Materiality Assessment and Target

At Mega Lifesciences, sustainability begins with understanding what matters most to our business and to the people, communities and partners connected to us. We conduct materiality assessment to identify the environmental, social and governance topics that influence MEGA’s ability to grow sustainably, while also considering the impacts that our business may have on the economy, environment and people. In 2025, MEGA enhanced this process by partially adopting a double materiality perspective, which considers both the impacts MEGA may create externally and the sustainability-related risks and opportunities that may affect MEGA’s business resilience and long-term value creation.

This transitional approach helps MEGA look at material topics through two complementary lenses. Impact materiality considers MEGA’s actual and potential, positive and negative impacts on the economy, environment and people, including human rights, across our activities, products, services and business relationships. Financial materiality considers how external trends, stakeholder expectations, regulations, climate risks, market conditions and other sustainability-related risks and opportunities may influence MEGA’s strategy, operations, competitiveness, access to resources and long-term enterprise value.

Guided by the MEGA Way, we use the results of materiality assessment to strengthen our sustainability strategy, manage risks, improve performance and continue building a company that can live and grow beyond all of us. The 2025 assessment represents a transition year. MEGA has applied selected double materiality principles to strengthen the current materiality matrix, while preparing for full adoption of a more formal double materiality assessment process in 2026.

Our Materiality Assessment Approach

MEGA conducts materiality assessment annually as part of our sustainability management and reporting process. The assessment is based on stakeholder engagement, business context, current realities, regulatory developments and MEGA’s environmental, social and governance footprint. The 2025 assessment represents a transition year. MEGA has applied selected double materiality principles to strengthen the current materiality matrix, while preparing for full adoption of a more formal double materiality assessment process in 2026.

In 2025, MEGA considered feedback and inputs from key stakeholders, including shareholders, analysts, financial institutions, customers, suppliers, employees, communities, government agencies and regulators. These inputs were gathered through channels such as annual and quarterly meetings, opportunity day interactions (Earning call), site visits, customer interactions, employee feedback, supplier inputs, regulatory updates, surveys and other engagement activities. These inputs helped MEGA understand stakeholder concerns, expectations and potential impacts connected with the Company’s operations and value chain.

The assessment was also informed by business and external context, including regulatory developments, climate-related risks, supply chain conditions, human rights expectations, product responsibility, cyber security, stakeholder trust and other sustainability-related matters that may affect MEGA’s ability to create long-term value.

The assessment process helps MEGA to:

Identify actual and potential, positive and negative impacts related to MEGA’s business activities, products, services and business relationships;
Understand sustainability-related risks and opportunities that may affect MEGA’s business continuity, competitiveness, stakeholder trust and long-term value creation;
Prioritize material topics based on their significance from both impact and business relevance perspectives;
Align sustainability priorities with risk management, business planning and operational improvements; and
Set targets and management focus areas for continuous improvement.

For the full double materiality adoption planned in 2026, MEGA expects to further strengthen the process through the following steps:

Context & Value Chain

Define the assessment context and value chain by mapping the organisation’s operations, geographical footprint, dependencies, and relevant upstream and downstream business relationships;

Stakeholder Engagement

Engage with affected stakeholders, investors and subject matter experts to gather relevant perspectives and insights, ensuring that the assessment is not solely based on internal desk research;

Identify IROs

Identify actual and potential impacts, risks and opportunities across relevant sustainability topics, including those covered by ESRS and GRI standards;

Assess & Score

Assess impact materiality by considering severity, including scale, scope and irremediability, and assess financial materiality by evaluating the likelihood and magnitude of sustainability-related risks and opportunities;

Prioritise & Disclose

Apply defined thresholds to prioritise material topics, validate the results through appropriate governance processes, and document the assessment outcomes to support transparency, disclosure and assurance readiness.

Materiality Matrix

MEGA’s materiality matrix reflects the relative importance of each sustainability topic to stakeholders and to the business. The results are grouped into three dimensions: Environmental, Social and Governance. For 2025, the matrix should be read as a transitional double materiality view. It continues to show the relative prioritization of sustainability topics, while also beginning to consider how each topic relates to MEGA’s external impacts and business resilience.

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Environmental Dimension

Dimension		Key Performance Indicators	Reporting Boundary
E1	Waste Management and Hazardous Materials	Optimization and disposal.	Thailand manufacturing
E2	Water Management	Intensity and recycling.
E3	Ground Water Utilization	Risk Assessment and analysis of ground water usage.
E4	Energy Intensity and Clean Energy Pivot	Improving Carbon footprint and reducing energy consumption.
E5	Sustainable Packaging	Recycled / Recyclable packaging and reducing wastage.
E6	Biodiversity Conservation	Study of Biodiversity and impact of Mega’s operations in sensitive areas if any.
E7	Climate Adaptation and Mitigation	Maintaining the sustainability of the business by optimizing the use of resources and considering optimizing renewable resources.

Social Dimension

Dimension		Key Performance Indicators	Reporting Boundary
S1	Availability and Affordability of Medicines	To make good quality medicines available at affordable prices.	Thailand and Rest of World
S2	Talent Attraction and Retention	Ensuring congenial workplace for attracting and retaining talent.
S3	Employee Health and Safety	Elimination or Reduction of employee injuries, fatalities and absenteeism due to workplace injuries.
S4	Human Rights	Conducting Human Rights risk assessment within the company and in Supplier workplace.
S5	Personal Data Protection	Implementation of Data Protection laws and ensuring data protection.
S6	Diversity, Equity & Inclusiveness	Ensuring that employees are treated equally and allowed fair opportunity to grow.
S7	Product Stewardship and Customer Satisfaction	Ensuring that the products and services meet customer’s expectations and feedback system is functional.

Governance Dimension

Dimension		Key Performance Indicators	Reporting Boundary
G1	Ethical Conduct	Ensuring compliance with business Ethics and Code of Conduct.	Thailand and Rest of World
G2	Anti-Corruption / Anti-Bribery	Conducting bribery / corruption risk assessment and mitigation. Driving industry excellence in this space.
G3	Intellectual Property Protection	Ensuring compliance with Intellectual Property laws and ensuring protection of Company’s intellectual property.
G4	Cyber Security	Risk Assessment and protection against cyber attacks.
G5	Supply Chain Risk Management	Ensuring compliance with supplier code of conduct and screening suppliers before onboarding.
G6	Risk & Crisis Management	Identifying and mitigating operational risks.
G7	Business Continuity Management	Ensuring that businesses continue in the event of disasters, adverse impacts having a high negative impact on business.
G8	Innovation Management	Considering the Double Materiality approach we have classified the Materiality topics.

From Assessment to Action

The results of materiality assessment are used to guide MEGA’s sustainability priorities, risk management, operational planning, stakeholder engagement and disclosure. Each material topic is managed by responsible functions and ESG dimension leaders, with oversight through MEGA’s sustainability governance structure. As MEGA moves towards full double materiality adoption, the link between material topics, impacts, risks, opportunities, targets and accountable functions will be further strengthened.

MEGA also links material topics with performance monitoring and public disclosure. Environmental topics are tracked through indicators such as energy consumption, renewable energy, greenhouse gas emissions, water withdrawal, water consumption, waste generated, waste diverted from disposal and waste directed to disposal. Social topics are tracked through areas such as employee engagement, training, health and safety, human rights, diversity and customer satisfaction. Governance topics are tracked through ethics, anti-corruption, risk management, supplier governance, business continuity and cyber security processes.