Friendly Workplace

Employee Relations Occupational Health and Safety

Workplace Diversity and Human Rights Policy

Tung Ho Steel respects and supports the internationally recognized human rights norms and principles, including the "Universal Declaration of Human Rights", "United Nations Global Covenant", and the International Labor Organization's "Declaration on Fundamental Principles and Rights at Work". We abide by the laws and regulations of the place where the Company is located and have established Workplace Diversity and Human Rights Policy in accordance with the UN Guiding Principles (UNGPs) on Business and Human Rights. The scope of this policy also applies to the Company’s subsidiaries, foundations whose cumulative direct or indirect donations exceed 50%, and other group companies and organizations such as institutions or legal persons that we have substantial control over.

Workplace Diversity and Human Rights Policy
1. Diversity, Inclusion, and Equal Opportunity In accordance with all national labor laws, the Company prohibits child labor and forced labor and does not tolerate discrimination. The Company strives to create a diverse, open, equal, and harassment-free work environment and provides an effective and appropriate grievance system to protect the rights and interests of its employees. Employment is based on professional abilities and experience, and employees are not to be treated differently or discriminated against in any form based on race, nationality, social class, language, ideology, religion, political affiliation, place of origin, birthplace, gender, sexual orientation, gender identity and expression, age, marital status, pregnancy, appearance, facial features, physical or mental disabilities, zodiac sign, blood type, or previous union membership, including in recruitment, selection, assignment, deployment, training, evaluation, promotion, compensation, and benefits; where otherwise provided for in other laws, such provisions shall prevail.
2. Safe and Healthy Work Environment The Company is committed to providing a safe and healthy work environment as well as necessary health and first aid measures to eliminate any factor that may be hazardous to the health and safety of its employees in the work environment, reducing the risk of occupational disasters. The Company regularly provides labor safety related education and training, annual employee health checks, and various health promotion activities, in order to take care of the physical and mental health of its employees.
3. Freedom of Assembly The Company respects the rights of employees to form and join various social organizations. Diversified communication systems and platforms are provided for employees to ensure a harmonious and win-win labor-management relationship.

Workplace Diversity and Human Rights Policy

1. Diversity, Inclusion, and Equal Opportunity

In accordance with all national labor laws, the Company prohibits child labor and forced labor and does not tolerate discrimination. The Company strives to create a diverse, open, equal, and harassment-free work environment and provides an effective and appropriate grievance system to protect the rights and interests of its employees.
Employment is based on professional abilities and experience, and employees are not to be treated differently or discriminated against in any form based on race, nationality, social class, language, ideology, religion, political affiliation, place of origin, birthplace, gender, sexual orientation, gender identity and expression, age, marital status, pregnancy, appearance, facial features, physical or mental disabilities, zodiac sign, blood type, or previous union membership, including in recruitment, selection, assignment, deployment, training, evaluation, promotion, compensation, and benefits; where otherwise provided for in other laws, such provisions shall prevail.

2. Safe and Healthy Work Environment

The Company is committed to providing a safe and healthy work environment as well as necessary health and first aid measures to eliminate any factor that may be hazardous to the health and safety of its employees in the work environment, reducing the risk of occupational disasters.
The Company regularly provides labor safety related education and training, annual employee health checks, and various health promotion activities, in order to take care of the physical and mental health of its employees.

3. Freedom of Assembly

The Company respects the rights of employees to form and join various social organizations. Diversified communication systems and platforms are provided for employees to ensure a harmonious and win-win labor-management relationship.

Note: On December 26, 2023, the 6^th meeting of the 25^th Board of Directors approved the revision of the Human Rights Policy to the "Workplace Diversity and Human Rights Policy."

Compensation Policy

Compensation Policy
1. Employees remuneration policy The main compensation items of our full-time employees include fixed salary, job allowances, supervisor bonuses, fuel subsidies, meal allowances, work bonuses, sales bonuses, and other allowances. In addition, surplus bonuses, year-end bonuses, and employee compensations are distributed based on the company’s operating profitability. Standard of remuneration payment is based on the Company’ s salary structure standard for each position. It also refers to the salary market and the state of operation, which involved the individual’s responsibility, learning and working experience, professional skill, job tenure and personal working performance. The salary payment is based on stable compensation, and flexible bonuses that take into account the content of each job, the responsibility, contribution and personal work performance are also provided. There is no difference in pay based on age, gender, race, religion, political stance, marital status, or union affiliation. The Company’s compensation policy has been set up based on the principle of profit sharing.
2. Managers remuneration policy The numeration for managerial officers is determined based on the company’s overall market positioning, relevant industry salary survey results, and the remuneration is determined considering factors such as the managerial officers’goal attainment and contributions. The numeration package includes fixed salary, managerial allowances, fuel subsidies, job bonuses (or sales bonuses), various allowances, incentives, year-end bonuses, and employee compensation. The reasonableness of the remuneration is regularly evaluated by the Remuneration and Nomination Committee.
3. Directors remuneration policy Based on the Company’s articles, the total allocation for directors’ remuneration should not exceed 2% of the Company’s earnings for the year and should be distributed by performance evaluation of each director. Salary and Remuneration Committee proposes that the Company pays a monthly fixed amount for directors’ remuneration by referring to the payment level of other listed companies in the same industry and the responsibility of each director. Thereafter, the above proposal will be evaluated and approved by the board of directors. Besides the monthly fixed remuneration for directors, an allowance for their attendance will also be provided based on the actual frequency of their participation in the board meeting. If the directors also served as other functional members in the committee, they are entitled for an additional monthly fixed payment based on the actual frequency of their participation in the Board meeting.
4. Independent Director remuneration policy Independent directors get a monthly fixed payment. In addition, an allowance for their attendance will also be provided based on the actual frequency of their participation in the Committee meeting. However, they cannot participate in the distribution of earnings. The fixed payment mentioned above is based on the degree of the participation and contribution of an individual in the Company’s operation and refers to the payment situation of other listed companies in the same industry. It is submitted to the remuneration committee for discussion, then proposed in the Board of Directors for evaluation and approval. If the independent directors also served as other functional members in the committee, they are entitled for an additional monthly fixed payment based on the actual frequency of their participation in the Committee meeting.

1. Employees remuneration policy

The main compensation items of our full-time employees include fixed salary, job allowances, supervisor bonuses, fuel subsidies, meal allowances, work bonuses, sales bonuses, and other allowances. In addition, surplus bonuses, year-end bonuses, and employee compensations are distributed based on the company’s operating profitability.
Standard of remuneration payment is based on the Company’ s salary structure standard for each position. It also refers to the salary market and the state of operation, which involved the individual’s responsibility, learning and working experience, professional skill, job tenure and personal working performance.
The salary payment is based on stable compensation, and flexible bonuses that take into account the content of each job, the responsibility, contribution and personal work performance are also provided. There is no difference in pay based on age, gender, race, religion, political stance, marital status, or union affiliation. The Company’s compensation policy has been set up based on the principle of profit sharing.

2. Managers remuneration policy

The numeration for managerial officers is determined based on the company’s overall market positioning, relevant industry salary survey results, and the remuneration is determined considering factors such as the managerial officers’goal attainment and contributions.
The numeration package includes fixed salary, managerial allowances, fuel subsidies, job bonuses (or sales bonuses), various allowances, incentives, year-end bonuses, and employee compensation.
The reasonableness of the remuneration is regularly evaluated by the Remuneration and Nomination Committee.

3. Directors remuneration policy

Based on the Company’s articles, the total allocation for directors’ remuneration should not exceed 2% of the Company’s earnings for the year and should be distributed by performance evaluation of each director.
Salary and Remuneration Committee proposes that the Company pays a monthly fixed amount for directors’ remuneration by referring to the payment level of other listed companies in the same industry and the responsibility of each director. Thereafter, the above proposal will be evaluated and approved by the board of directors.
Besides the monthly fixed remuneration for directors, an allowance for their attendance will also be provided based on the actual frequency of their participation in the board meeting.
If the directors also served as other functional members in the committee, they are entitled for an additional monthly fixed payment based on the actual frequency of their participation in the Board meeting.

4. Independent Director remuneration policy

Independent directors get a monthly fixed payment. In addition, an allowance for their attendance will also be provided based on the actual frequency of their participation in the Committee meeting. However, they cannot participate in the distribution of earnings.
The fixed payment mentioned above is based on the degree of the participation and contribution of an individual in the Company’s operation and refers to the payment situation of other listed companies in the same industry. It is submitted to the remuneration committee for discussion, then proposed in the Board of Directors for evaluation and approval.
If the independent directors also served as other functional members in the committee, they are entitled for an additional monthly fixed payment based on the actual frequency of their participation in the Committee meeting.

Management Regulations for ESG-related Incentive Pay to Senior Management

To encourage senior executives to actively participate in and promote ESG goals, enhancing the company's sustainable competitiveness, we have formulated the “Management Regulations for ESG-related Incentive Pay to Senior Management”. Assessment criteria include the proportion of renewable energy use (30%), absolute carbon reduction targets (30%), direct carbon intensity (5%), environmental fines at plant sites (5%), significant occupational accidents (5%), injury incidents (5%), corporate governance evaluations (20%), and other short- to medium-term goals. ESG bonuses are awarded based on the department's performance and alignment with these criteria. The scheme was approved by the 5th session of the 6th Compensation and Nomination Committee on May 14, 2024, and by the 9th session of the 25th Board of Directors on May 24, 2024.

Distribution of Employees

To establish a harmonious, friendly, and healthy working environment, Tung Ho Steel hires employees in accordance with Labor Standards Act, Act of Gender Equality in Employment and Occupational Safety and Health Act. However, due to the characteristics of the iron and steel industry, there are more male employees, and the gap between the number of male and female employees is large. As of the end of 2024, the total number of employees in Tung Ho Steel was 2,126 (1,835 full-time employees and 291 males temporary employees ^{Note 1}). The Company hired 59 indigenous employees (accounting for 2.8%) and 22 employees with disabilities (accounting for 1.03%) ^{Note 2}, higher than the 1% standard of the government’s employment quota prescribed in the People with Disabilities Rights Protection Act. All employees are full-time employees, and senior management ^{Note 3} are 100% Taiwanese nationals. In addition, there were 5 staff members without guaranteed working hours and 259 non-employee workers ^{Note 4}.

Note：
1. Temporary employees refer to specific contract personnel, mainly foreign workers.
2. Indigenous people account for 2.8% of the total number of employees, and the job categories include department supervisors and other personnel. Employees with disabilities account for 1.03% of the total number of employees, and their job categories include senior executives, department supervisors, and other personnel.
3. High-level management refers to management positions including the president, senior Vice President, vice president, assistant manager and factory director.
4. Non-employee workers refer to contractors, whose main task is rebar processing.
5. The main work of the Company is all conducted by the employees hired by the Company, and there is no dispatched manpower and does not include board members.
6. The employee statistics mentioned above are from the HR system, and there are no numerical assumptions.
7. Local places refer to Taiwan region, and the major operating bases include the Head Office, Taoyuan Works, Miaoli Works, Kaohsiung Works-Jiaxing, Kaohsiung Works-Daye, Taoyuan Fabrication Center, and Taichung Harbor Logistic Office.

Labor-Management Communication

The Company does not hinder the right to freedom of association. Except for the Kaohsiung Works-Daye, enterprise unions have been established in all operating bases, with labor-management meetings being regularly held. Trade union members can elect labor representatives to participate in labor-management meetings for labor-management communication, coordination of labor-management relations and promotion of labor-management cooperation. In 2024, more than 93% of employees in the Company joined the trade union.
To maintain stable labor relations, promote labor-management harmony, and enhance labor welfare, the Company started a collective agreement negotiation meeting with the enterprise union in Miaoli Works in September, 2023 in accordance with the Collective Agreement Act, discussing matters concerning labor conditions, welfare measures, occupational safety, employee grievance systems, labor union organization operations, and the use of enterprise facilities. After six negotiation meetings, the two parties signed a collective agreement on May 8, 2024. The validity period of the collective agreement was from the signing date till May 7, 2027, with a period of 3 years.
The Company has set up the Employee Welfare Committee and the Supervisory Committee of Workers' Retirement Fund, both of which have representatives elected by the enterprise union to serve as the committee members to supervise and protect the employees’ rights and interests.

Employee Benefits

Tung Ho Steel regards employees as the most important assets of the Company. In order to take full care of the employees and provide great working conditions to satisfy employees’ needs, we not only provide basic protection in accordance with legal requirements but also specifically provide or sponsor the promotion of welfare programs with establishment of the Joint Employee Welfare Committee among the major operating bases (including the Head Office, Taoyuan Works, Miaoli Works, Kaohsiung Works-Jiaxing, Kaohsiung Works-Daye, Taoyuan Fabrication Center, and Taichung Harbor Logistic Office) to organize various employee welfare activities and subsidies.

Talent Cultivation

To stimulate the potential of our employees and enhance their professional capabilities, we have provided diverse learning resources and channels, including the orientation training for new recruits, technical and professional training for various functions, management training for supervisors at all levels, and general education courses like languages and courses in arts and humanities. It is hoped that all employees can be in appropriate job fit through a complete education and training system to enrich the human resources of the Company. To encourage our employees to continue on-the-job learning to obtain more knowledge and skills, the costs for participating in education and training at home and abroad of the employees are 100% covered by the Company in accordance with the Education and Training Regulations. If the education and training courses are held beyond normal working hours, the employees can apply for overtime or switch shifts as prescribed.

For unfit employees, the Company has set up relevant measures for performance improvement. The supervisors assist the employees to jointly establish the improvement plans and take corresponding measures, and three to six months will be provided for improvement. We aim at achieving the purpose of enabling employees to be in appropriate job fit.

Retirement System

The Company has set up the pension plan for the employees ^Note in accordance with the Labor Standard Act and Labor Pension Act and has approved the establishment of the Supervisory Committee of Labor Retirement Reserve. Actuarial calculation of the labor pensions of the old system is made year by year (from 2015 to 2017 the allocation rate was 7%, and starting from 2018, the allocation rate was adjusted to 10%), and a meeting is convened regularly to protect the employees’ rights and interests. As of the end of 2024, the pension reserve has been sufficient to cover the pension of employees who are qualified for retirement in a year. A 6% of monthly contribution to the individual pension account in accordance with the Monthly Contribution Classification Table is made for employees eligible for the new pension system, and the voluntary contribution percentage ranges from 0%~6%.

Note: Please refer to P.41 of the Individual Financial Statement for Q4/2022 for detailed information concerning labor pension.