Walsin attaches importance to employee benefits and upholds the concept of employee profit sharing. We conduct regular market surveys in hopes of providing employees with competitive overall salaries, so that we can attract outstanding talent to join the team of Walsin Lihwa. Walsin Lihwa offers a competitive salary and compensation system. Permanent employees are entitled to:

• We comply with relevant local laws and regulations, and strive to establish harmonious labor management relations within the scope of the law.
• Starting salaries for fresh-out-of-school employees and foreign national workers in compliance with relevant local laws and regulations.
• Reasonable yet competitive total rewards based on the market value of individual professional functions and job contributions to the company.
• Employees are rewarded with bonuses based on the Company's business performance, team goal attainment, and individual contribution and performance.
• Employees' salaries and compensation are determined by their education, knowledge, skills, professional experience, and individual performance. In no way does gender, race, religious belief, political affiliation, marital status, or membership in a union play a part in these decisions.
• Raises are planned each year based on the Company's profitability and comparison with results of the salary survey.
• Promotions are planned each year based on employees' performance and development potential, organizational requirements, and employees' aptitude and career advancement intentions.

At the beginning of the year, employees set annual work goals and policies, and the unit supervisor discusses and confirms the goals with employees. Employees update work progress in real time during daily work and conduct performance appraisals twice in the first and second half of the year (July and November), with appraisees in each unit being assessed by their supervisors at each level, and supervisors at each level conducting performance interviews with the employees. The key assessment items are as follows:

• General Employees: Performance assessment accounted for 50% and functional assessment accounted for 50% (Different functional items are distinguished according to different assessment categories)
• Senior Executives: Performance assessment accounted for 40% and management assessment accounted for 60% (Divided into operational capabilities, management capabilities, and corporate governance according to different assessment categories)

Variable rewards will be issued based on the above performance measurement results and are applicable to 100% of full-time employees.

In order to ensure that the managerial officers' performance is closely linked to the Company's strategy and that the overall salary and remuneration is competitive, the Company has formulated the "Regulations Governing Managerial Officers Performance Evaluation and Salary Remuneration Management". The aforementioned regulation includes the managerial officers' performance evaluation and salary remuneration policy. The remuneration standards shall be reviewed by the remuneration committee and then submitted to the board of directors for decision. Managerial officer remuneration includes salary and bonus. Salary is based on the Company's business strategy and profitability, as well as factors such as the managerial officer's personal professional ability, scope of responsibilities, and market competitiveness; Bonuses will take into account the results of individual performance evaluations, the company's operating performance and the rationality of the correlation between future risks, etc. However, if there are major risk events that can affect the company's goodwill, internal management misconduct, personnel malpractice and other risk events, bonus will be reduced or not be issued.

Walsin Lihwa complies with the retirement laws, regulations, and systems in the markets where it has presence to protect employee rights after retirement for retired employees to lead a worriless life. For employees who retire or terminate the employment relationship, the Company will assist in the transition in accordance with the law. There is also a consultant re-employment system for the retirement of key executives to reduce the impact on employees and the Company's management.

The pension system for employees in Taiwan is set forth in the Labor Pension Act, and is a defined contribution plan managed by the government; 6% of employees' monthly salary is contributed to a personal account at the Bureau of Labor Insurance. The contribution amounts of the 2022 and 2023 defined contribution plans are listed as expenses in the consolidated statement of comprehensive income as NT$109,019,000 and NT$114,765,000.

Subsidiaries located in mainland China set aside a certain percentage (13%-18%) of individual employees' monthly salary as retirement pension, which is deposited by the relevant competent authority in employees' independent savings accounts, in accordance with the local governing laws. The salaries of retired employees are managed by the local social security bureau where the company is located, and employees enjoy retirement pension according to local regulations. When employees reach the statutory age of retirement and have made payments for a cumulative 15 years, they will enjoy basic retirement insurance benefits.

Subsidiaries in Malaysia make monthly payments of 12%-13% of employees' salary to the EPF according to regulations of Malaysia's government, providing security after retirement.

The pension system for employees in Taiwan is set forth in the Labor Standards Act, and is a defined benefit pension plan managed by the government. Pension payments are calculated based on the employee's years of employment and average monthly salary for the last 6 months before retirement.

The Company makes monthly payments equal to 2% of the total salary of employees who retained their seniority in the old system to their retirement fund, and the Supervisory Committee of Workers' Retirement Preparation Fund deposits the funds into a dedicated account at the Bank of Taiwan under its name. Before the end of the year, if the account's balance is determined to be insufficient to pay workers that reach requirement conditions the following year, then the difference will be deposited into the account before the end of March the following year. The amount of defined benefit plans on 2022 and 2023 consolidated balance sheets are as follows:

Walsin Lihwa also provides benefits that exceed local regulations, such as group insurance, transportation subsidies, etc., to ensure that employees enjoy comprehensive protection.

Walsin Lihwa, in accordance with the Labor Standards Act, stipulates that the Company shall not terminate the labor contract of employees during maternity leave, and provides female employees with 56 days of maternity leave before and after childbirth. When employees accompany their spouses for pregnancy check-ups or when their spouses give birth, they can choose a 7-day leave. During the paternity leave, wages will be paid as usual. In addition, for employees with childcare needs, the Company also follows the provisions of the Act of Gender Equality in Employment. Employees who have been employed for more than half a year can apply for parental leave without pay if they need to take care of the family's young children under 3 years old.

In 2023, a total of 187 people were eligible to apply for parental leave without pay, and 9 of them applied for parental leave without pay. The reinstatement rate was 66.7%, and the reinstatement retention rate was 33.3%. Some of the employees who have not been reinstated are mainly due to the subsequent need to take care of their families. For those who have been reinstated, the Company has also arranged for reinstatement-related matters in advance, including internal departmental education and training, which can help shorten the period of adjustment and integration for reinstated employees from parental leaves and familiarize themselves with their work contents more effectively and quickly, so that they can return to their workplaces efficiently.

For major operational changes that affect employees' rights and interests and related countermeasures, the Company will communicate through labor unions or labor-management communication meetings before implementation, and will notify affected employees in advance in accordance with legal requirements. In addition, the Company also offers relevant measures, such as providing assistance in transferring to other internal units, providing employees with relevant terms and providing assistance in applying for relevant government subsidies. Taking the Taiwan region as an example, the Company complies with the Labor Standards Act and provide notices 10 to 30 days in advance depending on the employee's seniority.

In order to raise employees' concern and awareness of the Company's participation on social issues and to collect their opinions and feedback on the Company's measures on human rights and equality, workplace health and safety, employee cultivation and career development, talent recruitment and salary and benefits, and labor relations in 2023, we conducted a questionnaire on ESG issues at the end of 2023, as well as a survey on the satisfaction and opinions on the Company's human resources-related measures in 2023:

• The survey subjects were a total of 1,411 division-level employees in Taiwan. There were 6 questions in the questionnaire on social issues concern. The annual satisfaction and opinion questionnaire on human resources measures was designed with 19 questions in the social issues aspect. The topics included organizational climate and operations, health-related benefits and facilities, health assistance, digital work environment construction, scientific methods and basic management ability development, digital learning resource issues, diverse talent work environment, digital work habits, multiple communication channels and care at work, etc.
• Questionnaire results on social issues: Employees are most concerned about the company's measures on workplace health and safety (53.54% are very concerned), followed by talent recruitment and salary and benefits (51.57% are very concerned).

• Friendly environment and people-oriented (43.72%) best represent the organizational atmosphere of Walsin. The Company recognizes the importance of employee participation and encourages employees to participate in the discussion of important departmental decisions (37.85%) as part of the company's organizational operation.
• In response to the international business layout and strengthening the working environment for diverse talents, nearly 75% of employees believe that international culture/etiquette courses are helpful in getting along with employees with different cultural backgrounds and understanding the cultures of various places. Nearly 75% of employees believe that the Indonesian language program can increase the ability to communicate with Indonesian employees, while 84% of employees believe that the English language program can increase the initiative to establish relationships with international employees and stimulate interest in learning English, which is a positive feedback to the company's promotion of a diversified work environment.
• Nearly 60% of employees use their spare time at work to study online courses; Nearly 80% of employees believe that they can access other areas of professional knowledge or strengthen their work requirements through the company's online learning platform, reflecting their willingness to learn independently and the extent to which the company's digital learning resources are utilized.
• Nearly 70% of employees believe that current work arrangements are challenging and provide opportunities for growth and learning.
• Nearly 98% of employees learn about and exchange company-related information through multiple communication channels such as Walsin e-newsletters, Walsin portals, announcement systems, and Walsin internal communities (Viva Engage), which meets the needs of different groups.

The lower-rated items or demand items in this opinion questionnaire will serve as the direction for improvement of human resources policies and services in 2024:

• If employees are not familiar with the rotation mechanism between functions/departments, Human Resources will clarify the rotation mechanism and strengthen the concept of rotation development to help employees plan their career development paths in advance.
• Employees hope to have a clear understanding of the company's expectations of them, strengthen their ability to assist supervisors in conducting performance interviews with employees, and improve the method and frequency of communication so that employees can more clearly grasp their position in the company.
• Employees expressed the need for health assistance for sports and fitness activities, physical fitness assessment consultation, and the Company will plan more related seminars and expert consultation in this direction in the future.
• Employees are looking forward to solving more workflow problems through M365. The company will continue to promote the learning and utilization of M365 tools and popularize the automation and real-time exchange of information and data.