5.3 Responsible Procurement and Supplier Management

5.3.1 Responsible Procurement and Supplier Management

As in the financial service industry, PSC is an agent or a distributor, so we cause little impact on the environment. Our suppliers in 2022 can be mainly divided into renovation projects, software and hardware maintenance, information services, and others, all of whom are local suppliers in Taiwan. To contribute to the society's pursuit of environmental protection, energy conservation, and carbon reduction, the procurement principles are clearly set out in our requisition and procurement management regulations that the items purchased shall be aligned with the environmental protection, sustainable development, and radiation protection standards, thereby reducing the impact of PSC’s procurement on the environment.

5.3.2 Supplier Management

We adopt an open and fair procurement process and have set up a section dedicated to invitation to bid on the Company's website to provide information on invitation to bid. To control the quality of suppliers, we review whether suppliers’ transaction counterparties have a record of unethical or illegal conduct as per the Ethical Corporate Management Best Practice Principles and avoid collaboration if such a record is confirmed. If unethical conduct is discovered after a contract has been signed, we may terminate or rescind the contract at any time. To maintain the principle of fairness, as per the Company's Purchase Requisition and Procurement Management Regulations, if the total purchase amount exceeds NT$ 800,000, it requires a price negotiation meeting by the members of the price negotiation team, including directors of the Finance Department, the Administration Department, the Compliance Division, the Settlement and Clearing Department, and the Risk Control Office, and at least one representative of the Company’s top management in accordance with the negotiated price. In addition, quotes should be obtained from three suppliers and compare the prices. In 2023, the price negotiation team deliberated on a total of 86 cases in full compliance with the Company’s regulations for price negotiation.

To improve the service quality of suppliers and enhance the fairness and transparency of the Company’s supplier evaluation scoring mechanism, the General Affairs Department revised the “Procurement and Purchasing Management Regulations” in 2023 to include acceptance, incident, and sustainability assessments on top of the existing annual evaluation. The revisions made the supplier evaluation process more comprehensive. Since 2017, we have conducted all supplier assessments by electronic means, which has greatly reduced paper waste.

In 2023, assessments were conducted on 100 suppliers whose annual procurement transaction amounts exceeded NT$100,000. Each supplier was evaluated by at least two individuals to ensure objective scoring. The overall assessment results showed 71 suppliers receiving an A grade and 29 receiving a B grade, with no unqualified suppliers.

Since 2016, PSC Securities has required its suppliers to sign a Supplier Social Responsibility Commitment Statement and has established a dedicated supplier section on the Company's website. In 2023, the overall percentage of suppliers who signed the commitment reached 95.93% (excluding one-time purchases). The suppliers who did not sign were primarily foreign suppliers or individual physicians. This demonstrates the Company's influence, ensuring that partner suppliers understand PSC’s commitment to integrity and sustainability while also encouraging them to implement sustainability practices. This collective effort contributes to a sustainable environment, achieving shared prosperity and success.