The Company has established criteria for classifying business partners that engage in procurement activities with the Company. This classification enables the organization to systematically analyze its supplier base and develop appropriate procurement strategies.

The classification criteria take into account factors such as purchasing volume, the importance of products and services to the Company’s business operations, the level of dependency on each business partner, and the availability of substitute products or alternative suppliers. Based on these criteria, business partners are classified into three categories as follows:

1. Critical Tier 1 Suppliers

Critical Tier 1 Suppliers refer to key business partners that directly manufacture products or provide services to the Company. These suppliers are characterized by high contract values, limited availability of substitute products or suppliers, continuous purchasing requirements, and the supply of key raw materials that are essential to the Company’s production processes.

2. Tier 1 Suppliers

Tier 1 Suppliers refer to business partners that directly manufacture products or provide services to the Company and have medium to low purchasing volumes or contract values.

3. Non-Tier 1 Suppliers

Non-Tier 1 Suppliers refer to business partners that do not conduct business directly with the Company but engage in business transactions with the Company’s suppliers. These suppliers generally have medium to low purchasing volumes or contract values.

The Company requires all business partners to undergo an annual performance evaluation through the Vendor Evaluation Form and Vendor Self-Assessment. These assessments cover social, environmental, and governance aspects to evaluate the capabilities of business partners and monitor their performance in accordance with the Company’s Supplier Code of Conduct.

The evaluation process also supports continuous collaboration between the Company and its business partners to further improve the quality of products and services on an ongoing basis.

The Company also conducts sustainability risk assessments for business partners that engage in business with the Company. The assessment considers both the likelihood and potential impact of ESG-related risks across economic and governance, environmental, and social dimensions. The objective is to enhance the sustainability performance of business partners and support the long-term sustainable growth of the Company and its network of partners.

As part of this process, sustainability risks are identified, analyzed, assessed, and prioritized based on their Likelihood and Impact. The assessment is supported by information obtained from the Vendor Self-Assessment, which serves as a key input for evaluating potential sustainability risks associated with each business partner.

Based on the 2025 sustainability risk assessment of the Company’s business partners, 3 out of 10 Critical Tier 1 Suppliers were identified as having a high level of environmental risk due to non-compliance with environmental laws and regulations, such as issues related to air pollutant emissions.

Nevertheless, the Company has established risk management measures and conducts annual on-site assessments of its business partners to address identified risks and promote collaborative business practices that support long-term sustainable growth, as follows: