桓達科技股份有限公司

Sustainable development management

Sustainable Development Committee

In order to practice corporate social responsibility and promote economic, environmental and social progress to achieve the goal of sustainable development, the company established a Sustainable Development Committee in December 2022. The committee's powers include:

Formulate sustainable development directions and goals, and formulate relevant management policies and specific promotion plans.
Promote and implement work related to the company's sustainable development direction and goals.
Track, review and revise the implementation and effectiveness of the company's sustainable development.
Other matters handled by this committee upon resolution of the board of directors.

The company's sustainable development committee has five members, including two directors: WU TING-KUO and Wu KUEI-YUNG, and three independent directors: CHIEN CHUN-CHU, WU CHIN-KUANG and WU HSI-HE. Director WU TING-KUO serves as the convener. The goals are implemented by six working groups: environmental sustainability, employee care, social welfare, corporate governance, customer care and partnership. The board of directors will conduct a report on goals and sustainability implementation results at least once a year, and the content can only be issued after approval by the sustainability committee.
For the implementation status of the Sustainability Committee, please refer to the company’s website: Investor Relations > Corporate Governance > Functional Committee.

Risk Management

The Company has formulated risk management policies and procedures, which have been approved by the Board of Directors. The goal of risk management is to improve management efficiency, provide reliable information, and effectively allocate resources, so that the company can operate steadily and move towards the goal of sustainable development.
The company's functional committee - the Sustainability Committee is responsible for reviewing and supervising risk management. The Company reports risk management-related matters to the Board of Directors at least once a year, most recently at the 11th meeting of the 8th Board of Directors (December 18, 2023). The risk management organizational structure is described as follows:

The company's risk management procedures include five major elements: risk identification, risk analysis, risk assessment, risk response, and supervision and review mechanism. The risks identified by the Company in 2023 and their response strategies are as follows:

Risk category	Countermeasures
Strategy risk	In response to the differential changes in geo-economics, the company operates a multi-brand strategy to reduce revenue risks and certification transformation caused by economic stagnation in a single region. The Americas segment operates the A+Fine brand, the EU and German regions operate the Mütec brand, and Asia and other parts of the world operate the FineTek brand identity.
Business risk	The company regularly reviews the development of high-value industries (HVI) and establishes four main axes for marketing strategies: water resources industry, food industry, energy development and industrial internet of things and information security are combined into four quadrants, all internal and external the innovative activities and services are all related to these four themes. Promote measures such as PDCA supply chain inventory and warehouse age management, global factory production scheduling, exclusive supply chain inventory, active/passive component annual contracts, multi-skilled personnel, and factory-wide automation planning. Assist important supply chain workers and materials to reduce the inventory burden on suppliers. Understand customer needs in the next year and prepare safety stocks and second supply chain development in advance.
Financial risk	Including exchange rate and interest rate risks, the company's financial department evaluates exchange rate and interest rate differences at any time, and then takes hedging measures, such as natural hedging, to avoid causing the company to suffer heavy losses.
Information risk	The company has complied with ISO 27001:2013 information security environment education and training, including application service layer information security management and control training courses, and holds relevant courses regularly. The company has obtained ISO 27001 lead auditor qualification. We conduct a complete assessment of all information security risks and asset impacts, formulate risks and implement countermeasures, and provide a secure operating platform that is consistent for customers, users, and the supply chain. And establish a dual backup system for each factory area. The implementation of external project plans complies with 40/200 information security requirements for people's livelihood and public Internet of Things.
Compliance risk	The company strictly abides by relevant laws and regulations and laws related to the internal control system, including compliance with the listing laws and regulations of the Labor Bureau, etc., and hires legal consultants to provide necessary consultation and review basis to avoid the risk of damaging the company's goodwill and causing significant losses.
Other emerging risks	Due to the impact of the COVID-19 epidemic, the company promotes the use of remote digital management/operation teaching/on-site services on the client side. In addition, modular design of passive components and IC components reduces the customer maintenance burden, and FAE promotes on-site visit services for major customers. The company also promotes SDGs, enhances the corporate governance evaluation brand image, assists Southeast Asian customers with their southbound national certification needs (in response to manufacturers leaving China, European and American lockdowns, and manufacturing service foundations moving to Asia). In addition, it has also established work from home/home Management and training.