Management of Material Topics

Corporate Governance and Legal Compliance

Management mechanisms and purpose:

• Periodic sustainability and corporate governance meetings are conducted to follow up on the implementation status of annual plans, thereby protecting shareholders' rights, treating shareholders equally, strengthening the Board of Directors' structure and operations, increasing information transparency, and fulfilling the Company's social responsibility.
• Categorization is accomplished based on organizational function and the laws relevant to each function; the Company follows regulatory changes and makes 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.
• A corporate culture of business integrity is created and sound business development is facilitated.
• Ongoing optimization of the Company's intellectual property-related regulations and rules is implemented, and the Company has established an intellectual property management system.

• Corporate governance is a mechanism for guiding and managing the Company to fulfill its responsibilities, protect shareholders' lawful rights, and give consideration to the interests of other stakeholders.
• Business integrity is an important part of the Company's culture, stressing that all business activities must comply with local laws and regulations.
• The Company is committed to complying with laws, regulations, and procedures, and has established an emergency reporting system.

• Internal complaints: Walsin Lihwa has an internal company mailbox and provides employees with easily accessible internal complaint channels.
• External complaints:
  Complaint mailbox (violation of business integrity and sexual harassment)
  Corporate sustainability hotline and mailbox (ESG mailbox)
  Shareholder/Investor hotline and mailbox (Shareholder/Investor relations mailbox)

Business Performance

Management mechanisms and purpose:

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

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

• Shareholder/Investor hotline and mailbox (Shareholder/Investor relations mailbox)

Risk Management

Management mechanisms and purpose:

• An internal audit system and independent directors are present 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, and transparent, and comply with relevant regulations.

• The Chief Audit Executive makes reports at Board of Directors meetings on a regular basis, and makes reports to the Audit Committee and independent directors on the internal audit and control implementation status on at least a quarterly basis.

Information Security Management

Management mechanisms and purpose:

• Information security plans are formulated for year-by-year implementation of the Information Security Policy, information security systems and workflow standards are introduced, and comprehensive information security technologies and relevant protection measures are set up.

• Maintenance of the confidentiality, integrity, and availability of sensitive customer data and business information, and jointly achieving information security goals with the collective efforts of all employees, internal and external information service users, and third-party service providers.

• Walsin Lihwa has implemented the ISO 27001 Information Security Management System and obtained third-party verification, and the commitment to information security is fulfilled using the PDCA cycle. The confidentiality, integrity, and availability of all Company data are secured by a comprehensive information security management system. The Company continues to strengthen information security management by implementing pre-incident prevention, real-time monitoring, and post-incident response, in alignment with the Zero Trust architecture.

Green Product / Green Business Development

Management mechanisms and purpose:

• Walsin Lihwa examines and manages the environmental impact of products from the aspects of raw material use, energy use, and greenhouse gas emissions.
• Walsin Lihwa develops clean technology and green products, such as wind power and electric vehicles, to help reduce greenhouse gas emissions and air pollution as well as promote green economy development.

• The Company continues to develop high-performance green products to move toward a circular economy and improve application performance in order to reduce its impact on the environment.
• The Company continues to evaluate and actively consider participating in international environmental sustainability initiatives, such as the SBTi and EP100.

• Goals: Focus on the future expansion of processes and materials, strive to develop green processes that achieve resource conservation, water conservation, electricity conservation, and energy consumption reduction, and produce high-performance green products for net zero practices and sustainable development.
• Complaint mechanism:
  Complaint mailbox (violation of business integrity and sexual harassment)

Hiring, Salary, and Benefits

Management mechanisms and purpose:

• Walsin Lihwa has referenced the overall salary conditions of the employment market and established a remuneration system based on the salary levels of industry peers, in order to attract and retain talent.

• The Company adheres to the principles of compliance with local laws and regulations, strives to create harmonious labor-management relations under legal requirements, and ensures that the starting salaries of new employees and foreign workers comply with local laws and regulations.
• The Company provides reasonable and competitive overall compensation based on the value of every employee's professional competency in the market and the contribution of employees' duties.

• Resources: Company website (Join us)
• Actions: Quarterly labor-management meetings
• Complaint mechanism: Internal suggestion mailbox

Sustainable Supply Chain Management

Management mechanisms and purpose:

• Walsin Lihwa's policies, such as the Supplier Management Measures, Supplier Social Responsibility Performance Appraisal Principles, and Sustainable Procurement Management Measures, ensure suppliers meet requirements on quality, cost, timely delivery, and service quality. There are also written evaluations and onsite audits to track suppliers' performance in issues such as environmental protection and human rights, thereby ensuring suppliers fulfill their social responsibility and promoting the sustainable development of the supply chain.

• Include corporate social responsibility (CSR) in supplier management mechanisms.
• Implement green procurement to realize the spirit of sustainable development.
• Supplier capability enhancement by information exchange and business practice collaboration.
• Prohibit the use of conflict minerals.

• Short term: Implementation of the green supply chain project in conjunction with environmental and safety management, gradually compile carbon coefficients, and expand the scope of management to Mainland China plants. The Indonesian plants plan to obtain the Responsible Minerals Initiative (RMI) certification in 2025.
• Medium term: Implementation of effective counselling mechanisms for high-risk key suppliers and tracking of their improvement plans.
• Long term: Development of supplier sustainability performance goals and expansion of the scope of carbon management at suppliers year by year.

Customer Relationship Management

Management mechanisms and purpose:

• The Company works closely with customers in terms of technology and service through a professional team to resolve customers' pain points. In addition to routine customer visits and material usage assessments, the Company explores specific topics with customers, monitors the progress of new product testing, and conducts technical seminars to discuss key technologies, thereby enhancing the value of its products and services.

• Walsin Lihwa upholds the spirit and philosophy of "focusing on customer and industrial development" as the Company continues to optimize service processes, strengthen customer trust, and jointly drive industry progress with customers with the goal to create a win-win situation.

• Actions: Customer satisfaction survey and visits
• Resources and complaint mechanisms: Contact person hotline and mailbox for each business group (Contact person)

Sustainability Commitments

Management mechanisms and purpose:

• The Board of Directors is the highest level guidance unit for strategies of Walsin Lihwa, and is responsible for fulfilling the Company's commitment to sustainable development. In addition to guiding management strategies and important action plans, it also monitors the achievement of various goals. The Sustainable Development Committee was established to promote and implement sustainable development, and assist the Board of Directors in continuously monitoring and supervising sustainability issues, ensuring continuous improvement in overall sustainability performance while pursuing corporate growth and profitability.

• Strengthen resource management, decrease environmental impact, and pursue circular economy.
• Uphold Walsin Lihwa's concept of full engagement to cultivate top-tier talent and create a happy workplace.
• Uphold the corporate culture of business integrity and continue to improve corporate governance.
• Strive to develop green processes, technologies, and products to create shared value with customers.

• Goals: Pay attention to the rights and interests of stakeholders, and attach importance to impacts on ESG while pursuing sustainability and growth.
• Resources:
  The Company's ESG website
  Corporate sustainability hotline and mailbox (ESG mailbox)

Occupational Health and Safety

Management mechanisms and purpose:

• Responsible for the integration and supervision of domestic and overseas plants' occupational safety and health management performance and gradual establishment 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, as well as caring for employee health, building a friendly and supportive work environment, and continuously improving performance in safety and sustainability practices.

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

Product Quality and Responsibility

Management mechanisms and purpose:

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

• Actions: Customer satisfaction survey Customer visits
• Resources and complaint mechanisms: Contact person hotline and mailbox for each business group (Contact person)

Labor/Management Relations

Management mechanisms and purpose:

• Through regular labor-management meetings and dedicated complaint channels, the Company promotes communication between management and employees to maintain harmony.

• Uphold Walsin Lihwa's concept of full engagement to cultivate top-tier talent and create a happy workplace.

• Resources: The Company's ESG website
• Actions: Quarterly labor-management meetings
• Complaint mechanism: Complaint mailbox (violation of business integrity and sexual harassment)