Materiality Identification Process

According to the GRI 3 - Material Topic, presented in GRI Universal Standards 2021 of the GRI Standards system issued by the Global Reporting Initiative (GRI), companies are required to conduct due diligence and disclose in the ESG Report the process of identifying, preventing, mitigating, and explaining how to address their actual and potential negative impacts on the economy, environment, and people (including their human rights). This process should be documented to obtain consensus and approval from the Company's internal sustainability-related organizations as a standard procedure for future Identifying Material Topics.

In 2023, the Company redefined and implemented the Materiality Identification Process in accordance with the aforementioned GRI Standards, to be carried out every two years. The "Impact Level" was used as the principle for assessing whether a topic is material, and the positive and negative impacts, scope of impact, and likelihood of occurrence were identified for each issue. Finally, the Board of Directors approved the material topics of the 2022 ESG report, covering the Material Identification Process and 11 material topics.

Although the Material Identification Process does not need to be carried out again in 2024, the "Impact Level" and "Likelihood of Occurrence" of the 11 Material Topics in the 2022 ESG Report still need to be reviewed and managed. The ESG team members will then discuss and prioritize, followed by verification by external assurance providers, and finally reported to the Board of Directors. The "Material Topics of the 2023 ESG Report" were approved by the Board of Directors on February 26, 2024.

Material Topics Boundary

This report is based on the organizational chart of affiliated companies and the internal supply chain as shown on pages 108-109 of the 2023 Annual Report (please refer to the diagram below). It further identifies material topics for companies with substantial production, in which the company holds more than 50% ownership, have a significant economic, environmental and social impact on the Company, have upstream or downstream relationships with the Company, and where the Company is able to control the operations of non-controlling and venture capital investees.

• TThe scope of this report includes: Coretronic’s Taiwan Plants (Lixing Plant, Chunan Plant, Tainan Plant 1, Tainan Plant 2), Coretronic's China plants (Kunshan plants: Coretronic Projection (Kunshan), Coretronic Optics (Kunshan); Wujiang plants: Coretronic Optotech (Suzhou), Coretronic Display (Suzhou), Coretronic Optics (Suzhuo)), and subsidiaries in Taiwan (Champ Vision Display, Coretronic Intelligent Cloud Service, Coretronic Intelligent Robotics).
• Furthermore, for identifying material topics outside the organization, we selected stakeholders with high importance and high relevance to the Company's daily operations from 9 stakeholder groups, including customers, suppliers, and communities, to conduct the identification.