Shengda Group Sustainable Development Committee

If you have any questions, guidance or suggestions, please feel free to contact us.esg@billion.com

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.

Significant Topics Quantitative Impact

Billion Group 2023 External Experts' Identification and Evaluation Results for Material Topics