Water Management

Arizon focuses primarily on domestic water use in its water resources management. Although the Company does not use water in its production processes, it upholds the Arizon RFID Technology Group’s commitment to the sustainable use of water resources and continues to implement water-saving measures. Through equipment maintenance, employee education, and daily water-use behavior management, the Company reduces unnecessary water consumption and ensures the maximization of water-use efficiency.

I. Management Background and Water Resource Risks

Climate change has led to an increased frequency of extreme weather events, resulting in rising global water resource risks.

Arizon regularly uses the WRI Aqueduct Water Risk Atlas to assess water-related risks at its operating sites:

Taipei Plant: Low to medium water risk

Yangzhou Plant: Medium to high water risk

In response to potential water scarcity threats, the Company continuously reviews its water usage, identifies potential risks, and plans strategies to enhance water-use efficiency. In addition, KPMG Taiwan (Kuo Fu Hao Hua Certified Public Accountants) has been engaged to conduct assurance services to ensure information transparency and the effectiveness of management practices (as shown in the table below).

II. Management Objectives and Strategies

Arizon aims to reduce unnecessary water use and enhance environmental resilience, and continues to promote the following strategies:

• Enhance employees’ awareness of water conservation through education and training, fostering responsible water-use practices.
• Reduce unnecessary water loss in daily operations through equipment maintenance and behavioral management.
• Continuously monitor water-use data to strengthen risk management and implement improvement plans.

III. Management Policies

The Company actively promotes water-saving measures at the Taipei Plant, including:

• Introducing or replacing water-efficient equipment to improve overall water-use efficiency.
• Regularly reviewing domestic water use to ensure compliance with regulatory requirements.
• Enhancing employee participation through education, communication, and reminders.
• Incorporating water-use management into environmental management processes to continuously strengthen management effectiveness.

In response to the medium to high water scarcity risk at the Yangzhou Plant, Arizon has established a “Three Lines of Defense” strategy to enhance operational continuity and risk resilience:

First Line of Defense: On-site Water Storage Facilities

Utilizing on-site water tanks and reservoirs to provide basic water supply support during short-term emergency situations.

Second Line of Defense: Emergency Water Transfer from Nearby Areas

Planning backup water sources in nearby areas to ensure rapid access to alternative supplies when local water availability is constrained.

Third Line of Defense: Integration of Remote Water Sources

Establishing cooperative mechanisms with external water resource entities to introduce stable water supplies when necessary, addressing broader water scarcity pressures.

IV. Water Conservation Measures

To ensure the efficient use of domestic water, Arizon has implemented the following multi-faceted strategies:

1. Introduction of Water-Saving Equipment:
   Installation of water-efficient faucets, toilets, and related facilities to reduce water consumption.
2. Routine Inspection and Maintenance:
   Regular inspections of pipelines and water-use equipment to prevent leakage and waste, with timely repairs conducted as needed.
3. Employee Education and Engagement:
   Enhancing employees’ awareness of water conservation through internal communications, workshops, and daily reminders, and fostering habits such as “turning off taps when not in use” and “using water in appropriate amounts.”
4. Monitoring and Review:
   Regular review of water-use data and tracking of annual trends, with results incorporated into environmental management processes to support continuous improvement.

Although Arizon does not have significant water demand, the Company firmly believes that every drop of water is valuable. Going forward, it will continue to reduce environmental impacts through equipment improvements and educational initiatives, and work together with all employees to promote the sustainable use of water resources.

V. Water Resource Usage

Arizon combines the implementation of water-saving equipment, routine inspection and maintenance, and employee education and engagement to continuously enhance water-use efficiency. The Company regularly monitors water-use data, tracks annual trends, and incorporates the results into environmental management processes to ensure continuous improvement and the achievement of sustainable management goals.

The water sources for both the Taipei and Yangzhou Plants are municipal water supply. The summary of water withdrawal, discharge, and consumption is shown in the table below:

Water Resource Usage

Unit: Million Liters

VI. Continuous Improvement and Commitment

The Taipei and Mainland China Plants do not involve process water in their production activities; the primary water discharge consists of domestic wastewater. At the Mainland China Plant, domestic wastewater is treated in septic tanks before being discharged into the municipal sewer system and subsequently processed at a centralized wastewater treatment facility.

Although water usage is limited, Arizon places great importance on the sustainable use of water resources. The Company actively promotes water conservation through education, awareness campaigns, and equipment improvements, encouraging employees to develop water-saving habits in daily life. For example, water-saving signage is placed near sinks and drinking fountains to reinforce awareness.

Specific Targets:

1. Reduce overall water consumption by 10% annually.
2. Achieve a water resource utilization rate of over 50%, promoting sustainable water use through multiple water sources and recycling initiatives.

Through these strategies and actions, Arizon integrates water resource management into its core sustainability practices, minimizing environmental impact while ensuring operational water security, and fostering a culture of water conservation among employees and the community.