Sustainable Governance

Compliance risks across LCY's operating sites in Taiwan are identified through regulatory assessments conducted by designated units within their respective risk domains. LCY's Intelligent Regulatory Compliance Operations Management System ( the "Compliance Platform") currently tracks 944 regulations and 22,350 legal interpretations. During 2025, the platform monitored 122 regulatory amendments and 88 updates to regulatory interpretations ensuring all operations comply with the latest laws. These updates are communicated to employees through training programs, internal briefings, and announcements, to cultivate compliance awareness.

Guided by a compliance-centric philosophy, LCY delivers high-quality products and services while proactively adjusting operational strategies in response to regulatory changes and policy trends. In recent years, regulatory authorities have tightened controls on hazardous air pollutants by implementing new emission limits for stationary pollution sources, while enforcing stricter wastewater discharge standards and energy conservation and carbon reduction targets. In response, our facilities have implemented measures including transitioning to low-emission fuels (replacing heavy oil with natural gas), installing enclosed hoods in production lines, optimizing processes, and replacing high energy-consuming equipment. In addition, in compliance with the amended Regulations of the Labor Health Protection, our facilities with 50 or more employees engage contracted healthcare personnel to provide on-site health services.

Based on the results of its materiality assessment process, LCY identified topics with financial and impact materiality to established a forward-looking risk management framework. Led by the ERM & Sustainability Department, this framework encompasses dimensions including financial risks ( e.g., foreign exchange exposure ), process safety, occupational health, climate-related physical and transition risks, environmental impact management, and business integrity. The Board serves as the highest oversight body for risk management. In addition to supervising the formulation and execution of risk management strategies, the Board conducts quarterly financial trade off and decisions on major risks. This ensures that risk management is effectively integrated into key business decisions, such as capital allocation and R&D strategies, thereby strengthening LCY's ability to create long-term value.

Once product development reaches a designated milestone, researchers can file for patents or document trade secrets for R&D outcomes that demonstrate patentability and commercial value. This framework safeguard the company's innovations while rewarding investors with incentives. From 2014 to 2025, cumulative patent applications reach 188, with more than 100 employees receiving IP rewards.