Sustainable Operation Commitment

Message from the Chairman

Reviewing 2023, as the COVID-19 pandemic came to an end but followed with the prolonged standoff of Russia-Ukraine war and the quiet breaking out of Israel-Palestine conflict, these events not only heightened international tensions but also impacted industrial policies and supply chain arrangements. Meanwhile brand companies continued to adjust their inventories, and rising overseas labor costs have resulted consumer electronic component orders lowered than expected. TaiHan Precision Technology Inc., hereinafter referred to as TaiHan, steadfastly adheres to its core business, responds to customer needs, and continually generates values for all stakeholders via stepping up the planning and construction of its new Vietnam plant, strictly controlling various costs and expenses, as well as the scope expanding of business orders.

Furthermore, in response to a rapidly changing epoch, TaiHan continuously reviews issues of concern to various stakeholders through perspectives of environment, society (human rights), and corporate governance. While pursuing profits and growth, TaiHan focuses on integrating sustainability goals with its operational strategies, continues to strengthen its own resilience, and becomes a responsible enterprise that thrives with its employees and the society.

Response to climate change:

As the increasingly severe global warming, COP28 has reaffirmed efforts to keep the global average temperature rise within 1.5 degrees Celsius above pre-industrial levels, and countries are intensifying their legislative efforts to impose carbon fees and carbon tariffs. In response to national net-zero policies, TaiHan proposes in accordance with the TCFD (Task Force on Climate-related Financial Disclosures) requirements, fulfills the disclosure of its climate-related risks, and completes annual carbon inventories for all its plants in accordance with ISO 14064. Moving forward, the Company will continue to promote relevant carbon reduction plans, replace outdated machinery, improve energy-use efficiency, and make steady progress towards its carbon reduction goals proposed.

Social care:

Employees are the foundation for an enterprise to preserve its technology and knowledge. Through data analysis, TaiHan actively arranges training and education in areas covering onboarding, information security, environmental safety, and general courses, and continually enhances the depth and breadth of its training programs. While improving employee competencies, TaiHan also promotes a safe and clean production environment through its Occupational Safety Committee, striving for zero accidents and zero injuries.

In 2023, TaiHan has organized a total of 7 public welfare activities which includes donations, blood donations as well as volunteer activities. These efforts included mooncake distributing during the lunar Moon Festival with the Huashan Social Welfare Foundation, educational fund donation for early intervention children through the Syin-Lu Social Welfare Foundation, and the public welfare activities at overseas plants, and a total of 158 people participated in these initiatives co-aiming to society contribution in meaningful ways.。

Sustainable governance: 

TaiHan has established the Sustainable Development Committee in 2023 to assist the Board of Directors in supervising and implementing various sustainability issues across the Group. The Company has ranked in the top 6-20% of the corporate governance evaluation for listed companies for two consecutive years. In addition, TaiHan strengthens its capabilities of legal compliance and integrity management through independent regulatory identification and the mandatory courses of integrity management for all indirect personnel, aiming to achieve the goal of sustainable business operations.

Sustainable Development Committee

To strengthen the Company’s sustainability governance, TaiHan established the Sustainability Development Committee in November 2023. As a functional committee, it assists the Board of Directors in overseeing and addressing various sustainability issues (stakeholder engagement results, major issue formulation and responses, annual sustainability goals and plans, etc.). The Committee is composed of 3 members: the Executive Vice President and two independent directors, with the Executive Vice President serving as the Chair. The Committee helps formulate sustainability strategies and goals and reports the execution results, stakeholder engagement status, and sustainability reports to the board of directors semi-annually (with 0 key major events reported in 2023). To enhance the efficiency of corporate sustainability management, a sustainability implementation team is established with 3 working groups: Corporate Governance Group, Environmental Protection Group, and Social Relations Group, to better coordinate and plan across units, ensuring the implementation of sustainability strategies and goals.

Integrity Management

Taihan Technology has set up a “sustainable promotion team” to be responsible for promoting corporate governance issues such as honest management, anti-corruption, and anti-bribery networks. Taihan Technology upholds the corporate culture of integrity management and the sound development of good business operations, and has formulated the “Integrity Management Code” approved by the board of directors to ensure the implementation of the company’s integrity management.

execute projecteffectivenessEvaluation
The headquarters promotes "Integrity
Management" to overseas factory
Taiwan:18 persons;18 hours
Vietnam factory: 20 persons; 20 hours
Dongguan factory: 17 persons; 17 hours
Philippines factory: 16 persons; 16 hours
1. All staff’s post-course test scores are higher
than 80 points
2. A total of 71 people; 71 hours
The factory conducts self-organized
education and training on integrity
management
Vietnam factory: 730 persons; 1,460 hours
Dongguan factory: 72 persons; 72 hours
Philippines factory: 65 persons; 65 hours
A Total 867 persons; 1,595 hours
New employee induction education and
training and signing of the Code of
Integrity Management
In 2023, a total of 8 newcomers will
register in Taiwan, with a total of 8
hours of integrity management education
and training, and 8 signatures of
the integrity management code.
All staff’s post-course test scores are higher than
80 points, and the code signing rate is 100%
Cases of dishonesty or corruption
complaints received in 2023
0 casesShows that there is currently low significant risk

Internal and external personnel reporting system and process

In order to implement the company’s ethical behavior and integrity management, Taihan Technology encourages the reporting of illegal, immoral or dishonest behaviors, and formulates “Procedures for Reporting Illegal and Unethical or Dishonest Conduct”. The company’s internal or external personnel and stakeholders can prepare relevant evidence (name, unit, characteristics or violations of the person being reported) and report to the independent directors, spokespersons, and internal auditors announced on the company’s website. Taihan Technology promises to keep confidential the informant’s personal information and any information that may reveal his identity, so as to protect the relevant rights and interests of the informant and avoid unfair treatment.

Cases that have been found to have violated the “Code of Conduct” or “Integrity Management Code” will be punished according to regulations. If the circumstances are serious, they will be removed from office and the right of legal recourse will be reserved.

Reporting channelAuthorityAnnouncement of verdictImprovement plan
Company's website
〈Contact〉
Reporting mailbox
relationship@thpt.com.tw
1. Spokesperson: Accept reports from shareholders, investors and other stakeholders.
2. Operation center: reporting of customers, suppliers, and contractors.
3. Personnel department: accept reports from colleagues within the company.
If the person being reported has indeed violated relevant laws or the
company's integrity management policies and regulations, he shall
immediately request the person being reported to stop the relevant
behavior and deal with it appropriately. If necessary, he shall report to the competent authority or transfer it to the judicial authority for investigation, or through the law The program seeks damages.
The responsible unit will report to the board
of directors on the reported situation, how to deal with it and the follow-up review and improvement measures.

Supplier Management Policy

TaiHan Technology has established a “Supplier Code of Conduct” approved by the Board of Directors, serving as the basis for supplier selection and assessment. Annually, TaiHan conducts regular assessments of its cooperating suppliers. The evaluation criteria, referring the supplier self-assessment questionnaire of RBA, includes aspects such as labor and human rights, health and safety, environment, and business ethics. Suppliers are required not only to maintain product quality and pricing but also to fulfill corporate social responsibility alongside TaiHan. In cases of serious violations, cooperation with the supplier will be terminated. If any supplier partners have sustainability-related suggestions, they can submit inquiries and proposals via relationship@thpt.com.tw. (No reports of illegal or unethical conduct were received in 2023.)

In 2023, TaiHan has evaluated the top 35 suppliers based on transaction amounts, covering over 80% of the total transaction volume. The assessment results indicated that all suppliers were rated at the highest level, demonstrating that TaiHan has relatively low supplier-related risks and has established effective communication channels. The Company aims to develop a sustainable supply chain in collaboration with its suppliers.

GradeScoremanagementstatistics
first level85 or aboveGood suppliers have to increase their
purchases.
35
second level60-84Qualified suppliers will conduct publicity
and education training.
N/A
third levelBelow 60Suppliers with bronze medals for two
consecutive years will terminate their
cooperation.
N/A
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