Stakeholder Analysis

Managing Stakeholder Impacts Across the Business Value Chain

Modernform operates a furniture manufacturing and distribution business with a value chain that spans from product development, production, marketing and sales, transportation and installation, to after-sales service to create value and meet the real needs of customers.

The Company has identified key stakeholders, considering both the positive and negative impacts of activities within the business's value chain, which includes primary activities and support activities, with the aim of reducing potential impacts from operations on stakeholders by conducting business fairly, responsibly using limited resources, and being accountable to stakeholders.

Modernform’s Value Chain

Modernform believes that sustainable success arises from creating shared value with all stakeholder groups. Therefore, the Company prioritizes listening to, understanding, and responding to stakeholder expectations systematically through diverse and efficient communication channels to utilize the information for defining strategies and continuously improving operations.

Stakeholder Management Process

The Company manages its stakeholders through four primary steps as follows

1. Stakeholder Identification and Categorization

The Company identifies both internal and external stakeholder groups involved in its business operations throughout the value chain. This is determined by considering those who impact the organization and those who are impacted by the organization’s operations. This covers eight primary groups: Employees, Customers, Suppliers, Shareholders/Investors, Government Agencies, Society and Communities, Business Partners, and the Media.

2. Stakeholder Prioritization

The Company assesses and prioritizes each stakeholder group based on two dimensions: the level of Influence on the organization and the level of Interest in the organization. This enables the effective allocation of resources and the determination of appropriate engagement approaches for each group with maximum efficiency.

3. Engagement and Listening to Feedback

The Company creates diverse communication and engagement channels tailored to each stakeholder group (as detailed in the table “Stakeholder Engagement Management Guidelines”) to listen to opinions, expectations, and various concerns. This information is vital for analysis and operational improvement.

4. Response and Reporting

Information gathered from engagement is analyzed to define response strategies and improve organizational operations. Subsequently, performance results are communicated back to stakeholders through various channels, including the disclosure of information in this Sustainability Report.

 

Response to Expectations and Risk Management Measures 2025

Modernform believes that sustainable success arises from creating shared value with all stakeholder groups. Therefore, the Company prioritizes listening to, understanding, and responding to stakeholder expectations systematically through diverse and efficient communication channels. This information is utilized to define strategies and continuously improve operations.

Sustainability Materiality Assessment

Modernform is committed to driving its business by prioritizing sustainability issues that are truly material. To ensure that the Company’s strategy aligns with the business context and responds to the expectations of stakeholders, in 2025, the Company has elevated its materiality assessment process by officially adopting the Double Materiality framework, which is considered a global best practice.

Principles of Double Materiality Assessment

This assessment framework enables the Company to identify and prioritize ESG issues by considering impacts in two dimensions simultaneously:

1. Financial Materiality (Outside-In Analysis)

Assessing risks and opportunities from external factors that may significantly impact the Company’s financial performance, cash flow, and enterprise value in the short, medium, and long term.

2. Impact Materiality (Inside-Out Analysis)

Assessing both positive and negative impacts that the Company’s operations have on the economy, society, and the external environment.

Materiality Assessment Process

The Company’s assessment process consists of 4 primary steps:

Step 1: Identification

Gather potentially relevant sustainability issues from both internal sources (Enterprise Risk Assessment) and external sources (industry trends, stakeholder expectations, and international standards).

Step 2: Impact Assessment

The Sustainability Working Group and executives from relevant departments jointly assess the impacts of each issue in both dimensions (Financial and Impact).

Step 3: Matrix Development and Prioritization

The assessment results are used to develop the Double Materiality Matrix to categorize and prioritize various issues.

Step 4: Review and Approval

Present the analysis results and identified material issues to the Corporate Governance and Sustainable Development Committee for consideration and approval as the annual material issues.

2025 Materiality Assessment Results

From the assessment based on the Double Materiality framework, the Company has defined the material sustainability issues for 2025 as shown in the following diagram:

Issues located in the P1: Key Material Issues group, which have high impacts on both the organization and external parties, are the issues that the Company prioritizes most in management and resource allocation to drive the “Designing Our Tomorrow” strategy and will be reported in this report.

ESG Risk Management and Emerging Risks

Modernform recognizes that operating a business in a rapidly changing environment involves various risks and uncertainties. Therefore, the Company has integrated Enterprise Risk Management (ERM) with the global COSO framework to cover Environmental, Social, and Governance (ESG) risks, including emerging risks. This integration enables the organization to anticipate, respond to, and transform challenges into opportunities for sustainable growth.

ESG Risk Management Process

The Company conducts an annual ESG risk assessment to identify and prioritize risks material to business operations. The assessment is based on two primary dimensions: Likelihood and Impact. The results are presented in an ESG Risk Heat Map to provide a comprehensive overview and determine appropriate management measures.

Based on the 2025 annual risk assessment, the Company has identified significant risks at High and Medium levels and has defined proactive management guidelines as shown in the following examples:

Key ESG Risk Management

Following the 2025 annual risk assessment, the Company has established Risk Response strategies and proactive management guidelines for material issues as follows: