Stakeholder Engagement

For Primax’s stakeholders, we have planned rigorous identification and selection method. In reference to the relevanceand upstream & downstream segments of the chain value and business, we took an inventory of the population of Primax’s stakeholders. In addition to the five principles of the AA 1000 Stakeholder Engagement Standards (SES): "Dependency,Responsibility, Influence, Diverse Perspectives and Tension," we also assessed the stakeholders actually or potentially affected by various ESG issues management of Primax from the perspective of individuals or groups whose interests are or may be affected by the organization's economic activities, in accordance with the definition of stakeholders under the GRI Standards ( 2021 ).Review and adjustment will also be performed on a yearly basis.

This year, the ESG Office’s  assessment result shows that there is no significant change in the main stakeholders of Primax from the previous year, including government agencies/competent authorities, customers, shareholders/ investors/financial institutions/external rating institutions, employees, suppliers/contractors/outsourced business, local communities, and non-governmental organizations/non-profit-seeking organizations.

Communication with and response to stakeholders

Primax places great importance on the interests and opinions of stakeholders and engages in continuous communication and engagement. The engagement approach adopts diverse forms, including unilateral, bilateral, one-to-many, or many-to-one, with the aim of understanding stakeholders' concerns and expectations towards Primax. The ESG Office conducts biannual communication with key representatives of various stakeholder groups, gathering their perspectives on sustainability issues and identifying any significant impact events. The consolidated report from these engagements serves as a reference for identifying material issues and is regularly presented to the Board of Directors.

A convenient complaint and reporting channel

Primax has established the "Operational Procedures for Ethical Managementand Guidelines of Conduct," "Employee Communication and Feedback Management Measures," and "Employee Code of Conduct." We have also set up Business conduct complaint mailbox and reporting channels to facilitate communication and feedback from internal and external stakeholders.

Externally, we have a dedicated ESG (Environmental, Social, and Governance)sustainable website section that includes an ESG mailbox as a communication channel with external stakeholders. This mailbox allows stakeholders to raise any questions, suggestions, complaints, reports of misconduct, or other relevant matters related to Primax Electronics. It is managed by the ESG Office, which is responsible for handling the received correspondence and messages, notifying relevant internal departments for evaluation and response, and maintaining openand constructive communication. No whistleblowers or stakeholder need to worry about retaliation.

Internally, we provide diverse employee communication channels. If any employee is unsure whether a situation violates applicable laws, regulations,binding policies, or company norms, they can seek advice and assistance from supervisors, human resources, or legal departments. We aim to maintain apositive labor-management relationship while safeguarding employees' rights.Primax Group encountered no grievance concerning employees’ ethics andintegrity in 2023 .

Identification of Material ESG Issues

Issues Collection and Consolidation

Prior to the ESG issues assessment, we first compiled the ESG issues that might pose some impact on the external economy, environment, human rights or company operations, in reference to sustainability standards and regulations (GRI, SASB, TCFD), ESG rating institutions (DJSI and MSCI, etc.), Rules Governing the Preparation and Filing of Sustainability Reports by TWSE Listed Companies, Issues of Concern to Stakeholders, Material Topics in the Upstream and Downstream Segments of the Value Chain (peers and major customers), Industry Characteristics and Relevant Regulations, and ESG advice and suggestions. This year, we also particularly integrate the main operational risk of Primax into the ESG issues and compile a total of ESG issues as the sources of impact assessment and stakeholder's level of concern questionnaire.

Material Issues Impact Assessment

The ESG Office of Primax and the top executives of each unit at Tymphany conducted a positive and negative impact scenario analysis of each ESG issue based on Primax Group's actual management status, and then assessed the impact posed by each ESG issue externally (economy, environment and population (including human rights thereof) and internally (Primax’s operations)based on the impact scenarios. When assessing the significance of impacts, the likelihood and severity (scale, scope, and remediation difficulty)/importance(scale, scope and likelihood) of each ESG issue shall be taken into consideration.Meanwhile, the level of concern questionnaire was also conducted with respectto the seven major stakeholders, and a total of 64 valid questionnaires were collected as a reference for determination of material ESG issues.

Material Issues Significance Ranking

After completing the impact assessment of each ESG issue, the ranking isbased on the materiality assessment (positive and negative impacts) and the stakeholder level of concern score, and the threshold is set as the benchmark for determination of material ESG issues. The ESG issues with the positive impacts higher than the threshold refer to the 12 issues. The ESG issues with the negative impacts higher than the threshold refer to the 4 issues. The ESG issues with stakeholders’ level of concern higher than the threshold refer to the 15 issues,including ethical management, economic performance, and talent recruitmentand retention.

Determination of material ESG issues

After analysis and statistics, the materiality assessment (positive and negativeimpacts) and stakeholders’ level of concern scores are summed up and averaged.Upon comprehensive consideration by the ESG Office and external ESG experts and advisors, the issues of value set to be higher than the average ( 4 . 7 scores) are determined as the material ESG issues of the year, namely the 12 issues including climate change response, economic performance, occupational safety and health,privacy and cybersecurity, product innovation and development, talent recruitment and retention, supply chain sustainability management, labor-management relationship,talent development and cultivation, ethical corporate management, labor rights, and diversity and equality. Compared with the Material ESG Issues of the previous year,product innovation and development are added as a new material ESG issue, primarily because Primax's overall product R&D and innovation are relatively mature, which may have a positive synergistic effect on the Company's operations and external economic development. Therefore, both the positive score and the level of concern score arehigher than the threshold. Corporate governance and risk management are identifiedas basic ESG issues, while there is no significant difference in other material ESG issues.

Response to and management of the impacts