In all business activities, Primax Electronics engages in business activities based on the principles of fairness, honesty, trust worthiness and transparency.It has formulated the "Operational Procedures for Ethical Management and Guidelines of Conduct," which have been approved by the Board of Directors.The Human Resources Division serves as the primary promoter and reportsthe implementation status to the Board of Directors at least once a year. Shall there be any unethical event, the dedicated unit would report the treatment and the followup review and improving measures to the Board. Further, the Board of Directors and senior management implement their commitments to the management policies proactively and have signed the Statement of Ethical Corporate Management Best Practice Principles to fully implement the ethical management policy. For details on the Company's implementation of ethical corporate management, please refer to 【P40 ~P41 of the 2023 Annual Report of Annual General Meeting】.

Furthermore, the Company's "Work Rules" and "Employee Code of Conduct"require all employees to comply with laws and ethical guidelines when performing business activities, where as suppliers and business partners are bound to sign the "Statement of Suppliers" and  “ Supplier Code of Conduct” in order to create a trading environment following the principles of fairness, honest, trust worthiness and transparency.

Primax's important internal regulations

Employee code of conduct

Primax Electronics is committed to fulfilling its mission of "maximizing yield for shareholders and customers, and creating a joyful environment for employees to work in." To achieve such goals, we need the trust and support from customers,business partners, shareholders and the general public, and employees who are honest, credible and law-abiding become an important foundation. The"Employee Code of Conduct" is the basic standard of conduct that all employees of Primax shall abide by when performing related business activities. It includes personal ethical standards, regulations on gifts and hospitality, protection of trade secrets, avoidance of conflicts of interest, compliance with fair trade,whistleblowing methods and disciplinary principles.

The relevant facts will be investigated if any of Primax's employees is found or accused of being involved in any unethical conduct. If any violations of relevant laws and regulations or the employee code of conduct are proven, depending on the severity of the circumstances, sanctions such as reprimand, retraining,reprimand or demerit, with holding of performance bonus or dividend, demotion or dismissal may be imposed in accordance with the work rules applicable locally. In the case of material circumstances, the employment contract may be terminated in accordance with local laws and the terms of the employment contract, and the Company may pursue the employee's criminal and civil liabilities pursuant to laws.

Ethical corporate management education and training

Every year, Primax Electronics regularly organizes various communication meetings, promotional videos, and fun activities to convey the integrity value insimple terms. Meanwhile, it also arranges employees to under go anti-corruptioneducation and training. Each new employee must participate in the orientation training courses for 8 hours within one month after his/her onboard. The courses include the introduction and explanation of employee code of conduct、ethics and integrity for one hour. The training percentage of new employees was 100 %. Meanwhile, the Company also offered ethical corporate management education and training courses to the existing employees. In 2023 , a total of 813 classes were organized, attended by atotal of 17 , 790 participants. In 2023 , Tymphany Huizhou organized the RBA basictraining (including ethics and integrity) for 0.5 hour in 2023 , where 3,882 employees and non-employees received a total of 1,941 hours of training, with 100 % of new employees receiving training. (RBA basic education training for new employees and training for existing employees have not been conducted at other locations).

In addition to employees, Primax works with third-party accreditation entities to hold annual social responsibility training for suppliers every year step by step.The training is mainly based on the RBA Code of Conduct, including four major topics of labor, health and safety, environment, and a code of ethics. In addition to communicating the RBA COC V7.0 standards with all suppliers through the GPMS system, we offered relevant training sessions to let suppliers understand thedegree of Primax's concern about the above issues. Please refer to the chapter on【 sustainable supply chain for the percentage of suppliers which received training】.

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Avoidance of conflicting interests

Primax Group has formulated the "Corporate Governance Best Practice Principles"and"Operational Procedures for Ethical Management and Guidelines of Conduct,"which state that, if a director, manager, or any stakeholder attending or presenting at the Board meeting has interest in any motion discussed in theBoard meeting, himself/herself or on behalf of the juristic person represented by him/her, he/she must state the stakes involved during the current meeting session and shall disassociate from all discussions and voting if the stakes arein conflict against the Company's interests. Meanwhile, the concerned partymay not exercise voting rights on behalf of other directors. All of the directorsare highly disciplined in their conducts, and have managed to disassociate themselves from agendas that present conflicting interest. For more disclosures regarding avoidance of conflicting interests managed by the highest governance body, please refer to the section about corporate governance on《 P24 of the 2023 Annual Report of Annual General Meeting》.

Robust internal audit system

In order to implement the corporate governance and self-supervisory mechanism, in accordance with the " Regulations Governing Establishment of Internal Control Systems by Public Companies,"and in consideration of theoverall business activities of Primax and its subsidiaries, Primax Group has the Chairman call the audit unit and managers to prepare the internal control system subject to approval of the Board of Directors, aiming to "promote the effective operation of the corporate organization."

Primax Electronics has set up an operation audit unit, including one chief internal audit officer and two dedicated personnel. Each unit and subsidiary of the Company conducts a self-inspection at least once a year. Then, the internalaudit unit will review the self-inspection results of each unit and subsidiary.The result, together with the deficiencies found in the internal control by the internal audit unit, will serve as the reference helping the managers evaluate the effectiveness of the overall internal control system. The Audit Committee and directors shall hold regular meetings with the chief internal audit officer regarding the deficiencies found in the internal control system, and meeting minutes shallbe prepared to facilitate the implementation of the internal control system. The minutes shall be submitted to the Board of Directors.

The Company's internal audit unit formulates an annual audit plan for the next year based on the risk assessment results by December of each year, and implements various audit items according to the audit plan. The internal auditors summarize the problems discovered during the audit, formulate improvement suggestions, prepare the "Internal Audit Report" and request each improvement unit to complete the improvement countermeasures and then submit them to the chief internal audit officer and Chairman for review. Deficiencies and abnormalities found in the internal control system during the inspection shall be disclosed in theaudit report honestly. Upon submission of the report, we will follow up them atleast on a quarterly basis until they are corrected, in order to ensure that relevant units have taken appropriate improvement measures in a timely manner. In 2023 ,the internal audit plan has been completed, and all units have been audited. For details on the communication between independent directors and chief internal audit officers and CPAs, 【please refer to】 the Company's website.

Compliance

Primax Group firmly believes that compliance lays the foundation of ESG. We uphold our commitment and continue to work hard to ensure that all corporate activities comply with local regulatory requirements. the table below shows our reporting breaches of the Codes of Conduct. In 2023 , no major disciplinary incidents occurred to Primax Group.Not with standing,one sexual harassment case occurred at one of Primax's overseas locations.It has investigated the case and imposed punishment according to relevant laws and regulations. We also improved the internal "Regulations Governing Prevention of Sexual Harassment at the Workplace" and implement remedial measures to minimize negative impacts and mitigate the risk over recurrence inthe future.