Shengda Group Sustainable Development Committee

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Identification of Major Topics

Billion introduced materiality analysis in the preparation of the sustainability report, and followed the standards set by the Sustainability Accounting Standards Board (SASB) for the hardware (HARDWARE) industry, taking into account industry peers. After integration, a total of 35 topics were selected by external experts based on their actual or potential negative impacts and positive contributions to the economy, environment, and population (including human rights). The analysis also considered the requirements and concerns of international sustainability organizations and potential investors regarding corporate sustainability. Each topic was scored based on actual negative impacts, potential negative impacts, actual positive contributions, and potential positive contributions to the economy, environment, and population (including human rights), and discussed with on-site colleagues. Based on the economic, environmental, and social topics that have a significant impact on the company's sustainable operations. They will be used as the reference basis for major topics and information disclosure in the 2023 annual report.

ESG Topics Materiality Analysis Steps

1. Identification of Stakeholders	2. Summarizing ESG Issues	3. Surveying Issues of Concern	4. Identification of Material Topics	5. Review and Discussion
Principle of Stakeholder Inclusion	Principle of Sustainability Context	Materiality Principle	Materiality Principle	Integrity Principle
Through discussions and feedback from external experts, department heads and colleagues, and with reference to the stakeholder groups identified in the ESG reports of industry peers, identify inclusive stakeholders as the target of material communication. In 2023, employees and other workers, shareholders and other investors, customers, suppliers/ contractors, banking institutions, and media were identified as the Company's main stakeholders.	The collection of topics considers the context of sustainability, mainly using the GRI Standards published by the Global Reporting Initiative (GRI) and the Sustainability Accounting Standards Board (SASB) standards, and with reference to the topics of industry peers, as the topic pool for materiality identification and ranking. A total of 35 items were summarized, including corporate governance, economy, and environmentrelated content, as the scoring items for positive and negative impacts.	In 2023, through scoring and identification by external experts and internal discussions with the Company's executives and colleagues, the impact of each issue on the company's sustainable management was understood and used as a reference for topic ranking	Based on the scoring results and the opinions of the Company's management, the materiality of each topic is analyzed and ranked, and material topics are identified. In 2023, a total of 9 material topics were identified, and effective management approaches were formulated for each topic.	After identification, for the boundaries of material topics, Billion Electric prioritizes the issues and incorporates them into annual work or goals. In the future, management will continue to be strengthened, and reviews will be conducted to determine if there is a need to adjust the material topics. Relevant information will be disclosed in the ESG report. identification, for the boundaries of material topics, Billion Electric prioritizes the issues and incorporates them into annual work or goals. In the future, management will continue to be strengthened, and reviews will be conducted to determine if there is a need to adjust the material topics. Relevant information will be disclosed in the ESG report.

Material Topics Identification Results

Based on the scoring results of external experts, 13 issues were selected: economic performance, customer privacy/information security, customer health and safety, supplier social assessment, supplier environmental assessment, employee diversity and equal opportunity, innovative product R&D and marketing, occupational health and safety, risk management, waste, customer service management, energy, and renewable energy. After discussions with the Company's colleagues, it was confirmed that the material topics for 2023 are economic performance, information security, supplier social assessment, supplier environmental assessment, employee diversity and equal opportunity, occupational health and safety, risk management, customer relationship management, and innovative product R&D and marketing, a total of 9 sustainability issues. These are listed as items for continuous attention and promotion, as well as the basis for future ESG report disclosure. Compared with 2022, after discussions with senior management and colleagues, "Innovative Products and Technologies" was renamed to "Innovative Product R&D and Marketing". Since Billion Group is not an enterprise that uses a large amount of energy, and renewable energy is the Company's own products and services, not related to the production of renewable energy within the Company, and because the Company's production lines do not generate significant hazardous and large amounts of waste, the 2023 material topics focus on 9 material topics, so the three topics of "Energy", "Renewable Energy" and "Waste" were reduced. The content will be compiled by the

Sustainable Development Committee, reported to the Board of Directors for confirmation, and then issued.

Based on the risk assessment, the relevant risk management policies or strategies are formulated as follows:

Major Issues	Risk Assessment Item	Description
Environment	Environmental Impact and Risk Management	1. Obtained the ISO 14001 Environmental Management System certification and will continue to maintain its validity
		2. A climate risk identification process has been established following the TCFD framework. Through cross-department discussions, one opportunity and five risks have been identified.
		3. In 2024, completed an ISO 14067 product carbon footprint inventory for power products.
		4. By 2025, plans to extend the implementation of ISO 14064-1 greenhouse gas inventory operations across the entire group.
Society	Occupational Safety and Health	Fire drills and workplace safety training are conducted annually to develop employees’ emergency response skills and self-safety management capabilities make employees are protected from exposure to potential hazards that may cause injury or illness, such as chemicals, radiation, noise, and fire.
	Employee Diversity and Equal Opportunity	Established diverse accesses to implement Billion's diversity and equality policies, ensuring employee rights and benefits.
Corporate Governance	Economic Performance	Adopted a prudent business strategy and continue to make profits, create maximum corporate value to safeguard shareholders' rights and interests, and fulfill social responsibilities, take natural hedging in the physical parts of foreign currency generated by operations, and continue to pay attention to market changes to reduce or avoid possible economic losses.
	Supplier Environmental and Social Assessments	1. Social responsibility and ethics and environmental management have been incorporated into the supplier evaluation to confirm that the supplier meets the requirements, and the main suppliers are regularly sampled for re-evaluation to implement supplier management.
		2. Social responsibility: continue to increase the proportion of local procurement, comply with local laws and regulations in working hours, do not have illegal and improper profits, and ensure that products do not use conflict minerals from the Congo and its surrounding areas.
		3. Environmental policy: Advocate the company's environmental policy to suppliers when issuing purchase orders - encourage full participation, effective energy conservation, continuous pollution prevention, and commitment to continuous improvement.

Major Issues	Risk Assessment Item	Description
Corporate Governance	Customer Relationship Management	To efficiently address customer dissatisfaction and feedback, the highest management of each business unit holds periodic customer satisfaction review meetings, involving the quality assurance, R&D, production management, procurement, and sales departments. The goal is to integrate internal resources, resolve customer dissatisfaction, provide comprehensive customer service, and enhance overall customer satisfaction.
	Information Security	1. Billion's information security management regulations must comply with relevant government laws and regulations, such as the Information and Communications Security Management Law, Criminal Law, State Secrets Protection Law, Patent Law, Trademark Law, Copyright Law, Personal Data Protection Law, etc. We will continue to strengthen information security protection measures and enhance employees' awareness of salary security protection. Since Billion Watts has case monitoring products, it must have special personnel to standardize and manage the customer's personal information, and Billion Watts has a review meeting every year to review the relevant management norms and projects in a timely manner, and whether there is a need to adjust them to strengthen their safety.
		2. For the customer's personal information, there are special personnel in the information department to standardize and manage, and Billion Watts has a review meeting every year to review the relevant management norms and projects in a timely manner, and whether there is any need to adjust or add or delete measures.
		3. Manufacturers need to understand the high security standards of Shengqi for personal information protection before cooperating, and Shengqi will also carefully evaluate its past cooperation experience, service enterprises and capability requirements before cooperating with Shengqi to ensure that both parties have a consensus on the protection of customer information security before starting relevant cooperation.
		4. Billion has led the ISO 27001 information security system and established the "Information Security Committee", which is responsible for implementing the effective operation and continuous improvement of the information security management system, formulating internal information security policies, planning and implementing information security operations and information security policies.
Corporate Governance	Innovative product development and marketing	Power Supply R&D
		1. Low-cost strategy: refers to the use of means to reduce the cost of products, in order to reduce the sales price to strive for use
		2. Improving energy efficiency: In response to the global trend of energy conservation and emission reduction, improving energy efficiency in power supply product design is a priority strategy, which can help consumers reduce the consumption of power conversion in electrical products and achieve energy saving.
		3. Green Energy Product Policy: In Taiwan's 2040 comprehensive electric vehicle plan, power supply research and development provides the main power supply application of AC EV charging piles for electric vehicles of its subsidiary "Billion EVC" to enhance the charging demand for electric vehicles in Taiwan.
		4. Comprehensive service strategy: Implement more comprehensive and thoughtful sales services to gain the trust of users and achieve the purpose of improving market competition. Comprehensive services include: marketing, technical training; Check the quality, complete spare parts; Installation adjustment, guidance, or telephone customer service, etc.
		Telecom R&D and Marketing
		1. Grasp the development trend of the industry: 5G NR, FWA (Fixed Wireless Access).
		2. Combining Networking and New Industrial Trends: Industries with M2M Applications (Energy Saving and Security Applications)
		3. Product differentiation: Customized functions and specifications are tailored to meet the needs of individual industries.
		4. Provide customers with cloud value-added services to win customers and enhance the added value of products.