Management of Material Topics

Corporate Governance & Legal Compliance

Management mechanisms and purpose:

• Periodic Sustainability and corporate governance meetings conduct follow-ups on the implementation status of annual plans to protect shareholders' rights, treat shareholders equally, strengthen the Board of Directors' structure and operations, increase information transparency, and fulfill CSR.
• Categorized based on organizational function and the laws relevant to each function; we follow regulatory changes and make proposals where necessary to revise the Articles of Incorporation or internal regulations
• The Business Integrity Center under the Sustainable Development Committee is responsible for the implementation of related policies, regulatory compliance training, and supervision of the audit mechanism
• Create a corporate culture of honest business practices and facilitate sound business development and corporate sustainability.
• Ongoing perfection of the company's intellectual property-related regulations and rules to establish the company's intellectual property management system.

• Corporate governance is a mechanism for guiding and managing companies to fulfill their responsibilities, protect shareholders' lawful rights, and give consideration to the interests of other stakeholders.
• Integrity is an important part of the company's culture that stress that all business activities must comply with local laws and regulations.
• We are committed to complying with laws, regulations, and procedures, and have established an emergency reporting system.

• Internal complaints: Walsin Lihwa has an internal company mailbox and easily accessible internal complaint channels
• External complaints:
  violation of honest business practices and sexual harassment
  TEL: 886-2-8726-2211 ext.6399
  E-mail: opinion@walsin.com
  ESG mailbox:esg@walsin.com
  Mailbox and phone for investors and shareholders: https:// www.walsin.com/en/about-us/contact-us/#pillsstackholders- communication

Sustainability Strategy

Management mechanisms and purpose:

• The Sustainable Development Committee is responsible for sustainability strategy and vision development to ensure strategy implementation through individual pronation centers, stay on top of the implementation status at regular meetings, and report the annual implementation results of corporate sustainability to the board of director on regular basis.

• Insistence on integrity and commitment to ongoing improvement of operational effectiveness.
• Ongoing improvement of corporate governance to ensure business sustainability.
• Development of a friendly work environment and an innovative learning organization.
• Thorough safety management to create an outstanding workspace.
• Effective implementation of carbon reduction and energy to enable green production.
• Ongoing corporate social responsibility and public interest initiatives.

• Align the goals of the promotion centers under the Sustainable Development Committee with those of business groups
• Questionnaire on sustainability issues to understand the level of stakeholders' concern of sustainability issues.
• ESG mailbox: esg@walsin.com

Financial Performance

Management mechanisms and purpose:

• Comprehensive strategy development and sound management practices are required to help achieve ongoing, sustainable growth and meet the expectations of customers, employees, shareholders, and other stakeholders.

• Strategy integration, digital transformation, and core competitiveness enhancement help Walsin Lihwa continue improving its management performance

• Mailbox and phone for investors and shareholders: https:// www.walsin.com/en/about-us/contact-us/#pillsstackholders- communication

Risk Management

Management mechanisms and purpose:

• Established an internal audit system and independent directors to ensure the effective operation of internal control and reporting mechanisms.
• Related departments carry out risk management work to lower the impact of operational risks.

• Compliance with related laws and regulations.
• Operating performance and efficiency
• Reports are reliable, timely, transparent, and comply with relevant regulations

• The chief audit executive's reports at board meetings on a regular basis with at least a quarterly report to the Audit Committee and independent directors on the internal audit and control implementation status.

Product Quality and Responsibility

Management mechanisms and purpose:

• Close attention to the EU's REACH and RoHS Directive as well as lists of new hazardous materials and Substances of Very High Concern, and products inspections by competent authorities on a regular or as-needed basis to fulfill health and safety duties.
• Quality management system implementation and perfection to ensure customer satisfaction with product quality.

• The quality of all products complies with domestic and international environmental protection regulations and laws and meets customer needs.
• Established solid auditing and certification abilities, utilized internal/ external audits and second and third party certifications, such as customer certifications, product certifications, and system certifications, and used the concept of PDCA to constantly improve our quality management system.

Complaint mechanism:

• Customer satisfaction survey
• Irregular feedback through e-mail, letter, and phone communications
• Irregular visits to customers
• Questionnaire survey for materiality identification
• Customer service contact

Informational Security Management

Management mechanisms and purpose:

• Information security management planning; information security management policy promotion year by year; information security system, process, and specification implementation; and ongoing and comprehensive information security protection technology development.

• Maintenance of the confidentiality, integrity, and availability of sensitive customer data and business information to achieve information security protection together by all employees, internal and external information service users, and third-party service providers.

• Third-party verification of the ISO 27001 Information Security Management System implemented; fulfillment of the commitment to information security by the PDCA cycle, with the confidentiality, integrity, and availability of all the company data secured by a comprehensive information security management system to keep strengthening information security management through effective prevention, monitoring, and responsiveness before and throughout any information security event.

Waste Management

Management mechanisms and purpose:

• Environmental protection and energy management practices at the Taiwan and overseas plants are integrated and monitored to help strengthen resource utilization efficiency, recyclability, and reuse to move towards circular economy.

• Green production, happy company, and sustainability policies with commitment to compliance, risk control, pollution prevention, energy saving, waste reduction, and performance enhancement.
• We improve management practices, integrate resources, upgrade our technologies and cultivate R&D/technology talents in the environmental field to achieve the Company's environmental safety and health management vision: "Energy Conservation, Carbon Reduction, Reutilization, and Recycling."

• Recycling and reuse of furnace slags to decrease furnace slag processing costs and facilitate circular economy by regeneration of waste acids.
• Resolution to clearance of reducing slags and research of waste recycling and reuse.
• Research of reduction of reducing slags from steelmaking, and assessment of the uses of low-temperature steam pressure and controlled low-strength materials (CLSM).
• Circular economy development by application for the reuse of regenerated acids.
• Product registration of regenerate acids to be sold the factories that are in need of them with effective control of the whereabouts of such acids and filing of recovery and regeneration planning.
• Acid regeneration plant (ARP) implementation assessment and circular economy model development.

Climate Action

Management mechanisms and purpose:

• Climate change opportunities and risks are assessed to propose coping strategies as well as various greenhouse gas emission prevention solution to help slow down the rise of global average temperature by value chain cooperation. The disclosure of greenhouse gas management performance includes emissions, reduction objectives and the status of implementation, as well as renewable energy usage and the status of implementation.

• Green production, happy company, and sustainability policies with commitment to compliance, risk control, pollution prevention, energy saving, waste reduction, and performance enhancement.

• Assessment of financial impacts resulting from climate change on a regular basis.
• Greenhouse gas reduction objective, strategy, action plan, and effectiveness-tracking plan development.

Occupational Health and Safety

Management mechanisms and purpose:

• Responsible for the integration and supervision of domestic and overseas factories' occupational safety and health management performances, and gradually establish a safety culture.

• Green production, happy company, and sustainability policies with commitment to compliance, risk control, pollution prevention, energy saving, waste reduction, and performance enhancement.

• Implementation of the ISO 45001 Standard for comprehensive production safety management including the 5S Workplace Methodology, Total Productive Management (TPN), and Safety Job Procedures(SJP).
• Safety awareness developed by workers' full participation in their section and shift meetings to achieve zero work injury, with the Toyota Production System (TPS) and Kiken Yochi Training (KYT) in conjunction with simplified SJP for muscle memory enhancement to deal with high-risk jobs.
• Effective reward and punishment system implementation to improve environmental protection and occupational safety by strengthening executors' safety awareness and executives' determinedness to help decrease occupational accidents.

Product R&D and CleanTech Innovation

Management mechanisms and purpose:

• Development of wind power generation, clean technology, and other green products to help degrease greenhouse gas emissions and air pollution to promote green economy development.
• Reinforcement of intellectual property management to protect the freedom of business as well as R&D innovations.

• Ongoing improvement and innovation with commitment to green manufacturing process technology, and product development to create shared value with customers for sustainable business model development.

Complaint mechanism:

• Irregular feedback through e-mail, letter, and phone communications
• Irregular visits to customers
• Customer service contact

Labor Relationship

Management mechanisms and purpose:

• Through regular labor-management meetings and dedicated complaint channels, we promote communication between employers and employees to maintain harmony.

• Uphold the concept of total involvement, cultivate top tier talents and create a happy workplace.

• Resources: Employee intranet and e-newsletter, electronic bulletin board
• Actions: Quarterly labor-management meetings
• Channel for filing complaints: Employee complaints mailbox

Energy Management

Management mechanisms and purpose:

• Walsin Lihwa continues review and improvement of energy consumption and costs to strengthen energy management intensity by its implementation of the ISO 14000 Environmental Management System, ISO 50001 Energy Management System, and ISO 14064 Greenhouse Gas Emission Inventory System.

• The environmental, safety, and health management policies of Walsin Lihwa are intended to effectively implement ongoing energy-saving and carbon reduction, develop towards green and circular production, set up power-saving and carbon reduction goals, make efficient and reasonable energy utilization, and decrease greenhouse gas emissions to cope with climate change challenges.

• Complete energy information platform implementation at the plants in Taiwan and Mainland China.
• Set up energy and resource consumption reduction goals.
• Promote various energy and resource consumption reduction projects and track implementation results on a regular basis.
• Obtain the ISO 14001, ISO 50001, and ISO 46001 certifications.