Non-woven Fabrics Mills
IV. C306010 Outerwear Knitting Mills
V. C801100 Synthetic Resin & Plastic Manufacturing
VI. C801120 Man-made Fiber Manufacturing
VII. C805050 Industrial Plastic Products Manufacturing
VIII. CB01010 Machinery and Equipment Manufacturing
IX. CC01120 Data Storage Media Manufacturing and Duplicating
X. F501060 Restaurants
XI. F104110 Wholesale of Cloths, Clothes, Shoes, Hat, Umbrella and Apparel, Clothing Accessories and Other Textile Products
XII. F204110 Retail sale of Cloths, Clothes, Shoes, Hat, Umbrella and Apparel, Clothing Accessories and Other Textile Products
XIII. F105050 Wholesale of Furniture, Bedclothes, Kitchen Equipment and Fixtures
XIV. F205040 Retail Sale of Furniture, Bedclothes, Kitchen Equipment and Fixtures
XV. F113050 Wholesale of Computing and Business Machinery Equipment
XVI. F213030 Retail sale of Computing and Business Machinery Equipment
XVII. G202010 Parking Garage Business
XVIII. H701040 Specialized Field Construction and Development
XIX. H701060 New County and Community Construction and Investment
XX. I103060 Management Consulting Services
XXI. I501010 Product Designing
XXII. J701020 Amusement Parks
XXIII. J701040 Recreational Activities grounds and Facilities
XXIV. J801010 Golf Driving Range

155 -

XXV. J801030 Athletics and Recreational Sports Stadium

XXVI. J901020 Hotels and Motels

XXVII. JE01010 Rental and Leasing Business

XXVIII. IG03010 Energy Technical Services

XXIX. ZZ99999 All business items that are not prohibited or restricted by law, except those that are subject to special approval

Business activities ratios:

Unit: NT$ thousand

Department	2023		2024
	Amount of business activities	Weight of business activities (%)	Amount of business activities	Weight of business activities (%)
Polyester Division	28,197,129	71.27%	31,382,598	68.00%
Optoelectronics Business Group	5,850,986	14.79%	6,530,399	14.15%
Financing Securities Division	5,435,582	13.74%	6,993,231	15.15%
Others	81,443	0.20%	1,242,937	2.70%

Products and services offered by the Company and new products planned:

(a) Plastics: Polyester chip, PET sheet, PET bottle and engineering plastics. Plan to develop new products, including diversified applications of TPEE, biodegradable polyacrylate, high-performance polyacrylate, environmental protection engineering plastics, and functional 3D printed materials.

(b) PET fibers products include polyester chip, polyester staple fiber, Polyester filament, polyester textured yarn and HTY. Depending on the characteristics of each product, there are different functions and different processes. New products include T2T chemical recycling and reclamation of fibers, environmental protection recycling TPEE fibers, ambient temperature environmental protection and pollution-resistant epoxy fibers, Sigma series high-function mechanical spring-loaded epoxy fibers, BIO-TPEE flexible fibers, polyacrylate HTY, sweat-proof polyacrylate fibers, polyacrylate hollow fiber HTY, and highDPF hollow fiber parent.

156 -

Operational Highlights

(c) Optronics: Prism and TAC film for TFT-LCD display, and PET film for various purposes. Plan to develop new products, including the transparent solar energy module film, the MLCC film, and the conductive coating film.
(d) Financial services: Commercial banking, leasing, securities service, life insurance agency, and non-life insurance agency services.
(e) Others: Mainly including construction contracting, real estate development, information and software services, and electronic grade hydrogen peroxide for solar related and semiconductor wafer processes.

(II) Industry overview

Current and future industry prospects

(1) PET fibers

a Bottom out of demand: The chemical fiber market is still being affected by global inflation and geopolitical disputes. The demand in the second half of 2024 is gradually increasing, and the orders for bulk products are still under the pressure of low-price exports from China. Brand customer's storing of goods is mainly on functional yarns, and the impact is limited. However, it is still necessary to pay attention to the impact of tariff wars.
b Environmental sustainability and carbon reduction: Global brands continue to pay attention to environmental protection issues and carbon reduction issues. In 2024, the Company led the market in announcing its investment in the Ambercycle chemical recycling mass production plan to implement the sustainable environmental protection and carbon reduction policy, in order to meet the global environmental policy and meet market needs.
c Continuous technology innovation: In 2024, the Company developed a variety of new technologies and

new materials to mitigate the impact of sultry environments. The Company also announced the Neolast poly-ester flexible cooperation project to create innovative products, lead market innovation, and increase the recycling of materials.

d Localized sales and local services: Establish production, sales and service locations in Vietnam, and adopt the "local to local" supply model to better satisfy the needs of brand customers and respond to changes in global trade policies. This can not only shorten the supply chain, reduce the cost of logistics, but also enhance the service speed and flexibility in the local market, and further enhance the competitiveness in the global market.

(2) Plastics

In 2025, the global demand for ester pellets for bottles was estimated at approximately 39 million metric tons, with a growth rate of approximately 5.4%. Ester pellets are mainly used in the manufacture of PE bottles for sodas, mineral water, tea and functional drinks, etc. In recent years, PBT resin has maintained its growth rate of 4-5%. PBT resin is mainly used for engineering plastics, industrial and clothing fibers.

Currently the plastic product business faces the issues with eco-friendly, national protectionism, oversupply and competition, etc. How to break through the current situation and find a new development strategy is the main course for the industry to maintain the profitability.

According to the statistics of the Ministry of Economic Affairs, Taiwan's non-alcoholic beverages have been growing for 8 consecutive years since 2015, and the output value in 2025 is expected to continue the growth trend and set another record.

In addition to the existing sheet market, films are used in food, tools, printing, electronics, and medical packaging, as

158 -

Operational Highlights

well as the continuously developed advanced electronic packaging materials and patented molded lunch box products. The Company is a HACCP and ISO22000 certified professional manufacturer; the products use PET/PET that meets the environment-friendly recycling requirements and have passed food contact certification to be closer to the consumer market and develop a circular economy.

Due to the mature development of industrial technology and the increasingly fierce market competition, brand manufacturers devote more effort in marketing and product innovation. In particular, the ESG issues raised internationally in recent years have also begun to affect the development of the PET bottle industry toward the direction of lightweight, environmental protection, recyclability, and carbon reduction.

(3) Optronics Products

Optronics products are mainly used on TFT-LCD displays, so TVs, mobile phones, notebooks, automotive displays and semiconductors are all within the application scope. The relevant industries' status is as follows:

a Polyester film: The supply is still greater than the demand in the polyester film industry. The Group's global production capacity is less than 1%, and after re-adjusting the development direction, the Group focuses on the development of optical films for automobiles, NBs, mobile phones and semiconductors and related industrial applications. With the increased applications in the consolidation of new energy and environmental protection trends, the Group also continues to develop niche products, and gradually improves the operating efficiency. Although the global supply chain adjustment and industry trends are unclear, the market is still challenging. The Group will actively respond, and focus on improving technology

159 -

competitiveness and market deployment, in order to improve competitive advantages.

b Brightness enhancement film: With the increase in global demand for energy conservation, carbon reduction, and green energy environmental protection, as well as the continuous improvement of display quality, how to effectively utilize light sources, reduce energy consumption, and meet the brightness requirements of displays has further driven the market's demand for high brightness enhancement films. As the LCD market growth slowed down in 2024, the demand for brightness enhancement films has slowed down. However, the demand for displays (TVs, notebooks, etc.) and automotive displays is still stable. As the rise of new technologies such as OLED and Micro-LED has gradually replaced some LCD applications, the Company will focus on the mid-to-high-end market and automotive applications with its advantages of technology and supply chain in the future, and continue to promote technology innovation to improve added value and expand emerging markets.

c TAC film: The proportion of mid- and large-size products in the global panel market increased in 2024, and the total shipment area grew slightly by about 3% to 5%. The supply chain has gradually stabilized due to the rise in demand for TVs, automotive displays and high-end IT panels. The total area of global polarizer shipments slightly rebounded from 520 million square meters in 2023 to 536 million square meters. Among them, the VA-Type had the highest proportion, reaching 57%. The proportion of the IPS -Type was 35%, and the proportion of SN/STN/WV types was about 8%.

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Given the uncertainties still existing in the global economy, the LCD industry showed a moderate recovery in 2024. As the inflationary pressure eased, terminal consumer demand stabilized, and AI technology is promoting the development of high-end display products, the market demand has improved compared to that in the previous year. However, the supply chain adjustment and regional economic variables still affect the overall market momentum, and the growth rate is limited.

The LCD TV sizes are getting bigger and the 8K TV is gradually becoming popular, and Chinese manufacturers have the largest production volume of polarizers. After the production capacity is gradually launched, the Group's future market share is expected to increase significantly. It is expected that the TAC film market demand in 2025 will increase. The Group will consider optimizing the combination of various membrane products, and plan the most suitable business strategy depending on product performance, in order to increase the proportion of overall shipment and make stable contributions to its operating performance.

Association between upstream, midstream, and downstream manufacturing participants

(1) Polyester industry (Relationship chart of the chemical fiber industry and plastics industry)

(2) Industry association chart for optronics - PET film and prism

Operational Highlights

(3) Industry association chart for optronics - TAC film

3. Product development tendencies and competition

(1) PET fibers

To satisfy the global market demand for high-performance and special purpose polyester fibers, functionality has become an important direction for the development of fiber products, which helps to increase the added value of products and enhance market competitiveness. As environmental problems such as global climate change and heavy rains, people's awareness of environmental protection rises, and the global demand for carbon neutrality has made environmental friendliness, comfort, and energy efficiency the key factors in market competition. Therefore, the Company actively promotes carbon reduction production, is committed to reducing the impact on the environment, and has launched energy-saving and low-carbon environment-friendly products

to reduce carbon footprint and comply with the global environmental protection trend.

(2) Plastics

(a) Polyester chips:

Due to the advantages of being transparent, fragile, non-toxic, lightweight and recyclable, PET has a lower impact on the environment, and has become the first choice for food, beverage and utensil/packaging. In recent years, the PET market is increasing by about 5% to 6% every year. However, the global supply of polyester granules is excessive, resulting in a fierce price competition, and the impact of the significant expansion of production in China is the most significant. r-PET is a product that can reduce carbon emissions and meet environmental protection requirements, and has the potential to drive demand growth in the next few years. With the rise of environmental awareness and the promotion of related policies, the r-PET market will gradually expand.

(b) Advanced materials:

The main applications are the components in electronics, home appliances, communications, and automotive industries. The sales of automotive products account for nearly half of the total sales, and most of the products are used in the new energy green industry such as electric vehicles. With the development of the new energy vehicle industry, high-end materials will expand with the growth of this field. Looking ahead to 2025, the Company will continue to promote the certification of the long-term aging test laboratory for high-performance materials to significantly shorten the time to launch products and improve market competitiveness. In

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addition, the Company will strengthen the research and development of environment-friendly, recyclable, and biodegradable materials, and expand the overseas market to effectively reduce the uncertainty brought by the geopolitical or market environment.

It is mainly used in vacuum molding, and has the advantage of low processing mold cost and diversified use. As environmental awareness rises, more and more industries have begun to replace the use of PVC or PS for packaging with PET products with environmental protection advantage. In addition, in response to the requirements of environmental protection and carbon emission, various industries have switched to r-PET materials. This not only meets the requirements of environmental protection regulations, but also effectively reduces carbon footprint and promotes the development of the circular economy.

In the high-end electronic packaging field, materials are gradually developing to meet special needs such as electrical conductivity and heat resistance to improve product differentiation and value addition. At the same time, the packaging of medical peripheral products is also improving continuously to not only improve product quality, but also to effectively increase profits.

(d) PET bottle

PET bottles have the characteristics of good transparency, light weight, air-proof, acid and alkali resistance, impact resistance and not easy to break. With low energy consumption and recyclability, it meets the requirement of eco-friendliness and is suitable for home use. Therefore, it is an excellent eco-friendly packaging

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vessel and is currently widely used for the bottling of beverages such as soda, tea, juice mineral water. To meet the goal of reducing carbon footprint, we develop r-PET for downstream customers to apply to tea beverages, fruit juice and mineral water, and cooperate with customers to develop new uses by converting other plastic bottles into PET bottles, thus promoting a green circular economy.

(3) Optronics Products

(a) PET film:

In recent years, the Group has actively invested in the development of high value-added multi-functional thin films and the research of various forward-looking high-end film materials, and is committed to developing high-function composite polyester films for optical panels, touch panels, energy saving and environmental protection, home appliance decorations, 5G components, and diverse packaging materials. We provide a variety of high-performance substrates to help downstream customers maintain their competitive advantage in the market. To meet the needs of the industrial trend and reform, we continue to develop various high-value polyester and composite substrates, in order to create a win-win situation with our customers, and become the core supplier of the vertical supply chain of the polyester industry and lead the industry's development.

In addition, the Company has incorporated corporate social responsibility into its core, and focused on developing eco-friendly high-gluten film materials, and is committed to establishing a smart, high value-added, and sustainable industry of polyester, in order to lay a foundation for future development.

(b) Prisms

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Integrating optical film products for backlight modules to meet the trend of cost reduction in the industry. Integrating other optical films into multifunctional film products is the future development trend. With the development of autonomous driving and the smart car market, the demand of the brightness enhancement film by automotive displays will continue to grow rapidly. We distinguish ourselves from our competitors by relying on our R&D and new products. Based on continuously innovative R&D technology, we produce differentiated products to meet customer needs. With the support of the Group and by combining the sales team with abundant industry sales experience and the partners that use strategies flexibly, we have been constantly developing successful new products and become one of the few manufactures in Taiwan with such product competition. We will continue to rely on our technological developments to increase the additional functions of production, and aim to vertically integrate the production of raw materials. We also expect to supply the market with cost-effective products to ensure the Group's competitive advantage.

In recent years, the crazy expansion of LCD panel plants and ultra wide polarizer production lines in mainland China has boosted the investment in the production and manufacturing of relevant key raw materials in mainland China, with polarizers and brightening films being the most significant investments. It is anticipated that the global new production capacity of polarizers will be launched in succession and will further push up the requirement of key raw materials for polarizers. Among these, the low-permeability polarized

photon protective film has received a great deal of attention. With the development of the LCD TV market, when the LCD size exceeds 50 inches, it is usually necessary to use low-damp materials to make the polarized light sheet to prevent the LCD from bending or deforming due to the wave. Therefore, the reliance on LCD TV is gradually decreasing, and it is gradually being replaced by PMMA/PET materials with low moisture. In 2024, the market share of PMMA/PET has reached nearly 50%. According to market forecast, the market share will increase to 60% in 2028.

As large-size LCD TVs now generally use low moisture permeability materials, traditional TAC manufacturers have adjusted their existing production capacity and focused on the production of ultra-thin TAC films. This has enabled the thickness of TAC to further evolve from 40um to 25um or even 20um, and makes it widely used in the manufacturing of polarizers for mobile phones.

In 2024, in addition to ensuring the stability of the TAC raw material supply chain, it is still necessary to comprehensively consider the competition between TAC and other alternative materials such as PET/PMMA, as well as the exchange rate between USD and JPY. It is hoped that end consumer demand will effectively recover in the second half of the quarter.

(III) Technological research and development

1. Research and Development Overview

The Group is committed to developing new products and enhancing profitability, and has invested considerable funds in advanced analytical instruments and testing equipment over the

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years, as well as actively cultivating professional talents and establishing an R&D center for new material and re-processing development and innovation. In addition, while fully utilizing our own resources, we also cooperate with well-known international brands to jointly develop new technologies and products, and regularly engage in technical exchanges and cooperation with domestic industry, government and academic institutions, such as the Textile Industries Association, Textile Industries Research Institute, and Industrial Technology Research Institute, and Plastic Center, in order to promote technology upgrades and industrial innovation. In addition, the Group has established close technical cooperation relationships with leading international companies such as DuPont, Toray, and Celanese to jointly develop high-performance products and improve market competitiveness.

In the future, the Group will continue to deepen its commitment to R&D, aiming to further enhance its technological capabilities and create added value for products. The focus will be on key areas such as functionality, value-added, circularity, and energy saving and environmental protection, and focus on innovative polyester granules, polycrystalline fibers, engineering plastics, and other high-performance materials, to promote industrial upgrades and realize sustainable development.

Research and Development expenses

The research and development expenses in 2024 and as of April 15, 2025 are NT$583,814 thousand and NT$149,057 thousand, respectively.

Research and Development Results in the most recent 3 years:

(1) Plastics

High-performance biodegradable polyester, TPEE for shoe materials/fibers/waterproof and breathable membranes, transparent TPEE, ultra-edge flow physics foam TPEE, cationic dyeable TPEE, bending resistant polyester, optical

film grade polyester granules, antistatic coating film, automotive insulation engineering plastics, home appliance high stability engineering plastics, and biomedical engineering plastics.

(2) PET fibers

Temperature and humidity management polyester, TPEE flexible fiber, CD-TPEE flexible fiber, environmental protection and recyclable TPEE fiber, waste fabric recycling polyester, T2T clothing chemical recyclable polyester, Sigma series high-function mechanical polyester, and BIO-TPEE flexible fiber.

(3) Optronics Products

Nano-ceramic thermal film, ultra-high luminance traditional brightness enhancement film for NB/plate/vehicle-mounted products, ultra-high luminance double-sided brightness enhancement film for NB/tablet products, full-size LCD vehicle-mounted low-cadmium quantum dot film, NB/tablet/vehicle-mounted no-cadmium quantum dot film, and full-size mini-LED uniform light film.

(IV) Long-term and Short-term Business Development Plan

Fiber Business Group

As the market competition is fierce, especially with the emergence of the companies in Mainland China and Southeast Asia, the chemical fiber industry in Taiwan is facing unprecedented challenges. Domestic peers are actively developing environment-friendly products. The competition is fierce and there is an urgent need for continuous innovation to ensure sustainable operations. The textile industry needs to focus on meeting the needs of consumers in society, politics and personal life. The Company is committed to improving the comfort of wearing and using its products, and insists on quality first. The short-term and

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long-term plans are based on the basic requirement for sustainability as follows:

(1) Short-term plans:
(a) Continuously replace machines to enhance product quality.
(b) Improve customer loyalty, and enhance product competitiveness and market share.
(c) Increase the proportion of differentiated products to raise the sales of profitable products.
(d) Parts of eco-friendly raw materials are produced by ourselves to avoid shortages.
(e) Explore domestic and overseas new customers to decentralize the market.

(2) Long-term plans:
(a) Increase the sales percentage of fiber for industrial use and home decoration.
(b) Establish strategic alliances with major brands and cooperate to develop new niche products.
(c) Promote industrial smartification to reduce manpower cost and enhance efficiency.
(d) Expand overseas markets in response to market shifts, disperse the market, and avoid the risk of high tariffs.
(e) Invest in the Vietnam market, and vertically integrate production and sales to reduce the impact of tariffs.
(f) Continue to research the feasibility of industry cooperation in response to the local supply chain demand in Southeast Asia.

Plastics Business

Because the demands of the market have developed toward diversification, the Company has also embarked on relevant plans to meet customers' demands:

(1) Short-term plans:

(a) Strengthen product development differentiation to meet the demand of customers and the market.
(b) Enhance products' added value to increase profit.
(c) Disperse the market
(d) Promote recycle of polyester chips.

(2) Long-term plans:
(a) Strengthen to develop new products to enhance the profitability.
(b) Explore new markets to enhance market share.
(c) Strengthen customer service to raise the customer's satisfaction.

Optronics Business Group

To meet the needs of the market and customers, and to counter the threat of alternative materials, the Group will implement relevant plans:

(1) Short-term plans:
(a) Keep abreast of market information in a timely manner, strengthen the layout of overseas customers and stabilize market share.
(b) Focus on cost control and reduce the total cost of products, thereby enhancing competitiveness.
(c) Continuously improve production technology, integrate surface treatment and other optical film production to provide customers with supporting products, and increase the added value of products.
(d) In terms of precision coating applications, we will work with the Group’s production needs to create the maximized effect.
(e) Carry out business and technical cooperation with leading Japanese manufacturers, make more appropriate arrangements for production capacity plans, and at the

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same time improve the Group's production technology capabilities and quality control standards.

(2) Long-term plans:
(a) Develop new bright enhancement related products, including the use of new materials and the development of process technologies.
(b) In response to future market changes, the Company has successively invested in research and development of films with functions such as energy storage, high-frequency communication, folding mobile phones, etc.
(c) Invest in the development of high-transparency and high-heat-resistant polymer materials in response to the expanding demand for mobile phones and car lenses.
(d) Develop new nanometer materials and various specialty chemical products.
(e) The Company is developing new materials in various ways to compete with competitive products on the market (PMMA, PET), and to effectively reduce the cost of key materials with unique formulations.

II. Market and Sales Overview

(I) Market analysis

Fiber Business Group

(1) The sales areas of the main products:
including Vietnam, Thailand, Hong Kong, the United States, Japan, Europe, India and Sri Lanka.

(2) Market shares:
Focus on high value-added functional products and create high value-added fiber products.

(3) Supply and demand and growth trend:
As the demand for environmental protection functional

products continues to grow, the Group continues to expand the production capacity of environmental protection functional products, and develops closed-loop perpetual-cycle environmental protection products.

(4) Strong competitive niche:

With a strong R&D team, we continuously develop differentiated and multi-functional products. By improving the technical content and innovation of products and maintaining excellent production quality, we effectively raised the technical threshold and thereby enhanced the difficulty and challenge of production. This not only improves our market competitiveness, but also ensures the high value-added and uniqueness of our products, and provides customers with more competitive solutions.

(5) Future development factors and strategies:

We will proactively respond to market changes by developing overseas locations to face the challenges of capacity overflow in China and Southeast Asia. Meanwhile, we will strengthen cooperation with raw material production equipment suppliers to seek solutions for potential raw material shortages and ensure a stable supply chain operation. To meet the growing environmental protection needs, we will continue to develop and promote sustainable environmental protection products, and strive to build a responsible and forward-looking corporate image in the global market.

Plastics Business

(1) The sales areas of the main products:

Except for domestic sales, the main sales markets are Asia, America, Europe, the Middle East and Africa, etc.

(2) Market shares:

The domestic market share for polyester chips is around 20%. The global market share for engineering plastics is around

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4%.

(3) Future supply and demand in the market and its growth:

Although the demand for solid polyester granules is about 5.0 ~ 6.0% per year, the supply will still be greater than the demand. In response to the green environmental protection and sustainability concepts, the demand for r-PET is expected to gradually increase.

The Company produces 28,000 tons of 100% r-PET in Taiwan and 210,000 tons of r-PET in Thailand. The expected annual growth rate of engineering plastics in EV applications is about 6%.

(4) Competitive niche:

The Company has been devoted to the field of plastic products for many years. With the stable quality and strong brand reputation, the Company has been widely recognized by the market. In recent years, the Company has been actively developing differentiated products, and has achieved preliminary results to lead the industry peers. In the future, we will continue to expand the production capacity of differentiated products and further enhance our market competitiveness, so as to provide more innovative and value-added products to customers.

(5) Favorable and unfavorable factors for future development and actions taken:

The quality and functions of solid polyester granules continue to improve. For example, the Company has launched energy-saving products, used a catalyst that is better for human health, and used non-toxic, environment friendly, and recyclable special materials. Therefore, its application scope is gradually expanding, and it is replacing other plastic materials gradually to become a better and environment-friendly food packaging material.

In the field of engineering plastics, with the increasing demand of electric vehicles for energy saving and environmental protection, the Company cooperates with UL to promote the establishment of a UL LTTA CTDP-certified laboratory. This not only improves the technical level, but also provides higher safety specification materials to meet future market needs. In the meantime, we have continued to promote the elastic material TPEE in recent years. The material has excellent physical plasticity and reasonable price, and is expected to replace other products in the future and become one of the mainstream materials on the market.

Optronics Business Group

(1) PET film

(A) The sales areas of the main products:

Except for the domestic sales market, it's also exported to Asian countries.

(B) Market shares:

The Group's products are mainly used on packaging, electroplating, and in industrial-grade and optical-grade markets. According to the characteristics of each production line, we produce tailor-made solutions for products of different purposes. In terms of domestic sales, products are provided by the Group, Nan Ya Plastics or import suppliers.

The optical-grade thin film market is mostly dominated by Japanese and Korean manufacturers, but with the breakthrough of domestic manufacturers' technology and R&D, many important customers have switched to using our and Nan Ya Plastics' products as their main resources of supply. Our influence and market share in the domestic market have gradually increased, and we have become the main supplier.

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In addition, the Group has successfully won the certification of important overseas customers, particularly in the development of the Japanese market. I is expected that our market share will continue to grow to further expand our international influence.

a Supply status:

In recent years, Chinese manufacturers have continued to expand their production capacity of packaging and general-purpose films, and have brought about a greater challenge for market competition. In the optical film industry, the Group's main competitors are Japanese and Korean manufacturers. However, the production quality of Chinese manufacturers has gradually improved. Although it has not yet reached the standard of optical-grade quality, Chinese film manufacturers have gradually occupied a certain market share in some low-end optical products.

b Needs and growth:

Conventional industrial applications include packaging, plating and bronzing, and the demand is still growing steadily. Especially on general industry-grade applications, the window film market has grown drastically in recent years. In addition, industry-grade release films have also shown a continuous growth.

In terms of optical-grade thin film, as the demand for the panel industry is affected by the fluctuations in the sales of large-size TVs and mobile phones, the demand for optical-grade films is not as steady as for traditional films. However, overall speaking, the optical-grade thin film market is still a market that

major film manufacturers are actively competing for, and it continues to attract the attention and investment of the industry.

(D) Competitive niche:
a Market niche

The downstream applications of the polyester film industry are wide, covering many different industrial fields, so the risk can be effective spread. Each product with different purposes belongs to a different industry, which enables the polyester film industry to reduce the impact of specific industry demand fluctuations or regional economic cycles on the market, effectively reducing operational risks and maintaining stable development.

b Product niche

The Group has been engaged in the manufacturing of thin films for more than 30 years, and has been certified by many international quality certifications such as FDA and UL over the years. Our products have been widely recognized and affirmed by the domestic and foreign markets. In addition to continuous improvement in quality, the Group is committed to the development of new products and constantly promotes product differentiation, in order to stand out in a highly competitive market. Despite the oversupply in the traditional film market, the Group's production capacity has been successfully transferred to other high-end markets, thus maintaining a stable business growth.

(E) Favorable and unfavorable factors for future development and actions taken

a Favorable factors:

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(1) The demand for industrial and optical-related industries has continued to grow. The Group has earned a good reputation in the industry, and it is easy for customers to have confidence in us.

(2) The Company is a major polyester manufacturer, and the affiliated companies cover the up, middle and down streams. Whether it is in the control of quality stability or the development of new downstream products, we can understand the market demand more easily than other companies in the industry.

(3) As Taiwan has a comprehensive optics-related industry chain, and the quality of personnel in the industry is high, many Japanese downstream industries are attracted to set up plants in Taiwan, and the demand for polyester films also increased accordingly.

b Unfavorable factors:

(1) Taiwan does not have an FTA with most countries (such as ASEAN), so the sales are at a disadvantage in these regions.

(2) Exports to film producing countries may have dumping concerns.

(3) Chinese manufacturers persisting in expanding plants substantially and it may cause serious overcapacity again in the PET film industry.

c Actions to be taken:

(1) Continue to develop markets free of anti-dumping concerns.

(2) Accelerate the development of differentiated products and the certification of high-end optical films.

(3) On the other hand, we will also keep on enhancing the quality of our existing products so as to increase customer satisfaction.

(2) Prism

(A) The sales areas of the main products:

In addition to supplying the domestic market, it is also exported to the Asia region.

(B) Market shares:

The brightness enhancement film is a key component of the LCD backlight module. With its strong R&D capabilities, abundant sales experience in the industry, strategic partners, and strong group support, the Group has successfully developed a number of innovative products. These products have been highly recognized by the backlight module manufacturers and widely used. Some of the technologies and products are unique in Taiwan. In the future, the Group will continue to be devoted to the development and promotion of new products, and continue to increase market share and further strengthen its leadership position in the industry through high-performance and high price-performance ratio products.

From the perspective of the smartphone panel market, the LCD market share will continue to shift to OLED, resulting in a continuous decline in demand. With the increasing application of Mini LED technology, the future of Mini LED is bright. In terms of small and medium-sized panels, considering the explosive growth of the electric vehicle industry and the rise of automotive intelligence and autonomous driving trends, the demand for the automotive industry is expected to remain strong. At the same time, with the development of VR, AR, and Metaverse

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technologies and the maturity of 5G networks, applications in these fields will drive the growth of the display market in the long run.

(D) Competitive niche:
a. Excellent R&D ability and strong professional management team.
b. Owned-patent, unique manufacturing technology, and diversified products.
c. Self-made and local process equipment.
d. Increase market share through end customer certification.
e. Stable quality, timely service, and highly competitive prices.
f. Rooted in Taiwan, cross-strait integration.

(E) Favorable and unfavorable factors for future development and actions taken

Favorable factors:
a. The global TFT-LCD industry is growing year by year and the active participation and promotion of both cross-strait governments has driven the flourishing development of TFT-LCD related components.
b. Self-made process equipment and the enhancement of yield.

Unfavorable factors:
a. As the LCD market is gradually saturated, the growth will slow down. At the same time, most of the manufacturers of prisms are facing increasingly severe operational difficulties, and the supply of prisms will still be greater than the demand in the short term. Due to the cost control pressure that panel manufacturers are under, and the intensified competition in the market,

the price of brightness enhancement films will continue to drop.

Actions to be taken:

a The Company is actively introducing and developing self-made optical-grade PET films jointly with strategic partners to reduce material costs, while further enhancing production technology. The Company will continue to promote technological innovation to ensure to remain a leader in the fierce market competition.

b We will continuously develop new products, follow the market trend, and keep expanding our market share with products of high performance and high price-performance ratio.

c The development of new products and the increase of products with added value will enhance the application value of the products.

(3) TAC film

(A) The sales areas of the main products:

The Group's products are widely used in LCD TVs, desktop displays, tablet PCs, notebooks, mobile phones, and automotive displays. To increase production volume, the Company will improve production efficiency through the consolidation of production lines and adjustment to the product portfolio.

The total sales volume increased from that in the previous year, but the market share of each region slightly changed. The shipment ratio of Taiwanese manufacturers dropped to 25%, mainly due to LCDs used on LCD TVs and in the IT field. The shipment ratio of Chinese manufacturers increased to 65%, mainly due to LCDs used on LCD TVs, and then in the IT field. The shipment ratio of Japanese

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manufacturers maintained at 10%, mainly due to LCDs used on LCD TVs and automotive displays.

Looking forward, it is expected that 60um TAC will still be the main demand for LCD TVs. The Group’s goal is to increase the sales of 40um TAC products to increase gross profits, and to conduct strategic sales in different regional markets based on existing production capacity.

(B) Market shares:

In view of the significant increase in the influence of the Chinese market, in addition to continuing to expand the Chinese market, the Group also actively strive to cooperate with leading Japanese manufacturers to stabilize production capacity and improve production technology. The Company will also develop new customers in other markets to further increase its market share. In 2024, the global demand for polariton TAC protective films is about 646 million square meters, and the Group's market share in the global market is about 9%. In the future, the Group will continue to strengthen its market deployment, strive for a greater market share, and further strengthen its global competitiveness.

It is estimated that global LCD panel manufacturers will expand their production capacity by 2025 to meet the demand for low vapor permeable optical grade film for large-size LCD TVs. As the low vapor permeable material becomes the standard configuration in LCD TV polarizers, it will have an impact on the market share of traditional TAC in LCD TV polarizers. In response to this change, the Group has not only continued to establish a solid supply and demand relationship with its existing customers, but also actively responded to the growth momentum of

China's LCD panel market. The Company actively cooperates with existing customers to develop smaller size LCD TVs for the Chinese market. Under the trend of low moisture permeability materials, the Company hopes to find a market segment and market positioning that TacBright Optronics maintains its competitiveness in the new market landscape.

(D) Competitive niche

The Group's management team and core technical team have manufacturing and sales experience in optical films, precision coating technology and TFT-LCD components and modules, and can immediately meet market demand. The Group also cooperates with leading Japanese manufacturers to increase the Group's production technology and quality management level indirectly. Meanwhile, through the manufacturing technology with unique formula, process integration and optimization, and application for self-owned patents, the Group has passed the certification of end-customers, and continues to strengthen our services in the four aspects of price, quality, delivery time, and service, in order to develop and increase market share. The Group is committed to rooting in Taiwan, integrating the cross-strait efforts, and move towards internationalization.

(E) Favorable and unfavorable factors for future development and actions taken

Favorable factors: The global TFT-LCD industry grows year by year, and the size of sales models is expected to grow slightly. The total shipment area of panels will grow by about 3% to 5%. The annual demand for polarizers is expected to grow slightly from last year's 540 million square meters to 560 million square meters, and the growth

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energy is mainly from the Chinese market. As new local polarizer manufacturers have successively started production, the market supply will be expanded further.

The global market share of the Group in 2024 is about 9%, of which polarizers account for 3% and polarizer compensation films account for 6%. The new polarizer production capacity mentioned above is concentrated in the Chinese market, and is targeted to supply the newly expanded LCD panel plants in China. Based on its price advantage, the Group will contribute to the growth of upstream sectors, and enhance market competitiveness. Therefore, the Group will actively grasp market growth opportunities, and expand market share through real-time response and strategic deployment to ensure its competitive advantage in the global polarizer industry.

Unfavorable factors: Complex uncertainties such as global inflation, the Russia-Ukraine conflict, the Israel-Arab conflict, the China-US trade war, and the exchange rate of USD against JPY.

Actions to be taken:

a The Group is the only supplier in Taiwan with the ability to produce self-made TAC membranes, and is currently actively negotiating long-term supply contracts with raw material suppliers to stabilize the supply of raw materials.

b We are continuously expanding and enhancing market share, and continuously increasing production capacity and yield with existing equipment, with the goal of full production and full sales to effectively reducing costs and attract existing customers and stabilizing shipment quantity.

c We are also developing optical films that combine high temperature resistance and low moisture permeability to increase product added value and compete with PMMA/PET to enhance product application value.

(II) The important purposes and production process for the main products

PET fibers

(1) Main products and purposes

Polyester chips: Spinning. Polyester filaments: Garment, home furnishings, industrial use. Polyester staple fibers: Clothing fabric, non-wovens, filling.

(2) Production processes of main products

Plastics

(1) Main product applications

Polyester chips: mainly for beverage bottles (cups) including soda, mineral water, tea, juice, PET sheets, etc.

Engineering plastics: engineering plastics injection molding for the parts of electric machines, electronics and automobiles, and home appliance components.

PBT & TPEE Resin: Downstream processing is widely used in 3C/vehicle/household/leisure industry products.

PET sheets: they are applied for packaging products on food and printing, etc. For electronics, they are mainly used for trays for electronic parts. The processing method is vacuum thermoforming where a tray or a packaging box is shaped

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according to the mold pattern. Recently, it has been actively developed for the packaging of medical peripheral products.

PET bottles: mainly for the packaging of soda, juice, soy sauce, plant oils, cosmetics, cleaners, and general foods.

(2) Production processes of main products

Polyester chips

Engineering plastics

PBT & TPEE Resin

PBT

A-PET sheet

PET bottle

Optronics Products

(1) Prism

a Main product applications

Operational Highlights

These are mainly applied for LCD backlight modules, which can concentrate the scattered light to the front side and achieve the purpose of enhancing the front brightness. And the unused light outside the viewing angle is recycled by the reflection of light to reduce the loss. The large size is used in LCD TVs, notebooks, and monitors. The small size is used in mobile phones, digital cameras, video cameras, PDAs, tablets, and communication and consumer electronics.

b Production processes of main products

(2) TAC film

a Main product applications

TAC can be used as a protective film for the polarizer in an LCD display. Many optical characteristics have since been added to TAC films to increase their value and significance in the production of polarizers. Examples of such improvements include WV film, CV film, Transfer film, and photographic film developed by Fuji Film.

Except for its application in LCDs, TAC film can also be used in sunglasses, photographic equipment, filters, anti-glare goggles, car navigators, other polarizing microscopes, and special medical glasses.

b Production processes of main products

(3) PET film

a Main product applications

The product has broad applications including: wires and cables, electrical insulation, transfer printing, embossing, conduction bands, release agents, flexible printed circuits, phototypesetting, window films, lamination films, glitter powder, electroplating, labels, decorations, optical base films, protective films, release films, general food packaging (FDA approved), sealing tape, insulation tape, metallic yarn, label films, drum pieces, antistatic films, color art, lamination, printing, etc.

Operational Highlights

b Production processes of main products

(4) Other films

a Main product applications

It is applied to displays and touch modules, can effectively reduce defects such as foreign objects, scratches, or pollution caused by environmental or equipment factors during the production process, and improve the overall yield rate.

b Production processes of main products

(III) Supply and demand of key materials:

Product category	Main materials	Primary provider	Secondary provider
PET fibers	PTA, EG	Taiwan
Plastics	PTA, EG, BDO	Taiwan	Japan, China, Korea
Prisms	PET film	Japan, Taiwan	Korea
PET films	Polyester chips	Taiwan
TAC film	Triacetate cellulose	USA, China	Japan

(IV) Names of trade partners representing more than 10% of the total purchases (sales) in the last two years

Main suppliers in the last two years

Unit: NTD thousands

	2023				2024
Item	Name	Amount	As a percentage of annual net purchases (%)	Relationship with the issuer	Name	Amount	As a percentage of annual net purchases (%)	Relationship with the issuer
1	A Company	7,102,371	27.59	Not related party	A Company	6,950,889	24.52	Not related party
2	B Company	5,852,329	22.73	Not related party	B Company	6,809,146	24.01	Not related party
	Others	12,789,353	49.68		Others	14,593,332	51.47
	Net Purchases	25,744,053	100.00		Net Purchases	28,353,367	100.00

Main customers in the last two years

Unit: NTD thousands

	2023				2024
Item	Name	Amount	As a percentage of annual net purchases (%)	Relationship with the issuer	Name	Amount	As a percentage of annual net purchases (%)	Relationship with the issuer
1	A Company	3,797,837	11.32	Not related party	A Company	3,802,853	10.21	Not related party
2	B Company	3,687,854	10.99	Not related party
	Others	26,059,697	77.69		Others	33,429,892	89.79
	Net Sales	33,545,388	100.00		Net Sales	37,232,745	100.00

Operational Highlights

III. Human Resources

Employee information in the last 2 years up until the publication date of this annual report

Year		2023	2024	As of April 15, 2025
Number of employees	Staff	3,214	4,394	4,346
	Local Operators	356	392	396
	Foreign Workers	666	1,130	1,131
	Total	4,236	5,916	5,873
Average ages (excluding foreign workers)		41.4	44.0	44.3
Average years of services (excluding foreign worker)		11.6	16.0	16.2
Education distribution ratio	Ph.D.	0.21%	0.37%	0.29%
	Master's	5.97%	5.39%	5.62%
	College & University	64.94%	61.12%	60.96%
	Senior High School	24.18%	29.11%	29.10%
	Junior High School and below	4.70%	4.01%	4.03%

IV. Environmental Protection Expenditures

(I) Losses and fines incurred due to pollution of the environment in the last year up until the publication date of this annual report

Item\Year	2024	2025 up to the date of printing
Compensation object or disciplinary unit	Department of Environmental Protection, Taiyuan City Government	None
Reference number of the penalty document	(1) Fu-Huan-Hua-Zi No. 1130241431
(2) Fu-Huan-Ji-Zi No. 1130369247
Violation of laws and regulations	(1) Paragraph 1, Article 27 of the Regulations Governing the Toxic and Concerned Chemical Substances in Food.
(2) Paragraph 2, Article 24 of the Air Pollution Control Act.

Year Item	2024	2025 up to the date of printing
Pollution status (type and degree)	(1) The workplace and facilities are not marked with warning signs and pollution prevention-related information in accordance with the regulations. (2) The air pollution control equipment was not operated in accordance with the permit content.
Compensation amount or penalty amount	A total of NT$130,000.
Other loss	None

(II) Responsive strategies and possible expenses

The Company continues to adhere to its formulated environmental policy of "legal compliance, energy conservation, waste reduction, pollution prevention and continuous improvement", and urges all departments to conduct research and development, carry out process control and improvement of prevention and control facilities, confirm the normal operation of prevention and control equipment, prevent abnormalities, and gradually improve environmental protection performance. In response to the requirements of product innovation and quality enhancement, we have introduced intelligent process control to improve cost, quality and efficiency, pursued the highest guiding principle of net zero emissions, and maintain a clean and comfortable living environment. The Company has made the following improvements to reduce waste gas, energy saving and carbon reduction, and recycling of waste materials: waste gas reduction, energy saving and carbon reduction, waste water recycling, noise prevention, and water quality control. The Company has also continued to add new improvements to environmental engineering, including new purchases of nitrogen re-arrangement nitrogen machines, air compressor, gas blower, cooling towers, hanging air-conditioning boxes, refrigerant water compressor, and wastewater treatment devices. The Company has also added new upgrades and improvements to energy saving, including

Operational Highlights

smart electric gauge, efficiency monitoring equipment, and oxygen wastewater treatment system. The budget for the new improvements is estimated at NTD 124 million.

V. Labor Relations

(I) Availability and execution of employee welfare, education, training and retirement policies: elaborate on the agreement between the employer and employees, and protection of employees' rights

Employee welfare measures:

(1) The Company formed an employee welfare committee on April 20, 1982. The committee carries out regular discussions of events and monitors income and expenditures, as well as organizing employee welfare and labor events. The Company’s welfare measures include: employee wedding and funeral allowances, group accident insurance, periodical domestic trips, all types of ball games and competitions, plant activities, year-end meals and lucky draws, allowances for all types of group activities, money or gifts for 3 major festivals, money or gifts for birthdays, meal allowance, and preferences from contracted suppliers for employees. In addition to the various holidays provided by laws, the Company also has many holidays that are superior than the statutory ones, including maternity leave, childbirth examination leave, recreational health leave (those who have passed the trial period are entitled to), and special leave after one month of work.

(2) We offer scholarships to the children of our employees as an encouragement for them to excel at school. In order to look after the children whose parents unfortunately lost their lives at work, as well as those who are less fortunate, and those who encounter a sudden change in the family (or a major disaster), we have specially established measures to help their children

receive an education at school.

(3) All employees of the Company join the labor insurance, national health insurance and occupational accident insurance. The Company takes out group insurance for managerial officers and the insurance premium is fully borne by the Company.

(4) Complimentary dormitories are provided at plants for employees from remote areas.

(5) Transportation is provided for employees who live in remote areas.

Pension system:

(1) The “Labor Pension Fund Supervisory Committee” was established on December 25, 1986, overseeing affairs relating to retirement plans. If the employee is eligible for the old pension contribution rate stipulated in the “Labor Standards Law”, the Shinkong Synthetic Fibers Corporation, Pan Asian Plastics Industry Corporation, and Shinkong Engineering contribute an amount equal to 9%, 6% and 6% of the salary paid each month to their respective pension funds (the Funds), which are administered by the Labor Pension Fund Supervisory Committee (the Committee) and deposited in the Committee’s name in the Bank of Taiwan. A total of 4 meetings were held by the Labor Pension Fund Supervisory Committee in 2024. For those who were eligible for the old system, the Company paid NT$66,856,145 to a total of 31 employees.

(2) The new pension system became effective as of July 1, 2005. The pensions applicable to employees in the new "Labor Pension Regulations" will be paid according to the monthly salary scale of employees, and 6% will be paid monthly. In the personal accounts of the employees of the Labor Insurance Bureau, an employee may voluntarily withdraw their pension

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Operational Highlights

and withholds it in their individual pension account of the Labor Insurance Bureau.

(3) The Company fully complies with the regulations specified in the Labor Standards Act and Labor Pension Regulations and has established retirement measures for our employees including employment retirement qualification, pension application method, standards for pension payment, as well as the payment. The Company specifies that eligible employees must be those who have served the Company for 15 years or more and are 55 years of age or over, those who have served the Company for 25 years or more, those who have served the Company for 10 years or more and are 60 years of age or over, or those who retire using the project retirement (meaning that during the implementation of the project retirement, the age plus service has reached 60 years with the consent of the company).

Employee education and training:

Due to globalization and the market's continuous evolution, enterprises are faced with increasingly complex competition and challenges. In response to this trend, the Company is actively promoting a systematic talent cultivation mechanism through diversified courses covering industrial trends, environmental safety and health, research and development, professional skills, ESG, artificial intelligence (AI), and language learning, in order to improve the professional skills of employees, strengthen the organization's competitive advantages and innovative capabilities, and promote personal career development and corporate sustainable operation. For the succession planning and cultivation for the key management, we continuously arrange courses and lectures on corporate management skills, industry analysis, competence for new technology, and competence for the senior management (visionary leadership, cross-team collaboration, developing others, decision-making, strategic thinking, business

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acumen, etc.).

The Company has been cultivating employees for many years. Since its establishment for more than 10 years, the "Shin Kong Fibers Enterprise University" is committed to promoting the education concept of lifelong learning and cooperative learning, and continues to optimize the systematic learning mechanism. With the development of digital technology in recent years, the Company has introduced a cultivation system for the new generation of talents. This system not only improves the efficiency of training and performance evaluation, but also provides abundant internal and external learning resources, so that employees can improve their personal knowledge and skills through a flexible digital learning mode to adapt to the rapid-changing market demand.

To further deepen the development of talents, the Company has established a mid- and long-term talent cultivation plan based on the "Talent Cultivation System" to integrate physical and digital learning resources comprehensively, and continues to establish a complete learning map to solve the problem of insufficient industrial talents. At the same time, the Company is committed to attracting and cultivating potential new-generation talents to ensure that they can quickly integrate into the organizational culture and acquire professional competence. In addition, the Company will continue to focus on the training of management and their successors, and strengthen their leadership skills and decision-making capabilities to improve competitive advantages.

Agreement between labor and management

The Company follows the objectives and spirit of the international human rights principles set forth in the "Universal Declaration of Human Rights," the "United Nations Global Compact," the "United Nations Guiding Principles on Business and Human Rights" and the "International Labor Organization" as well as

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Operational Highlights

local laws and regulations associated with labor and gender equality in the workplace. At SSFC, we formulate and disclose the Company's human rights protection policies and specific management practices with reference to the relevant provisions.

The Company promises the following measures to protect human rights:

Employment must be on a voluntary basis.
Prohibition of any form of forced labor.
Prohibition of child labor.
Female employee protection.
Ensuring that employee salaries are not lower than the statutory minimum wage and providing benefits.
Ensuring that employees have a minimum of 24 hours of rest for every 6 days of work.
Respecting privacy rights, eliminating workplace violence, avoiding harassment and illegal discrimination including any form of harassment, infringement, corporal punishment, verbal insults and mental oppression, and providing effective and appropriate appeal channels and handling mechanisms.
Providing employees with equal employment and career development opportunities, without differentiation or any form of discrimination based on race, class, language, ideology, religion, party, place of origin, gender, sexual orientation, age, marriage, appearance, facial features, physical or mental disability, zodiac sign, blood type, previous union membership or other status protected by applicable laws, and striving to create a dignified, safe and equal work environment
The Company abides by labor laws and respects employees' right to freedom of association and collective bargaining according to law. The Company maintains a smooth communication channel with employees and is committed to
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building a harmonious workplace for labor management relations

Based on its sustainable development and strengthening of corporate social responsibility, the Company promotes company policies and legal concepts covering human rights policies, sexual harassment prevention, anti-discrimination, anti-slavery, anti-forced labor, anti-child labor, ethical management, and business ethics to employees every year. In 2024, the Company conducted the training course in “infringement in the workplace” to supervisors at section level or above in response to the change in laws and regulations. 1,855 people (2,414.9 hours) of employees have completed the training on corporate social responsibility, legal governance concept and corporate sustainability.
The Company has signed a “bargaining agreement” with the union. This agreement mainly covers issues such as leave of absence, performance appraisal and salary adjustment. Representative meetings, supervisory board meeting are held by the trade union and regular labor and management meetings, welfare committee meetings are organized to build the communication channel and consultation mechanism between the labor and management.
Various employee rights protection measures:

The Company makes adjustments and resolutions to determine the employees’ year end bonus and managerial staff’s performance bonus based on the operation performance of the year. This policy is also prescribed in the collective bargaining agreement and managerial staff performance bonus policy signed with the union, as a means to encourage our employees to work together to achieve business goals.

(II) Actual or estimated losses arising as a result of employment disputes in the last year up until the publication date of this annual report, and any

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Operational Highlights

response measures taken.

The Company has good labor relationship and there was no loss due to labor disputes in 2024.
The estimated amount that may occur at present and in the future and the actions taken: None.

VI. Information security Management

(I) The company's information security risk management framework, information security policy, specific management plan and resources invested in information security management.

Information security risk management framework:

In accordance with relevant regulatory requirements of the competent authority and in order to strengthen the protection and management of listed companies' information security, The Company has established an Information Security Committee on November 7, 2022 to plan, monitor and execute information security management operations for the information security system. The Information Security Committee is a functional organization under the President, with the head of the Information Division serving as the Chief Information Security Officer. Other committee members are also the staff of the Information Division. The Company has established and followed relevant information security policies and established an information security organization in accordance with ISO 27001. There are 10 team members in total. Their main responsibilities include information security policy formulation, promotion, education and training, and convening of meetings to ensure continuous promotion and enhancement of information security protection. In addition, the sales staff have obtained the ISO 27001: 2022 administrator license, which is valid until October 31, 2025.

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Information security Policy:

The Company's information security objectives are to ensure the confidentiality, integrity, availability and compliance of the internal core systems, and to define and measure the quantification indicators of information security performance for various levels and functions, so as to confirm the implementation status of the information security management system and whether the information security objectives are achieved.

(1) Confidentiality: The disclosure of any sensitive information of the Company on the internet should be avoided.

(2) Integrity: The Company's sensitive information (such as financial information, personnel information and system information) should be correct.

(3) Availability: It should be ensured that the important information held by the Company is actually backed up.

(4) Compliance: Taiwan's relevant laws (such as the Personal Data Protection Ac, the Trade Secrets Act and intellectual property rights related laws) should be followed to avoid infringement of the rights and interests of the Company or third-party manufacturers.

Specific management plans and resources invested in information security management:

The implementation of the information security management

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Operational Highlights

system should be based on the looping mode of Plan, Do, Check and Action to ensure the effectiveness and continuity of information security in a cyclical and step-by-step spirit:

(1) Internal assessment and review shall be conducted at least once a year, taking into account the latest status of laws and regulations, technological changes, expectations of interested parties, business activities, internal management and resources to ensure the effectiveness of information security practices.

In addition, in order to keep the information security policy abreast of the times, the Company makes arrangements with external evaluation agencies or external professional teams for evaluation and review from time to time.

(2) Amendments shall be made according to the review results, and shall become effective after the publication by the President.
(3) After the information security policy is formulated or revised, stakeholders such as employees, suppliers, customers, external auditors, etc., should be informed in an appropriate manner (ex. E-mail or website announcement or hard copy).

(II) In the most recent year and up to the date of publication of the annual report, the losses, possible impacts and countermeasures of major information security incidents.

In the face of the rapid development of the industry and technology, the Company has been trying its best to keep up with the trend. Since obtaining the ISO 27001 information security certification for the computer room, network and ERP system in 2019, the Company has been regularly audited by external certification units every year, and information security protection has been updated and strengthened year by year. The Company was attacked by hackers on February 27, 2025, and its information system was encrypted. The emergency recovery procedure was activated. The information system has been restored to

normal, and the Company did not suffer significant impact and losses.

VII. Important Contracts

Nature of the Contract	Client	Contract start/end date	Main contents	Restriction
Industry-academia collaboration	National Central University	2023.07.01~2025.06.30	Research plan to utilize high-efficiency heat-resistant plastic hydrolytic enzymes to decompose and recycle PET and PLA.	None
Government subsidy program	Department of Industrial Technology, Ministry of Economic Affairs	2023.01.01~2025.12.31	rTPEE copolymerization and depolymerization and permeable films technology development plan	None
Government subsidy program	Bureau of Energy, Ministry of Economic Affairs	2023.11.01~2025.10.31	High-efficiency transparent back sheet material development plan	None
Engineering Service Contract	Dakim Environmental Protection Enterprise Co., Ltd.	2025.01.01~2025.12.31	General Business Waste Clearance Contract	None

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Review of financial position, business performance, and risk issues

Five. Review of financial position, business performance, and risk issues

I. Analysis of Financial Status

Comparative analysis of consolidated financial position

Unit: NTD thousands

Year Item	2024	2023	Difference
			Amount	%
Current assets	146,262,124	125,941,330	20,320,794	16.14
Non-current assets	68,029,821	69,102,198	(1,072,377)	(1.55)
Total assets	214,291,945	195,043,528	19,248,417	9.87
Current liabilities	135,661,949	123,432,958	12,228,991	9.91
Non-current liabilities	29,003,386	24,765,491	4,237,895	17.11
Total liabilities	164,665,335	148,198,449	16,466,886	11.11
Shares	16,184,093	16,184,093	-	-
Capital reserve	2,165,692	1,963,101	202,591	10.32
Retained earnings	14,860,762	13,667,565	1,193,197	8.73
Other equity items	4,903,427	4,566,158	337,269	7.39
Treasury stock	(29,834)	(29,834)	-	-
Non-controlling equity	11,542,470	10,493,996	1,048,474	9.99
Total shareholders' equity	49,626,610	46,845,079	2,781,531	5.94
Explanation to significant current variations amounting to NT$10 million or 20% or above in the later period: None

Comparative analysis of standalone financial position
Unit: NTD thousands

Year Item	2024	2023	Difference
			Amount	%
Current assets	7,788,335	8,067,900	(279,565)	(3.47)
Non-current assets	48,487,345	45,848,256	2,639,089	5.76
Total assets	56,275,680	53,916,156	2,359,524	4.38
Current liabilities	7,885,393	6,962,819	922,574	13.25
Non-current liabilities	10,306,147	10,602,254	(296,107)	(2.79)
Total liabilities	18,191,540	17,565,073	626,467	3.57
Shares	16,184,093	16,184,093	-	-
Capital reserve	2,165,692	1,963,101	202,591	10.32
Retained earnings	14,860,762	13,667,565	1,193,197	8.73
Other equity items	4,903,427	4,566,158	337,269	7.39
Treasury stock	(29,834)	(29,834)	-	-
Total shareholders' equity	38,084,140	36,351,083	1,733,057	4.77
Explanation to significant current variations amounting to NT$10 million or 20% or above in the later period: None

Review of financial position, business performance, and risk issues

II. Analysis of Operation Results

Consolidated financial performance analysis for the previous 2 years

Unit: NTD thousands

Item\Year	2024	2023	Increase (Decrease) Amount	Variation %
Total revenues	46,149,165	39,565,140	6,584,025	16.64
Total expenses	43,026,906	38,064,309	4,962,597	13.04
Net profit (loss) before tax of continuing businesses	3,122,259	1,500,831	1,621,428	108.04
Income tax benefits (expenses)	(699,685)	(331,257)	(368,428)	111.22
Continuing operations - Net income	2,422,574	1,169,574	1,253,000	107.13
Net profit after tax of discontinued businesses	-	-	-	-
Current net income	2,422,574	1,169,574	1,253,000	107.13
Other comprehensive income	783,290	1,780,375	(997,085)	(56.00)
Total comprehensive income	3,205,864	2,949,949	255,915	8.68

Explanation to material variations:

Increase in after-tax income from continuing operations: Mainly due to the increase in the net amount of sales, leases, and disposal of investment property of polyacry and the financial securities business department in the current period, as well as the disposal of property.
Increase in income tax expense: Mainly due to the increase in taxable income for the period, leading to an increase in income tax expense.
Increase in after-tax income from continuing operations: Mainly due to the increase in the net amount of sales, leases, and disposal of investment property of polyacry and the financial securities business department in the current period, as well as the disposal of property.
Increase in net income: Mainly due to an increase in the pre-tax profit of continuing operations.
Decrease in other comprehensive income: Mainly due to a decrease in the

valuation of equity instruments measured at fair value through other comprehensive income.

Standalone financial performance analysis for the previous 2 years
Unit: NTD thousands

Item\Year	2024	2023	Increase (Decrease) Amount	Variation %
Net operating income	23,038,688	21,818,314	1,220,374	5.59
Operating costs	(21,461,692)	(20,924,491)	(537,201)	2.57
Gross profit	1,576,996	893,823	683,173	76.43
Unrealized gain on transactions with subsidiaries	(30,760)	(15,716)	(15,044)	95.72
Realized gain on transactions with subsidiaries	30,312	71,354	(41,042)	(57.52)
Realized gross profits	1,576,548	949,461	627,087	66.05
Operating expenses	(1,342,184)	(1,036,834)	(305,350)	29.45
Net operating income (loss)	234,364	(87,373)	321,737	(368.23)
Non-operating income and expenses	1,482,577	750,697	731,880	97.49
Pre-tax profit	1,716,941	663,324	1,053,617	158.84
Income tax benefits (expenses)	(11,021)	101,086	(112,107)	(110.90)
Net profit for the year	1,705,920	764,410	941,510	123.17
Other comprehensive profit or loss for the year	714,671	1,710,148	(995,477)	(58.21)
Total comprehensive profit or loss for the year	2,420,591	2,474,558	(53,967)	(2.18)

Explanation to material variations:
1. Increase in gross profits: Mainly due to the increase in operating income and gross profit rate for the period.
2. Increase in unrealized gain from subsidiaries: Mainly due to the unrealized gain (loss) on the sales transactions with subsidiaries.
3. Decrease in realized gain with subsidiaries: Mainly due to the realized gain (loss) on the sales transactions with subsidiaries.
4. Increase in realized gross profit: Mainly due to the increase in operating income and gross profit rate for the period.
5. Increase in operating expenses: Mainly due to the increase in operating income for the period, leading to an increase in promotion expenses.
6. Increase in operating profit: Mainly due to the increase in operating income and gross profit rate for the period.
7. Increase in non-operating income and expenses: mainly due to the increase in the share of profit or loss of subsidiaries and affiliated companies using the equity method.

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Review of financial position, business performance, and risk issues

Increase in pre-tax net profit: Mainly due to the increase in operating income and gross profit rate, as well as the increase in the share of profit and loss of subsidiaries and associates accounted for using the equity method for the period.
Increase inf income tax expense: Mainly due to the increase in the profit before tax of continuing operations, which resulted in an increase in current income tax expense.
Increase in non-operating income and expenses: Mainly due to the increase in operating income and gross profit rate, as well as the increase in the share of profit and loss of subsidiaries and associates accounted for using the equity method for the period.
Decrease in other comprehensive income: Mainly due to the decrease in unrealized valuation benefits of equity instruments measured at fair value through other comprehensive income.
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III. Analysis of Cash Flow

Cash flow analysis

Unit: NTD thousands

Opening cash balance as of December 31 2024	Projected yearly net cash flow from operating activities②	Estimated annual cash outflow③	Estimated cash (deficit) balance ①+②-③	Remedies for cash deficits
				Investment plans	Financing plans
9,916,370	(3,000,000)	(3,400,000)	10,316,370	-	-
1. Analysis of cash flow for the year: (1) Operating activities: The estimated operating activities are presented as net cash outflow. (2) Investing activities: The estimated investing activities are presented as net cash outflow. (3) Financing activities: The estimated financing activities are presented as cash inflow. 2. Improvements for lack of liquidity: None. 3. Liquidity analysis for the next year: Cash flow from operating, investing, and financing activities should remain normal and continue to support the Company's operations.

IV. Major Capital Expenditure Items

(I) Major capital expenditures and sources of capital

Unit: NTD thousands

Planned Projects	Actual or estimated source of capital	Actual or estimated completion date	Total fund needed	Actual or expected uses of capital
				2024	2025	2026
Invested in the 1st phase development of “Youth Venture Village and Smart Manufacturing Park”.	50% loan and 50% own funds	2027.05.19	5,600,000	48,065	1,050,000	2,500,000

(II) Expected profits

In 2022, the Group signed a development contract with the Taoyuan City Government for the investment in the development of “Youth Venture Village and Smart Manufacturing Park.” A subsidiary company, Shinkong Youth Co., Ltd. has been established to carry out relevant business operations. The development of the park is expected to

Review of financial position, business performance, and risk issues

proceed in two phases. The first phase includes the development of the Youth Venture Village (including workshops), the installation of basic infrastructure pipelines, the construction of some public facilities in the park (such as landscape detention ponds, roads, etc.), and smart logistics warehousing. The expected completion date is May 19, 2027. The second phase includes the construction of smart manufacturing production plants and other public facilities in the park. The expected completion date is May 19, 2030.

V. Investment Policy in the Last Year, Main Causes for Profits or Losses, Improvement Plans and the Investment Plans for the Coming Year

The goals of the Company's investment policy are diversified businesses, expansion of business exposure, reduction of the Group's operation risks, and maintaining profitability over the long term. The investments objects may exhibit fluctuations in profitability due to changes in the industrial cycle, but the Company considers investment risks to be manageable given the amount committed. For the operating results and related information of the Company's reinvestments in 2024, please refer to the Consolidated Business Report of Affiliated Enterprises.

The investment focus and development plan for this year and next year are the domestic development of the Youth Venture Village and Smart Manufacturing Park.

VI. Analysis of Risk Management

Analysis of the following issues in the last year up until the publication date of this annual report:

(I) Impact of interest rate, exchange rate, and inflation on the Company's earnings, and response measures:

Impacts of interest rate variation and response measures

The Company's interest rate risks are mainly associated with

long-term and short-term liabilities that arise as a result of business activities. To minimize the risk of interest rate changes, the Company not only relies on cash inflow from operating activities as the main source of capital, but also makes flexible adjustments to its long-term and short-term financing arrangements depending on interest rate changes, and in doing so reduces the impact on profit and loss.

Impacts of exchange rate variation and response measures

The Company generates more than half of its operating revenues from export sales, while some raw material procurement and capital expenditure are denominated in foreign currencies. Therefore, other than natural hedging for exchange rate risk, the Company collects and grasps information on foreign exchange market changes at any time, and timely utilizes derivative financial instruments to reduce exchange rate risk.

Impacts of inflation and response measures

In recent years, due to factors such as the US-China trade war, geopolitical conflicts, and climate change, raw material prices have fluctuated, and the increase in uncertainties may further affect the Company's operations. Thus, the Company will continue to secure the source of its raw materials and improve production procedures in a manner that minimizes the adverse impacts of price fluctuation on operations.

(II) Policies on high-risk and highly leveraged investments, loans to third parties, endorsements/guarantees, and trading of derivatives. Describe the main causes of profit or loss incurred and future response measures:

The Company was never involved in high-risk or highly leveraged investment.
Loans to third parties are arranged according to the Company's Third Party Lending Procedures.
All endorsements and guarantees are provided for subsidiaries
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Review of financial position, business performance, and risk issues

and arranged according to the Company's Endorsement and Guarantee Procedures.

The Company's derivative transactions mostly comprise short positions in forward exchange contracts and options. These derivatives are used mainly to fix the rate of exchange between foreign currencies and NTD, which the Company is exposed to as a result of export sales. All of the above transactions are executed according to the "Asset Acquisition and Disposal Procedures", with hedging transactions undertaken to mitigate risk exposures.

(III) Future research and development plans and its estimated spending:

In the future, the Group will continue to work the development of new products to proactively enhance its technology level and create added value for products. At the same time, the focus of R&D will be "energy saving and carbon reduction," "Circular regeneration," and "high function/high value," in order to respond to the industrial trend and promote innovation and sustainable development. The future R&D plan will include various high-functional TPEE chips, recycled renewal/bio polyester granules, multifunctional polyester fibers, recyclable polyester fibers and a variety of functional films for display applications. To realize this vision, the Group plans to invest NT$300 million in R&D to accelerate the development of technology innovation and market applications.

(IV) The impact of changes of the important domestic and international policies and laws on the Company's financial operation, and the corresponding measures:

The Group pays attention to and grasps the information of the policies, laws, and regulations that may affect the Group's operations, and adjusts the relevant internal systems and operations accordingly. For example, the United Nations signed the "Paris Agreement" in 104 to control the rise of the earth's temperature, and reduce greenhouse

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gas emissions, in the hope of jointly curbing the trend of global warming. As a result, countries and enterprises around the world are also paying attention to this issue, and have begun to formulate related ordinances and schedules to reduce carbon emissions. like the government's carbon fee declaration and formal expropriation of 2026, the Group does not attach importance to this issue. It has set the net zero emission target by 2050, and will discuss with upstream and downstream companies and customers how to reduce carbon emissions, optimize energy efficiency, expand low-carbon and circular economy products, and gradually introduce renewable energy. Meanwhile, the Company continues to work with the government and industry associations to propose voluntary reduction plans, and strive for a more favorable carbon fee calculation method to reduce possible costs and burdens.

In response to the recent tariff changes in the US, the Group will evaluate the impact of tariff decisions on each region, adjust the US market strategy, amend product export deployment in a timely manner, and explore the expansion of the Southeast Asian market in order to reduce the risk of tariff fluctuations. Flexibly evaluate the flexibility of production sites, adjust capacity allocation in a timely manner depending on market changes, and maintain competitive advantages.

The Group will continue to monitor changes in domestic and foreign policies and regulations, and take proactive countermeasures to ensure the sustainable operation and competitive advantage of the Company.

(V) The impact of technological (include information security risk) and industrial changes on the Company's financial operation and the corresponding measures:

With regard to industrial changes and the rapid development of technology, the Group has always been striving to keep up with the trend, and has used information technology to research, develop and

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Review of financial position, business performance, and risk issues

optimize various application systems. The Group obtained ISO 27001 information security certification for its computer room, network and ERP system in 2020; in 2022, the Group applied for certificate renewal which was approved by the external certification unit BV, and was recertified on February 14, 2023. The Group passed the tracking audit in 2024, with the latest validity period till October 31, 2025. Relevant information security policies are formulated and followed in accordance with ISO 27001, and regular audits are conducted by external certification units every year to allow the update and strengthening of information security protection year by year.

The Group has demonstrated a high degree of adaptability and integration capability of its long-standing information soft power to support its operational needs. Our information services focus on digital transformation with information security as the foundation, and we are gradually deepening applications such as system integration and innovation.

The main goals of the information service team are 1. Improve information security; 2. Introduce the product carbon footprint platform; 3. Deepen digital transformation; 4. Expand the core system of industrial intelligence; 5. Continue to introduce new technologies/techniques; and 6. establish overseas centers to enhance support.

Important achievements in 2025: 1. Promotion of cybersecurity certification: The Company obtained six certificates for ISO 27001:2022 lead auditors, and conducted important information communication equipment CISCO/FORTINET certification training. 2. Information security training: Information security trend case training, social engineering exercises, and irregular information security announcements. 3. Information security monitoring and protection: Introduced information communication security threat detection and management (SOC) services (including Taixin factory), introduced endpoint information security protection for external

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services or important hosts, isolated backup architecture, VPN multifactor verification, and strengthened privileged account management.

Adaptability enhancement: ERP Includes important on-site operation systems, with at least two disaster recovery drills per year.
Continuous development of the product carbon footprint platform.
ERP breakpoint and RPA integrated application to improve OA efficiency.
Project management platform integration.
Digital e-forms.
Industrial intelligent optimization, including systems for barcode/OEE/MES/intelligent judgment/COA/inspection instrument data integration/real-time inventory/inspection/work safety/automatic report generation/automatic packaging/real-time energy service/maintenance.
Promotion of machine learning AI: introduced process improvement and research and development formula.
Promotion of generative AI: OA application, big data analysis, GPT Q&A platform, conference verbatim manuscript and other applications,
ERP integration application promotion for overseas bases and expansion points.

Facing the challenges ahead, the competition in the industry will become more severe. The Group continues to move towards the Industry 4.0 intelligent industry, focuses on process optimization and integration of information services, and continues to promote various information applications and integration projects in order to assist in the sustainable operation and development of the enterprise.

(VI) Crisis management, impacts, and response measures in the event of a change in corporate image: None.

(VII) Expected benefits, risks, and response measures in relation to mergers and acquisitions: None.

(VIII) Expected benefits, risks and response measures associated with plant expansions:

Please refer to page 210 of this annual report, titled "Major Capital Expenditure Items".

(IX) Risks and response measures associated with concentrated sales or

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Review of financial position, business performance, and risk issues

purchases: None.

(X) Impacts, risks, and response measures following a major transfer of shareholding by directors, independent directors, or shareholders with more than 10% ownership interest: None.

(XI) Impacts, risks, and response measures associated with a change of management: None.

(XII) Litigation and non-contentious cases:

The Company had an employee involved in the loan fraud case of New Site Industries, Inc. After the Taiwan High Court's criminal judgment referenced Jin-Shang-Zhong-Su No. 8 of 2021, it was determined that the employee jointly committed the special fraud crime under the Banking Act. Subsequently, the Supreme Court's criminal judgment referenced Tai-Shang No. 5978 of 2021 rejected the employee's appeal and confirmed the case. Yuanta Bank, one of the victimized banks in the New Site fraud case, filed a civil damages lawsuit with the Taiwan Taipei District Court (on November 12, 2020, the Company received and served an additional defendant letter for a criminal incidental civil lawsuit), claiming that the Company shall jointly bear the employer's liability under the Civil Code for the employee's crime, and jointly compensate with the employee for a total of about NT$166.47 million, including about NT$111.08 million in the name of Highlite Industries, Inc. (case No. 2021 Jin No. 29) and NT$55.39 million in the name of New Site Industries, Inc. (case No. 2021 Jin No. 17). In October 2019, the project inspection report of the Financial Supervisory Commission found that Yuanta Bank was negligent in the Run-Yin loan fraud case. Due to the fact that the Company may be liable to pay for the compensation, the determination of the amount of compensation is subject to investigation by clarifying the proportion of fault of both parties. As of December 31, 2024, for the borrower, EasyCard, the Taiwan Taipei District Court has ruled in favor of the Company with the 2021 Jin-Zi No. 29 (the first instance judgment, date: December 9, 2024), and

the Company is not liable to compensate Yuanta Bank. It is not yet known whether Yuanta Bank has filed an appeal. The case is still being reviewed by the Taipei District Court, and the Company has already estimated the liability reserve according to the external attorney's opinions (Taiwan Taipei District Court No. 17, 2021). Nevertheless, the Company has no other determined or pending determined significant litigation, non-litigation or administrative disputes that may have a material impact on shareholders' equity or the price of securities.

(XIII) Other material risks and response measures:

Due to the sustainable development of the Company, as well as the requirements of international net zero carbon emission trend, corporate governance, social regulations, and requirements of investors and customers all pay attention to the investment and performance of enterprises in ESG (Environmental/Social/Corporate governance). In addition, the impact of global climate change is increasingly obvious, and a series of potential risks are threatening enterprises, including water shortage, water supply interruption, power instability, production and supply chain interruption, rising resource and material costs, and reduced sales. The implementation of the ESG strategy can reduce enterprise risks, reduce operating costs, and increase future development benefits to lay the foundation for long-term development, and make contributions in social, environmental, and economic aspects. The Group has planned response strategies and combined ESG and SDGs goals, including:

Energy saving and waste reduction: Transfer to a low-carbon model, and introduce new energy-saving technologies to increase energy efficiency. Actively reduce the consumption and use of water resources, increase recycling and reuse, reduce wastewater discharge, develop emerging renewable energy sources, such as solar power plants, and reduce greenhouse gas emissions. It has been listed as one of the focus operations each
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Review of financial position, business performance, and risk issues

year is green developments which will be installed according to laws and regulations.

Develop new products/services/markets: The continuous promotion of the 3330 target is to accelerate the research and development of new products and expand new markets. The goal is to complete three large-scale R&D equipment updates within three years and increase the profit of each business unit by 30%.
Adjustments of production and sales strategy: Pay attention to market changes and diversify the market to avoid excessive market concentration; diversify suppliers, distribution and logistics alternatives to diversify risks. Promote the development of circular economy with resource management and source management such as waste reduction, recycling, and promotion of green supply chain.
Strengthening corporate social responsibility: Enhance employees' awareness of sustainable development, ensure their safety and health, pay attention to environmental issues, and adhere to integrity and ethics to implement corporate social responsibility.
Other: When making decisions regarding investments, factors of climate changes must be included and should be approached from the operational and engineering design aspects in order to maintain process capabilities and reduce the impact extreme weather brings.

VII. Other important disclosures: None.

Special Remarks

Six. Special remarks

I. Information on Affiliates

(I) Consolidated Business Report of Affiliated Enterprises: Please visit the MOPS, enter the Company's code "1409" to inquire about the consolidated business report of affiliated companies.

(II) Consolidated financial statements of affiliated companies: Please visit the MOPS, enter the Company's code "1409" to inquire about the consolidated financial statements of affiliated companies.

(III) Affiliation report: None.

II. Private Placement Securities in the Most Recent Year and as of Publication Date of the Annual Report:

(I) Private placement of preferred shares: None

(II) Private placement of common shares: None

III. Other supplementary information: None.

Occurrences that are significant to shareholders' equity or securities prices, as defined in Sub-paragraph 2, Paragraph 3, Article 36 of the Securities and Exchange Act: None.

Shinkong Synthetic Fibers Corp.

Chairperson: Tong-Sheng Wu

AI assistant

SSFC — Annual Report 2024

51787_rns_2025-06-09_3e7aaec5-46d5-4e53-bd85-dd3cea31a5f4.pdf

新光合成纖維股份有限公司

One. Letter to Shareholders

4. Smart manufacturing:

II. In response to geopolitical risks and market changes, the Company is actively expanding the global market:

1. Southeast Asian market:

2. North American market:

2024 Business Report

Two. Corporate Governance Report

2. Remuneration to the President and vice presidents

2. Evaluation of the Board of Directors

2. Functions of the Salary and Remuneration Committee

Deloitte.

勤業眾信

勤業眾信

2-3. Subsidiaries' information on greenhouse gas inventory

3. Greenhouse gas reduction goals, strategies and concrete action plans

Succession planning for board members and key management personnel:

3. Audit Committee

4. The Remuneration Committee

III. Information About the Company’s Audit Fee

IV. Change of CPA: None.

VII. Relationships among top-10 shareholders:

VIII. Aggregate shareholding percentage

Three. Capital Overview

I. Capital and Shares

(I) Source of capital

2. Share categories

(II) List of major shareholders

(III) Dividend policy and execution

1. Dividend policy:

Four. Operating Highlights

I. Business Activities

(I) Scope of business

3. Product development tendencies and competition

(1) PET fibers

(III) Technological research and development

1. Research and Development Overview

II. Market and Sales Overview

b Production processes of main products

(3) PET film

a Main product applications

(4) Other films

III. Human Resources

IV. Environmental Protection Expenditures

(II) Responsive strategies and possible expenses

V. Labor Relations

Five. Review of financial position, business performance, and risk issues

I. Analysis of Financial Status

II. Analysis of Operation Results

III. Analysis of Cash Flow

IV. Major Capital Expenditure Items

V. Investment Policy in the Last Year, Main Causes for Profits or Losses, Improvement Plans and the Investment Plans for the Coming Year

VI. Analysis of Risk Management

Six. Special remarks

I. Information on Affiliates

II. Private Placement Securities in the Most Recent Year and as of Publication Date of the Annual Report:

III. Other supplementary information: None.

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SSFC Annual Report 2024