We keep a close eye on global climate trends and international responsesand include climate change as one of the material issues and risks in relation to corporate sustainability. Ongoing analysis and control are underway to mitigateand adapt to greenhouse gas (GHG) emissions. In 2023 , Primax continued toprepare the TCFD Report according to the TCFD disclosure framework and withreferences to the International Financial Reporting Standards S 2 (IFRS S2 )announced by the International Sustainability Standards Board (ISSB). The reportcovers the period from January 1 to December 31 , 2023 . For the full disclosures,please refer to the third“ TCFD Report” released by Primax Group or《 2.1 Sustainability Management and Practice 》and " 3.6《 Risk Management》" herein.Some of the contents are summarized as follows:

Climate-related governance

Primax Electronics established the Risk Management Committee in November 2021 , as the dedicated unit for climate change issues. The Committee members are appointed by the Board of Directors. The current members include Chairman Duh, Jia-Bin, Director Pan, Yung-Chung, Independent Director Wu,Chun-Pang and Independent Director Wang, Chia-Chi. The convener is Duh, Jia-Bin. The ESG Office reports to Risk Management Committee at least once a year.The Risk Management Committee reviews risk assessments, responding strategy and implementation results and its convener reports to the Board of Directors at least once each year. Risk management related information is disclosed asrequired by competent authorities via the Company's  website, sustainability reports and annual reports. In 2023 , the Committee has convened a total of 2 meetings, and reported the GHG inventory and net zero pathway and operation and climate change risk assessment report to the Board of Directors in June and November. Meanwhile, in order to enhance the knowledge of Board of Directors and the management on climate change, Primax arranges continuing education courses from time to time. In 2023 , five courses were planned, covering topics such as net zero, circular economy, emerging risks and risk management. A total of  5 directors attended the training courses.

In order to achieve the goal of net zero emissions, Primax Electronics encourages employees to make continuous improvements by establishing the incentive mechanism. The "Regulations Governing Energy Saving and Waste Reduction Management and Control" are formulated with respect to all employees. Meanwhile, according to the sustainability strategy roadmap, since2023 , the variable remuneration for senior management teams including the vice president and above by 10~15% has been linked to ESG performance, including smart manufacturing, greenhouse gas reduction and other goals. Further, the implementation of green production from low-carbon design and development to low-carbon manufacturing has been accelerated, including energy-saving density reduction performance indicators for regional manufacturing supervisors and R&D highest supervisors' completion of low-carbon product project development,etc., to be included into the annual performance (critical to the 5~10%) since 2024 .

Climate Risk and Opportunity Assessment andManagement

Primax conducts research and evaluation on domestic and internationalclimate change-related laws and regulations and initiatives as a consideration for the Group to formulate environmental policies, to comply with domesticdevelopment trends, and to enhance the Company's ability to cope with climate change. The climate risk and opportunity identification process is as follows:

Climate Change Risk and Opportunity Identification Result

The Risk Assessment Taskforce, based on the questionnaire scales, considers international trends, existing company measures,and scenario simulation result in order to evaluate the score, following which the ESG Office then engages in discussion according to the evaluation score result, and finally, four climate change risks and three climate change opportunities are identified. Meanwhile, the resultis compared with the evaluation result of last year. For the current year, the transition risk of "Introduction of Low-carbon Production Technology" has been adjusted from high risk to medium risk. After the key risks and opportunities are identified, the ESG Office then convenes TCFD risk and opportunity response strategy discussion meeting, in order to determine the Company's future climate change related strategies.

The period of the present assessment is divided into short-term( 2024 - 2025 ), medium-term ( 2026 - 2028 ), and long-term ( 2029 -2033 ). During the assessment, the expected occurrence timeframe for each risk and opportunity item is determined. Based on Primax's"Corporate Risk Management Policies and Procedures," the risk levels are categorized as 3 (high), 2 (medium), and 1 (low) to assess risks that may have significant impacts. Risk response measures are developed according to the different timeframes and risk levels. High-risk items require immediate handling and mitigation plans, while the reporting and decision-making for medium-risk items depend on the circumstances. The following table presents the identified risks and opportunities that have significant impacts in the short, medium, and long term. Our company will continue to monitor changes in the risk and opportunity levels and the positioning in the short, medium, and long-term timeframes through annual assessments. This information will be promptly reported, and decisions will be made accordingly.

Short-, Mid- and Long-Term Climate-Related Risk and Opportunity Identification Results and Strategies

To address the identified major risks and opportunities, Primax formulates risk mitigation plans for continuous monitoring and improvements according to the risk response steps set forth by its " Corporate Risk Management Policies and Procedures" regarding high-risk items or items required for reporting. The audit unit then incorporates important action plans into periodic inspections under audit plans.

Climate-related Financial Impact Assessment

Based on the identified risks /opportunities , Primax  etimates the potential financial changes that climate change may bring to Primax. It formulates risk response strategies and conducts cost and benefit assessmentsfor "Cost Management" and "Benefit Management." The financial impact of climate risks/opportunities is assessed and estimated for the short-term( 2024 ~ 2025 ), mid-term ( 2026 ~ 2028 ),and long-term ( 2029 ~ 2033 ) timeframes.

For the identified risk/opportunity items, their corresponding strategies,actions, and expected output benefits are quantified as financial information.The analysis of their impact on revenue composition is presented in the following chart. For the short term ( 2024 ~ 2025 ), the average financial impact is estimated to be approximately 2.07% of the operating revenue. For the medium term( 2026 ~ 2028 ), the average financial impact is estimated to be approximately 9.19 % of the revenue. For the long term ( 2029 ~ 2033 ), the average financialimpact is estimated to be approximately 10.52% of the revenue.

The expected investment cost for all corresponding strategies is summarized according to the risk and opportunity items identified, and such cost includes the addition of facility equipment, increase of R&D cost, cost for recycled materials, and investment in sustainability projects, etc. The financial impact scenario of Primax with respect to the climate change investment cost up to the year of 2033 is estimated.For the short term ( 2024 ~ 2025 ), the average financial impact is estimated to be approximately 1.45 % of the revenue. For the medium term ( 2026 ~ 2028 ), the average financial impact is estimated to be approximately  1.27% of the operating revenue.For the long term ( 2029 ~ 2033 ), the average financial impact is estimated to be approximately 1.24% of the operating revenue.

Net Zero Commitment

Primax aligns itself with the international initiatives and internationally recognized methodologies proactively. In 2023 , it had its main production facilities, Kunshan Plant and Chongqing Plant, meet the 1.5°C emissions reduction pathway goals based on the methods outlined by the Science Based Targets initiative(SBTi), and passed the SBTi recognition in the same year.

Please refer to "2023 TCFD Climate-related Financial Disclosures Report" for complete information on Primax's climate change risks.Please refer to the Chapter 4 Environmental Sustainability herein for climate change response management actions and performs.