2017 HTC CSR Report

HTC Corporation
HQ & Factory
No 23, Xinghua Rd, Taoyuan City, Taoyuan County, Taiwan+886-3-3753252

Taipei Office
TPE1: No 88, Sec 3, Zhongxing Rd, Xindian Dist, New Taipei City, Taiwan
TPE2: 1F, No 6-3, Baoqiang Rd, Xindian Dist, New Taipei City, Taiwan+886-2-89124138+886-2-89124138

CORPORATE SOCIAL RESPONSIBILITY REPORT

http://www.htc.com

HTC Corporation

2017

Editorial Principle
Thank you for reading the sixth Corporate Social Responsibility (CSR) Report issued by the HTC Corporation(HTC). HTC has an open and honest approach to the review and disclosure of our executive performance
related to all CSR matters and offers our stakeholders a clear picture of all the related issues. Our aim is
to use our brand’s influence to integrate our CSR strategies into the organization, and we start off with acomprehensive response to all these issues.
As a global mobile-device brand, we are ready to confront all the challenges that might present themselves. For
each major CSR issue that relates to our future development, we make it clear at the beginning of each section
which challenge we are facing, our current achievements, and our goals for future development.
By understanding and commitment to these issues, HTC will define and confirm our direction towardsustainable development, and also let our stakeholders know everything about our performance and theresults with respect to CSR in 2017.
This report has been prepared in Chinese and English. Both versions are posted on our official website and areavailable for download (www.csr.htc.com).

HTC CSR Website
This website is updated annually to inform all stakeholders and the public about
HTC CSR activities. Please use the following link to access the HTC website: www.
csr.htc.com

The HTC 2017 CSR Report is downloadable in PDF format.

2017 HTCCSR Report+886-3-37
53252

CORPORATHTC Corporation

E SOCIALRESPONSIBI2017

LITY REPORTThis report has been prepared in accordance with the Global Reporting Initiative (GRI) Standards Core Option
and AA1000 (2008) standards and has been confirmed by SGS-Taiwan to be in compliance with AA1000AS
Type II top-level assurance and GRI Standards Core option.

Forward-Looking Statements & Statistical Calculations
In this report, HTC makes some forward-looking statements about future CSR challenges and developments.
However, because some of these issues are uncertain and subject to variable factors (such as policies, laws,
and international regulations), it should be noted that they have been made after discussions on current
HTC status and are made as forecasts, the purpose being to give our stakeholders a picture of the HTC
understanding and realization of CSR issues. The forecasts are not promises by HTC of guaranteed financial,
operational, and business performance.
The figures shown in this report are in the metric system and are statistical and calculated results generated
according to the related international standards and bases of calculation. In the event that any special
calculation methods are implemented for particular indicators, notes are provided below the corresponding
tables or graphics.

Contact us

HTC CSR Report 2017

Quality and Sustainability Management, HTC Corporation
Contact: Simon.YK Chen +886 (0)3 375 3252 Ext 31546
E-mail: corporate_responsibility@htc.com
Address: No 23, Xinghua Rd, Taoyuan Dist., Taoyuan City, Taiwan
CSR URL: www.csr.htc.com

Report Scope and Boundary
The organizational boundary, as mentioned in this annual report,
mainly covers the company office buildings and plants in Taiwan:
the headquarters in Taoyuan, two office buildings in Taipei, and theHsinchu and Tainan offices. All HTC business operations in Taiwan arewithin the boundary.

Report Basis

Should you have any questions about this HTC Corporate Social Responsibility Report 2017, please let us know
to help us make continuous progress.

HTC Corporation+886-2-89
124138+886-2-89
124138We plan to issue the HTC Corporate Social Responsibility Report annually. This report generally covers theyear 2017 from January 1 to December 31. However, in order to provide a more complete picture of all our CSR
achievements in various aspects to date, the content and information about some issues refers to work carriedout in 2016 to 2018 May, as well as the HTC CSR management policies, key issues, and performance, responses
and activities for previous years.

Feedback

HQ & Factory

No 23, Xinghua
Rd, Taoyuan
City, Taoyuan
County, Taiwan
Taipei Office
TPE1: No88, Sec 3,
Zhongxing
TPE2: 1F,
Rd, XindianNo 6-3, Baoqiang
Dist, NewRd, Xindian
Taipei City,
Dist, New
TaiwanTaipei City,
Taiwanhttp://www.htc.com

Time Coverage of Disclosure

HQ & Plants

Taipei Office 1
Taipei Office 2

Hsinchu Software R&D Center

Geographic Coverage of the HTC CSR Report 2017
Boundary

AddressTel

HQ & Plants

No 23, Xinghua Rd., Taoyuan Dist.,
Taoyuan City 330, Taiwan+886-3-3753252

Taipei Office 1

No 88, Sec 3, Zhongxing Rd, Xindian Dist,New Taipei City, Taiwan

Taipei Office 2

1F, No 6-3, Baoqiang Rd, Xindian Dist,New Taipei City, Taiwan+886-2-89124138

Hsinchu Software
R&D Center

8F, No 1, Taiyuan 1st St, Zhubei City,
Hsinchu County, Taiwan+886-3-3753252

Tainan Software
R&D Center

4F., No.701, Sec. 1, Ximen Rd.,
West Central Dist., Tainan City, Taiwan+886-3-3753252

001

Editorial Principle+886-2-89124138
Tainan Software R&D Center

HTC 2017 CSR Report 002

Content
Editorial Principle001

Statement of the Management
Assurance Statement

005

141

GRI 103:
The Management Approachand Its Components 147
GRI 103: Management Approach
GRI Index

149

150

About HTC

007

029

Responsibility
Management

About HTC
Global Operation Locations

Corporate Governance010

Product and Industry Overview

Risk Management

011

Overview of Financial Performance
The Pursuit of Brilliance

089

015

Staff Management

031

097

Complete Education and Training Plan

037

Contractor and Supplier Management
Customer Relations

091

Talent Attraction & Retention

035

Innovative R&D Management

014

Friendly Workplace

042

A Sound Wage and Welfare System

Occupational Health and Safety

017

051

Corporate Social
Responsibility

The Mechanism for Committee Operation

CSR Related Management Procedures and Systems
HTC 2017 Material Topics and Boundary

Sustainable Environment
Sustainable Design020

Diverse Channels for Transparent Information Disclosure
The United Nation’s Sustainable Development Goals

025

023

083

087

139

Other Social Engagement Activities

073

Sustainable Packaging
Sustainable Product113

Social Investment
and Contributions

HTC Foundation

054

Sustainable Manufacturing Process

021

135

137

Sustainable Agenda
019

105

Listening to the Voice of the Employee

050

098

079

142

Statement of the Management

Thank you for taking the time to peruse the 6th “Corporate Social Responsibility Report” issued by HTC.
In the year that HTC celebrated its 20th anniversary, we’ve been focusing on delivering the innovation andtechnology that defines HTC and devoting the necessary resources to create great products. We produced
another strong year of innovation in 2017, recording more technology firsts and consolidating our position as
thought leaders across our product groups. It is also HTC’s first report to adopt the latest “Global Reporting
Initiative Standards” and AA 1000 standards. We focus on demonstrating our effort and result in fulfillingsocial responsibilities and sustainable management to the general public and all stakeholders.
Over 2017, HTC earned NT$62.1 billion in revenue, with a gross profit of NT$1.3 billion and a gross marginof 2.16%; however, the operating margin of -28.05% led to a net income of -NT$16.9 billion, corresponding toearnings per share of -NT$20.58. While keeping a keen eye on expenditure, HTC continues to invest in key
technologies that will enable the Company to leapfrog current generation product trends and drive our visionof VIVE Reality.
In September 2017, we entered a ground-breaking business cooperation agreement with Google, Inc.,
whereby the ‘Powered by HTC’ engineering and technical teams working on Google’s Pixel smartphones
were transferred to Google in a deal worth $1.1 billion. Building on our decade-long strategic relationshipwith Google, this agreement allows us to strengthen our HTC branded smartphone business, enabling amore focused product portfolio, greater operational efficiency and financial flexibility. It also enables HTC tocontinue investing in emerging frontier technologies, including VR, AR, AI, Smart IoT and Blockchain which
will be vital across all of our businesses and present significant long-term growth opportunities.
The completion of this agreement, together with the significant efforts we have made over the last twenty years
to strengthen and invest in innovation teams, streamline business processes and reduce operating expenses,
has laid a solid foundation for HTC’s new chapter. HTC will benefit from innovative products and marketing
planning when facing various challenges in the market.

In addition to continuously launching innovative products,
we strive to improve ourselves through a comprehensive
program of initiatives to minimize our environmental
impact and add value to society. HTC continues to seek
ways to provide a positive impact on the environment, ouremployees and the communities around us. We continued
to work hard at further improving our energy managementat our manufacturing facilities in 2017, achieving anelectricity use reduction rate of up to 49.83%, compared to42.26 % for 2016. The corresponding reduction in carbon
emissions represented a greenhouse gas emission reductionof up to 50.20%, again comparing favorably to 2016’s 42.69%.Progress was also made regarding the green fields andplanted areas inside the factories, which are irrigated withrecycled sewage water to avoid increasing total water
consumption. This contributed to a sewage recycling rate of
73.99% in 2017, up from 72.54% the previous year.
Looking ahead, HTC will continue to uphold the rightstrategies, world-class talent, innovation and a heritageof innovation that will drive our next stage of growth.
Throughout all of our operations and partnerships, HTC
seeks to ensure the highest standards of environmental
protection as well as R&D and innovation. HTC strives
to become a world’s leading brand, for our Pursuit ofBrilliance in all aspects of our business is never-ending.

Our vision remains to foster human connectedness, to bring people closer together, and to enable customers
around the world access to the digital universe of information, education, entertainment and diverse
experiences through our products. The company ethos, Pursuit of Brilliance, not only has rooted in ourcompany culture, but also encourage us to keep creating revolutionary efficacy and smart devices withexcellent experience, to enable our customers to share and pursue wonderful lives.

HTC Corporation
Chairperson

005

Statement of the Management

HTC 2017 CSR Report 006

About HTC ___Name
HTC Corporation (TWSE stock symbol 2498)
Address
No 23, Xinghua Rd, Taoyuan City, Taoyuan
County, Taiwan
EstablishedMay 15, 1997
SectorManufacturer of computers and consumer
electronics (handheld smart computers andwireless communication products)
Main business
Smartphone/HTC phones and accessories
Consolidated revenue
NT$ 8,215,276,050

The Global Leader in Innovative Mobile Phone Design – HTC

Global Operation Locations

Moscow, Russia

Slough, UK

EurpoeParis, FranceFrankfurt, Germany

ASIA PacificBeijing

Japan, Tokyo

China

ShanghaiSuzhouMEA Dubai
Jidda, Saudi Arabia

Hong Kong
New Delhi, India
Mumbai, India

Headquarters

Taipei, Taiwan
Taoyuan, Taiwan
Hsinchu, Taiwan
Tainan, Taiwan

Chennai, india

SeattleUSA

San Francisco

HoustonMexicoSydney, Australia

The HTC Corporation (HTC) was established in 1997. HTC brings brilliance to life through leading innovationin smart mobile device and experience design. Beginning with a vision to put a personal computer in the palmof our customers’ hands, we have led the way in the evolution from palm PC to smartphone, and are now
applying that same innovative approach to connected devices and virtual reality. To date, our Company has
been through four major transformations that have helped us reinvent ourselves and achieve new growth.
Starting from the beginning of the company’s professional PDA design, HTC has continued to deepen
innovation in R&D technology. HTC’s first major turning point came in 1999, when the Company moved into thetelecommunications arena. HTC was the first to integrate Internet, entertainment, video and personal assistantfunctions into a mobile phone with a large dimension onto high resolution and full-color display panel.
Since 2007, the launch of the HTC brand globally has committed the Company to long-term global branddevelopment. In 2014, HTC began to seek new fields to apply our distinguished heritage in design, engineeringand manufacturing excellence as well as innovative thinking.

009

About HTCHTC is headquartered in Taiwan. Driven by effective branding, HTC
now has operations, sales, and services covering most areas in the world,
including Europe, the Americas and Asia. With the coordination andintegration of our operational HQ, HTC provides customers with a networkof professional services.
HTC stands in the immediate presence of our customers and provides
instant service. Offices have been established in all the major markets of theworld, including the USA, Canada, the UK, Germany, France, Russia, India,
Australia, China, Japan, Hong Kong, Vietnam, and UAE.

HTC 2017 CSR Report010

Chronicle of HTC Product Development
HTC
founded in Taiwan

1997World’s first
Windows 3G smartphone- HTC Universal

World’s first
Google Android smartphone- HTC Dream

First 4G Android
smartphone in the US- HTC Evo 4G

World’s firstmetal body smartphone- HTC One

World’s first dual tone finishedall metal flagship smartphone- HTC One M9World’s first smartphone with
Edge Sense “squeeze” technology- HTC U11

2005

2008

2010

2013

2015

2017

Launched
new-format
standalone camera- HTC RE

1998

2007

2009

2011

World’s first
Windows CE PDA- HTC KangarooWorld’s first
touch-centric smartphone- HTC Touch

HTC SenseTM intuitive userinterface and customization- HTC Hero

HTC listed among“Best Global Brands”
by Interbrand

Product and Industry Overview

2016

First smartphone with OIS
in front and back cameras- HTC 10

2014
World’s first smartphone withrefocusing Duo Camera- HTC One M8

Discover virtual reality Comprehensive smart
beyond imagination connected fitness system- HTC VIVETM®
- UA HealthBoxTM

2018

Bigger, bolder, and edgier– HTC U12+
Winner of 29 awards fromCES 2018 - HTC VIVE Pro

HTC VIVE™

Since its establishment, HTC has had very strong R&D capability that has been clearly demonstrated byproducing a stream of first-class products for the international market. HTC has persisted in a consumeroriented approach to continuously provide real cutting-edge smartphones and demonstrate our commitment
to both users and shareholders through our growing global marketing and service network.
We believe that only a deep, sincere, innovative, and unique experience can truly stand out in competition. In
this regard, HTC mobile phone design extends the texture and craftsmanship of products and integrates thedesign, hardware, user interface, software, applications programs, and cloud service flawlessly.

VR (Virtual Reality) is an exciting featureof next-generation computing andentertainment. HTC VIVE allows users
to browse through the VR world and use
unique hand-simulation controllers tointeract with objects. In the Consumer
E l e c t r o n i c s S h ow ( C E S ) i n t h e U. S.
i n Ja n u a r y 2 01 8, H T C d e b u t e d t w oinnovative hardware, the VIVE Pro and
VIVE Wireless Adaptor.
VIVE ProHTC Main Product: Smartphone
Year

Capacity (Thousands)

Output (Thousands)

Output Value (NT$ Millions)2015

20,8009,364

49,7962016

18,4007,910

44,885

2017

9,600

5,015

42,760Note: The term “Capacity” refers to the maximum number of a given product the company can produce with the normal operation of the existing manufacturing facilities after
consideration of necessary shutdown and off days.

VIVE Pro is a new head-mounted display(HMD) upgrade from VIVE, bringing top audio and video
entertainment for virtual reality enthusiasts and corporate users. The VIVE Pro includes dual-OLED
displays for a crisp picture resolution of 2880 x 1660 combined, a 78% increase in resolution over thecurrent HTC VIVE™ HMD. The lifelike images will greatly enhance the overall experience. In addition,
it features built-in high-end headphones with an amplifier that provides richer and more vivid stereo.
The VIVE Pro’s new headstrap was built with enhanced ergonomics and comfort, including a knob toadjust the headband size, reduce the weight of the front of the head-mounted display, and ensure a moreeven distribution of the overall weight. Other upgrades include dual microphones with active noise
cancellation, and dual front-facing cameras designed to empower developer creativity.

Product Sales: Smartphone and Others (Accessories)
Domestic SalesYear

VIVE Wireless Adaptor

Export Sales

Volume (Thousands)

Value (Millions)

Volume (Thousands)

Value (Millions)2015

70,424

17,62460,183102.464

2016

1,812

9,844

26,83365,920

2017

1,221

6,869

23,34352,725The VIVE Wireless Adaptor is a wireless transmission accessory that adopts Intel’s WiGig technology,
which offers HTC’s VIVE series to commence wireless connections in the interference-free 60GHz band.
The low-latency and high-performance characteristics for the truly wireless VR headset integration forboth VIVE and VIVE Pro headsets will bring consumers with the best wireless VR experience.

Note: The figures for the main products do not include income from maintenance and product development.

011

About HTCHTC 2017 CSR Report012Industry Overview

Re-investment & Affiliated Companies

Smartphones
HTC designs and manufactures personal computing devices in various form factors, with smartphones being
the primary device over the last fifteen years.
Personal computing devices have evolved over time. The implementation of 5G will enable even greater
human-machine interactions, and open up endless new possibilities with ubiquitous connections.

HTC’s reinvestment policy focuses on the core business of the organization and the businesses that are
beneficial to long-term future development. In addition, through appropriate financial assessments andanalyses of industry trends, market competition, team experience, businesses models, and risk assessment,
strategic investments have been carried out through equity investment or mergers and acquisitions. The
specific objectives are to continue to enhance product and service quality, strengthen the developmentof key technologies, and grasp the future market demand, thereby continuing to enhance the corecompetitiveness of HTC.
In 2017, the company continued to expand and deepen the ecosystem of virtual reality (VR) and augmented
reality (AR), through strategic investment and the VIVE X accelerator program, to partner with incredibly
talented and promising teams in VR and AR around the world to solve industry pain-points and improve user
experiences across AR and VR and move the whole industry forward. New startups of batch 2 and batch 3
VIVE X Accelerator Program are focusing on foundational technologies and key verticals including enterprise,commerce, healthcare, entertainment, social and eSports. At present, the five VIVE X accelerator centers in
the world will cultivate and grow the global VR and AR ecosystems.

Personal Computing Devices Evolving Over Time

1960s

1980s

2000s

FutureReal-time display

Mouse & GUI

Touch screen & gesture

Ubiqutious computing

Overview of Financial Performance
HTC’s upstream suppliers provide components parts and operating systems. Downstream channels include
telecom service providers, distributors and retailers. HTC has continued to work closely with upstream
partners to ensure the high quality of our products, and retains good relationships with traditional telecom
partners and distributors around the world. HTC has also put emphasis on online as well as offline retail
distribution, reflecting the global trend towards omnichannel sales of consumer goods.

Industry Relationship Chart
Upstream suppliers

Manufacturers

Downstream channels

Revenues for 2017 totaled NT$62.1 billion, with gross profit of NT$1.3 billion and a gross margin of 2.16%;
however, the operating margin of -28.05% led to a net income of -NT$16.9 billion, corresponding to earnings
per share of -NT$20.58. We look forward to the achievement in 2018 coupled with continued progress inoperating expenditure control, meanwhile anticipating novel products like virtual reality and connected
devices will provide a boost to revenues.

· Components/parts
suppliers· Telecom service
providers· Operating systems
suppliers· Distributors

Operating Revenue· Retailers

Virtual Reality
HTC VIVE first started shipping in April 2016, to unprecedented media and consumer acclaim. In 2017, HTC
continued to focus on technological innovation and stable growth in this nascent industry, and explored new
ways to develop the virtual reality industry ecosystem.

013

The fierce competition that continued in 2017 in the worldwide mobile market resulted in lower revenues andgross profits than those of 2016. Also, because of the policy of austerity that effectively lowered operating costs,
the difference in operating loss is minor compared to 2016.

About HTC

Unit

2014

2015

2016

2017

NT$ Million

187,911

121,684

78,161

62,120Operating Costs & Expenses

NT$ Million

187,242

135,887

92,76979,545

Income Tax

NT$ Million

500

-48

-24

-38

Employee Wages

NT$ Million

17,485

15,781

12,451

11,825

Dividends

NT$0314,63600Social Investment /Donation

NT$ Million

7.01

0

0

0

HTC 2017 CSR Report014

Note: The related figures are those listed in the consolidated statement.

The Pursuit of Brilliance
The core spirit of the “The Pursuit of Brilliance” inspires us to strive for better performance and to create
revolutionary new mobile devices. We explore the unknown and are committed to bringing innovative design
into the lives of users and to think of new ways to link people and their dreams to the world.

Future Goal

An
Unending
Curiosity

At HTC, we go where others haven’t thought to. Breaking down barriers and creating
industry firsts is a large part of our history, which is why HTC has become synonymouswith innovation, engineering breakthroughs, and designing the future of humancommunications as we continue to expand into uncharted product territories.

An
Unyielding
Resilience

Strong character is at our core. Award-winning vision requires taking risks andchallenging convention. From the very beginning, resilience has been at the heart of ourcreative spirit. To this day, we stay committed to our pursuit, believing that the greatest
ideas transcend temporary recognition: they influence behavior, shape lives, and inspire
new thinking.

A
RefinedApproach

We hold our ideas and our products to a higher set of standards. That is why we designfor performance over popularity – and our partners have taken notice. Other industry
leaders come to us because they understand that we create great products with an eyefor design and mind for engineering that’s celebrated by the industry and customers
alike.

A
Real
Impact

It is our belief that technology’s purpose has always been to bring humanity together
to overcome and conquer difficult challenges. That is why we always design our
technology to generate a real impact – to serve a greater, human purpose that every
single human being can benefit from.

A
Greater
PurposeHTC takes a broader approach to serving society and making life better. We believe that
we can make more of a difference looking beyond the obvious, reaching out to people
and enabling them to make a difference, and in improving the way we do things.

To increase market share
To strengthen the integrationof marketing
To deepen the penetration of
our brand

Current Achievement
Creating smartphones with excellent designs globally
The most valuable international brand from Taiwan
The world’s first virtual reality system VIVE brings real-world interaction and experiencethrough space-based positioning technology
Through virtual reality and augmented reality, big data, and artificial intelligence
technology, with the goal of developing and providing precision personalized medical
products and services to reduce costs and improve the effectiveness of healthcare

HTC’s
Challenge
How to enhancebrand loyalty

015

About HTC

Nowadays, human life is deeply influenced by ubiquitous smart technologies in every aspect. Whether it’sfor home, car or city, smart devices are indispensable cornerstones. HTC takes this opportunity to integrate
talents, resources, and experience for overall arrangement. With outstanding design, hardware and software
integration, and R&D abilities, we believe HTC will shape the future with strong capabilities, develop lifeconnected devices with an ambitious vision and bring a whole new world to consumers.

HTC 2017 CSR Report016

Corporate Social
Responsibility
Management ___To ensure effective discussion and treatmentof CSR issues, HTC has run a CSR Committee
since 2012, and has also set up a dedicatedteam for formulating CSR policies, drawing
up related action plans, performing crossdepartment coordination, and handlingcommunication with, and feedback from, theexternal stakeholders and our key suppliers.
We use clear organization and work breakdown,
through interdepartmental meetings, tointegrate CSR work into the managementof related departments, such as legal affairs,
compliance, environment, procurement,
human resources, and marketing, to activate
overall CSR and innovation. This ensures that
CSR policies and measures are an integral partof the daily operations of the company.

CSR Related Management Procedures
and Systems

The Mechanism for Committee Operation
The HTC “CSR Committee” convenes annually with each related unit and prepares a report of their CSR
practices. The CSR-related work and actions will be expanded to the supply chain in 2013 as planned. In
addition to a CSR compliance audit, CSR related education and training would be provided.
In addition, the CSR Department holds periodic meetings with each responsible department where the annual
CSR performance results are summarized. A CSR report is then prepared in accordance with the GRI Standard
and is signed by the CSR Committee Chairman before publication.
Structure of the HTC CSR Committee
HTC CSR Committee

Employee Care

MFG

Product

Sourcing

Environment

This HTC CSR report is based on the GRI Standard with a focus on disclosing GRI topics, mainly concerning
disclosure of material issues related to action, performance and achievement.
Based on the relevance of the industry, the stakeholders have been identified, and the issues of concern havebeen included in the major issues. The HTC CSR Committee members met to confirm the impact of the material
issues on the internal and external organization. In other words, the positive, negative, or potential impact on
the economy, environment and society, taken as a whole in accordance with internal considerations, industrial
conditions, industrial chain practice, and stakeholders’ suggestions, as well as to confirm the impact of each issue.
At the same time, HTC attaches great importance to communication and interaction with its stakeholders. In
addition to setting up various communication channels, we respond to important suggestions or opinions fromstakeholders based on their concerns and impact on HTC’s operational impact. The feedback is submitted to therelevant units for response and processing, and regularly disclosed in the CSR report. We will gradually invite andencourage internal and external entities to join the CSR disclosure process in the future.
In addition, to ensure that the policies and decisions of the “CSR Committee” can be put into practice, wehave divided CSR activities into four areas, “green products, environmental protection, occupational safety &health, and social responsibility,” and have set up a dedicated management system for each. These have beenverified as aligned with the applicable international regulations and standards, and help integrate company
policy for sustainability and social responsibility into our daily operations.

CSR – Related Management Systems

The HTC “Corporate Social Responsibility (CSR) Policy”
HTC is committed to observing all the International and Regional laws in the countries where it
operates and to do business with honesty and integrity. We will continue to provide innovativeand quality products, protect the environment, care for the health, safety and human rights of ouremployees, and positively maintain our stakeholders’ rights and interests.
This CSR policy helps HTC maintain social responsibility and realize the vision of sustainable
development. All our related business partners advocate and share this policy with us and in this way,
we all protect and enhance the rights and interests of our internal and external stakeholders.

Using Responsible Business Alliance Code of Conduct as a reference for code of conduct,developing HTC as a good corporate citizen and participating in international Initiatives
Promotion of energy efficiency, carbon-reduction practices and various environmental
protection activities
Sustainable innovation from creation to development

The Green ProductsManagement System

Since the end of 2007, HTC’s Taoyuan facility and the Taipei building have regularly
passed all audits conducted by the international certification agencies, and obtained andmaintained certificates of IECQ QC080000 Hazardous Substance Process Management.

Green ProductVerification

In 2013, the HTC One became the world’s first smartphone inspected in accordancewith international standards ISO/TS 14067:2013, PAS 2050:2011, ISO 14040:2006, as
well as the carbon footprint and life cycle assessment ISO 14044:2006. In 2015, HTC M9
and Desire 820 smartphones completed the carbon footprint and life cycle assessment.

The Environment
Management System

We strive to minimize the impact of our operation on the environment. In addition
to establishing the ISO 14001 environment management system, and make sure all
our manufacturing sites around the world obtain and maintain ISO 14001 certificates.
From 2011 to 2017, there were no penalties for breach of regulations or laws.

The Occupational
Safety & HealthManagement System

To reduce the risks of workplace injury and reduce accidents, the Occupational Safety& Health management system has been established according to OHSAS 18001, andmake sure all our manufacturing sites around the world obtain and maintain OHSAS
18001 certificates.

The Energy
Management System

ISO 50001 inventory the source and amount of greenhouse gas emission according
to ISO 14064-1 Standards. The energy management system enables planned energy
management to be realized, thereby supporting sustainable operation.

Sustainable supply chain management
Be a responsible corporate citizen, with the highest ethical standards

019

Corporate Social Responsibility Management

HTC 2017 CSR Report 020

HTC 2017 Material Topics and Boundary
2017 HTC Materiality Matrix

Material Topics and Boundary Identification

High
Material Topic

Training and Education
EmissionsOccupational Health and Safety
Diversity and Equal Opportunity
Forced or Compulsory Labor

Within the
Organization
HQ

Economic Performance
Employment
Customer Health and Safety
Marketing and Labeling

R&D
CenterOutside the Organization
Investor

Corporate
Customers

Consumers

Employee

Supplier Contractor

Local
Community

Economic Standard
Economic
Performance

14

V

Anti-corruption

34

V

V

V
V

Level of Stakeholder Concern on the Topics

Environmental Standard
EnergyEmissionsEffluents and Waste

Child Labor
Security Practices

Low

021

Corresponding
Page Number

Non-discrimination
Effluents and Waste

Level of Impact of Topics on HTC’s Operation

Responsibility Management

Customer Privacy
Socioeconomic Compliance
EnergyAnti-corruption

High57, 62

V

V

56

V

V

66-69, 79, 80

V

V

V

V

V

V

V

V

V
V

Social Standard
Employment

94, 105-108, 111

V

V

V

Occupational Healthand Safety

113-133

V

V

V

V

V

Training and Education

98-104

V

V

V

V

V

Diversity and Equal
Opportunity

92-94, 105

V

V

V

Non-discrimination

97

V

V

V

Child Labor

91

V

V

V

Forced orCompulsory Labor

43, 91V

V

V

Security Practices

113

V

V

V

Customer Healthand Safety

78

V

V

V

V

Marketing andLabeling

83

V

V

V

V

Customer Privacy

50

V

V

V

V

Socioeconomic
Compliance

34

V

V

V

V

HTC 2017 CSR Report 022

Diverse Channels
for Transparent Information Disclosures

Investors
General Shareholders

Enterprise
Customers

GeneralConsumers

Employees

Suppliers

Contractors

Corporate Shareholders

Corporate Customers

Dispatch manpower

General Employees

Raw material suppliers

Construction Contractors

Rating Agencies

Telecom Distributors

Vocational Students &Trainees(including Direct/ Indirect/
General Service & Facilities/Staff
Clinic/hospital)

Local
Communities
Local Community
Associations

Cleaning/ Maintenance
Service Providers

Local Civic Organizations
Local Governmental
Agencies

Waste Disposal Vendors

Foreign Labor

Concerned Issues
Communication Channels
and Frequency
023

Information disclosure(finance, business)
Compliance with laws
and regulations
Operation Status
Strengthening
corporate governance
Strengthen risk
management
Key shareholder shareholding rates

1. Board of Directors
meeting 4/year
2. Shareholder conference
1/year
3. Annual report 1/year
4. Investor Conference 		
1/season
5. Monthly revenue
statement 1/month
6.Visiting investors
Standing
7. Investor RelationshipWebsite Standing
8.Spokesperson Standing

Friendly Workplace

Product quality
Service quality
Price competitivenessOn-time delivery
Green products
Carbon footprint/
carbon disclosure
Restricted substancemanagement
Corporate social
responsibility

Pre-sales consulting
After-service
Product quality
Service quality

1. Business review with key
1. Local service hotlines in 70 countries
customers (QBR meeting)to provide customers with real-time
Quarterly
communication and assistance Daily
ongoing
2 Reply to customer
inquiries From time to
2. Websites in different languages fortime
customers to give feedback and toaccess information in a real-time
3. Customer audit andmanner (20 established) Daily ongoing
replies to customers
questionnaires 		
3. Dedicated email boxes for different
As required by customers.
functions (PR, Service, Copyright,
Security, etc.) to provide convenient
4. Meeting the customer
customer contact with HTC Daily
requirements about
ongoingenvironmental and social
responsibilities		 4.Postal service survey for investigating
As required by customers.
customer satisfactionn Daily ongoing
5. Contacting customers who givenegative feedback in the satisfaction
surveys to address their concerns Daily
ongoing

Local Media

Learning & growth
Working environment/labor conditions
Wage/welfare
Health & safety
Career development
Work-life balance

Construction safety &Raw material quality
healthPrice competitivenessContinuously stable supply
Supply chain management
Compliance with various
regulations
Technical capability
Cooperation with logistics/
transportation providers to
conduct effective packing (e.g.
packing reduction and reuse)
Working environment & health
Machine/equipment safety
Carbon management training
and contests

Environnemental
impact (air pollution,
sewage discharge, etc.)
Compliance with laws
and regulations
Shaping the Corporate
image
Economic contribution
Social concerns
Public welfare
Cultivation of talent

1. Department quarterly
meeting Quarterly
2. One-on-one interview
with supervisors
Irregularly
3. Annual performanceappraisal/ interview
Annually
4. New employee
seminar Weekly
5. Employee assistance
hotline and mailbox,
Health Center,
Employee Aid Scheme
From time to time
6 Labor-management
meeting Bimonthly

1. Supplier communication
1. Induction training
conference Irregularly
Weekly2. Guidance and audit for2. Patrol inspection in the
suppliers Annuallyfacility Daily
3. Cooperation project with
suppliers for addressing CSR
and greenhouse gas issues
issues Projects issued in2017 include supplier CSR
audit/ GHG disclosure/investigation of toxicologicaland allergenic substances

1. Positive employee
engagement in public
interest activities
Irregularly
2. HTC cooperation
with governmental
agencies and nonprofit organizations ineco, environmental andother public welfare
activities Monthly
3. Clean the beach
Quarterly

HTC 2017 CSR Report 024

HTC’s Performance in Responseto the UN’s Sustainable Development Goals

The United Nation’s
Sustainable Development Goals

Goal 3:

Good Health and Well-being
Through the integration of virtual reality technology and education and with the full range of software andhardware support, VIVE has visualized abstract knowledge, turning learning into an experiential journey
immersed in virtual space and comprehensively changing existing forms of education.

The Dr. Mackay APP
HTC DeepQ Healthcare Business and Mackay Memorial Hospital have cooperated todevelop the Dr.Mackay APP, allowing patients to use their mobile phone to scan the
medicine bag or QR Code on the “refillable prescriptions for patients with chronic
illnesses” to complete personal medication setting free of charge. The APP also
features medication time notifications, “refillable prescriptions for patients withchronic illnesses” claim reminders, and other functions. In addition, the LINE versionof clinic registration for the public and personalized medication information search
was released in 2017. Through interaction on LINE, medication photos and related
health education are accessible, which greatly enhance patients’ medication safety.
The Dr. Mackay APP received the first place in the Young Award-Biotechnology Category in 2016, the Smart City Innovation
Application Award-Smart Medicine Field in 2017, and HIMSS AsiaPac17 Outstanding ICT Innovation Award. As of the end of
2017, the APP has had 8,755 downloads and has been promoted in other hospitals that will subsequently go online in 2018.
In the future, the Dr. Mackay APP will continue to deepen patients’ interactive care and medication safety and quality,
closely link physicians and patients, provide all-around thoughtful care in and out of the hospital, thereby enhancing clinicaltreatment effectiveness.

In 2015, the United Nations passed 17 Sustainable Development Goals (SDGs) aimed at ensuring peace andprosperity for all people. Each goal also details specific goals to be achieved in the next 15 years, thereby
establishing the guideline and blueprint of the future sustainable development direction, serving as a global
sustainable development agenda and action appeal. In order to achieve a more sustainable future, companies,
governments, and society need to fulfill their responsibility and make an effort.
As global citizens, we spare no effort to implement the goals of the United Nations. We are committed tointegrating SDGs into corporate operations and business development planning In addition to establishinggender equality in practice and empowering female employees and providing them with benefits, we also focus
on green sustainability in the manufacturing process, achieving responsible consumption and production.
Externally, the HTC team has also collaborated with external institutions on the research and development of
products and services that enhance healthcare quality, making full use of innovative technologies to promotesound health and well-being of people of all ages, while establishing multiple partnerships with teams fromdifferent fields to accelerate the implementation of goals.
In addition, HTC believes its unique virtual reality technology can bring unprecedented change to theworld. Through the interactive and immersive experience that HTC VIVE can provide, we hope to change
developments in education, health, medical care, art, and many other fields. In response to the United
Nation’s sustainable development goals of eradicating poverty, protecting the earth, and ensuring peacefuland prosperous life of mankind, HTC announced the VR for Impact Plan in 2017, providing US$10 million in
funding and technology to encourage the development of more virtual reality content and technology that
produce a positive impact. Since the release of the plan, we have received much feedback from the media andthe industry. So far, more than 800 developers and organizers have expressed great concern, hoping to workwith HTC to bring real influence to the world. We firmly believe that the virtual reality importation plan will
be a powerful tool for raising awareness for the UN’s 17 sustainable development goals.

025

Friendly Workplace

AI Medical Service Chat Robot in Taiwan: Wan Xsiao-Fang
HTC DeepQ Healthcare Business and Wanfang Hospital jointly launched Taiwan’s first
AI medical service chat robot named-“Wan Xsiao-Fang” in 2017. Through the 24-hour
online and offline one-stop services available on the LINE platform, general public
users may enter their symptoms for Wan Xsiao-Fang to commence machine learning
according to the users’ region and user characteristics perceived, assist in providing
recommended clinic department, provide clinic registration and clinic visit related
information search and other medical services, enabling the general public to makespeedy clinic registration. The general public may make a speedy clinic registration
before a clinic visit, a reminder of the scheduled time will be sent, and real-time clinic
visit progress can be looked up, which reduce anxiety from waiting. As of the end of
2017, 3,262 people have used this APP.
In the future, HTC will continue to cooperate with Wanfang Hospital to upgrading the chat robot - Wan Xsiao-Fang’s
functionalities. Wanfang Hospital will also leverage DeepQ’s artificial intelligence technology in conjunction with the App toincrease patients’ accessibility to medical services; inquire about personal records of physical examination and medication,
as well as integrate the hospitalized services in the smart ward and the long-term care service in communities out of hospital.,
thereby contributing to the new generation of smart medical services.

Smart Epidemic Prevention Chat Robot: Disease Manager
In order for the general public to have instant access to influenza vaccine-related information despite their busy lifestyle,
HTC DeepQ Healthcare Business and the Centers for Disease Control (CDC, Taiwan) jointly developed “@LINE chatbot- Disease Manager. With the "Disease Manager" as the imagery, the general public is provided with reliable epidemic
prevention information and related consultation functions. The general public may through the chatting window enter theirbasic information, and the system will automatically reply regarding "public-funded flu vaccination eligibility", as well as
further information such as phone numbers and addresses of nearby public flu vaccination contacts. Common questions

HTC 2017 CSR Report 026

related to flu vaccines are also instantly answered, thus substantially reducing the time forpeople to make inquiries. In addition, the chat robot also sends messages to remind the people
eligible for public-funded flu vaccination to go to a nearby contract hospital to receive thevaccination. Compared to the past when people mainly searched public-funded vaccination
information through the Epidemic Prevention Hotline: 1922 or the official website of theCenters for Disease Control (CDC, Taiwan), the “Disease Manager” saves about 20% of
manpower compared to the Epidemic Prevention Hotline: 1922. As of the end of 2017, “Disease
Manager” users reached 62,666 persons.

VIVEPAPER
HTC DeepQ Healthcare Business has developed an augmented reality
system called VIVEPAPER, which presents virtual multimedia content
on a piece of physical card. When viewing through the head-mounted
device (HMD) display, the card is viewed as a multimedia book. Users
can interact with the book through natural gestures and eye positioning,such as swiping to turn pages, clicking or looking at the selected content.

HTC will cooperate with the Centers for Disease Control (CDC, Taiwan) to keep up with thetimes, not only from the perspective of technology-based epidemic prevention but also toprovide the general public with proper epidemic prevention information in the most convenient and fastest way. Additional services
will also be included in the future to achieve the goal of smart epidemic prevention.

VIVEPAPER turns a regular 2D card into unlimited content provided
in 2D, 3D, and VR while retaining the natural interaction between thereader and the book. Since its launch in 2016, VIVEPAPER has been
adopted in many fields, including education, training, and tourism to produce rich and immersive interactive media materials.

DeepQ Medical Encyclopedia

At present, HTC DeepQ Healthcare Business has collaborated with several medical universities and hospitals to develop
surgical training, long-term care, nursing technique training, health education, first aid, and other medical contents into VR
interaction contents trough VIVEPAPER, allowing readers to be on the scene to interact with contents and thus substantiallyenhancing learning interest and effectiveness. In the future, HTC DeepQ Healthcare business unit will work with more
hospitals and schools to develop related medical contents for breaking through the bottleneck of traditional medical
education.

DeepQ Medical Encyclopedia is committed to provide the general publicwith content that is reliable and easy-to-understand to reduce the generalpublic’s burden from reading medical science related articles. From theneeds and perspective of the general public, an encyclopedia consistingof 1,000 articles on diseases has been created to enable the general public
to quickly and accurately grasp the definition of the disease, symptoms,
etiology, diagnosis, treatment, and medicine references. After the
publication of DeepQ Medical Encyclopedia, it received a majority of the
public’s response. In the future, it will combine with medical artificial
intelligence and medical services to become a medical education platform
for interaction between the public and medical personnel.

Goal 17:

Partnerships for the Goals
Promote partnerships that facilitate goal realization. HTC and many core strategic partners have achieved
cross-domain cooperation to further expand the VIVE ecosystem.

Goal 4:

Quality Education
With quality education, virtual reality technology and education combined and a full range of software andhardware support, VIVE visualizes abstract knowledge, turning learning into an experiential journey immersed in
virtual space and fully revolutionizing existing forms of education. HTC has also applied VIVE interactive media
features in anatomy, first aid, and other medical education training, turning the human body structure into VR
content, breaking the physical constraints, and achieving half the work, twice the learning result.

VIVEPORT EDUCATION
In order to expand the depth and breadth of education, HTC has created a VR education content platform that revolutionizes
the existing mode of education. In our real education environment, virtual reality technology has been used to create a learning
environment with high immersion, thus fully improving learning performance. With the support of the multi-function platform, we
will create one-stop VR education services for our partners.

Virtual Reality Anatomy and Physiology Teaching System (3D Organon)
3D Organon is the world’s first virtual reality anatomy teaching APP
developed by Australian anatomy professor and physician Dr. Athanasios
Raikos. The APP has 4,000 built-in simulated human structures andorgans, which can be displayed on a computer or tablet PC and achieve VRinteraction, making anatomy learning fun.
After putting on a VR helmet, users can monitor the bones, muscles, bloodvessels, organs, and other anatomical structures in the 3D space and examine
the structures from all angles, which enable students to better understand the
key concepts in anatomy.

027

Friendly Workplace2017 VIVE Ecosystem Conference (VEC2017)
Virtual reality industry leaders from all parts of the world have gathered
to share and discuss the latest industry insights and development trends.
At the conference, HTC and Shenzhen Municipal People’s Government
jointly announced the establishment of the Virtual Reality ResearchInstitute. Both parties will jointly commit themselves to achieving
breakthroughs in virtual reality related equipment, technologies,
industrial, applications, big data, and other fields and promoting thetransformation and upgrading of related industries.
As one of the important strategies for the construction of the VIVE
ecosystem, the VIVE X Accelerator Plan at VEC2017 released the second batch of listed companies. 30 new companies
from Taipei, San Francisco, Beijing, and Shenzhen were selected. Under the support of the plan, global virtual reality andaugmented ecosystems have been jointly promoted.
HTC and Warner Bros. reached a global strategic partnership. VIVE will become its exclusive virtual reality partner in all
virtual reality content productions and online and offline promotional activities, jointly promoting the much-awaited box
office hit “Ready Player One”. In order to continue to boost the VR entertainment industry, VIVE and China’s largest home
appliance retailer Gome signed an agreement: VIVE will be Gome’s primary technical partner in the VR movie theaterbusiness, providing support of China’s first batch of one hundred VR movie theaters. At the same time, VIVEPORT M has also
signed mutual agreements with six VR glasses manufacturers.
VIVEPAPER has co-constructed the “VR reading and innovation education display platform” with Qingdao PublishingGroup. In the next few years, it will enter key schools in major cities. The platform will fully mobilize the content and channel
resources of Qingdao Publishing Group and industrial collaborators and distribute VR education contents and services inschools, libraries, and Xinhua Book City, including VR technology and platform, VIVEPAPER included, which will be an
important way for realizing contents and services.

HTC 2017 CSR Report 028

Responsibility
Management ___Corporate Governance
We place great importance on corporate governance and operational transparency, and have formulated andimplemented corporate governance guided by the Company Law, Taiwan’s Securities Exchange Act, and otherrelevant laws to continue improving our management performance, and protect the interests of our investors
and other stakeholders through the comprehensive and systematic implementation of CSR.

Organization Structure

AGM

To achieve this high standard, we formulated the HTC Corporate Governance Framework in 2014, which has
been approved by the Board of Directors and complies with the Corporate Governance Practice Principles for
all the TWSE/GTSM Listed Companies. The objectives being:
1. To appropriately and effectively divide authority and responsibility amongst the Board of Directors,
the Executives, and the shareholders, and to build a management team that is fully responsible to ourshareholders;
2. To build up a system where the Executives and the Board of Directors are enabled to review the company’s
operations and achieve its goals;
3. To cultivate and sustain a corporate culture that advocates accountability and diligence and maintain thehighest ethical standards; and4. To encourage the effective and responsible use of resources.

Board of Directors
Board of Directors
Chairwoman

Compensation
Committee

Internal Audit

There are six directors on the HTC Board (including two
independent directors) and two supervisors. The group of
directors and supervisors includes one female director and isprimarily responsible for setting and monitoring management
goals and long-term business strategy. They are also responsible
for maintaining an internal financial and accounting inspection
system, assessing operating risks, and proposing strategies forthe reduction of such risks.

Independent Directors

The Compositionof HTC Management (Directors/
Supervisors) by Age & Gender
Breakdown by Age

Male

Female Total<30 (Excluding 30)

0

0

0

30 ~ 50000>50 (Excluding 50)

5

1

6

Total

5

1

6

HTC believes that good corporate governance is critical if
a business is to gain the long-term funding that underlies further investment and growth. We recognizethat to achieve good corporate governance, it is necessary to widen the scope of independent viewpoints inorder to win the trust of the public and the shareholders. During the election of board members (directors
and supervisors) in 2007, two independent directors were elected according to the provisions set forth in
the Securities and Exchange Act. This action served to solidify our corporate governance, strengthen the
independence and functions of the directors, and improve the general performance of the Board of Directors.

Chief Executive
Officer

Compensation Committee
The Compensation Committee is set up under the HTC Board of Directors. The committee is comprised of an
independent director, and two independent external experts. The Compensation Committee assesses the salary
remuneration policies and system of the Company directors, supervisors, and managers from a professional andobjective viewpoint. The committee also makes suggestions to the Board of Directors for discussing. For HTC
corporate governance organization and members, please refer to Page. 26 in 2017 Annual report.

Supervisors
Core Products
and Services

New Platforms
and Infrastructure

Innovation
Research andDevelopment
CenterCorporate
Functions

HTC has an appropriate number of supervisors. These supervisors quarterly review material issues, such as
financial, legal statements and internal audit. To ensure reasonable and proper expression of HTC financial
statements, the supervisors are also responsible for verification of risk management, key stakeholdertransactions, fluctuation in accounting policy, risk assessment in Intellectual property right litigation and toensure the internal control system has been designed and executed effectively.

Please refer to annual report Page.28

031

Responsibility Management

HTC 2017 CSR Report 032

Complete Disclosures

Strict Mechanisms for Avoiding Conflicts of Interest

HTC is committed to real-time and transparent information disclosure. In addition to regular information
disclosure, HTC also participates in investment forums and investor conferences held by domestic andinternational brokers to explain details of the HTC financial data, business performance, and other publishedinformation to give investors as much information about the HTC financial and business situation as possible.
The meeting provides expected data for the next quarter’s operating revenue, gross profit and operating profit,
so that investors can instantly understand the company’s operational information.

To prevent potential risk of corruption and being unethical, in addition to “Anti-corruption and Bribery
Statement “ passed by the chairman of the board, HTC has established “Rules for Derivatives Transaction,”“Credit Policy & Operational Procedure,” and “Regulations for the Appointment of Directors/Supervisors
in Re-investment” and has revised the “Operational Procedures for Transactions of Specific Companies,
Business Conglomerates, and Parties,” “Regulations for Budget Management,” “Regulations for Managementof Subsidiaries,” and “Operational Procedures for Processing Internal Material Information and Preventing
Insider Trading” as bases for internal operations.

Real-time and transparent information disclosure by HTC has been regularly affirmed by the competentauthorities with an A+ rating. This was received for the first time in the 6th information disclosure assessmentof the Securities and Futures Institute and the A+ rating has been awarded for three consecutive terms,
including A++ ratings in the 9th, 10th, 11th and 12 th terms. HTC took part in the 1st and 2nd “Corporate
Governance Evaluation” held by the Securities and Futures Institute and was ranked amongst the top 20% ofcompanies with excellent performance.
We disclose our practice of corporate governance and legal compliance on the company website. For more
information about HTC governance policy and other related guidelines, please visit http://tw-investors.htc.com
Diverse Channels for Transparent Information Disclosure
Spokesperson & Deputy
Spokesperson

A spokesperson (and a deputy spokesperson) has been assigned forcommunication with the media, investors, and analysts according to “Corporate
Governance Best-Practice Principles for TWSE/GTSM Listed Companies.”

Press Release, Press
Conference & MediaInterview

The company’s latest developments are also communicated to our investors
and the public through press releases, press conferences, and media interviews.

Website Platform

1. HTC has established an Investor Relations Website (in both Chinese and English)
through which the investors can access and download the company’s financial
statements, annual reports, other financial news, information about investor
conferences, and correspondence with shareholders. In the “Investor Service”
section, contact information and electronic forms are provided for investors tomake contact with the Investor Relations Division by phone or by email.

After the establishment and subsequent revision of the “Operational Procedures for Processing Internal
Material Information and Preventing Insider Trading,” the company makes internal announcements to all
employees through e-mail, and also posts related information to our Intranet website. Furthermore, the latest
version of the rules is always accessible for immediate reference on the corporate website and on the Intranet.
In addition, as clearly set forth in the HTC Employee Manual, involvement in fraud, bribery, embezzlement,
and violation of business competition limitation may lead to a punitive dismissal. Any reports about the above
offenses may be sent to the heads of the related departments, the Human Resources Division, or the auditing
unit. The Human Resources Division is responsible for disciplinary action. A dedicated reporting channel(anti-corruption@htc.com) has also been established for employees to expose any improper behavior thatcomes to their attention. There were no corruption related events in 2017.

Internal Audit System
HTC has set up our internal audit unit as subordinate to the Board of Directors. The internal unit is responsible
for assisting the Board of Directors and management in checking any defects in internal control and in theassessment of operational efficiency and performance, as well as the accuracy of the financial statements andcompliance with the related laws. The unit also addresses areas that need improvement in a timely manner toensure internal control is continuously and effectively implemented. The audit results are used as a basis forthe review and amendment of the internal control system to advance sound management in HTC. There wereno anti-corruption related risks in 2017.

2. The Investor Relations Website is continuously maintained and updated withthe latest HTC Company development information.
HTC will continue maintaining and updating relevant and material company
information, so that investors can get the latest news.
Investor Conference &International/Domestic
Investor Forum033

HTC regularly holds investor conferences and from time to time participates ininternational and domestic forums held by foreign brokers. Details of these areprovided to explain company operation, financial profile, strategic development,
and business policies to the investors.

Responsibility Management

HTC 2017 CSR Report 034

Risk Management
Management of Climate Change Risk
As an answer to requests from customers, HTC joined the Carbon Disclosure Project (CDP) in 2008. We
voluntarily disclose information about our climate risks, future development opportunities, emissions, andstrategic management mechanisms.
Risk Factor

Operational Risk from
Climate ChangeManagement of Operating and Financial Risks
HTC has never made high-risk, high-leverage investment, yet, as a part of our long-term business strategy, weare still positively evaluating the risks and benefits of introducing new technology. To remain responsive to thepotential risks caused by increased costs as a result rapid industrial development, we control operating costrisks by strengthening the functions of our products, reducing overall costs, and strictly controlling expenses.

Legislative Risk from
Climate Change

HTC manages corporate risk with a focus on sustaining value for the shareholders and stakeholders. We
have established an appropriate control mechanism after careful consideration of all the various operational
uncertainties that ensures a rapid response to uncertainty, as well as to any attendant risks and opportunities.
Such careful risk management enhances our ability to create value.

Unstable or limited power supply
Power supply may become unstableor limited due to peak demand forelectricity in the summer
Regional natural disaster
The increasingly extreme climate
can bring about floods, supertyphoons, super downpours, oreven drought
Laws and standards for energy
efficient products (e.g. California
Energy Law, Energy Star, ErP, etc.)
The Taiwan Draft Greenhouse Gas
Reduction Act
Customer guidelines
The customer may ask for our
regular disclosure of carbon
emission

Resulting Risk or Impact
Shut down in production lines
Shortened life or immediate
damage to instruments anddevices due to unstable room
temperatures
Grounded flights impacting
transportation
Increased shipping time andcosts

Opportunity
Adjusting and optimizing production
processes in advance, to improve
efficiency and reduce energy
consumption

Planning how to work with our
suppliers to improve the efficiency of
packing and transportation

Introduction of a green supply chain
Increased costs for materials
and parts

Since power consumption
is still the main source ofgreenhouse gas in the ICT
industry, the total emission ofgreenhouse gas must increase
with the growth of businessand production

Looking for green innovation
business (e.g. reduced packing andrecycled packing materials)

Providing KPIs (Key Performance
Indicators) for evaluating design
simplification and standardization,and manufacturing and testing
efficiency

Due to fast and fiercely changing global financial markets, foreign exchange movements will trigger thechallenge of business operation and thus influence shareholder’s rights. As a result, HTC has adopted relevantrisk management policies and standards for measurement of risk. In this regard, we have set up the funds
management practice, which clearly stipulates the tools and decision-making processes.
In 2017, HTC foreign exports accounted for around 84.88% of our total business revenues. HTC’s revenue
is mainly based on the US dollars and Euros, the manufacturing costs are also based on US dollars, so thesignificant fluctuations in the international exchange rates may affect the operating income, operating costs
and operating net profits in foreign currency denominations. In addition to strengthening the control of
quality and collection cycle of foreign currency accounts receivable, we also mainly avoid the operational riskof operations with the Foreign Exchange Forward Contract. In the future, we will strengthen the automatic
hedging effect of foreign currency claims and liabilities offset, using auxiliary tools such as derivative financial
products to conduct hedging under the appropriate risk guidelines.

035

Responsibility Management

HTC 2017 CSR Report 036

Innovative R&D Management
Since our establishment, HTC has invested
heavily in cultivating R&D talent anddeveloping technical innovation. Currently,
our in-house R&D employees make up
37% of all HTC's global employees, theinvestment of which is about 17% of thetotal operating revenue. With this strengthof innovation, HTC has special insight
into industry trends and the outstanding
capability for meeting consumer demand.
This puts HTC always in the lead.

Investment in Innovative R&D
Unit

2015

2016

2017

Fixed R&D Investment

Million (NT)13,728

10,957

10,440Total Revenue

Million (NT)121,684

78,161

62,120Percentage

%

11

14

17

Note: The related figures are those listed in the consolidated statement.

Engaging Diverse R&D Talent
In 2017, a total of 3,865 R&D workers joined HTC globally. In addition to those in Taiwan, we have many R&D
personnel coming from, or based in, other countries, such as Europe, America, and Asia. We expect that thedifferent cultural backgrounds of our diverse employees will fuse and fuel innovative thinking, so as to support
HTC in the development and launch of products that meet consumer needs in different regions and withdifferent cultural characteristics.

Future Goal
People-oriented:
Changing the way people interact, andthe technology around the world.

Current Achievement
Innovative accessories “VIVE Tracker” won the 2017 Best Game ProductAward at the Consumer Electronics Show (CES) in the United States
HTC VIVE received 29 Awards from CES in January 2018.

HTC’s
Challenge
Expediting patent layout
Strengthening
advertising ofproduct
innovation

037

Responsibility Management

TaiwanOthers2017
R&D
Personnel
3,865

Taiwan Others

Taiwan2016
R&D
Personnel
3,738

2015
R&D
Personnel
4,542

OthersHTC 2017 CSR Report 038

Smart Innovative Products
With this strength of innovation, HTC has special insight into industry trends and the outstanding capability
for meeting consumer demand. This puts HTC always in the lead. In 2017, HTC employed “You” as the conceptbehind its design to launch the brand-new HTC U Ultra, continuing with HTC U11 and HTC U11+. In addition
to Edge Sense, HTC has also developed even more sophisticated functions to introduce the next dimension
in touch interaction. With customer feedback an integral part of the development process combined with anobsessive attention to detail, HTC delivers everything that consumer would want.
Furthermore, HTC also devotes to the wisdom of the medical field by creating HTC Healthcare business unit
through virtual reality / augmented reality, big data and artificial intelligence technology, with the goal ofdeveloping and providing precision personalized medical products and services to reduce costs and improvethe effectiveness of healthcare.

2017 WORLD CONFERENCE on INFORMATION TECHNOLOGY

DeepQ Receives the Honor of Second Place in Tricorder XPRIZE
Qualcomm Tricorder, the world’s largest international medical care contest was held by the XPRIZE
Foundation. In 2016, HTC in support of The DBG (Dynamical Biomarkers Group) participated in this contest.
The contest theme was to produce a mobile device weighing less than 5 pounds, used for home monitoringand health status diagnostics, required to perform 24-hour continuous monitoring of vital signs and complete
diagnosing 12 diseases within 90 minutes.
The XPRIZE Foundation announced the results of the finals on April 12th, 2017. The DBG team co-led by
HTC’s Prof. Chih-Wei Chang and Harvard Medical School Associate Prof. Chung-Kang Peng stood out fromthe 312 teams from around the world to win the second place and a cash prize of US$1 million.
HTC’s capabilities and experience in software and hardware development, industrial design, system integration,user experience, and big data AI made the selection plan a reality. This cross-domain, inter-school, and crossindustry teamwork has provided a good testimony to the strength of Taiwan’s medical community and industry.

WORLD CONFERENCE on INFORMATION TECHNOLOGY (WCIT) drew domestic and foreign informationand communication companies, nearly 700 booths exhibit the world’s world technological trends, HTC’s
Health and Medical Business Department exhibited the results of medical AI and applications of virtual
reality in medicine. The DeepQ Mobile Health Care Tester has won second place at the global Qualcomm
XPRIZE Tricorder and the latest release of a high-accessibility and high-usability platform that can assist in
establishing cost-effective neural model training, thus enhancing AI research efficiency.
In terms of VR medical applications, the Surgical Theater VR medical surgery simulation training system and3D Organon VR anatomy teaching system, the world’s first VR anatomy teaching APP, were experienced at thesite. It has 4000 built-in simulated human body structures and organs, which are presented in VR 3D images.
This APP is said to be the best teaching tool for experiential learning.
As for the progress of augmented reality, VIVEPAPRE that integrates VR and AR provides readers with a brandnew immersive reading experience.

Introduction of DeepQ Mobile Healthcare Detector
DeepQ Mobile Healthcare Detector is a medical device that weighs less than
5 pounds (2.3kg). It can correctly diagnose 12 diseases and continuously
monitor five vital signs. In a home environment without the assistanceof medical personnel, the device intended to improve medical quality inregions devoid of resources can be operated even by users without medical
knowledge. DeepQ covers five major diagnosis and treatment systems,
including eye examination, hematuria diagnosis, respiratory diagnosis,
life diagnosis, and consultation. In particular, HTC is mainly responsible
for big data learning and metastasis learning, integration of traditional
dipstick techniques in hematuria, development of respiratory diagnostic
techniques, heart rate, respiratory rate, body temperature, oxygen
saturation, blood pressure, and high blood pressure monitoring, as well asinterface design and APP development. In 2017, HTC continued to improveaccuracy through AI technology, and the disease diagnosis items increased
from 10 to over 100.

039

Responsibility Management

HTC 2017 CSR Report 040

Contractor and Supplier Management
Protection of IP Rights
HTC regards R&D and innovation as an essential force needed for the company to remain sustainable andcompetitive. In particular, the protection of intellectual property rights is a key to maintaining our brandvalue. The protection we put on our intellectual property rights covers four areas: patents, trademarks,
copyright, and trade secrets. Of these, patent protection is particularly valued and is realized at two levels:

Positive filing of patent applications to protect the results of our various product R&D andtechnical innovation.

Internal

Holding regular training courses for R&D staff about IP management.
Encouraging our employees to invent and create.
Setting up a dedicated unit under the Legal Affairs Division for the protection and dispute
resolution of intangible assets such as patents, trademarks, copyrights and business secrets.

Contractor Partners
HTC focuses on industrial technology and works in collaboration with different professional contractors
to jointly develop the industry. In addition, HTC has passed the OHSAS18001: 2007 version of the
Occupational Health and Safety Management System. Newly recruited construction workers receive
safety and health education before they start on their jobs. They are given all necessary information about
the working environment and the relevant safety regulations. They all know the location of fire-fighting
facilities and how to use it.
The HTC Family was created in cooperation with the Taoyuan City Government in 2014. The City organized
the safety and health seminars and field trips and also shared actual case studies with the contractors every
year. This caused small and medium-sized enterprises to work for occupational safety just like a mother hen
leads her children. From 2015 to 2017, the contractor’s injury rate (IR) was 0*.
*

Note:

1. The total number of working days for men is 5,406 days, and the total working hours is 43,248 hours.
2. The total number of working days for women is 165 days and the total working hours is 1,320 hours.

External

Engaging in technical cooperation with leading domestic and foreign research institutions,providing top talents with the opportunity to receive practical training in HTC, thereby fueling
our R&D with innovative thinking.
Mergers and acquisitions company to obtain key technologies and patents to speed up
research and development

In terms of patents, HTC has not only actively defended patent lawsuits against patent trolls, as well as filingan infringement lawsuit against HTC in courts in America, China and countries in Europe in order to protect
the rights of HTC. In order to strengthen the competitive advantage of products, HTC has also obtained patentauthorization from major international companies in order to rule out obstacles of patents.
In terms of trademarks, HTC has actively applied for trademark registration in various countries in order toacquire important trademark rights. HTC has also actively and closely worked with customs and local police
agencies in various countries to crack down on counterfeited goods and protect HTC’s business reputation.
HTC has also actively investigated the situation of HTC’s registered trademark abuse in various countries, andactively took legal actions with law enforcement agencies in various countries to protect the company’s rights
and interests.
Additionally, in terms of copyrights and business secrets, HTC clearly stipulates employees’ intellectual
property rights in the employment contract and demands employees to comply with HTC’s intellectual
property related regulations. The Ministry of Justice also collaborated with the Information Center, strictly
restricting employees’ internal data access authorization, such as software program codes, R&D data, unlisted
product business information, etc. In addition, in order to prevent leakage of business secrets, program codes,
or confidential Information, HTC has also set up relevant regulations for the management and has signed aconfidentiality contract with specific persons in order to protect business secrets.

041

Responsibility Management

3. IR rate = total number of work injuries / total work hours × 200,000* (*: 50 weeks in a year, 40 working hours per week, the ratio for every 100 employees.)

Measure ofContractor Construction Management●

The provision of site safety induction
sessions at construction sites.

●

Verifying the information about
construction workers and vendors.

●

Monitoring high-risk operations.

●

Maintaining facility access control.

●

Ensuring construction site safety.

●

Conducting safety and health management
for new facility construction.

●

Obtaining the required insurance forcontractor employees.

Contractors Health and Safety Audit●

Incorporating requirements for safety& health management in the writtenagreements with all contractors according to
the applicable regulations to clearly define
contractor obligation and responsibility,and evaluate all the risks in the working
environment including that from dangerous
machines, so as to have proactive control
and eliminate potential hazards.

●

Formulating a system for on-site patrols
and inspections according to theapplicable regulations and contractual
requirements about labor safety & health.
The performance of regular patrols,
inspections and audits, working precaution,
records of the safety & health education of
the workers, and all safety requirements tobe met before, during and after the use ofmachines, tools and equipment.

HTC 2017 CSR Report 042

Supply Chain Partners

The Green Supply Chain Management System

Suppliers are a vital factor for the continued success of HTC, we were founded in Taiwan and are a Taiwanesecompany whose operations and procurement drives the development of the related sectors. Except for certain
key parts and components, it is a general procurement policy to use raw materials and equipment that originates
in Taiwan to the greatest extent possible. We not only require our suppliers to provide quality services andproducts, but also measure our supply chain against stringent ethical and environmental standards.
HTC is a member of the Responsible Business Alliance (RBA) and has formulated an “HTC Supplier Codeof Conduct” according to Responsible Business Alliance Code of Conduct, with the aim of working with our
supply chain partners to protect the environment, uphold the human rights of our workers, their safety andhealth, and extend this social responsibility to the supply chain system.

HTC Supplier Code of Conduct
The HTC Supplier Code of Conduct details the responsibilities and regulations that have to be followedby all suppliers doing business with HTC. In addition, HTC also conducts a regular assessment of theimplementation of the Code as the basis for our further selection of business partners. The supplier’s
code of conduct reaches 100%.
The provisions about labor issues, health and safety, and ethics were framed with reference to
Responsible Business Alliance Code of Conduct and the related documents issued by the United
Nations Universal Declaration of Human Rights. For more information about the “HTC Supplier Codeof Conduct,” please see: http://www.csr.htc.com

HTC has had a green supply chain management platform since2006 to assist R&D engineers to select green materials from theproduct database that comply with both International regulations
and customer requirements. Green materials are used from thestart of design to significantly enhance the reliability and related
validation process and schedule of green products.
HTC has, since the fourth quarter of 2016, added the HSF
performance appraisal in the Supplier Performance Management
System. At the supplier quarterly meeting, improvement
effectiveness was confirmed with the suppliers.

Supplier Management
2016

2017

Percentage ofInterests
Percentage ofInterests
AmountAmountTotal Purchasewith HTC’s
Total Purchasewith HTC’s(NT$ Million)(NT$ Million)
Amount (%) Stockholders
Amount (%) Stockholders
Supplier Code A

7,301

15

None

7,462

19

None

Supplier Code B

-

-

-

4,821

12

None

Others40,78285

None27,83069

None

Total Purchase Amount

48,043100

None40,113

100

None

043

Responsibility Management

HTC 2017 CSR Report 044

The HTC Supplier CSR Assessment and Audit
In addition to implementing corporate social responsibility of our own brand, HTC also delivers the concept
and requirements of CSR to the supply chain. We established the CSR unit in 2010 and then initiatedinvestigations of those suppliers who had implemented CSR.

2%
6%Humane Treatment 7%

Freedom of Association
Non-discrimination

A Quick Look at the HTC Supply Chain Management
Owing to differences of industry characteristics and supplier category, HTC
identifies critical supplier and major audit for reference by following two
principles:
1. Suppliers’ annual amount of transaction representing more than 10% of
total purchase.
2. According to the mechanical components which vary based ontechnology, markets and purchase annually, CSR and sourcing
departments define critical suppliers of current year based on different
situations every year.

Definition of HTC
Critical SupplierSelf-assessment
SurveyWeights of CSR-related issues in the supplier’s self-assessment form
have been raised 2016.

On-site Audit“Supply Chain CSR Compliance Audit “ has been implemented since 2011.
20 suppliers will be chosen every year to check compliance with the “HTC
Supplier Code of Conduct”.
In 2017, an addition was made in the manufacturing process. According
to the RoHS and REACH directives, hazardous substances subject tocontrol are required to be audited.
On-site audit for 20 suppliers had been planned in 2017. ( Note: 9
suppliers had been completed audited and the other 11 suppliers will becompleted in May 2018 as planned. )Management
Mechanism

On-Site Audit Results(Total of 175
Noncompliance
Items)

Labor Rights

55 cases, mainly about overtime.

Health and
Safety81 cases, mainly about lack of protective facilities and equipment andinsufficient first-aid.

Environment

33 cases, mainly about Inadequate chemical and hazardous waste
management measures, followed by inadequate air emission, wastewater
and waste management measures and failure to conduct no greenhousegas inventory and energy-saving measures.

Ethics6 cases, mainly about the failure to establish the management proceduresfor employees accepting inappropriate payments and gifts.

Treatment andResponses

045

Responsibility Management

In response to the above findings, in addition to the request to the
suppliers to respond with improvement measures, we also provided theexperience of introducing and implementing the management system forthe suppliers’ reference.

Freely Chosen Employment

9%

Working Hours

40%

Audit Result ofLabor Rights

Wages and Benefits

16%Child Labor AvoidanceIndustrial Hygiene

1%Machine Safeguarding

20%

1%

3%
Occupational Injury and Illness 3%
Physically Demanding Work

Food, Sanitation andHousing

Occupational Safety

22%

Emergency Preparedness

48%

Audit Result of
Health and Safety

22%

HTC 2017 CSR Report 046

No conflictminerals productused at HTC in2017

Wastewater adn Solid Waste

3%

Storm Water Management

6%

Air Emissions

Responsible Procurement of Minerals

0%

HTC has responded to the global boycott of conflict minerals, supports the Conflict-Free Smelter Program ,has promised not to use conflict minerals, and refuses to accept primary ore material from the Congo and theneighboring Central African countries in conflict.

Environmental permits
and Reporting0%

In addition, through a responsible procurement practice, our suppliers and we shall comply with the “HTC
Conflict Minerals Procurement Policy” and reply the “CMRT” and “Conflict Free Minerals Statement” in aconcerted effort to avoid all use of conflict minerals. HTC has not only monitored and managed its supply
chain and prohibited the use of electronic parts produced with the minerals but also supports the audit andcertification process of the minerals to ensure all the minerals HTC uses are conflict-free.

Energy Consumption andGreenhouse Gas Emission

9%

Product Content
Restrictions

Audit Result ofEnvironment

9%

Hazardous
Substances

Based on Conflict Minerals Reporting Template, HTC set up KPI, tracking the progress of sign-back, in order
to effectively manage the supply chain and reduce the risk of breaching the contract. We have completed thedevelopment of products using conflict-free minerals in 2016. All 3TG used in our products are CFSI qualified
smelters as of the end of 2017.

61%

Pollution Prevention
and Resource

12%

The Intended Use of Conflict Minerals

Fair Business,
Advertising and Competition

Disclosure of Information

Protection of Identity

17%

0%

Au

Sn

W

Point of Use

Contact in thecircuit boards

Soldering in thecircuit boards

Tungsten Alloy
used in Vibrator

TantalumCapacitor

Intended Use

As circuit board
contacts to ensure
proper connection.

Solder to mountcircuit board
electronic
components.

Tungsten alloy
used in the phone
vibration motor.

An element
used in tantalum
capacitors.

0%

Responsible Sourcing of Minerals

0%Ta

Result as follows:

1.33%
1.33%
SPAIN 1.33%
SOUTH AFRICA 1.33%
NETHERLANDS 1.33%
MEXICO 1.33%
KAZAKHSTAN 1.33%
ITALY 1.33%
BRAZIL 1.33%
BELGIUM 1.33%
AUSTRALIA 1.33%
UNITED ARAB EMIRATES 2.00%
TURKEY 2.00%
INDIA 2.70%
CANADA 3.30%
SWITZERLAND 4.70%
RUSSIAN FEDERATION 5.30%
KOREA(REPUBLIC OF) 6.00%
UZBEKISTANTAIWANBusiness Integrity

17%

Audit Result of Ethic

No Improper
Advantage

Protection of Intellectual Property

49%

17%

1

047

Responsibility Management

OTHERS

11.37%

JAPAN

20.70%Gold
CHINA

19.30%UNITED STATES

8.00%

The Conflict-Free Smelter Program website of the Electronic Industry Citizenship Coalition is http://www.eicc.info/CFSProgram.shtml

HTC 2017 CSR Report 048

5.70%UNITED STATES 1.90%
MALAYSIA 1.90%
BOLIVIA 1.90%
THAILAND 2.85%
JAPAN 2.85%
VIETNAM 5.70%
OTHERS

Customer Relations

INDONESIA
BRAZIL

CHINA

9.55%

Tin

46.70%

Protection of Customer Confidentiality
HTC makes a promise of “Strict observation of contractual obligations and confidentiality commitment” toall customers. All information we provide to our customers is subject to clear policies and a system of strict
internal control. In addition to technical data and hardware and software, information related to patents andother intellectual property rights of customers may be incorporated into our controlling system. We complete
confidentiality agreements with all customers and suppliers in advance to maintain the absolute security of all
the confidential information belonging to our corporate customers.

20.95%

OTHER

6.90%

The HTC privacy policy is also incorporated in the orientation training of new employees. Every employee istrained in all aspects of maintaining confidentiality when working with customers. Under our solid control
mechanism, there was no damage to the rights or interests of any customer caused by a breach of privacy orfrom lost data in 2017.

3.45%
RUSSIA FEDERATION 5.17%
GERMANYVIETNAM

JAPANUNITED STATES

6.90%
6.90%

Corporate Customer Satisfaction Management

Tungsten

CHINA

60.34%

Participation in CSR Program Offered by the Client

7.80%
KAZAKHSTAN 3.10%
OTHER

4.70%

JAPAN

6.25%

In 2015, we took part in the CSR program that Deutschen Telekom AG provided to suppliers. The program,
aimed at enhancing supplier social responsibility, includes ten principles: corporate governance, anticorruption, supply chain management, environmental protection, production operation, safety and sanitation,
salary and benefits, employee satisfaction and turnover rate, improvement of the working environment, andemployee relations.
CHINA

BRAZIL

6.25%

AUSTRIA

6.25%

GERMANY

7.80%

Responsibility Management

42.20%

Tantalum

UNITED STATES049

HTC has established “Customer Satisfaction Management Procedure” to meet the specific needs of all ourcustomers and to respond to customer expectations and requests. A Quarterly Business Review is made to
determine customer satisfaction. Each Business Unit proposes corrective action for any nonconforming
project and regularly track any action taken to ensure that the customer has been perfectly satisfied.
The HTC customer satisfaction management index, in addition to product quality, delivery, and after-sales
service, includes evaluation of corporate social responsibility. We have designated a department to regularly
aggregate HTC CSR information for communication and response.

10.34%

INDIA

While HTC makes mobile phones bearing our own brand, we also work with the world’s leading ICT dealers in
the development of customized handheld devices for them, or in the launching of ‘co-brand’ handheld devices
to further present our products to mass market around the world.

HTC has promoted 14 CSR projects in 2017. After persistent effort over the past year, HTC has received a Gold
Award from Deutschen Telekom AG for its performance in the program for two consecutive years.

15.65%HTC 2017 CSR Report 050

Sustainable
Agenda ___HTC
Sustainable
AgendaSustainable
Environment

Sustainable
DesignEnergy and climate change
Energy management system
Green facility
Water resource management

As a global leader in the innovative designof mobile phones, HTC recognizes that byminimizing the environmental impact of ourmanufacturing processes we, and our vast
number of consumers, can make a contribution
to the well-being of our planet.
To this end, HTC has set up a “Sustainable
Agenda” from five aspects: “a sustainable
environment, design, processes, packing,and product,” we have put this concept ofenvironmental sustainability into action, havepositive control, and are reducing the impact of
our operations on the natural environment.

Eco-design
Eliminating the use ofhazardous substances

Sustainable
Processes

Sustainable
Packaging

Sustainable
Product

Environment safety and healthManagement of hazardous
substances
Management of waste andchemicals

Green packaging material

Product Carbon
Footprint

Sustainable Environment
HTC provides and maintains a safe and healthy working environment as part of our environmental protection,
safety and health, and energy management efforts. In order to achieve our commitment to protect the safety
and health of our employees, HTC has established the ESH Departments of Labor and Social Security inaccordance with the law, and are responsible for the implementation of the entire safety, health and energy
management system. It also assists the various factories in continuing to promote occupational safety andhealth management and environmental management systems and promotes environmental protection in an
all-around way, the fundamental work of safety and health management and pollution prevention.
Every year, we also formulate an occupational safety and health management plan based on the state of safety
and health management. The implementation focuses include: compliance with safety and health regulations;hazard identification to reduce risks; standardization of hazardous chemical labeling and general rules;
the promotion of occupational safety and health information; and the establishment of a system to manage
contractors. All these measures are aimed at reducing risks.
We have emergency response plans that will be implemented in the event of an emergency caused by humanerror or natural disasters, such as fire, explosion, typhoon, an accidental leak, mechanical injury, infectious
disease, or an earthquake. As identification of the nature of the emergency, taking the necessary measures andexamination of standard operating procedures. We hold fire all measures impact on the health and safety of theworkers and also try to least damage or company property.
HTC has introduced the ISO 14001 Environment Management System and verified by third-party authorities.
To implement and be in accordance with environmental policy, relevant targets are set up and the systematic
measure of environment management in the daily management.

HTC ESH Policy
HTC continues to provide safe and healthy working conditions for employees while also continuing
comprehensive environmental protection and efficient energy management. With this fundamental
commitment in mind, we abide by the following basic principles to provide our employees, customers,
suppliers, and contractors with the best quality-working environment that makes an ample contribution
to sustainable development.

1. We place equal importance on environmental protection, safety and hygiene and health, production,
quality, and energy efficiency.
2. We also place equal importance on the safety and health of our employees, customers, suppliers, andcontractors.
3. We require our employees to comply with regulations and operation standards on environmental
protection, safety and hygiene and health, and the proper use of energy.
4. We are committed to avoiding foreseeable dangers and we conduct loss control.
5. We comply with the requirements set forth in all applicable laws and regulations.
6. We shall use, maintain, and continuously improve our management systems for environmental
protection, safety and hygiene and health, and energy efficiency.

053

Sustainable Agenda

HTC smart mobile devices
help reduce the transportationand travel previously needed
for communication, andconsequently the carbon
footprint of the user as well.
New combinations andnew patterns of operation,
livelihood, work, study, andtravel involving smart mobile
devices help users save energy
and reduce carbon emission.
To this end, we have devised
a dual-aspect strategy
composed of “adopting anenergy management system”
and “performing energy-saving practice.” On one hand, we strive for optimizing our management system
to reduce energy consumption, and on the other, we use energy-saving technology to improve the energy
efficiency of our products.
By positive management of the supply chain and refining the green design of its products, HTC tries tominimize hazardous substances in its products and reduce the use of packaging material. It is our mission
to be a positive influence and help the users of our mobile devices around the world have a smarter work andlifestyle with less carbon.

A Quick Look at HTC Management of Energy and Climate Change
As a response to the issue of greenhouse gases and global warming, HTC implemented the ISO
14064-1 Greenhouse Gases Emissions Inventory Program and has an ISO 14064-1 Greenhouse Gases
Emissions Verification Opinion Statement for the planning of energy strategy and action.
All the HTC plants have been included in the Taiwan organizational boundary area and have been
subject to inspection since 2009.
Between 2010 and 2015, the HTC plants in China were also included in the scope of inspection anddisclosure and external verification was launched. Electric power was found to be the main sourceof emission.
After joining the Carbon Disclosure Project (CDP), HTC is obliged to regularly report its plans,
systems, and achievements regarding carbon risk and carbon management.
The ISO 50001 Energy Management System, based on ISO 14064-1 standards, is used to check thegreenhouse gas emissions and emissions source of a company. With the help of energy management
systems, the ISO 50001 can achieve energy management according to plan. HTC has implemented
the system since 2011 in an effort to reach the goal of sustainable management.

HTC 2017 CSR Report 054

Sustainability Management Vision

Energy-saving and Carbon Reduction

HTC will reach their short-, medium-, and long-term goals of sustainable development by the performance,
management mechanism promotion and system establishment, as well as by cooperation with society andother enterprises in environmental protection.

HTC introduced an energy management system as per ISO 50001 to gain a full picture of internal energy
use. The applicable regulatory requirements and energy benchmarks were implemented and HTC set energy
performance indicators, and short-, middle-, and long-term improvement goals. A progressive action plan was
set up to eliminate the waste of energy caused by bad habits or incorrect information.

Green Management Vision and Mid-term and Long-term Planning

GHG Emission and Reduction

2012-20152016-20202014 Taoyuan TY5 LEEDAwards—Gold Award
2014 Enterprise
Environmental Protection
Awards—Silver Award
2014 Taoyuan Energy
Conservation and Carbon
Reduction Action Label2015 Taiwan Corporate
Sustainability Awards
2015 UL Environment
Certificate—Platinum Award
2015 Helped safety andhealth program members
pass ISO 14001-related
verification

2016 Applied for clean production2021-2025

2016 Cooperated withgovernment agencies or schools
to promote environmental
protection

To create low-carbon living
circles through corporate
environmental protection
concepts based on HTC
experience

2016 Continued helping safety
and health program members
obtain ISO 14001-related
verification

To help contractors obtainenergy conservation andcarbon reduction action
labels2016 Continued participation
in Enterprise Environmental
Protection Awards
2016 Received Customer
Sustainable Development Award

2016

2017

t-CO2e2,346.95

2,140.06

3,409.39

Total Emission Scope 2

t-CO2e40,142.93

33,298.31

29,972.28

Eco-Efficiency Value

NT$

2.86

2.21

1.78

Total Emission Scope 3

t-CO2e446.44297.17

1,425.35

Emission:CO2

t-CO2e40,897.51

33,995.25

30,636.69

Emission:CH4

t-CO2e1,171.74

1,012.36

882.44

Water recycling rate reaches 75%.

Emission:N20

t-CO2e

1.86

1.19

1.25

Waste recycling rate reaches 80%.

Emission:HFCs

t-CO2e418.77429.57

1,861.30

2018 To receive Water Footprint
Third-Party Verification

2016
l
2020

Reduce power consumption (carbon emissions) by 1%.

Reduce electricity consumption (carbon emissions) by 1%.

Reduce power consumption (carbon emissions) by 1.5%
Water recycling rate reaches 70%.
Reduce paper consumption by 3%.
Waste recycling rate reaches 70%.

055

Sustainable Agenda

Total Emission

Unit

Total Emission Scope 1

Emission coefficients

1. Power Conversion CO2 equivalent emissions are calculated in accordance with thepower emission coefficient of the year announced by the Bureau of Energy
2. GHG Emission Coefficient Table, version 6.0.3
3. The scope includes HTC Taoyuan Plant and Taipei Headquarters Building

Global warming potential

2016-2017 based on IPCC 2007 4th Assessment Report.
2013-2015 based on IPCC 1995 2nd Assessment Report.

Water recycling rate reaches 70%.
Waste recycling rate reaches 72%.

2012
l
2015

HTC GHG Emissions
2015

2017 To apply for Energy
Conservation and Carbon
Reduction Action Label

2021
l
2025

Total greenhouse gas emission by HTC was 34,807.02 t-CO2e in 2017. 2013 continues to be the base year,
and the greenhouse gases inventory in 2017 didn’t exceed over 3% of significance threshold. The majorityof emitted gas was CO2. It is notable that HTC’s GHG emissions contained little percentage of CH4, N2O and
HFCs. Besides, we have extended greenhouse gas emission investigation and external verification scope 3 toinclude control over subsidiaries, including comprehensive statistics, and the monitoring of greenhouse gas
emissions to improve the overall energy use efficiency and create better energy revenue since 2014. HTC’s
GHG emissions contained no PFCs, SF6, NF3, SOx or other waste gases, and HTC does not use any substancesthat might endanger the ozonosphere. Moreover, the cooling and air-conditioning systems in HTC’s buildings
all use environment-friendly coolant R-134a to further preserve the ozonosphere.

Note : 1. Eco-efficiency value (revenue generated from each unit of greenhouse gas emission) = Operating revenue (in millions) / greenhouse gas emission (Scope 1+Scope 2).
2. Scope 3 emissions originate from gases emitted by shuttle buses for employees and vehicles for the transportation of domestic waste.
3. 2013 continues to be the base year because the greenhouse gases inventory 2016 in Taiwan didn’t change over 3% of significance threshold.
4. Greenhouse gas emissions 2016 in Taiwan were lower 35.13% than that in 2015.

HTC 2017 CSR Report 056

TargetEnergy-Saving
reducedcarbon emissions

Energy Saving and Carbon Reduction Results in 2017
桃園
TaoyuanProgram

Energy Consumption Analysis
The power used by HTC is mainly electricity. To decrease the use of electricity, we persistently promotevarious kinds of energy efficiency management. We achieve energy savings through the improvement of thelighting and air conditioning systems, and the installation of renewable energy equipment.
The design on energy efficiency contributed to 1,993,540.9 kWh (7,176.74 GJ) of reduction, and the total
amount of reduction in carbon emission was 1,054 tons of CO2e which translates into a saving of NT$5,980,623
during 2017. The electric power factor of the HTC buildings was 98.85% on average. Taipei headquarters
outperformed the others by means of power factor adjustment, refrigeration and air-conditioning cost saving,
and reached a final electric power factor of 100%.

Energy Saving and Carbon Reduction Results of Office buildings and Factories
Total Useof Electricity(kW)

Total Energy
Consumption(GJ)

Total Amountof Electricity
Bill (NT$)

TY3 Building

9,946,800

35,808.48

27,193,466

99.58

657,783-

H+P Building

27,630,400

99,469.44

68,459,158

98

2,557,928.1-

DaZhi Plant

3,839,200

13,821.12

10,145,060

96.67

143,229.6

TPE17,970,800

28,694.88

19,473,503

100

294,5052017

Average Total AmountElectric Powerof Savings
Factor (%)
(NT$)

TPE2

3,734,400

13,443.84

10,187,975

100

153,281

Others3,536,782

12,732.42

9,489,547

95.19

2,165.86

Total

56,658,382

203,970.18

144,948,709

98.85

3,808,892.56

Cold
Storage
Reduction

ActualProjected
Projected Actual Amount
CarbonCarbonEnergy Energy of Money
Emission
Emission
Savings Savings Saved in
Reduction in Reduction inin kWh in kWhNT$
CO2e/kwh
CO2e/kwh

Energy-saving and enhancing project ofrefrigerated air dryers in Building H
TY3 air compressor energy enhancing project
Energy saving measures for the water heaterof the gym in Building P
Energy saving measures for the water Heaterof the gym in Building P
T8 lightings in the hallway through Building Cof 2 Dazhi Rd have been replaced by LEDs
Turn off the lighting of the storehouse in Building
C of 2 Dazhi Rd for 2 hours a day in rest time
Turn off the lighting of the storehouse in Building
B of 2 Dazhi Rd for 2 hours a day in rest time
Mercury street lamps at the parking lot of
the company’s factory on Taoyin Road havebeen replaced by metal halide lamps
The motor fan energy saving solution in TY3 C/T

SavingRate

16,12812,09636,2888,531.712

6,398.784

172,800

131,400

394,200

91,411.2

69,510.6 76.04%

284

225

675

150.236119.025

23,28023,31069,93012,315.12

12,330.99 100.13%

749

748.8

2,246

396.221396.1152 99.97%

1,265

1,264.8

3,794

669.185669.0792 99.98%

2,170

2,169.6

6,509

1,147.93

1,147.7184 99.98%

13,86013,86041,5807,331.94

7,331.94

100%

54,839.1

56,757

170,271 29,009.8839

30,024.453

103.5%

75%

79.23%

28,40828,84586,53815,027.832

15,259.4811 101.54%

36,808.8

52,100156,300

19,471.8552

27,560.9 141.54%-

Elevator room cooling improvement planin Building P
Exhaust windmill upgrade and updatein Building H
Rainproof Pl lights changed to LED lights
in Building H

1,037

1,036

3,110

548.573548.4672 99.98%

740,031

Lights changed to LED lights in Building P

9,720

9,720

29,1605,141.88

5,141.88 99.97%-

740,031

Note : 1. Others includes Hsinchu and Tainan Software R&D Centers offices.

T8 lights on 4F&5F changed to LED lights
349,056 349,056
in Building H
T8 lights on 4F changed to LED lights
31,104
31,104in Building TY3
Mercury Lights in a Warehouse in Building C, No.
43,560 43,560
2, Dazhi Rd., Changed to Compound Metal Lights

184,650.624 184,650.624

100%

93,312

16,454.016

16,454.016

100%

130,680

23,043.24

23,043.24

100%

1,087,179

62,012.025

191,705.897 309.14%

902,294 1,119,647 3,358,941

477,313

117,225 362,393

Condenser inlet temperature to save energy

2. The electric power factor refers to the ratio of the effective current to the total current. By using capacitors, etc., the electrical power factor can be set to an appropriate
standard. The electricity industry can reduce the cost of power supply. If more than 80% of the power supply exceeds 1%, the monthly electricity bill will be reduced by 0.15%.

1,047,168

592,293--

ActualProjected
Projected Actual Amount
CarbonCarbonEnergy Energy of Money
Emission
Emission
Savings Savings Saved in
Reduction in Reduction inin kWh in kWhNT$
CO2e/kwh
CO2e/kwh

SavingRate

Total

TaipeiThe Eco-efficiency Value of HTC
Environmental Indicator

Unit

2015

2016

2017

Electricity

1,000 kWh/Year

62,276.8

62,48256,658Operating revenue

Million(NT$)

121,684

78,161

62,120Eco-efficiency value

NT$

1.95

1.25

1.11

Note1: The eco-efficiency value (revenue generated from each electricity consumption unit) = Operating revenue (millions) / electricity consumption

ProgramLighting in all offices on different floors changed
to a full installation of infrared switches
Electric room temperature setting increased from24 degrees to 26 degrees in TPE1

2,032

2,032

6,096

1,074.93

1,074.93

100%

301,190

301,190903,570

159,329.51

159,329.51

100%

Replace old chillers with new ones in TPE2

570,672 570,672

1,712,016

301,885.49

301,885.49

100%

Total

873,894 873,894 2,621,682

462,290462,290--

Note : 1. The money saved through energy conservation is calculated on a basis of the industrial electricity price announced by the Taiwan Power Company in 2017: NT$3/kWh.
2. The CO2 carbon emission coefficient is calculated on a basis of the 0.529 kg/kWh standard announced by the Bureau of Energy.
3. The effects achieved through the replacement or removal of lamps are figured out through power conversion.
4. The effects achieved by switching off lights at night and in the holidays is calculated through power conversion.
5. The effects achieved by reducing power consumed by water fountains are calculated through time control and power conversion.
6. The effects achieved through controlling air conditioning system temperature is calculated on the basis of saving ration and power conversion standard announced by the
Bureau of Energy.
7. The effects achieved through process optimization and two plants merged is calculated on a base of the actual used amount in the same period of 2013.

057

Sustainable Agenda

HTC 2017 CSR Report 058

Energy-saving Actions

The Use of Green Energy

Since large manufacturing centers are where the employees and the equipment consume energy most, we focus
our energy-saving efforts on the energy management of the large manufacturing centers, and carry out different
energy-saving strategies and measures according to the individual states of our respective facilities. In order toeffectively import relevant energy-saving measures, in 2017, TPE2 applied for the Performance Guarantee Planof the Bureau of Energy, Ministry of Economic Affairs, R.O.C. (Taiwan) and obtained a subsidy in the amount of
NT$1,300,000 in order to accelerate the energy conservation and carbon reduction goal. The project axis is toreplace high-efficiency pumps and chillers. Compared to the total energy saved in 2016 total thermal units, theactual total energy saved in 2017 accounted for 18.11%, equivalent to NT$1,573,655 energy costs saved per annum.
Targeting the Taoyuan plant area, HTC plans to build a new energy management system. Through theadditional monitoring system, the energy-consuming equipment inside buildings can be monitored. Throughmonitoring, control, management, analysis, and other steps, an insight is gained into equipment operations
and energy consumption situations. Then, based on the judgment made through the comparative analysisof the monitoring system big data, continuous energy conservation improvement can be made. In addition,according to the equipment deployment and operation time during factory working hours and off-work hours,
the equipment is turned on and off according to the automatic scheduling. This project is expected to becompleted in the third quarter of 2018.

Real-time information
monitoring system

ACsystemAir supply
andexhaustSingle line
diagramPower
resources
Ice water
systemMeter
overview

Cooling
water system

Details

Small fans

UPS

Air conditioning
boxes

Electricity
reportLighting
systemTwo-wire
control

Water
resources

Exhaust gas

To create a low carbon life, we use only green energy, which includes the use of solar panels, eco-cooler air
conditioners, and other low carbon emission sources like electric cars.
Energy-Saving Program

Descriptions
Taipei headquarters has solar panels that generate electricity used for lighting thestaircases and basement in 2012. The cumulative total number of solar panels since
it was built has reached 78,718 kWh.

Solar panels

HTC has installed solar panels on the rooftop of Hsinhua Dormitory for the water
heating system. Heat generated in this way can be stored in tanks to provide
hot water for washing facilities, which reduces the use of natural gas and carbon
emission. The solar-powered equipment that HTC uses saved 173,826 cubic metersof natural gas in 2017, this translates into an equivalent of $1,686,112 cost saving anda reduction of 328 kilograms of CO2e.
Note: 1. One cubic meter of natural gas costs NT$9.7.
2. The carbon emission coefficients of natural gas is calculated in accordance with Version 6.0.3 of the Greenhouse Gases Emissions
Management Chart (1.888 kgCO2e/m3).

Heat pumps for air
conditioning

Taipei Headquarters are equipped with cold air heat pump systems for shower
water for the employees and other uses. The design concept is to absorb heat fromthe atmosphere or water and store it in water through a heat exchanger. The water,
after absorbing the heat, raises the temperature of a hot water tank to provide agreat amount of highly efficient and low-cost hot water. The air released during theprocess becomes the dry cool wind of an air conditioner. The system can generate
hot water, cool air, and cold water at the same time.

Electric vehicles andbicyclesTaipei headquarters has installed an ample number of power-charging sockets forelectric vehicles and bicycles to encourage employees to use low pollution andhigh-energy efficient means of transport.

Gas system

PublicsystemAir pressure
systemNetworksystemEnergyanalysis
Generator

Tap water

Parameter
setting

SewageHot spot
analysis

AlarmsystemReal-time
alert
Alarm record

Power charging sockets for electric vehicles

Solar panels at Taipei headquarters

Free bicycles for rides

Boiling watercollecting

Building
H

059

Sustainable Agenda

Building
P

Building
TY3

HTC 2017 CSR Report 060

Setup of Renewable Energy Devices
Targeting the construction of a new parking shed in the Taoyuan plant area, HTC planned to use its roof
to build a solar power generation system, replacing the metal roof of the parking shed with solar panels, a
total generating capacity of 180KW. By means of internal line parallel series, the power was sold in bulk andincluded in Taiwan Power Company’s power supply system, thereby relieving Taiwan’s power load and supply
constraints and reducing carbon dioxide emissions. The devices are expected to be completed in the fourth
quarter of 2018

180kW Solar Power Generation System

Parking
shed 130kW

solar power
array

Inverter1

Sunlight / thermometer

R5485

Parking
shed 230kW

solar power
array

Inverter2

Resource Consumption Statistics in 2017

R5485

Parking
shed 330kW

solar power
array

Inverter3
R5485

Parking
shed 430kW

solar power
array

30kW

solar power
array

30kW

solar power
array

R5485

PM5350multimeter

Wholesale
electric
meter

2015

2016

2017

degree/year

553,732

482,277

441,856

WastewaterRiver

Dongmen Creek + New Taipei City
dedicated sewer

Total city water discharge

Tonnes

The amount of rainwater recycled

Tonnes/year

Total amount of water recycled/reused

1,000 liter /year

Green Plant

Unit

City water consumption

The ratio of water recycled/reused to total amount%/Yearof water consumed

Inverter5
R5485

Parking
shed 6

AC boxInverter4
R5485

Parking
shed 5

Taipower system

R5485

Inverter6

R5485

111,755

73,75063,98812,596.295

5,686

9,080

247,869

194,868

182,00244.76%

40.41%

41.19%

Total amount of waste recycled

Kg/ year

2,994,625

3,450,697

2,434,060

Total amount of waste reused

Kg/ year

3,260

0

0

Total amount of waste incinerated

Kg/ year

1,468,849

1,248,555

781,240

Waste disposal expense

NT$ thousand /year

5,484,338

6,880,479

4,216,638

Environmental management and recycling amount NT$ thousand /year

13,086.363

6,838,640

5,194,508

Note : 1. Waste materials, as put into statistical data, are divided into categories ranging from plastic, paper, scrap iron, scrap aluminum, scrap galvanized iron, waste edge board, scrap
computer products, waste wood (pallets), miscellaneous types of plastic, scrap parts, kitchen refuse, recycled domestic material and general rubbish.

Real-time solar information
monitoring system

2. Because Hsinchu and Tainan Software R&D Centers are offices, the consumption of those two is not significant. In this regard, the consumption of those isn’t included in the above.
3. In 2015, the reused waste was mobile phone screens. Starting in 2016, mobile phones were classified as materials. Hence, there was no reusable waste volume.
4. The relatively heavy rain in 2016 made the rainwater recovery tanks to be unable to continuously store water, thus the reduced recycling efficiency.
5. Domestic garbage at Taipei's headquarters building consists partly of recycled cartons that are unquantifiable. A recycling company has been commissioned for handling.

061

Sustainable Agenda

HTC 2017 CSR Report 062

Green Plant
The factories and offices disclosed in the boundary organization report this year have been establishedin industrial and commercial areas after environmental consideration and evaluation. The relevant
environmental protection has been implemented in compliance with local regulations and internal
environmental policies and specifications that have no significant impact on the local ecosystem and animaland plant species.
However, we still encourage all our plants and offices to go on with their efforts to beautify the environment.
As for the new buildings, we aim to improve the employee working environment through the introduction ofgreen building design.

An Office Environment with Plants and Green Landscaping
We uphold the concept of environmental sustainability and we regularly increase our green space in Taipei
headquarters and Taoyuan. The HTC outdoors green area now totals 30,700 m2 and the TPE1 building
horticulture planning adhered to the concept of environmental protection and open parks. The planting
area on the first floor reached 41% of the total base area. According to the topographic planning, large trees
totaling 260 were planted, including camphor trees, Liquidambar, Podocarpus, Decathlon, and cherry trees.
Additionally, the plan designated eight shrub planting areas and one ecological pool area to plant about 3,200
plants. In Taoyuan area, there are around 500 tree species native to Taiwan on the grounds, such as Camphor,
Yellow Cypress and the Taiwan Golden-rain Tree. Our employees can enjoy the lush green surroundings oftheir work environment.
Taipei’s headquarters building planning covers B1 to 17F. In every floor, the indoor foliage was widely planted,
totaling 450 pots. Different plants such as eucalyptus, Dracaena, Coarse, and White Crane are also added for
different festive holidays in order to enhance different festive atmospheres. To improve air quality, we haveplanted trees extensively inside the factories and offices buildings to purify the indoor air by reducing CO2
concentration. In the office areas, we set the potted plants every 20 to 50 meters and replace them regularly.
The annual management fees for our green environment amounts to NT$2.06 million which is used to provide
our offices with green areas to help reduce indoor air pollution (dust, carbon dioxide, and VOCs). In addition, ahanging garden on the seventh floor of Building H will undergo planning in 2018.

HTC’s Taipei Headquarters, The Golden LEED Certified Green Building
In 2013, HTC's Taipei headquarters office received the green building markfrom Ministry of the Interior and the golden LEED (Leadership in Energy& Environmental Design) certification from the U.S. Green Building
Council (USGBC), offering its employees an excellent and comfortablelow-carbon and take the responsibility of environmental sustainability.
The fully-integrated energy management system was utilized to attain afull real-time management and enhance the efficiency of energy use. The
total amount cumulated for the reduction in carbon emission since theinauguration of the building has reached 11,163.7 tons of CO2e.
The fully-integrated energy management system is constructed in the
Taipei headquarter, which covers over 7,000 spots of on-site monitoring,
total monitored spots amounted to 20,000. Under the effective control
and analysis, the EUI (Energy Usage Intensity) of Taipei headquarters
amounted to only 93.98 kWh per meter square annually in 2017, which
was quite a marvelous result.

LEED gold
certification

Green Building Label

Building

Unit

2014

2015

2016

2017

TPE1

EUI (average)

90.12

88.8

92.88

93.98

TPE2

EUI (average)

270.84265.2

263.56223.14

Taoyuan(P, H, TY3, DaZhi)

EUI (average)--

394.76302.13262.53

Green Procurement
Our strategy is to buy environmentally friendly products to substantiate our environmental protection concept of“recyclable, low pollution, and resource-saving.” We express the purchase of environmentally friendly products
as a priority in our procurement specifications to firmly integrate the concept into our daily operations.
Purchase amount in 2017 is NT$4,776,000. Between 2012 and 2017, procurement with green product marktotaled NT$24.43 million.

063

Sustainable Agenda

HTC 2017 CSR Report 064

Water Resource Management

Sewage Treatment

The water source at the HTC facilities is tap water. The production line processes at our facilities do not use
any water, so there is no industrial wastewater generated. The wastewater generated by our facilities is mainly
domestic sewage from the washroom and for other cleaning uses and restaurant wastewater that contains
no process wastewater. Domestic wastewater is discharged into the sewage system, which will not have thenegative impact on any neighboring water body.

The wastewater generated by our facilities is mainly domestic sewage from the washroom and for othercleaning uses and restaurant wastewater that contains no process wastewater. We invested NT 27,760,000
dollar in building sewage treatment equipment in 2010 and spent NT 1,627,872 dollar on operation andmaintenance in 2017.

In 2017, the total domestic sewage treatment volume was 245,990 tons, and the recovered treated domestic
sewage volume was 182,002 tons, accounting for 73.99% of the total sewage treatment volume. The recovered
volume exceeded the 2017 goal of 70% and is higher than the 72.54% swage recovery rate in 2016.

Description of Sewage Treatment Unit Facilities

Fine sievemachineOffice/Facility Water Use and Water
Plant

Usage in 2017 (Unit:ton)

TaoyuanTaipei
Headquarters

384,558

47,347

Domestic
SewageFine sieve pump

Sewageadjustment tank

Water Saving Measures
Utilizes 70% of the sewage for watering through water recycling

Fine sieve after
degreasing

Upper liquid
refluxOil slicktreatment slot

Surfacedegreaser

Aeration tank

The Taipei headquarters building selected water-saving waterequipment, using air conditioning condensate and recovered
rainwater. The overall daily water-saving rate was 66% (including
toilets, urinals, faucets and showerheads).

Scum
Greaseintercepting tank

Quick mixing
tank
Slow mixing
tank
Sedimentation
tank
Recyclestorage slot

Activatedcarbon filter

SludgePump

Sludgestorage tank

EntrustedcleanupMid slot

Discharge slot

Watering
Discharge

SludgeSludge belt
filterSludgeEntrustedcleanup

065

Sustainable Agenda

HTC 2017 CSR Report 066

Description of Sewage Treatment Unit Facilities
Sewage Treatment Facility

Sewage Treatment Facility

Description

Oil tank

Using the scum pump, regularly pump oil to the grease retainer tofacilitate the removal of grease and scum at regular intervals, so as
to achieve the primary treatment function and avoid the load on the
sewage plant.

Filtering system

The sand filtration inflow pump is automatically controlled bypressure, and the suspended solids in the water are separated byfiltration. The treated sewage is sent to the filter tower for filtering
through a filter pump. After filtration, the water is discharged into therecovery tank for watering and utilization.

De-oiled
screening slot

Remove coarse solids from the wastewater to avoid pump water pipeand valve blockage.

Discharge slot

The treated wastewater is discharged after being sent to adischarge poof for disinfection. Through the discharge pump, it isdischarged here for sampling use.

Adjustment slot

Control and adjust water or water quality variation. The function ofstirring is achieved through the use of blower aeration. The pH value
in the water is adjusted to reduce the required chemicals, reduce
flow changes, and ensure the processing system runs normally.

Aeration tankQuickmixing/floc slot

Sedimentation
tank

Sludge storagetank anddewatering
equipment

067

Description

Sustainable Agenda

Through the use of the honeycomb contact filter in the aeration tank,after a period of aeration, the contact material starts to grow andattach to biological sludge, forming a biofilm. The biofilm removes
and oxidizes organic substances in wastewater under aerobic
conditions. The two aeration blowers in alternating operation every
six hours, operates 24 hours a day.

Through the chemical coagulation method, the suspended particles
in the wastewater can be easily precipitated to improve the clarityof the water and reduce pollution. A pH meter is used to set the pH(about 7.0) and link with the dosing machine.

Suspended substances are removed by sedimentation. When thewater stream enters the large section tank, the water flow rate is
reduced, separating the suspended particles and water and forming
sludge precipitates. Then, the sludge is scraped using a scraper andis pumped to the sludge concentration tank through the sludge
pneumatic pump.
This unit is used for sludge storage and subsequent sludge
dewatering. The sludge produced by the sedimentation tank isdischarged into the sludge storage tank and dehydrated after the
addition of chemicals. The treated sludge cakes are then handed to aqualified disposal agency for disposal.

To substantiate sewage control, we have implemented daily maintenance and inspection in accordancewith the “Procedures for Sewage System Operation, Repair, and Maintenance.” We abide by all the laws andregulations and the sewage is tested every six months by an institution authorized by the Environmental
Protection Administration. The final test results are published on the Internet and show that the effluent andrecycled water are in full compliance with all the standards.
Domestic sewage is discharged into the sewage sewer. Based on the average concentration of effluent BOD and
COD from 2015 to 2017, there will be no adverse effects on the nearby water bodies. Since 2017, a self-initiatedtest of effluent heavy metals has shown ND or lower than the test value. Starting January 2013, the average
daily treatment capacity of the sewage treatment plant reached 600 tons, sufficient to replace the use of tap
water for park landscape irrigation and for toilet water use.
Water Discharge and Recycled Water Amount, and the Average Concentration of BOD
Amount of
Water Discharge(tonnes)Amount of
Recycled Water(tonnes)

Average
Concentrationof BOD (mg/l)

Average
Concentrationof COD (mg/l)

The
Suspended
Solids (mg/l)

Test ofEffluent Heavy
Metals2015

111,755

247,86915.7

100.05

21.05

-

2016

73,750

194,868

14.95

42.95

10.05

-

2017

63,988

182,002

16.6

50.85

22.35

None

NOTE: tested items of heavy metals: Cd. Cr. Cr+6. Cu. Zn. Ni.

HTC 2017 CSR Report 068

Sewage Recycling

Water-saving Sanitation Equipment

The green fields and planted areas inside the factories are irrigated with recycled sewage water without
increasing the total amount of water consumed. Starting from 2012, HTC drafted and implemented water
conservation plans. We examine results each year to examine whether or not to adjust the goals. The actual
recovery ratio of wastewater in 2017 was 73.99%. From 2014 to 2017, 858,383tons of wastewater had been
reclaimed for watering purposes.
Sewage Recycling Strategy and Effectiveness in 2017
Strategy and EffectivenessSewage Recycling

Annual target

NOTE: For a total of 63 months from October 2012 through December 2017, 231 liters of water were saved every month. With the total
number of taps of 500, the formula is 63*231*500=7,276,500 liters.

70%

Recycled water for irrigation (tonnes)

182,002

Sewage water output (tonnes)

63,988Amount saved (NT$)

HTC gives top priority to the use of sanitary equipment with a water-saving label.
The faucet device installed with water-saving spiral allows the faucet to reduce theamount of water outflow and each faucet can save 77 liters of water a day. Sinceestablished in October More than 7,276,500 litres of water have been saved since
installation in October 2012. All the toilets and urinals in the bathrooms should beenergy efficient and have the WaterSense Label of the United States Environmental
Protection Agency and Water Label of water resource agency, MOEA.

2,366,026

Actual wastewater recycling rate

73.99%

Rainwater Storage and Recycling System
HTC has established a rainwater storage and recycling system to collect rainwater for flushing toilets andwatering plants. In 2017, the Taoyuan plant recycled a total of 6,524 liters of rainwater and the Hsintien officerecycled 2,556 liters for a grand total of 9,080 liters of effectively saved water resources.

Photocopying Paper Management
HTC aims to reduce photocopying paper consumption by 1% per year and bring theuse of paper down to an absolute minimum.
By the end of 2017, cumulative savings of 9,626,500 sheets of paper had been achieved by optimal paper-saving
management. Renegotiations with the photocopy suppliers in 2017 resulted in a unified unit price which would
help save $12,125 (2%) compared with 2016.
Use photocopying papers with carbon footprint labels to support green, low-carbon products
Print

Link the computer with the employee number, the employee card must be sensed in front of
the business machine before printing, effectively reduces the unclaimed printed documents

Fax

Unified management in the entire factory area, select fax function to send faxes with theemployee's computer to eliminate the paper waste with paper fax in the past

ScreenDocuments can be scanned after the employee card is sensed and reply to the employee's
email immediately after the scan is completed

HTC Paper-Saving Performance
Year

2013

2014

2015

2016

2017

Paper use (Piece)

12,345,000

10,640,000

9,112,500

5,102,500

5,027,500

Paper saving (Piece)

2,309,000

1,705,000

1,527,500

4,010,000

75,000Paper saving target

10%

10%

3%

1%

1%

Achievement rate

16%

14%

11%

44%

1%

312,960

150,965

191,960

533,435

12,125

Amount saved (NT$)

Rainwater monitoring system

069

Sustainable Agenda

HTC 2017 CSR Report 070

Environmental Protection Education and Promotion

Environmental Protection and Safety and Health Education

HTC continues to promote and enhance environmental protection consciousness and awareness in employees
using a diversified interface. Employees can display a sustainable environmental protection message each day
via the HTC employee Service App as a daily routine. New recruits education and training was given to 2,268
employees in 2017. The training material includes the environmental protection concept of the plant and apolicy card is distributed that can be retrieved easily from the corporate identity system.

■ Foreign employee

Education and Training statistics for New and On-the-job Employees in 2017
CourseNumber of New employees and Contractor Education Trainees in 2017350

In the annual Family Day event, we show the results of environmental protection and energy conservation of
Taipei headquarters in the Green Energy Hall, and let employees experience the company’s environmental
protection measures in an interactive way. The implementation of environmental protection concepts within
the company is quite diverse and is actively implemented.

■ DL

■ IDL

■ Contractor

Hours

Environmental protection and3 hours
safety and health education training

New employees

Hazardous substance use

3 hours

New employees

3 hours

New employees / Change operations (operatorswith access to equipment)

1 hour per year

On-the-job employees

Hazardous chemical use notice

1 hour per year

On-the-job employees (with alcohol andchemical use in processes)

Environmental education

4 hour per year

On-the-job employees

Operational equipment hazard
notifications
General labor safety and healthin-service education training

300
250
200

Trainee

150
100
50
0

Encourage Employees to Carpool
Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

HTC runs a shuttle bus service on many commuting routes with a daily capacity of 1,520 passengers. Thistransportation arrangement together with car-pooling makes it easy for employees to move to and from work.
By cutting down on the number of vehicles travelling to and from the plant the amount of greenhouse gas
emitted, in the form of vehicle exhaust, can be significantly reduced.
Annual Gasoline Consumption and Carbon Emissions of Shuttle Buses in 2017
HTC Shuttle
Bus RouteWenn-chin
Miles permonth (km)Wenn-chin

Environmental Policy Card

Monthly oil
consumption Taoyuan Bus(litres)total
Monthly
carbonemissions(KgCO2e)

APP Software “Employee Services” and computer screen saver program
promotion of environmental information

071

Sustainable Agenda

Feb

Mar

Apr

Jun

Jul

5,817 5,540 5,540 6,094

Aug

Sep

Oct

Nov

Dec

5,817

6,371 5,053

5,817 6,094

25,969 23,664 30,631 25,847 27,675 30,030 29,509 31,462 29,786 26,073 26,462 24,894
3,313

3,158 4,273 3,338 3,690 4,082 3,904 4,273 3,904 3,505

3,441

3,133

1,016

785

842

970

1,016

4,613 5,005 4,920 5,243 4,966 4,347

4,411

4,149

12,731 14,083 13,469 14,742 13,469 12,092

11,871 10,809

4,329 3,943

831

970

5,104 4,308

Wenn-chin

11,430 10,895 14,742

Taoyuan Bus

3,505 2,708 2,867 3,347

total

May

19,875 18,955 25,645 20,030 22,135 24,490 23,415 25,645 23,415 21,020 20,645 18,800

Taoyuan Bus 6,094 4,709 4,986
total

Garbage classification promotion

Jan

11,516

923

3,184

923

1,016

970

1,062

3,184 3,505 3,347 3,664 2,905 3,347 3,505

14,935 13,603 17,609 14,863 15,915 17,267 16,974 18,089

17,133 14,997 15,218 14,314

Note : 1. Kilometers per month=kilometers per ride* total rides per month
2. Fuel consumption calculated as 6km per liter (km per month/6km)
3. Carbon emissions per km calculated using the coefficient of diesel fuel of 3.45 L/Kg CO 2e (mobile source) according to "information disclosure on the carbon footprint
calculation service platform".

HTC 2017 CSR Report 072

Sustainable Design
UL Environment Certificate Platinum Rating
In 2017, HTC has received UL Environment certification for the following two mobile
phones, which were all, awarded the highest “Platinum” certification after rigorous
verification procedures.
● HTC U11

● Co-production of mobile phone A

In order to conduct thorough evaluations in every aspect, six factors are consideredin the UL110 standard for sustainability of mobile phones, including materials used, health andenvironmental impact assessment, end of life management and extension of useful life, packaging
design, manufacturing management and innovative measures.

HTC assesses the sustainability of products by an examination of the entire product lifecycle. A complete
life cycle assessment and a detailed analysis of the flow of a product help the R&D team understand all thecomplex environmental factors. Different criteria and measures are applied at each stage of the process,especially at the product development and design stage. Great care is taken to ensure that the materials
used in production have low environmental risks and all comply with internationally accepted regulations
on banned substances in accordance with the Precautionary Principle. HTC makes sure that all the mobile
devices they design and manufacture meet the expectations of their consumers and in particular have a very
low impact on the environment.

BC

073

Sustainable Agenda

Description

Material

Packaging

No PVC, plasticizer and materials
from mines in conflict areas.

Less use of paper. Only paper
made from fast-growing trees or
recycled paper is used.

Charging connector

Recycling

High-performance and low energy
consumption charger with
universal connectors.

Green Marks Obtained by HTC
Green Mark

These products received “Platinum” certificates for the use of non-toxic and environmentally friendly
materials and no material used in their manufacture originates in conflict mineral regions. Highefficiency low-power-consumption chargers and the unified global charging plug are used to ensurecompatibility with other mobile phones. The mobile phone surface material has been rigorously
tested and contains no restricted heavy metals, PVC or plasticizer. Product recycling assessment isconducted at an early stage of development and the amount of packaging material used and consumed
during packaging has been reduced. Natural fiber used in packaging is of a kind that grows rapidly andrecycled paper is also used. The ISO environmental management system has been implemented in the
manufacturing process.

Applicable Area

Verified by a third-party verification company(UL) as meeting North American (US andCanada) energy efficiency requirements.

Power supply units

Verified by a third-party verification company(UL) as satisfying UL, sustainability standard
for mobile phone, and rated as Platinum.

Mobile phones, accessories(including shipping
packaging)

Verified by a third-party verification company(UL/TUV/ITS) as complying with California
appliance efficiency regulation.

Mobile phones, including
Accessories withrechargeable batteries, etc.

Working with RBRC to properly recycle usedbatteries in North America.

Batteries

Recycling 80% of reclaimed
materials.

Phone surface material

Manufacturing

Only environment-friendly materials
that have not been found to containany controlled heavy metal.

Adoption of the ISO environment
management systems.

We work diligently to reduce the use of environmentally harmful substances, to increase recyclability,
improve the reuse of resources, and reduce the adverse effects our products have on the environment. HTC’s
sustainable design concept is reflected in three areas:
1. Increased energy efficiency
2. Recyclability
3. Reducing hazardous substances with the serious intention of making our products really green andcompetitive

HTC 2017 CSR Report 074

Enhancement of Energy Efficiency
An analysis of energy efficiency starts with the raw material used to produce the electronic
telecommunications product, its manufacture, life cycle and disposal. The mobile phones raw material carbon
footprint is low, as is that of the manufacturing process as well as usage, when most of the greenhouse gas isemitted. We concentrate on energy saving from the early design and research and development phase. All
power supply devices used for HTC products must comply with the relevant international energy consumption
specifications: US Energy Star, California Energy Commission, the EU Code of Conduct, the EuP, and Energy
Efficiency Certification (EEC) with third-party verification. The power supply devices used for all specificmodels meet the 0.03W standby power minimum energy consumption standard.
According to the simulation calculation, the annual power consumption is about 6 kilowatts per hour,
including the use of chargers with a standby power of less than 0.03w. Compared to chargers with a standby
power of 0.15W, power consumption is reduced by approximately 5.5%.。

Recyclability
We start a full evaluation of a product for recyclability at an early stage of the R&D process. To dothis we conduct a simulation of disassembly and analyze the material composition of the productand relative recycling rate. In addition, we carry out a series of strategies such as material marking(as per the standards of ISO 11469 and ISO 1043) and component simplification and degree of easeof disassembly. Then feedback is given to the R&D team about any useful and valuable strategies.
Currently, HTC product could meet the present and future requirements for recycling.

>ABS+PC<

We consider material recyclability in the selection of all materials and product disassembly andanalysis is carried out by an impartial third-party. All current products such as the HTC 11 or HTC
U11 EYEs, allow 80% up material recovery. This significantly exceeds the EU WEEE Directive on
the mobile phone material recovery standard which is 70%.

The HTC R&D team has developed excellent power management modes that allow the phone (depending onuser habit) to automatically enter Standby mode to extend battery life. Some of our phones have an ambient
light sensing function that controls the LCD backlight according to the ambient light level in order to provide a
comfortable reading environment and also to save power.

Rapid and High Energy-efficiency Charger
For issues related to charging the cell phone, we have launched HTC Rapid Charger 3.0, a rapid-charging
device with high energy-efficiency, whose charging speed is faster than used to be. In only 30 minutes
would the new HTC 10 be charged up to 50% of its power. Its energy-efficiency has also reached the highest
standard currently set internationally, including Energy Efficiency Level VI and EU CoC Tier 2, whoseenergy consumption during no-load standby is lower than 0.03W and has reached the highest 5-star level.
In terms of design, its volume has also seen 25% of reduction compared to its predecessors. In addition to
reducing the use of resources, it is also more convenient to carry.

Participation in
the Foreign Service Carriers’ Eco-rating Program

HTC U11

HTC U11 EYEs

Material recovery rate:

Material recovery rate:

83.3%

80.1%

HTC assisted in the “Forum for the Future” to integrate the different plans ofseveral industries to launch “Eco-rating 3.0” and continued to participate in
the Eco-rating programs promoted by several foreign telecommunications companies in 2017.
The grading category includes life cycle assessment, product eco-design, and corporate social
responsibility. The overall assessment results are graded between 1 and 5 points. This allows a consumer
to make rapid comparisons at the time of purchase and also encourages the design and manufacture of
products in an environmentally friendly way.

075

Sustainable Agenda

HTC 2017 CSR Report 076

Phone and Battery Recycling
To properly fulfill their responsibilities as a manufacturer, HTC, which is 100% in line with EU WEEE
requirements, has also promoted the US and Canadian mobile phone recycling program. Old mobile
phones, up to a value of US$499.99, can be traded in to reduce the undue disposal or handling of oldmobile phones and the impact of this upon the environment.
1. HTC promotes cell phone trade-in program（http://www.htctradeup.com/）, through filling out thebasic information online to allow the customer to receive the old cell phone recycling offer without
limitations in cell phone brand, and acceptable as long as the old cell phone is still operable. The check
will be mailed to the customer after the new cell phone is purchased and the old cell phone is mailed
back. In 2017, the total cumulative units of devices were 9,763 units with the value of US$146,445.
2. HTC also participates in the industrial management program Call2Recycle that is currently
implemented in the United States and Canada. The program provides for the collection and recyclingof batteries, including cell phone lithium-ion batteries, as well as the recycling of cell phones in Canada.
We pay a fee to Call2Recycle for every mobile sold in the United States and Canada. A total of 63 million
kilograms of mobile phones batteries, was recovered through this program in 2017. As a result of raisingcustomer awareness and the availability to recycle, the weight of recycling has increased by 12% ascompared with 2016.
3. HTC takes part in the state-owned e-waste programs of more than 20 states in the US, responsible forrecycling Nexus-9 Tablet PC. Due to different recycle mechanism of life cycle termination determinedby each state, many states establish the weight of the Company’s annual recyclable electronic products
by market share, some states charge the cost to the manufacturer based on the price of unit weightof the recycled products, while the remaining states allow the mail recycle plan, and pay the annual
registration fee, without having to set the recycling target. For example, in Washington State, we pay acertain percentage of expenses according to the market share of the tablet PCs, the local governmentis responsible for the recycling collection operations across the entire state, and the recycle firms
legally registered with the state ecological department recycle the electronic products to ensure thatthe recycling operation is held responsibly and appropriately. From 2009 to 2017, there was a total of
167,375.58 metric tons of electronic waste recycled in the Washington state area.

077

Sustainable Agenda

Actively Reduce Hazardous Substance
HTC unveiled the world's first mass-produced RoHS-compliant PDA mobile phone. Today we require thatall parts, components, modules, materials, and so on delivered to HTC meet a set of requirements, which
are even stricter. The HTC Substance Control List not only restricts the six substances controlled by RoHS,
but also others restrained by international environmental regulations and customer requirements, such as
polyvinylchloride (PVC), Brominated Flame Retardant, and Phthalates listed by RoHS 2.0 are prohibited.
In addition, we established a platform for unified management of our entire green supply chain to help our
R&D engineers select green materials that meet international environmental regulations and customer
requirements from the HTC product database in 2006.
The platform had been revised in 2008 to enhance the overall control of the harmful substances through moreconvenient and simple user interface. During the selection of materials in 2015, we replaced the beryllium
copper alloy used for contact points in a mobile phone with other safer materials. Although beryllium copper
alloy is safe in itself, it can produce beryllium oxide during the recycling process that is harmful to humanhealth. We have thus decided not to use the material in any of our products since 2016.
In response to the international greening trend, HTC introduced halogen-free materials in 2009. Afterrequesting suppliers to provide halogen-free reports simultaneously, setting up halogen machines (i.e.,
halogen-free process auxiliary equipment/supplies inventory), and other stages, the “HTC’s new models are all
halogen-free” quality claim was proposed in 2012, with 100% qualified HSF sampling.

Compliance with Standards
All HTC mobile phones are verified by international public certification companies, such as SGS, TUV, andITS. Chemical analysis is carried out to ensure compliance with the EU environmental directives. HTC also
cooperates with their customers in green-related certification plans such as the ULE and ecological scoring
systems and this ensures that all products comply with customer green specification. Among the SAR regulations
currently in force, FCC (US) and CE (EU) are the strictest, and all HTC products satisfy meet these requirements.

HTC 2017 CSR Report 078

Sustainable Manufacturing Process
Management of Waste and Hazardous Substances
The major manufacturing operation at HTC is the assembly of Smartphone, so the only waste is gas produced
by welding, without NOx or SOx emission. We handle and dispose of waste according to our self-regulated“Process for Removal and Handling Business Waste,” and practice good resources recycling to ensurecleanliness of the working environment and reduce environmental impact.
Regarding management measures, besides entrusting legal disposal authorities to properly dispose of the waste
in accordance with the government policy, we also follow disposal trucks to check and confirm their cleaning
status on site from time to time. Regarding plants, we inspect waste storage and temporary storage zones
through inspection checklist regularly, and request corrections for non-compliance within a limited time. We
also establish environmental safety and health self-assessment form and perform audits, to accomplish effective
management and evaluation mechanism. In the event of environmental concerns, HTC can be reached via theinformation on the company’s website to ensure that we respond and handle it promptly.
Measures

Methods

Set up recycling bins and commission manual
sorting of domestic waste.

Set up recycling bins and encourage and propagandize
staff to sort domestic waste. The employees recycled
26,000 kg of domestic waste in 2017.

Used batteries, light tubes and information
technology objects must be recycled.

We have recycling stations for used batteries and lighttubes available to the employees

In the process of mobile phone assembly and manufacturing, HTC inevitably generates general businesswaste and small amounts of harmful business waste. HTC upholds and implements proper disposal of waste,
commissioning legal waste removal and processing companies and choosing the best handling approach basedon the nature of waste. In 2017, HTC’s waste disposal methods consisted of four types, including general businesswaste recycling, general business waste incineration, and general business waste (waste bakelite) burial. The
kitchen leftover was used as feed in legal livestock farms.
2015

2016

2017

Waste weight of each mobile phone manufacturing (kg/unit)

0.05650.07210.0785Weights of each mobile phone recycled (kg/unit)

0.24080.36280.4037

2015

2016

2017

HTC Waste Statistics
Treatment

Unit

Recovery (General)kg

3,037,885

3,450,697

2,434,060

Incineration (General)kg

1,257,469

1,143,555

660,540

Burial: Waste bakelite

kg

0

0

69,960Chemical treatment: Harmful waste liquid containing copper

kg

0

2,860

0

Other (Such as livestock husbandry): kitchen leftoverkg

381,968

400,489.1

324,077.5

Waste Reduction, Recycling and Reuse
HTC waste reduction strategy involves the reduction of the generation of waste from the source by meansof sorting and advocacy. The reuse of waste is also a priority and is essential for an increase in resource
recycling efficiency.
We have been taking steps to handle the treatment of waste materials according to type. As an example, we
commission contractors to collect and recycle waste trays. In addition, a number of other licensed contractors
are employed to recycle other material and much of the waste is purified and turned into industrial raw
material. Other waste goes through physical classification which increases reusability. For example, thesource control strategy is adopted when the recyclable plates and sponges can be recycled to the production
line for reuse. the material that is not recyclable goes to a final destination. We also publish the condition of
temporarily stored waste material on the Internet. Our recycled resources reached 2,434.06 tons in 2017.
Between 2011 and 2017, the money earned or saved by recycling waste rose year by year to reach NT$5,194,508
by 2017. The waste recycling rate increased from 56.89% in 2011 to 78.09% by 2017 to pass our long-term goalof 80%. By 2017 the accumulated savings and earnings from the recycling of waste had reached NT$66,983,184.

Note : 1. General business waste recycling category includes Tray plate, foam, miscellaneous plastic, waste wood pallets, etc. General business waste incineration category includes
domestic waste.
2. Waste bakelite had been produced in 2017, none of which was produced from 2015 to 2016.
3. The chemical treatment shall be conducted once every two years for the treatment of the copper-containing waste liquid according to Article 7 of the Waste Disposal
Treatment and Facilities Standard for Business Waste.
4. The amount of leftover is calculated on a barrel of 189 kilograms.

079

Sustainable Agenda

HTC 2017 CSR Report 080

HTC Hazardous Substance Management Policy

Waste Recycling Effect and Rate
NT dollar%

80,000,000

100.00%70,000,000

90.00%
80.00%

60,000,000

70.00%

50,000,000

60.00%

40,000,000

50.00%

30,000,000

40.00%
30.00%

20,000,000

Cumulative Amount ofRecycling in NT$
Recycling Rate

10.00%

2011

2012

2013

2014

2015

2016

00.00%

2017

56.89%

62.94%

65.82%

65.20%

70.72%

74.43%

78.09%

Kg
18,000,000

40,000,000

16,000,000

35,000,000

14,000,000

30,000,000

12,000,000

25,000,000

10,000,000

20,000,000

8,000,000

15,000,000

6,000,000

10,000,000

4,000,000

5,000,000

2,000,000

Total Weight ofWaste Recycling
Cumulative Weightof Waste Recycling

2012

2013

2014

2015

2016

2017

2,605,450

2,785,082

2,723,339

3,037,885

3,450,697

2,434,060

2,605,450

5,390,532

8,113,871

11,151,756

14,602.453

17,036,513

2017 HTC Weight of Wastes Recycling
Type

Unit: Kg

Type

Paper

1023,362

Wasted board edges

39,890Miscellaneous plastic

445,981

Domestic recycled weight

26,00024,095

Plastic

335,447.6

Scrap iron

Kitchen leftover

324,077.5

Scraped galvanized iron

Wasted wood (Board)
Scrap parts

081

Hazardous Substances and Chemical Control

6,466,984 18,403,308 31,109,190 41,863,673 54,950,036 61,788,676 66,983,184

Kg

0

Sustainable Agenda

In the aspect of production management, the manufacturing department has also set up the hazardous
substances testing standards to ensure that all products of mass production are non-toxic non-hazardous
green products.

20.00%

10,000,000
0HTC analyzes the international environmental protection regulations and complying with the environmental
protection requirements of international customers, with reference to the relevant international technicalstandards, and then establishing the IP-00000106-01 Toxic Substance Control List, and holding suppliers
meeting regularly to work with parts suppliers together seeking for the use of non-toxic materials under
the Company’s hazardous substance control policy with green supply chain management, so that the
procurement of raw materials, that is, using the principle of the source management to conduct strict controlof hazardous substances. In the product development stage, the R & D department will deliver the relevant
parts materials to the ISO 17025 qualified laboratories, such as SGS, TUV, to ensure that the materials used in
the product conform to the international environmental protection specifications.

147,180
42,524.7

Unit: Kg

3,410

Wasted information products

1,763

Wasted aluminum

1,330

0

HTC understands that in the green competition between corporations around the world, the active
management of harmful substances and chemicals is the only way to ensure the reliability of the
manufacturing process and product compliance with the standards of the different countries and customers.
In so doing, we reduce the legal risks that our products might suffer. We completely banned four chemical
substances, including n-hexane, n-heptane, benzene, and toluene. According to customer requirements,
international standards, and domestic regulations, we restricted the use of 527 chemical substances such as
hydrazine and dichlorobromomethane. Besides, we take the following measures to control the condition ofchemicals used during the manufacturing of components and parts. These include:
1. The designated employees make an inventory of the chemicals in the plant on a regular basis. They also haveto inspect the chemicals and ascertain their condition. Including:• Use types, quantities and the storage status of the chemicals (includes storage container management)• Whether the chemicals label of the use unit is complete• Whether the information about the chemicals is complete, such as the safety data sheet (SDS, Safety
Data Sheets)• Personnel are required to wear basic safety protective gears when using the chemicals• Use types, quantities and the storage status of the chemicals (includes storage container management)• Whether the chemical’s label of the using unit is complete• Whether the information about the chemicals is complete, such as the safety data sheet (SDS, Safety
Data Sheets)• Personnel are required to wear basic safety protective gears when using the chemicals
2. Compressed gas fire extinguishers should contain safe eco-friendly agents:
Replace CO2 fire extinguishers with safe halogen compound fire extinguishers.
3. Emergency lights should be powered by eco-friendly batteries:
Replace lead-acid batteries with nickel-cadmium batteries.
4. Set up regulations for the management of chemical agents for cooling water towers:
Choose cleaning solutions with safety certification.
5. Make sure that suppliers and contractors properly manage the chemicals they sell: The chemical
management that suppliers enforce covers aspects ranging from environmental protection, safety andhealth, to corporate social responsibility. This must include the investigation and auditing of supplierinternal management systems and an assessment of the risk levels.

HTC 2017 CSR Report 082

Sustainable Packaging
HTC mobile phone products are packed using materials that make transportation safe and add aesthetics tothe products upon delivery. We also consider the impact the packaging materials will have on the environment
when they are discarded. The materials we use must be compliable with the regulation, environmentallyfriendly, and sustainable. In packaging design, consideration is given to the following:

History of HTC “Sustainable Packaging”

1. Reduction of the amount of material used;
2. The use of biodegradable raw material;
3. Printing with environmentally friendly ink (soy ink);
4. The facilitation of shipment;
5. Mark following recycling symbols on the box to show the consumers recycling packaging material.

VolumeHas been reduced year by year,
one pallet can carry more packs

Transportation

All the packaging materials for HTC products are compliable with the EC directive on packaging (EU 94/62/
EC) and the US requirement on packaging (Model Toxics in Packaging Legislation of USA). The printing ink
used on the packaging material is low-volatility ink or soy ink certified by the American Soybean Association.
These efforts minimize the impact of our product packaging materials on the environment.

ResultOne pallet can carry
more packs and help
reduce freight

WeightHas been reduced, helps toreduce CO2 emission resulting
from transportation

Material

Fast growing materials(Sugar cane, bamboo)

Use more fast growing materials to improve material resource regeneration and emit
less carbon footprint

HTC specially selects mobile phone cases that are integrally formed and lightweight. Formed by 65% sugar
cane bagasse and 35% bamboo pulp, and is 100% recyclable and biodegradable. Compared to regular boxes
made of wood, these boxes made of sugar cane residues and rapid-growing bamboos are more environmentfriendly and are also lighter than regular boxes.
When the HTC mobile phones are shipped, in addition to the product information labeling according to
the requirements of customers and relevant regulations, HTC has elaborated the energy-saving and powersaving functions in the colored mobile phone box and manual. The HTC mobile phone box is made withenvironmentally friendly materials as well as fully recyclable and biodegradable paper. Furthermore,“Forest Stewardship Council” certified paper, is printed on the box to alert the consumer to the concept ofenvironmental awareness.

Packaging Material
Through continuous efforts, in 2017, HTC’s generation of the carbon footprint from the mobile phone package
during transport decreased by 13.94% compared to 2009. With HTC’s U11 product as the basis, compared toother flagship brands in the same year, other brands’ transport carbon footprint increased by 12-28%.

2009

2013/2014

2015

2016

2017

Hero Box

M7 Box/M8 Box

M9 BoxM10 Box

U11 BoxDimensions

183x89x60mm

160x160x28mm

160x160x28mm

180.5x150.5x33.5mm

202x165.5x34.5mm

Total Weight

170g

95g

95g

111g

149.2gTransportation Carbon
Footprint (kg CO2eq)

1.59

0.89

0.89

1.04

1.4

This box is 98% composed of recyclable paper
and material.
It is made at least 75% from fast-growing
bagasse (a sugar cane product and bamboo).
It was printed using vegetable-based ink rather
than petroleum-based ink.

Materials consist of current fast
renewable plants.
Fewer colors, less ink used for printing
No other glazing processing is used forprinting.
Top label: from 5 colors to 1 color printing.

Materials consist of current
fast renewable plants.
Reduce the printing area,
printing color.
Do not use glazing plastic.

Packing materials are completelychanged to fast-growing materials to
reduce the use of paper packaging.
Direct stamping on the box top
reduces the printing area and printing
color and ink use.
Glazedis notused. 084
HTCplastic
2017 CSR
ReportECO Features

083

Package volume reduced by 50%.
Soy ink used for printing.

Sustainable Agenda

Note: Calculate the distance: from HTC factory  Airport (by air)  customer’s distribution center

HTC’s Product Packaging Carbon Footprint Reduction Ratio in 2017

The Material of VR Packaging
Utilize recyclable packaging materials and lightweight design, details as shown below:

2015

2016

2017

Rigid Box

Rigid Box

Pizza Box

Item

Material

Dimensions

2017 (U11)

Other Flagship
Mobile Phone A

Other Flagship
Mobile Phone A

Fast-growing material(Such as sugar cane
product and bamboo)

Brand managementforest, bamboo, waste
bamboo shoot andrecycled papermaking

50% Recycled paper

574x420x212mm

415x295x181mm

532x344x185mm

3,000g1,800g2,250gWeight (g)

149

167.3

192.1

Transportation
Carbon Footprint(kg CO2eq)

1.40

1.57

1.80

WeightThe Number
of Pallets

Transportation
CarbonFootprint(kg CO2eq)

6pcs

24pcs

20pcs

28.14

16.88

21.11

28.75%
Printed with two colors
and reduce the ink use.

ECO Features

Volume reduced by 55%.

Reduce printing with ink.

Weight loss by 40%.

Share packaging to
reduce the generation of
new packaging materials.

Printed with two colors
and reduce the ink use.

Increase in Packaging
Transport Footprint0

12.13%

Note: “Additional items of package transport carbon footprint” assumes that under the same transport conditions, HTC’s products and the other two brands were compared. Thus, with
U11 in 2017 as the benchmark, the value was 0.

085

Sustainable Agenda

HTC 2017 CSR Report 086

Sustainable Products
In response to the global warming crisis, HTC constantly looks for ways to reduce the impact and influence of
manufacture, production, and consumption by users, on the environment. The concept of life-cycle time (LCT)
is our way of thinking about this and we start with R&D. The R&D engineers are provided with quantified andfully comprehensive green information for the initiation of life-cycle- investigation (LCI) on the supply chain
to establish a database of the key parts and components and their environmental impact.
The HTC product carbon footprint is measured in accordance with ISO 14040 and ISO 14044 standards. It
involves direct data provided by the HTC plants and upstream suppliers. The data are put into internationallyaccepted life cycle assessment software and databases like SimaPro and Ecoinvent, which are also fed withindirect data. The data, after passing third-party verification, is made public as a carbon footprint report or
Eco Declaration that gives transparent environmentally related product information to the relevant clients.

Plans and Actions for Carbon Reduction
The carbon footprint analysis measures the impact of a product on the global climate from the aspect of its totallife cycle starting from the production of raw material, manufacture of the product, its distribution, delivery to
the customer, to its end-of-life disposal. Such analysis finds that the carbon footprint of a smartphone is mostobvious during the mining of the raw materials and the consumer use phases. HTC will spend more effort on
reducing carbon emission during these two phases.

Carbon Footprint Related Plans and Reports over the Years
HTC has been conducting product environmental impact investigation andanalysis in accordance with life cycle assessment methods since 2010. The
annual action plans are set out below:

International Standards for Product Carbon Footprint
The product carbon footprint standard ISO/TS 14067 was announced in May 2013. It specifies theprinciples and guidelines for the calculation and disclosure of lifecycle carbon emissions of a productfrom the design phase. It can also serve as the basis for finding out the carbon footprint of various kindsof products and services and has become a global standard for the calculation and communication of the
carbon footprint of a product.
The ratio of HTC U11 Carbon footprint

67.1%
8.7%

Resource
extraction

087

Sustainable Agenda

Production

Transport

24.1%
0.1%

Usage

1. In 2010, we participated in the Product Environmental Information Disclosure
Program of the Industrial Development Bureau MOEA and completed theEnvironmental Protection Declaration (EPD) with 19 suppliers.
2. In 2011, we participated in the Low Carbon Product Design Program of theIndustrial Development Bureau MOEA, and completed carbon footprint
analysis and low carbon design counseling with 15 major suppliers.
3. In 2013, we cooperated with 11 suppliers to complete the ISO/TS14067 productcarbon footprint inspection.
4. In 2014, our main action plan is to establish carbon reduction targets andaction programs by providing the major suppliers with detailed life cycle
investigation data analyses.
5. In 2015, cooperated with 8 suppliers in 2015, fulfilled two products carbon
footprint inspection.
6. In 2016, 2water footprint inspection and third-party verification have beenaccomplished.

End of LifeHTC 2017 CSR Report 088

Friendly
Workplace ___Staff Management
Human Rights and a High Standard of Professional Ethics

Human Resource Structure

HTC values human rights and equal compensation and does not tolerate gender discrimination. As aninternational corporation, and a member of Responsible Business Alliance (to view the RBA’s membership
list please visit http://www.responsiblebusiness.org/about/members/), HTC strictly follows the related
regulations and as a responsible employer incorporates care for human rights into all aspects of daily
operations

HTC recruits promising talent from all around the world. At the end of 2017, HTC global employee workforce
totaled 10,391. Of these, 310 were foreign supervisors, accounting for 19.28% of the total number of executives
worldwide; foreign supervisors and professionals together accounted for 16.38% of the total number of
executives and professionals worldwide and 18.53% of the 1,608 supervisors were women.

No Child Labor
HTC strictly prohibits the use of child labor in our own manufacturing facilities as well as those of ourmanufacturing suppliers. We mandate proof of age for employment to ensure we meet all local labor laws andthe requirements of the jurisdictions where we operate. Even student workers need to be 16 years old.

HTC Code of Conduct
We place great importance on employee integrity and uphold high ethical standards. The company has
established the “HTC Code of Conduct” as the prime directive that directs all our employees in theperformance of their work. Every person in our employment, in any of our branches and subsidiaries, nomatter their position, level and location, must comply with these ethical standards.
New employees undergo an orientation training session on the same day they report for duty. They learn aboutthe HTC corporate policy, the Code of Conduct for employees, ESH policy and corporate social responsibility.
An e-learning program for new employees is also provided that explains the HTC corporate principles using
exemplary cases. There are physical and online courses for retraining for all employees every year. In any
case of conflict with the laws in force in places where HTC operates, the local HTC HR team shall submit thecontext of the laws at issue to HTC HQ for review. Except for a case such as the above, any violation of the “HTC
Code of Conduct” can lead to serious disciplinary action, including the termination of employment.

HTC’s turnover rate of direct workers in 2017 was 11.3%, with the statistical frontier encompassing the
Taiwan region (including students involved in industry-university cooperation programs, interns, and foreign
workers). The indirect workers turnover rate was 17.04%, with the statistical frontier covering the world.
To calculate the turnover rate, divide the number of employees leaving the company by the total number of
employees during the same period. The figure does not include employees who were dismissed for cause.

HTC HR Structure Overview
Unit

2015

2016

2017

Global Employee (Male)

Person

6,524

5,531

5,151

Global Employee (Female)

Person

5,918

5,398

5,240

Full-time workforce (Male)

Person

6,493

5,509

5,113

Full-time workforce (Female)

Person

5,885

5,369

5,204

Direct employees (Male)

Person

4,466

1,659

1,279

Direct employees (Female)

Person

1,768

3,841

3,697

Indirect employees (Male)

Person

2,058

3,872

3,872

Indirect employees (Female)

Person

4,150

1,557

1,543

Employees under fixed-term contracts (Male)

Person31

22

38

Employees under fixed-term contracts (Female)

Person33

29

36

Taiwan dispatch personnel (Male)

Person0

79

8Taiwan dispatch personnel (Female)

Person0

49

3

Taiwan part-time personnel (Male)

Person50

26

28

Taiwan part-time personnel (Female)

Person29

38

36Percentage of employees younger than 29 years old

%

47.32

39.69

38.76

Percentage of employees aged 30 to 50 years old

%

49.84

56.27

56.63

Percentage of employees older than 51 years old

%

2.84

4.04

4.61

Note: the full-time workforce includes general employees, foreign employees, R&D substitute service, interns, student workers and consultants.

091

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HTC 2017 CSR Report 092

Europe,
Middle East & Africa

Americas

Year

Level

Americas245

The Global
Distributionof HTC Personnel

169

in 2016
Total

Asia-Pacific

The Global
Distributionof HTC Personnel

2016

10,494

Total

Europe,Middle East & Africa

Americas10,391

264

319

Total

84

2,477

3,963

6,524

0.68

19.91

31.85

52.44

15

661

5,242

5,918

%

0.12

5.31

42.13

47.56

Total

99

3,138

92,05

12,442

Male

85

2,330

3,116

5,531

0.78

31.32

28.51

48.78

14

654

4,730

5,918

%

0.13

5.98

43.28

54.15

Total

99

2,984

7,846

10,929

Male

75

2,343

2,733

5,151

0.72

22.55

26.30

49.57

13

674

4,553

5,240

%

0.13

6.49

43.82

50.43

Total

88

3,017

7,286

10,391

Female%10,929in 2017

General%2015

Europe,Middle East
& Africa

Middle

Male

192

243

Senior%2017

Asia-Pacific

9,977

The Global
Distributionof HTC Personnel

FemaleFemaleNote: Senior: CEO, CMO, CFO and other executive positions above Vice GM.
Middle: Department Heads, Managers, and Section Chiefs.

in 2015

General: Engineers, Overseers, Foremen, Administrators, Assistant Technicians, Trainees, Student workers, and foreign employees.

Total

12,442Asia-Pacific

11,859Domestic personnel(male)

Domestic personnel(female)Foreign employees(male)

Foreign employees(female)

4,416

2,899

735

2,341

2017

HTC’s Turnover Rate of Employees in 2017
Year

Unit

2015

2016

Total number of new recruits (Male)

Person

901

714

676

Total number of new recruits (Female)

Person

723

371

256

Percentage of employees under the age of 29

%

79.74

49.68

Male 37.55

Female 13.41

Percentage of employees aged between 30 and 50%

19.77 49.03

Male 33.69

Female 13.73

Percentage of employees over the age of 51

%

0.49

1.29

Male

Female 0.32

The ratio of newly-recruited employees to total employees

%

13.05

9.93

2017

1.29

8.97

Note: The formula is the total number of employees at the end of the year as the denominator and the number of newly-recruited employees from different ages, levels and genders areused as a numerator.

Female
Age

DL

%

IDL

%

Middle Supervisor%

Senior Supervisor

%

≤29

2,193

21.1

391

3.76

21

0.2

0

0

30~50

1,261

12.14

440

4.23

631

6.07

7

0.07

Year

Unit

Male

Female

≥51

243

2.34

25

0.24

22

0.21

6

0.06

Total workers turnover

Person

1601

1237

Total

3,697

35.58

856

8.24

674

6.49

13

0.13

Workers turnover rate

%

56.41

43.59

Total workers turnover (≤29)

Person

817

691

Age

DL

%

IDL

%

Middle Supervisor%

Senior Supervisor%

Workers turnover rate (≤29)

%

28.79

24.35

≤29

566

5.45

815

7.84

42

0.4

0

0

Total workers turnover (30-50)

Person

756

514

30~50

671

6.46

623

6

2,203

21.2

48

0.46

Workers turnover rate (30-50)

%

26.64

18.11

≥51

42

0.4

16

0.15

98

0.94

27

0.26

Total workers turnover (≥51)

Person

28

32

Total

1,279

12.31

1,454

13.99

2,343

22.55

75

0.72

Workers turnover rate (≥51)

%

0.99

1.13

Male

HTC’s turnover rate of employees in 2017

Note: The formula is the total number of employees at the end of the year as the denominator and the number of newly-recruitedemployees from different ages, levels and genders are used as a numerator.

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HTC 2017 CSR Report 094

Care for Foreign Employees

Record of Number of Foreign Employees Receiving Counseling and Problem Analysis in 2017
1,500

1,450

■ Filipino ■ Vietnam

1,250■ Total

1,000

855
750

695
595

500

418
277

250

35

86

47

63
2835

57
10

Total

Other
misbehavior

Friendly Workplace

51

In-housecooking095

95

Illegal use ofelectricity

The health examination program for foreign workers is managed under a dedicated system and is identical tothat for Taiwanese employees without any different treatment. We also manage to follow up after the healthexamination, to ensure the state of health of the foreign employees.

3164
Shoes

As for daily living, free Internet access, air-conditioned dormitories, libraries, prayer rooms are also provided.
The public space in the dormitory provides a cleaning unit that cleans the dorm around the clock. Regularly
cleaning, disinfection, and environmental hygiene implementations are also done. We also re-planned
the dormitory space on Xinghua Road, adding a library, gym, reading room, Chinese classroom, employee
gathering room, and other facilities. Activities for foreign employees, labor management meetings, New Yearand annual company trips, etc. are also regularly held. For example, during the Lunar New Year holidays in
2018, an ecological navigation event was held in Pushin Ranch, which served as a channel for feedback and for
promoting physical and mental development.

114
82
32
BicycleIn addition to providing comprehensive orientation, we also emphasize life care for foreign employees. Apartfrom hiring translators, administrators and counselors who are skilled in native languages, providing life,
language, culture and mental health assistance, In 2017, a total of 1,450 foreign employees were counseled.
Most issues were related to living regulations, such as accommodation, transportation, etc.

92
Absencestaying
outsideThe top priority for HTC when dealing with foreign employees is to raise the awareness of anti-discrimination
regulations, to eliminate repulsion harassment and the lack of proper discipline in the workplace. The provisionof an open communications channel and an appeals system is also necessary to ease the disquiet many foreign
employees feel when working and living abroad in Taiwan and to allow them to concentrate on their work.

Other

0

340
248

Value and listen
to the voice of
our employee

Making detailed records of their feedback
Labor-relations meetings per two months
Express ideas and thoughts of workers
Keep track of follow-up effects
Respect workers’ decisions

Life & leisure

Offer CHT mobile phone subscription and discounting rate plan
Comfortable dormitories "24-hour air conditioning"a cleaning unit that cleans the dorm around the clock.
24-hour hot water supply
Free Lesson of learning Chinese

Proper healthexamination
programAdjust the welfare and foreign laborers' health inspection frequency regulated by related
laws and regulations
Biennial Health Examination Once
Health Examination Follow Up
Entry health check (General physical examination, general items designated by the Councilof Labor, intestinal parasites, chest X-ray examination, dengue fever, Han disease check)Tax refund
check

Provide clear information on taxation principles and period of tax refund in advance
Encourage to keep following tax refund
Follow up of tax refund check
Departing before filling out "Receipt Authorization Letter"
Tracking intermediate rebate cheques
The announcement of tax-receiving time
Tax receipts with identification

Enhancingphysical andmental healthactivities

NYR parties
Annual eco-travel arrangements
Insight Guides Taiwan travels
Counseling station held every two weeks

HTC 2017 CSR Report 096

Talent Attraction & Retention

Complete Education and Training Plan

HTC deeply understands that ‘The key to maintaining the momentum of innovation in a company lies in its
having competent and talented employees’. In addition to encouraging our employees to explore the unknown
and commit to bringing innovative designs to daily life, HTC remains committed to providing a multi-cultural,
highly challenging and vital working environment. In this way, talented people from both the East and theWest can try their best and play to their strengths.

The cultivation of talent is the foundation of a going business concern. HTC, while engaged in the pursuitof growth and profit, is also committed to helping employees grow with the company. The creation of anenvironment that will help them continue to do this is very important. HTC is guided by business needs aswell as personal career development. The company strives to provide employees with enhanced professional
skills, in addition to assisting them to seek a good career development direction; HTC has classified talentmanagement and development as an important management indicator. Employees should improve and growwith the company.

We have a talent-based recruitment policy and engage R&D talent available in the local labor markets
wherever we operate. To ensure the knowledge and skills of talents meet HTC’s requirements, we regularly
hold talent recruitment activities and seminars held by schools. In 2017, HTC attended six campus talent
recruitment expos held in National Taiwan University, National Chiao Tung University, Tsinghua University,
and National Cheng Kung University to openly recruit outstanding domestic talents and recruit talents fromproduct design, art design, R&D technology, engineering expertise, business management, international
marketing and sales, e-commerce, digital marketing, and relate fields. At the expos, there were job vacancies
for graduates seeking a job, general public job seekers, interns, and R&D individuals rendering alternative
military service. 1,752 resumes were received at the six expos.

Diversified Learning Channel, Providing a Comprehensive Learning Environment

The design of the internal training courses is centered on the five core occupational
functions and the learning effect is substantiated through a series of diversified channels.
There are physical and online courses for learning skills and drills.
Experts in various fields are invited from around the world to share industry trends andfuture technology blueprints in creative thinking forums.

HTC Campus Talent Recruitment Welcomes Cross-domain New
Graduates; Recruitment of Talents as well as Innovative Teams
HTC’s campus talent recruitment activities, in addition to recruiting
general employees, also welcome innovative teams. At the site, small
product shows were also held for graduating students to have theopportunity to experience HTC’s newly released smart mobile phone
U Ultra and U Play, as well as the highly acclaimed HTC VIVE thatbrings in-depth and immersive VR enjoyment. At the site, a numberof activities were also provided such as innovative team consulting,VR interactive contest, and the “Fill out a resume for a chance to win amobile phone” activity.

Engaging Diverse Talent
HTC offer job opportunities for diversified talents.
Year2015 2016 2017
In 2017, HTC hired 130 handicapped people and thisDisabled employees (Male)
78
64
54
exceeded the mandatory minimum number(95 people)
by 35. (The number of people involved was weighted.) As
Disabled employees (Female)47
43
42
a responsible employer, HTC is willing to hire disabled
people. In addition to relying on talent-job matching
conducted by the supportive or sheltering bodies, we also allocate jobs in consideration of the characteristics
of individual handicapped workers. We can also tailor job descriptions and the working environment, toallow the handicapped to have the opportunity to prove their abilities. Through education and training is also
provided to allow the handicapped to make a contribution to society and enhance their own quality of life.

097

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Learning tools, such as a mobile library and online learning platforms, are provided toencourage employees to study voluntarily.

GeneralPersonnel
Comprehensive training courses
are arranged for new recruits
every month to assist themt o b l e n d i n t o H TC c u l t u reand develop all the necessary
knowledge and skills as soon as
possible. This training also helps
them appreciate the corporate
environment and recognize the“Quietly Brilliant” culture of thecompany.

New
Employees

Direct Labor

We ensure direct labor gets all
the professional knowledge andtechnical skills training needed
for their occupation categories
and specialization (basic,
professional, advanced).

The
Management

To foster our key leadership teams, we have specially tailored Leadership Development
Framework training for supervisors at all levels. The curriculum is planned and combinedwith HTC core values, organizational development strategy and direction, as well as
leadership and management functions. To ensure that these courses further the daily workof the directors and substantiate their leadership and performance, follow-up action plans
are formed for each of these learning courses. These are devised to assess performanceboth before and after training, in such aspects as the supervisor’s counseling records,
subsequent presentations, and so on.

HTC 2017 CSR Report 098

Comprehensive Education and Training

Cultivating Key Leaders

To develop employee capability to meet global technology challenges and grasp the movement of the industry,
we construct a complete education and training system coupled with internal and external training, providing
employees with professional and life skills. The design of the internal training courses is centered on the fivecore occupational functions and the learning effect is substantiated through a series of diversified channels.

HTC actively promotes company culture in the face of rapid changes in the global industry and new patternsof global enterprise competition and cooperation. HTC quickly adapts to a constantly changing environmentand cultivates management talent with an international vision, expecting their excellent managers to becomepresent and future drivers who will continuously lead HTC towards steady growth and development in timesof hardship and challenge. In 2017, leadership-training courses were given to 300 people.
In order to enable executives to learn new viewpoints, new ideas, and change their inherent thinking patterns
from the best practices of the industry, to have new behaviors or practices in their work or management, we
also promote Manager Week activities, and share the management articles with all executives regularly eachweek with more than 51 articles shared in 2017.

Planning &Organizing

Communication& Influencing

Core
Competency
Driving For
Results

Customer
Focus

Training and Performance Integration
HTC is expanding and moving steadily forwards. We hope that our employees will grow with the company.
This is why we enforce the performance evaluation system and hope that every employee has a very clear
career goal that will both improve their own job performance and coincide with company business policy forthe achievement of better performance. This mechanism allows employees to become more proficient at theirwork through their own efforts to create a brighter future for both themselves and the company.
The HTC training and development system is closely linked to performance management. Each employee sets
their own performance goal at the start of the year. They can provide updates about progress any time overthe following months. However, at mid-year and at the end of the year their performance is evaluated by an
immediate superior, in terms of how much of their set goal has been achieved. On the basis of this evaluation,
they are required to set a goal for the next year as well as a focus for learning and development.

Teamwork

Learning Management System(LMS)
Newcomer Training Courses
HTC provides a complete training system for new recruits. Starting from their reporting, we assist newcomers
in quickly integrating into HTC’s culture and develop a full range of knowledge and skills through a varietyof physical and online courses. On the day of reporting to work, new employees undergo Buddy activities.
Newcomers are encouraged to share all kinds of matters taking place at HTC with a senior employee, thereby
helping newcomers to quickly blend into the HTC family.

099

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The HTC Learning Management System(LMS) gives employees a range of learning tools and more flexibility
to study according to their needs and without the limitations of time, location, and the associated stress. They
can also watch and listen to recordings made by experts or browse the rich collection of books in the library
online. It is very easy and convenient to learn professional and occupational skills without unnecessaryinterruption. In addition, an extra after-course interactive discussion area assists employees in exchanging
learning experiences, browsing and reviewing substantive courses and highlights of celebrity lectures,continuously strengthening learning skills, and demonstrating professional performance.

HTC 2017 CSR Report100Special Training Courses and Resources
Legal Training
HTC emphasizes legal training and we implement prevention and anti-corruption training and anticorruption training for middle and senior level executives. Besides, we list new recruits as necessary lecturesof legal compliance. To prevent insider trading and ensure security and IP rights etc, we invite legal experts togive special training to company management personnel. In addition, HTC also includes newcomers' training
courses when employees join the company, and enumerates examples in the online course of the Employee
Code of Conduct.
Anti-corruption Training Rates for All Levels of the Workforce in 2017
General Workforce

Middle Supervisors

Senior Supervisor

Highest Governing Institution

9.09%

5.20%

10.23%

75%

Recipient rate

HTC New Employees Legal Training in 2017
Course Content

Number of Participants Course Hours

IDL new employee legal training - confidentiality and anti-insider trading

819

36

IDL new employees legal training – intellectual property rights

819

38

IDL new employees legal training – US patent litigation

819

38

Personal Development Seminar-Deng Hui-Wen’s“Learning from Work with Joy”
HTC invited Deng Hui-Wen to share his expertise in psychology, social observations, as well as workplacecases’ workplace pressure and self-realization. 175 people participated in the event, at the end of which
experience sharing and social group activities were held to encourage employees to apply what they hadlearned in work and life.

In order to help our employees grasp new knowledge and expand their perspective, we launched Thinker
Forum in 2017 and invited experts and specialists to hold 13 seminars in different fields from around the world
to share industry trends, novel technologies and technological blueprints. Also, HTC has held 10 lectures on
personal development learning since. Employees will cultivate more smooth and efficient way of working
from the practical cases and experiences sharing. After the speech, employees are encouraged to share theirexperiences on the learning platform (LMS) and social media (Facebook, Line) so that learning resources canbe more effective.

101

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HTC 2017 CSR Report102English Leadership Resource and On-the-job Training Grants
As an international brand, HTC provided “Online English Learning” to encourage staff to learn continuously
and spontaneously. In 2017, a weekly English-language business English course is set up to provide themes
needed for work so that employees can improve their English proficiency. A total of 38 courses were held and a
total of 611 people participated in the learning course in 2017. The choice of sessions, the grade of difficulty andthe learning hours and objectives are designed to match the abilities of students at different competence levels.
We also offer on-job graduate study grants and a scholarship program to encourage employees to continuously
absorb professional knowledge and match their studies to their work for further growth. HTC provides grant
up to NT4,000 for the training.
In addition, HTC encourages employees to continue to absorb professional knowledge and to match theirstudy program to their work to ensure growth.
e-Library

Training Results

HTC helps staff develop good reading habits mainly by the provision of a wide range of reading activities and arich collection of library resources; employees can enjoy a rich literary atmosphere and reading environment.

In order to cultivate HTC employees to quickly respond to fierce challenges from global technology andgrasp the industrial pulse, in addition to upgrading the professional technical annual training courses anddepartment professional courses, in conjunction with HTC’s policy, organizational learning planning was
conducted, coupled with external training subsidies and other measures.

Electronic magazine services are also made available for employees so they can view and read the current
editions on their computers or mobile phones anytime anywhere. the number of people subscribing to ourelectronic magazine reached 28,795 in 2017. We continue holding reading workshops for writers to share the
new knowledge and life experience they put into their books.
Through organizing “Enjoy Reading,” providing employees with a platform for discussion and enhancing
knowledge in various fields. “HTC library book release activities” and Each season’s “Selected Good Book” allows
employees to quickly absorb the essence of the book. In conjunction with the lectures held, there were 5 Book
Fair held in 2017. Starting monthly in 2016, the e-newsletter “HTC Learning Charging Station” will be launched,integrating all training resources and information so that employees can grasp all kinds of learning information
at the first time, explore learning horizons, and plan for self-learning.

Between 2015 and 2017, HTC invested nearly NT$24,848,000 in employee training-related programs. Training
hours totaled 606,700 and there were nearly 215,000 attendees, each person receiving 53.91 training hours.
In 2017, HTC male employees received 65,240.12 hours of training and female employees received 89,948.34
hours of training. General staff received 108,867.52 hours of training, supervisors received 46,135.99 hours andmanagement 184.95 hours. The table below lists staff training over the years:
Year

Item

Course (Hours)

Number of Participants

Average Training Hours

2015

258,245

62,235

20.75

2016

193,31378,627

17.69

2017

155,188

74,425

14.93

Note: Total number of training hours of the year/total number of employees of the year = average number of training hours per person of the year.
The average number of training hours per person in 2015-2017 = total training hours in 3 years / average number of employees in 3 years. (11,524)

Male and Female Employees’ Training Hours at All Levels in 2017
Sex

Total Training Hour
(Male)

Total Training Hour
(Female)Average Training Hour
(Male)

Average Training Hour
(Female)General workforce

52,325.4

56,542.12

19.15

12.52

Supervisor

37,473.22

8,662.77

15.99

12.85

149.72

35.23

2.00

2.71

HTC 2017 CSR Report

104

Level

Manager

103

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A Sound Wage and Welfare System
HTC is committed to fulfilling the needs of its employees and provides all kinds of appropriate welfare
measures as well as attractive and motivating compensation and benefits programs. We encourage our
employees to do their best and share the growing profits of the company.
HTC hires new employees through open selection procedures, with candidates offered positions andappropriate wages based on academic background, professional years and market standards. We promise nodiscrimination based on ethnicity, skin color, social status, language, religion, political affiliation, country/
region of origin, gender, sexual orientation, marital status, appearance, disability, professional association
membership or other similar considerations not relevant to job performance.
What’s more, the performance evaluation system is implemented yearly. Wage will be adjusted and bonuses
will be given based on employees’ performance, work commitment, accountability, level of dedication anddevelopment in the future. In this way, employees’ wage and development will be assured. Performance
evaluation system can be integrated into corporate finance to encourage employee’s persistent devotion andinnovation.
HTC Salary Ratio for Men and Women in Taiwan
General Staff
Salary Ratio(IDL)

General Staff
Salary Ratio(DL)

Mid-Level
Management
Salary Ratio

High- Level
Management
Salary Ratio

Male

Male

Male

Male

Female

105

100

98

Female100112Female100

100Female100

New Recruits Basic Pay and Taiwan
Minimum Wage RateType

Basic Pay (DL)Minimum Wage

1

103

100

2

119

100

Employee Salary and Benefit Increase rate
Item description

2014

2015

2016

2017

Comparison of2016 to 201711,126,516,000

10,133,909,000

8,704,953,000

8,703,019,000

99.98%

Note: 1. Equation = (Average monthly pay for male / Average monthly pay for female) * 100%
2. Type 1—five-day workweek scheme. ; Type 2—monthly rotating shift scheme.
3. Middle-rank male supervisors are mostly male R&D personnel, while female employees are mostly engaged in administrative work, thus the varied basic salary ratio.

Note: Total employee salary and benefits (proprietary financial statements)

HTC Average Compensation Ratio for Men and Women in Taiwan
General Staff Average
Compensation Ratio(IDL)

General Staff Average
Compensation Ratio
(DL)

Male

FemaleMale

FemaleMale

FemaleMale

Female

105

100

98

100

115

100

124

100

Mid- Level
Management Average
Compensation Ratio

High- Level
Management Average
Compensation Ratio

Note: 1. Equation = (Average monthly pay for male / Average monthly pay for female) * 100%
2. Type 1—five-day workweek scheme. ; Type 2—monthly rotating shift scheme.
3. Middle-rank male supervisors are mostly male R&D personnel, while female employees are mostly engaged in administrative work, thus the varied basic salary ratio.

105

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Total employee salary andbenefits expenses (NT$)

In addition to rewards on remuneration, HTC also plans to implement incentives and retention bonuses for
employees based on the concept of profit sharing and talent retention. We’ve designed a bonus system forpatents, and competitions for quality improvement issues, with competition bonus programs offered.
HTC has an official and lawful retirement and pension plan that was established when the company wasincorporated. An amount equivalent to 2% of the monthly salary has been appropriated in the retirement
reserve since November 1999. An amount equivalent to 8% of the monthly salary has also been appropriated asa retirement reserve by the Labor Pension Committee since 2004. After implementation of the new pension
plan on July 1, 2005, in addition to the legal reserve for those employees who selected the new pension
contribution system, those employees with the old seniority system, after presenting the actuarial results tothe competent authorities for approval, have their appropriation rate adjusted from 8% to 2%.

HTC 2017 CSR Report106Diverse Employee Welfare
We provide all employees a wide range of employee welfare and benefits programs, including Labor andNational Health Insurance, department’s dinner (event) subsidy, and company club activities, free on-site
gym and fitness training courses, massage and bookstore gift coupons, etc. Our full-time employees receive
other benefits including a pension fund, commercial group insurance, meal allowances, annual travel subsidy,
physical exams, monetary assistance on the Dragon Boat, Mid-Autumn, and Chinese New Year holidays, andfor personal events, like wedding and dependents’ funerals.
The HTC’s Welfare Committee is responsible for all employee benefits matters, including education
scholarships for children, festival gifts, department travel subsidies, activity subsidies, and group insurance.
The committee is also responsible for the gymnasium and outdoor playgrounds.

Employee Recognition Program
In addition to bonuses, the company also focuses on talent retention. We recognize outstanding employees withan Employee Recognition Program initiated by funds set aside quarterly for individual units. This allows them topublicly recognize outstanding employees and teams each year and bring them to headquarters from around theworld in recognition of their contribution and for the presentation of incentive bonuses. In addition, trophies arepresented in recognition of service to employees who been with the company for five, ten and fifteen years. HTC
also has an internal replacement system to provide the necessary assistance to staff needing to be transferred, orto those making application for transfer, or who are seeking job enrichment or a change of career.

2017 Year-end Party
The 2017 year-end Party was held at the National Taiwan University Stadium, with “The Pursuitof Brilliance” as the event theme and love, solidarity, and conviction as the elements of the entire
program. In 2017, HTC celebrated its 20th anniversary. At the evening event, in addition to awarding
58 senior employees in service for 15 years, 17 senior employees in service for more than 20 years werealso invited to accept their award on stage. The Chairman gave these employees a hug as a token of
appreciation. For the program opening part, Japanese Troupe “Enra” was invited to lead the audiencethrough HTC’s smartphone and VIVE’s establishment through creative 3D projection technology anddances, opening the door to the future at the evening party. The midfield video series led by Grace Pump
Crew and performer group performances conveyed the program theme “Love and Future”, creating a
lively and warm atmosphere.

Group Insurance
HTC and the Welfare Committee buy group insurance for employees with a maximum coverage of 60 times themonthly salary, so that an employee who is hospitalized for sickness, injury, or who dies, can still provide somesecurity and protection for their families.

Activity Clubs
The available clubs are Badminton, Puzzle Board Games, Orphanage, Hawaiian Guitar, Yuan-Men Tai-Chi,
Creative Volunteer, Basketball, Table Tennis, Cycling, Music, Photography, Tai-Chi, Ukulele, HTC Run, andWine Tasting.

Education Scholarships for Children
The HTC Employee Welfare Committee provides scholarships for the children of employees from elementary
school to college: NT$800 for elementary school students, NT$1,600 for junior high school students, NT$2,000
for high school and vocational education students, including first, second and third year college students; andNT$3,000 for college students in their fourth and fifth year.

Staff Emergency Relief
Employees who become victims of an occupational accident that causes death, disability, injury, or an illness
are entitled to receive compensation from HTC in accordance with the Compensation Act. In cases wherecompensation has already been received by the company in accordance with the Labor Insurance Act or otherlaws and regulations, this can be offset by the company. The company and the Employee Welfare Committee alsooffer group insurance coverage.

107

Friendly Workplace

HTC 2017 CSR Report108Creating a Happy Workplace

Free Dormitory for Students
HTC has given in-depth consideration to accommodation space andother needs of students. Living and entertainment facilities, such as agym, library, reading and common rooms, as well as the provision of fulltime administrators and guards who form a joint force with the policeand citizens to ensure the safety and security of the residents.

A Working Environment Incorporating Brand Spirit
HTC regards the creativity that stems from brainstorming as one of our most valuable assets. To promoteinterpersonal communication, the R&D headquarters in Taipei is configured with many staff areas thatallow our people to interact and talk, this includes interlacing sky bridges between the buildings that link
departments together and interaction rooms that project from the floors like transparent boxes. We hope thatthese interaction-oriented spaces will encourage and promote cross-department synergism and cooperation,
supporting the free extension of creativity.

Multiple Communications Channels
Employee complaints system that has a complaint hotline, suggestionand complaint boxes, a complainant e-mail service, and a sexual
harassment complaint mailbox. Labor meetings and employee opinion
surveys are held regularly for reference by supervisors in such mattersas leadership, internal operations, enhancing employee satisfaction, andwork input improvement.

HTC believes sharing is the best kind of interaction. To this end we will share the lobby on the first floor of the
R&D Building with the community, This HTC Gallery will help young local artists show their creativity and work,
promoting social and community interaction. In addition, the HTC Gallery will cooperate with different institutions
and artists to regularly showcase new cultural and artistic works. It will be open to the community schools, groups,
and the public. Let us all get closer to the arts. All the people who work in this building can also appreciate being inan “art gallery” that will inspire creativity and help HTC launch better and more amazing products.

Transportation Vehicles
HTC offers employees many different means of transportation on several
different routes for commuting to and from work. The vehicles provided
ensure safety and peace of mind as well as being very convenient.

HTC Gallery & Sense Arena
In addition to holding cloth painting exhibitions, photography exhibitions, and oil painting exhibitionsof creations by Ling Yu-Ying, Lu Chia-Ying, and other artist at gallery in 2017. The HTC employees also
exhibited Father’s Day painting creations and photography works.

The Meal Subsidy Program
Meal subsidies of NT$55 for lunch, NT$75 for dinner, and NT$100 duringholidays are offered to indirect labor. Meal subsidies of NT$50 for lunch
and dinner are available for direct labor working during regular officehours. HTC also offers afternoon tea from 3 pm to 5 pm.

The “Taipei Symphony Orchestra-Your Favorite Music Theatre” held at Sense Arena, the “Life Blind
Jazz Band-Jazz Papa’s Concert” held on Father’s Day, and other activities brought arts and culture into
employees’ daily lives.

Travel Subsidy
Valuing Female Employees

Travel subsidies are provided based on seniority, details are shown below:

HTC regards the female workforce as very important. In view of the increasingly large number and influence ofworking women, we have continued to improve our software and hardware, in the hope that a diverse culture basedon gender equity will help HTC become more competitive. The physical and mental caring mechanisms we provide
for our female employees include:

Employee tenure (base date:2016/12/31)

Unit

2017
The HTC Employee
Welfare Committee

2017
HTC

2017
Total

Over 5-year tenure (Before 2011/12/31)

NT$

2,000

4,100

6,100

Over 3-year tenure but less than 5-year tenure(2012/1/1~2013/12/31)

NT$

2,000

1,800

3,800

More than 1- year tenure but less than 3-year tenure(2014/1/1~2015/12/31)

NT$

2,000

900

2,900

Less than 1-year tenure (later than 2016/1/1)

NT$

2,000

0

2,000

109

Friendly Workplace

A female cancer-screening program is part of the annual health check. This
includes the choice of a Pap smear, a breast ultrasound exam, or a mammogram.
Consideration for the physiological needs of female workers, providing a
comfortable environment for rest, the loan of free hot pads, menstrual pain
assessment, health knowledge and education, physician consultation orreferrals and so on.
A friendly environment for breastfeeding. We provide a warm andcomfortable nursing environment, ultraviolet milk bottle disinfection devices,microcomputer thermos, comfortable sofa, refrigerator for breast milk storage,
and infant breast-feeding-related publications and light music. HTC has 17
Breastfeeding room in Taiwan that was visited 60,738 times in 2017.

HTC 2017 CSR Report110Work-life Balance Support
In addition, in order to encourage andsupport employees to raise the next
generation with confidence, HTC
has a perfect application system forparental leave to protect employees'
work rights so that parents can takecare of their newborns with ease.

Employees Applying for
Family Care Leave

Employees Applying for Unpaid Parental Leave and Resuming Duty After Leave in 2017

Year

2014

2015

2016

2017

Male

98

91

56

66

Female

132

151

144

143
209

Total

230

242

200

Male

%

Female%Total

The number of qualified for UPL for raising children in 2017

717

61

457

39

1,174

The number of person actual applied UPL in 2017

27

19

115

81

142

The number of reinstatement-to-be in 2017

35

23

117

77

152

The number of application for reinstatement in 2017

20

17

98

83

118

Reinstatement rate

78%

The number of application for reinstatement in 2016

35

28

88

72

123

The number of retention over 1 year after reinstatement in 2016

23

25

69

75

92

Retention rate75%

Note: 1. The “number of qualified for UPL for raising children in 2017” was based on the number of employees who had taken maternity or paternity leave within 3 years (2015-2017).

Family Fun Day

2. The “number of reinstatement-to-be in 2017” includes applied in 2015 and should reinstate in 2017, applied in 2016 and should reinstate in 2017, applied in 2017 and should
reinstate in 2017.
3. The “number of application for reinstatement in 2017” includes applied in 2015 and reinstated in 2017, applied in 2016 and reinstated in 2017 and applied in 2017 and reinstated in 2017.
4. The “Reinstatement Rate in 2017” = Number of employees reinstated in 2017 / Number of employees that should have been reinstated in 2017

HTC not only attachés importance to employees, but also takes care of family relations. Every year,
Family Day activities are held, and all employees and their family members are invited to attend.
Through the Family Day, the families and HTC are brought closer together. We would like to takethis opportunity to thank the employees and their families for their commitment and support, which
contribute to the employees’ corporate cohesion.
HTC’s 2017 Family Day was themed “Happy Family Fun”. In addition to preparing fun and entertaining
theme park activities for the employees and their families, the H building was designed into the VIVE
experience area, allowing families and children to enter different scenes and rich game themes. Many
non-profit organizations, such as Chinese Rock Leadership Association, Chinese Christian Relief
Association, Man Fair Sheltered Workshop, Genesis Social Welfare Foundation, and so on, were also
invited for employees and their family to show more support to disadvantaged groups through actual
participation or donations and take the initiative to show concern with disadvantaged groups while
participating in Family Day activities. The rich cuisines, children contests and games, and cultural art
creation attracted 4,646 employees and 4,659 family members to take part.
At the same time, the staff clinic held the “Baby Sports Day”, featuring baby crawling and baby rollingball contests. 35 baby players joined the competitions, and the families had a good time together andcheering and laughing at the scene. The Taoyuan Fitness Center also held sports safety screening,cardiovascular exercise, aerobics classrooms-parent-child jumping, massage drums, flywheel
classrooms, abdominal muscle training experience, interactive boxing, and self-paid TANITA test
activities. Through raffle draws every hour, the atmosphere of the scene was successfully lit up. 201
people participated in the day.
In addition, the headquarters building’s environmental protection and energy conservation results
are displayed at the Green Energy Hall every year. By interactive means, the employees can personallyexperience HTC’s environmental protection practices. The company interior’s implementation
protection concepts are quite diverse and continue to be promoted. The many events left wonderful
memories of the 2017 Family Fun Day.

111

Friendly Workplace

5. The “Retention Rate in 2017” = Number of employees who had worked one year consecutively after being reinstated in 2016 / Number of employees reinstated in 2016
6. The “number of application for reinstatement in 2016” includes applied in 2014 and should reinstate in 2016, applied in 2015 and should reinstate in 2016 and applied in 2016
and should reinstate in 2016.

A Five Star Gym
In order to encourage and promote the sports atmosphere and allow employees to develop good exercise
habits, HTC has set up a fully equipped professional fitness space in office buildings. Various modern fitness
equipment and coaches are available on schedule to provide guidance and advice.
HTC has commissioned professional fitness management consulting firms and professional suppliers tomanage the gym and to provide full-time services. These include onsite fitness instruction, fitness curriculum
planning, and advice about the prevention of sports injuries. Six coaches with an emergency card or sports
injury protection license were on shifts at the site. This provides employees with the best health consulting
services and the environment. Employees get help for the establishmentof positive sports safety and healthcare. Courses are planned andUse of the Gym
arranged on various health topics and activities and employees canparticipate according to their preferences. In addition, the employee Location Number of Users in 2017service Application system is intimately developed for the employees to
Taoyuan
37,297click on the phone to register, save the time of waiting in line.
In addition, HTC plans two-month aerobic courses throughout the year
to provide a diverse curriculum for employees. There are yoga, boxing,
cardio and other stress relief courses available. Another spectacularsports facility is to be found on the 17th floor. It is a large hall, practicallya stadium, with a 10-meter-high ceiling that can be used for basketball,tennis or badminton. The gym also commenced additional sports
massage classes sold at NT$600-$800/30 minutes were available toemployees at NT$400. Through professional sarcolemma stretch, theemployees enjoyed a more comfortable exercise experience.

Xindian

52,543

Participationin Aerobic Classes
Location Number of Users in 2017
Taoyuan

2,588

Xindian

8,562

HTC 2017 CSR Report112Occupational Health and Safety
All our facility management systems comply with the OHSAS 18001 standard for Occupational Health and
Safety Management. Every new employee is given complete safety and health education training upon entry.
We have also published the “ESH Management Manual” and “Safety and Health Rules” which have also beenposted on our Intranet website for employees to consult at any time.

Occupational Safety and Health Committee
The Occupational Safety and Health Committee has 21 members. Among them, there are 7 labor
representatives, which accounted for 1/3 of the total number, 1 healthcare professional, 1 labor safety related
engineer technician and 9 department managers, supervisors and directors. We work out an occupationalsafety and health plan each year according to the relevant problems that need to be addressed. The focus is on
asking all the people involved to follow occupational safety and health rules; to identify hazards to lower risks;
to set up rules for the labeling of dangerous chemicals and a general understanding of them; the promotionof occupational safety and health information; and the establishment of a system to manage contractors. All
these measures are aimed at reducing risks.
We have emergency response plans that will be implemented in the event of an emergency caused by humanerror or natural disasters, such as fire, explosion, typhoon, an accidental leak, mechanical injury, infectious
disease, or an earthquake. As identification of the nature of the emergency, taking the necessary measures andexamination of standard operating procedures. We hold fire all measures impact on the health and safety Of
the workers and also try to least damage or company property.

Professional Security Service TeamAt HTC, the mission of security guards is not only to maintain security, but also to uphold a service-oriented
work attitude. With regard to the handling of and responses to all matters, they need to maintain HTC’s assets
and equipment as if they were family property, while all employees and visiting VIPs and manufacturers
should be seen as relatives and friends in order to demonstrate that it is a trustworthy and professional
security service team.
The salary of security guards must not be deducted for any cause other than their due labor insurance andNational Health Insurance (family members included). For labor insurance and National Health Insurance,
employees should be insured according to the salary level. In addition, according to the provisions of Article
8-2 Security Service Contract, pre-employment education training, three-day symposiums (36 hours), andParty A hazard notification course must be completed before being allowed to be stationed. The course content
includes security guard duty principles and special response methods, such as the pregnant women screening
procedure requiring pregnant women’s label to be checked while refraining from contacting or holding asecurity bar during the inspection.

113

Friendly Workplace

Food Safety - Hearty and Healthy Meals at HTC
To ensure our employees have “healthy and satisfying food,” we have engaged experienced licensed chefs
from five-star hotels and dieticians to design and produce healthy, nutritional, and delicious meals using local
ingredients from reputable and certified local food suppliers. The meals are nutritionally balanced and thenumber of calories is controlled, giving HTC employees the opportunity to enjoy high quality and healthy food.
HTC cafeterias are operated by the company and the ingredients and cooking oil used are purchased by thecompany and not outsourced. To safeguard the food safety and health of employees, we avoid all questionable
ingredients and insist that all purchases have CAS, TQF, ISO and HACCP food certification. Branded foodcommodities are given top priority and we always support the local agricultural producers.

Food Safeguards

Healthand Safety
Management

Checklists are used to control environmental disinfection,
the dress code, waste food control, refrigeration storage
temperatures, and the use of energy. Strict audits andchecks are carried out and all activities are strictly
managed from the sorting of ingredients, to their cutting,cleaning, storage and processing.

In addition, a light food cooking counter conveys the concept of healthy eating. The importance of not overcooking or frying food too long is stressed. Meals low in sugar, salt and seasoning are advocated and eventexting to have a food order prepared for collection is possible, all these are matters that have been given
careful attention. The dining environment is well styled with full view curtain walls, designer furniture, green
plants, and artistic decoration.
At the same time, the Taipei headquarters building employees’ canteen not only commences “dish tasting”
every month, in consideration to foreign employees’ hometown food, Taoyuan plant’s restaurant also prepares
cuisine that suits the tastes of foreign employees and irregularly holds “dish tasting” for four consecutive
months, serving four Filipino dishes, four Vietnamese dishes every time. After the dish tasting, a questionnaire
survey is conducted to collect employees’ comments. Then, based on survey results, the taste of food is slightly
adjusted to increase meal satisfaction. At present, the H Building B1 food court serves exotic cuisine every
Tuesday and Friday during breakfast, lunch, dinner, and midnight snack hours.
HTC has taken the initiative to study the feasibility of producing health tea drinks for employees so that they
can now enjoy a cup of healthy fresh tea. For employees’ convenience, vending machines are also placed fordairy products, snacks, and other beverages to meet various needs at different times. HTC also works withprofessional restaurants, meaningful and seasonal activities will be launched on holidays to celebrate andenjoy the atmosphere of holidays with our co-workers.

HTC 2017 CSR Report114More choices - “Café Bar” “Bakery ” & “Tea drinks”
The HTC cafe and juice bar uses only the freshest high-quality naturalingredients. HTC has strict safeguards for all food served and provides
employees with healthy meals without any additions in accordance with theconcept of healthy nutrition and “cooking for families.”
The 1F Coffee Lounge and Juice Bar insist on selecting fresh and highquality natural ingredients. This year, teas were added at Taipei headquarters
building 1F. The main constituents of the teas are catechins, anthocyanins,minerals, amino acids, and vitamin E, B, C, K. Catechins, in addition to being
an antioxidant, also reduces free radicals, strengthens fat utilization, andpromotes metabolism. Adhering to the concept of health and nutrition, rawmaterials are carefully selected to provide employees with the enjoyment ofhygienic and tasteful foods. Soybean milk is made with non-GM soybeans forsafety. Soybean milk is made with non-GM soybeans for safety. Bread is madefrom natural non-toxic ingredients, and tea culture is taught.
In addition, as a response to caring for the earth, kitchen utensils and all
the cups used at meetings are reusable. The counter drinks are offered at a
discount to discourage the use of disposable drinking cups.

Smoke-Free Workplace
HTC positively advocates the government policy of a smoke-free workplace. In compliance with the Tobacco
Control Act, smoking inside company premises is prohibited. There are outdoor smoking areas. Quit Smoking
Clinic has been started at the Employee’s Clinic since May 2016 to conduct quit smoking treatment throughprofessional physicians, pharmacists, quit smoking health teachers, to allow the participating 65 employees toquit smoking successfully.

Environmental Sanitation Agents
To ensure the quality of life and comfort of our employees as well as that ofnearby residents, HTC takes measures against dengue fever and carries out
pest and rodent control on a quarterly basis. Standing water pools near theplant are sprayed to reduce mosquito population density.

Environmental Expenditures
Year
Environmental expenses

Plant cleaning

The drinking water quality directly affects the health of employees and drinking water management is closely
related to water quality. Therefore, it is an indispensable part of daily life. HTC has set up a comprehensive
water fountain inspection plan to ensure the standard of purity of drinking water. Regular maintenance,water sample testing, and records disclosure are done according to the Drinking Water Management Act. The
maintenance and care of the drinking fountains are carried out by a professional company and testing of water
purity is carried out by an environmental testing agency that is authorized by the EPA to take regular samples
and perform the tests every 3 months. The results of the water quality tests are published and the records arealso posted in a prominent position close to the drinking fountains. The total bacteria count of drinking waterand E. coli colonies have passed the test in 2017.

Restaurant cleaning

Friendly Workplace

2016

2017

131,550

80,74368,737

103,913

Taipei Headquarters
19,396,155

Taoyuan Plant
22,606,733
10,674,878

Pest disinfection

21,943102,967

Rodent control

38,32533,249

Sofa cleaning

24,340-Elevator ladder cleaning

219,400--

218,642

Water tower cleaning
Exterior wall cleaning
Gardening

388,000-

20,057,503

1,461,200

Cleaning supplies

1,695,520

6,805,698

Total

41,841,186

41,903,367

Total Expenditure

115

2015

Environmental Maintenance Expenditures in 2017
Item

Drinking Water Quality Control

2014

83,744,553

HTC 2017 CSR Report

116Valuing Employee Health
HTC regards employees as the most critical element for its success and sustainable development. For thisreason, we strive to create a working environment that is safe, comfortable and which inspires creativity. We
always care for employee working needs and try our best to satisfy them. In HTC, we know that only when all
our employees maintain their professional strength and engage themselves fully in the development of thecompany will HTC succeed as a corporation and enjoy sustainable development.
HTC pay particular attention to four areas: “health management,” “health enhancement,” “vocational health,”and “employee assistance program(EAP).” to ensure the effective use of support resources and safeguard thehealth of our employees.
Health Enhancement Schemes for HTC Employees
Area

Actions

HealthManagement

HealthEnhancement

Vocational
Health
Employee
Assistance

117

Health center for managing and planning affairs related to employee health.
General and outpatient rehabilitation services.
Health exam and management for staffs.
Management/tracking for abnormal HE results, special care and case follow-up
management.
Health information webpage.

Health Management
HTC has established an “Employee Clinics.” Professional medical counseling is available for staff and there
are resident doctors in the clinic. There is also excellent physical therapy and health management service.
Health check services for employees cover the divisions of general medicine, family medicine, rehabilitation
medicine, physiotherapy, and radiographic screening. HTC employees are not required to pay a registration
fee at the employee clinic. The dependents of employees and suppliers (stationed at HTC to provide service)
can be treated at the employee clinic and enjoy the same benefits and services as HTC employees. At theend of 2015, the Taoyuan plant’s full-time medical specialist reported to work. Through his long stay in the
Taoyuan plant area, he fully understood the operating conditions of the plant area and became familiar withthe employees’ issues, which provided extra protection of the plant staff’s occupational safety and health. The
health center at Taipei headquarters building provides doctor health services every Thursday and every otherFriday, including occupational medicine and family medicine divisions. There are also physicians specialized
in baby-friendliness, health policy and management, labor health service and health checkup and promotion.
Approximately 7,588 people attended the clinic in 2017. Besides, 588 people attended Taoyuan Health Centerand 6,256 people attended Xindian Health Center. With a one-time entry fee of NT50, the total amount of
deducted registration fees for the year 2017 was NT139,050, which was equivalent to 2,781 persons, and thetotal deducted copayment was NT223,800, which is equivalent to 4,476 persons.
The Number of People Treated in 2017

Comfortable breastfeeding rooms, smoking cessation promotion, weight-loss classes,
topic seminars, blood donation activity.
Influenza vaccination, cancer screening, infectious disease control and treatment.
The “health ladder”(picture/music), aerobics.
The Family Day.
CPR & AED course design.

Category

Consulting

2,193

Establishment and maintenance of HE database for special-Operation staff.
First-aid training, prevention and treatment of occupational injuries and illness, workers
return to work management.

Trauma treatment

248

Mental consultations, special counseling.
EAP promotion activities and leaflets for new employees, EAP advocacy monthly
newsletter.

Friendly Workplace

Persons
General staff

Outpatient service

2,774

Dependents

6

Suppliers10

Occupational hazards and job placement

106

Physiotherapy

2,251

Total

7,588

HTC 2017 CSR Report

118

The Monthly Number of People Serviced in Taoyuan Health Center

The Monthly Number of People Serviced in Xindian Health Center
Person
900
800
700

71
65

600

63
55
42
32

55

52

49

500

37

300

36

31

300
200
100
0

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Jan

Dec

■ Health Management■ General Counseling■ Injuries Treatment■ Occupational Injury andMatching Counseling■ Health Center Service■ Total

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

46

44

62

52

56

53

52

56

48

46

51

56

265

250

278

285

292

301

339

350

382

643

591

764

22

32

26

27

32

26

18

22

28

42

23

26

2

2

2

2

2

2

-

2

3

3

1

3

28

32

31

52

56

53

56

56

42

46

48

46

363

360

399

418

438

435

465

486

503

780

714

895

6,256

588

The Number of People Serviced in Taoyuan Health Center by Category

The Number of People Serviced in Xindian Health Center in 2017 by Category
439

622

73

546

HTC 2017 CSR Report

Total

Motherhood
Protection

General
Medicine

59
Bed Rest

Dentistry

210
Mental HealthCounseling40

189
HealthCounseling8

150

Muscle Sorenessand Ache

17
Ophthalmology

142
Obstetrics &Gynecology

Otolaryngology

GeneralSureryDdrmatology

General
Medicine

Dentistry

HealthManagement

3

Total

0

324

HealthCounseling

0

801

19
Muscle Sorenessand Ache0
Ophthalmology

Friendly Workplace

9
Obstetrics &Gynecology

GeneralSurgery

General
Medicine

119

3,122

Ot0laryngology

45

Dec

120

Annual Health Check Subsidies

The Accumulated Health Check Completion Rate of IDL Employees in 2017

HTC provides health check subsidies to its employees in Taiwan according to job title and grade. The dependentsof the employees also have access to health checks at any of the HTC contracted medical institutions.

100%

In 2017, HTC spent NT$8,305,417 on subsidized health checks for indirect employees. There were 1,732
benefited employees. Among them, 95.95% of indirect employees completed health checks and 2,713 direct
employees had received the health check services.
According to the results of the health check, health management and a health education and counseling service
were arranged and employees needing further attention met with a physician so that more comprehensive
health care and treatment could be arranged. We track the health of these employees on a regular basis
according to the severity of their condition, and provide them to receive more comprehensive health care. As aresult, no harm caused by overwork occurred in 2017.

90%
80%
70%
60%
50%
40%
30%
20%
10%
0%

HTC Health Check Regulations
Frequency
Regulations

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Nov

Dec

IDL: with one-year seniority and once every two years
Article 20 and 46 of the “Occupational Safety and Health Act” (OSHA) and Articles 13-15 of
the “Labor Health Protection Regulations“
IDL: Staff can have a health check in numerous hospitals cooperated with HTC

Last Check Date

Oct

DL: biannual

Physical Examination Abnormal Education Rate

DL: Implemented by employee clinic

Way

Sep

Uncompleted Annual Health
Check Tracking Mechanism

100%
90%

DL: Arranged by departments since July 201580%

IDL: In progress

70%
60%
50%

Health Check Follow-Up and Statistics in 201740%

The number of new recruits with physical abnormalities follow-up

486

The number of employees with physical abnormalities follow-up

2,246

30%
20%
10%
0%
0

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

On the 11th of every month,employees are notified via email
re g a rd i n g t h e t i m e o f h e a l t hinspection. Supervisors of the firstorder will be added to the copyof the letter in 3 months, and thesupervisors are requested to assist insupervision. According to the resultsof the health checkup, management
at different levels will be carriedout. Employees reaching a certain
degree of severity are given healthadvice and health education.

Note:In September 2017, there was no case to be tracked, thus the unavailability of completion rate data.

121

Friendly Workplace

HTC 2017 CSR Report122Health Promotion Programs2017 Indirect Employees Abnormal Items and Number of Persons

895 persons had abnormal health examination results. The top five abnormal items are low-density cholesterol(169 persons), High cholesterol (158 persons), triglycerides (148 persons), slow pulse (142 persons), andhypertension (101 persons).
2017 Abnormal Items and Number of Persons for IDL Employees

Hypertension

101 persons
Low-density cholesterol

169 persons
Total
Slow pulse

142 persons

It is a well-known fact that the pressure of a technology industry tends to cause employees to neglect
the importance of their health. For this reason, in addition to providing employees with an additional
comprehensive health care service, also promotes relevant health care programs to provide employeeswith accurate health management information and also to give staff the necessary self-health management
capabilities. In 2017, 178 persons participated in the cancer screening activities, and 20 persons needed
further health consultation. All have completed tracking. In addition, eye care activities were organized. 150
persons had an eye checkup, 28 persons were willing to undergo further checkup, and 18 persons completed
the checkup. 38 persons signed up for the fitness strengthening course, 34 persons participated in the pre-test,
22 persons completed the final course, and 14 persons participated in the post-test. The 8-week cardio-aerobic
exercise and muscle training course had 124 attendees. In 2017, 58 classes of the health promotion course werecommenced, with 1,968 participants and the average satisfaction of 92.30%.
The Number of Employees Attended the 2017 Health Promotion Course by Type

718

Course Typepersons

Number of Attendees

58

60

High cholesterol
Triglycerides

158 persons

148 persons

1,986■ Number of Courses
50

1,750

Number of Attendees
1,500

40

31

As for the direct employee’s annual abnormal health check items and the number of persons, 1,448 hadabnormal health examination results. The top five abnormal items are: low-density cholesterol (615 persons),
total cholesterol (586 persons), urine occult (514 persons), urinary protein (451 persons), and hemoglobin.
(346 persons)

1,000
750

20

500

245

10

229

10
5

210
3

3 75

2 61

2 46

2

250

43

0

Total

First Aid
Courses

Dental Care

Women’s
ParentingCourseMental Health
Care

Infectious
Diseasesand Cancer
Prevention

Vision Care

HealthEnhancing
Promotion2017 Abnormal Items and Number of Persons for DL Employees

Exercise andDiet Weight
Loss Courses

0346 persons
Low-density cholesterol

Urinary protein

451 persons

Total

Xindian

2,512

451 persons

Friendly Workplace

574 persons

TaoyuanHigh cholesterol
Urine occult

The Number of Employees Attended the 2017 Health Promotion Course by Location

615 persons

persons

123

1,250

1,077

30

2017 Direct Employees Abnormal Items and Number of Persons

Hemoglobin

2,000

586 persons

Other

Total

1,335 persons
77 persons

1,986 persons

HTC 2017 CSR Report124

HTC Employee Clinic Facebook Page
https：//www.facebook.com/HTC.EmployeeClinic
HTC set up an employee clinic Facebook page for employees to provide employees with accurate healthmanagement information in multiple channels and to cultivate employees’ self-management capabilities.
The fan group consisted of 950 persons, mostly under the 25 years old-44 year’s old age bracket. Among them,
women accounted for 56% and men accounted for 44%.

HTC Employee Clinic Facebook Page Usage Analysis
24%

22%

56%
of your fans are

Women

0.421%
13-17

44%

0.21%

4%

3%
18-24

25-34

36-44

3%

5%

of your fans are

Men

45-54

15%
19%

Note: The summary demographic data for the page is based on the age and gender information provided by the users in the profile.

1%

0.526%

55-64

65+

1%

0.315%

Occupational Health
1. Specific Health Check

The work environment at the HTC Taoyuan Plant is carefully tested and monitored. In 2017, all 66 workers
engaged in operations that might endanger their lives, such as those involving ionizing radiation, dust, MDI
and noise must receive a thorough health checkup. In 2017, the total number of persons to be examined was
66, and the number of people examined was 66, reaching 100%. completion rate. The number of workers put
under Grade 1 Control was 35; Grade 2 Control was 31; Grade 3 Control was 0. In compliance with Articles 1315 of the Labor Health Protection Regulations, all 31 workers subject to Grade 2 Control were sent individuallyto the company infirmary for health consultation with a doctor, who gave instructions on personal health andhow to prevent further problems.
2. Emerging Health Issues

HTC’s employee clinic, environmental safety department, human resources division, and other undertaking
units planed the Protection Program in four themes, which was implemented gradually since 2016.

125

Friendly Workplace

Topic

Organizer

Overload and Health Hazard Operation Prevention

Employee Clinic

Maternal Health Protection Plan

Employee Clinic

Ergonomics Hazard Prevention

ESH Department

Execution Infringement Prevention

HR Department

HTC 2017 CSR Report126(1) Preventive Measures Against Health-Endangering Heavy Workloads(2) Maternal Health Protection Plan

According to related regulations, employers have the obligation to plan and take the necessary safety andhealth measures for employees taking rotational shifts, night shifts or who work for long hours, in case medical
conditions might occur which are related to an unusually heavy workload. Appointments are made with medical
doctors, or health consultants for employees should a medical check find them to have a health problem. A changeof work or the adjustment of working hours is usually recommended. In the year 2017 screening and notification,
92 risky employees were interviewed by doctors. There was no incident of injury caused by overload.

When safety and health hazard factors exist in the workplace, there may be adverse effects on pregnancy
and breastfeeding. When female employees’ presence in the workplace is indispensable, the importanceof the protection of maternal health is highlighted. HTC has since June 2016 launched the Motherhood
Health Protection Program, which includes all female employees one year after childbirth or breastfeeding
women as protected subjects. In accordance with the Program, the list survey, risk identification, individual
medical consultations, work assignment and work/ return to work, and other procedures were carried out.
As of December 31st, 2017, 175 employees completed the risk classification and protective measures. All theprotected targets were at low risk (risk level: 1), indicating the considerably safe work enjoyment and contents.
Note: Risk level 1: Evaluated by the doctor as harmless to the mother, fetus, or infant.
Risk level 2: Evaluated by the doctor as possibly harmful to the mother, fetus, or infant.

Identify
and Assess

Identify and assess the high-risk group
via the analysis of health check

Taoyuan health center counselingservice
Xindian plant on-site health service

HealthManagement

Health education and counseling service
will be arranged for employees withphysical abnormalities and a change ofwork or the adjustment of working hours
is also recommended.

The number of employees (new recruits 		
& IDL) with physical abnormalities (Xindian)
The number of new recruits with health check
The number of employees (IDL) withphysical abnormalities follow-up

Risk level 3: Evaluated by the doctor as harmful the mother, fetus, or infant.

2017 Maternal Health Protection Plan Risk Level 1 and Numbers of Employee

151

Set UpPreventive Plan

Make preventive measures against
health-endangering heavy workloads

Effectiveness
Assessment

Assess the effectiveness of plan andmake improvement plan

157

159

157

154

155

Feb

Mar

Apr

May

Jun

172

176

179

175

Jul

Aug

Sep

Oct

186

175

Number of injuries due to fatigue

Jan

Nov

Dec

2017 Employees with Overload Risk Management34■ 2017 Numbers of employees with overload risk

26 26

■ Number of people notified
20
12 12
55

Jan

127

Feb

Mar

Friendly Workplace

77

Apr

66
22

22

May

Jun

77
22

Jul

Aug

Sep

33
00
Oct

Nov

Dec

HTC 2017 CSR Report128Positively Preventing Occupational Accidents

Employee Assistance Program (EAP)The constant challenge and rapid changes in our highly technological industry result in a rather high job
stress in our employees. The avoidance of stress is a major concern at HTC and we pay constant attention toemployee working hours to steer clear of disorder and the attending stress and fatigue.

HTC has identified the prevention of occupational accidents as a top priority of facility management. By
following the “Occupational Accident Prevention and Self-Inspection Plan,” we prevent occupational
accidents and perform self-inspection to achieve our zero-accident goal.

HTC has been working with the Hsinchu Lifeline Association since February 2009 to provide employeeswith psychological counseling and guidance with respect to working career, relationships, family andparenting, gender sentiments, mental illness, and physical and mental stress. All employees are entitled to
six free counseling sessions per year at the expense of the Company. In 2017, 130 people had taken advantage
of counseling.

Our work covered seven aspects: “Management of Safety and Health,” “Education and Training for Safety
and Health,” “Standard Operating Procedures and Job Safety Analysis,” “Inspections for Safety and Health,”“Emergency Response,” “Health Management and Enhancing,” and “Safety and Health Campaign” for thecomprehensive prevention of occupational accidents.

Appointment hours: Monday ~ Friday 9am ~7pm
Reservation line: 035-260415

Employee Assistance Program(EAP) Results
2013

2014

2015

2016

2017

Number of telephone counseling (Free)

81

82

120

111

141

Number of interviews

60

70

78

79

130

Hours of interviews

86

79

91

106

140

Number of interviews (Male)

30

38

38

46

44

Number of interviews (Female)

30

21

40

33

86

Number of interviews (DL)

-

16

11

3

6

Number of interviews (IDL)

-

54

67

76

125

420,800

401,200

434,800

443,000

566,400

Invested expense (NT$)

129

Friendly Workplace

AspectMeasureManagement of Safety
and HealthIf there is any change in the organization or addition of new business units,
this has to be reported to the authorities concerned. Such information ranges
from hazard statistics, hazard investigation analysis, meetings convened by thecompany occupational safety and health committee, preventive inspections, andthe management of the entry of contractors into plants.

Education and Training
for Safety and Health

Provide occupational safety and health-related courses on a regular basis.

Standard Operating
Procedures and Job
Safety Analysis

Set up rules and procedures for operation, maintenance, and work safety. Amend
rules for workplace safety and health, general knowledge of dangerous materials,
and the assessment of risk.

Inspections for Safety
and HealthAll kinds of working environments, cars, equipment, facilities, and fire safety systems
should undergo regular inspection. The items to be checked include organic solventsin working environments, ionizing radiation exposure, and infrared detection.

Emergency Response

Implement an emergency response plan for the year and launch emergency
response drills.

Health Management andEnhancing

Purchase medical consumables and provide health checks or checks for special
health problems specific to both new employees and those already on the job.
Track and manage those with unusual results.

Safety and HealthCampaign

We have done everything legally required in response to all government
regulations. We also participate in all kinds of relevant meetings and publish
promotional posters, comics, and slogans. We constantly update information andcommunicate with employees over workplace safety. All these efforts are aimed at
improving work efficiency.

HTC 2017 CSR Report1302017 Full-time Environmental Safety and Health Personnel Training

Comprehensive Emergency Rescue Measures
A 24-hour emergency rescue Hot Line has been set up as part of a fullycomprehensive emergency notification system.
Sufficient rescue personnel has been lawfully designated and emergency rescue
personnel training courses are held annually.
Twelve Automated External Defibrillators (AED) are available at specific places
within the company.
Emergency evacuation drills are carried out periodically.
Since 2010, CPR seminars are held regularly each year2017 (Re) training for Certificate Training Completion Rate

Q1

Q2

Stacker operator retraining x8 trainees

100%Completed

1. Occupational safety and health management personnel x2 trainees
2. Energy management personnel x1 trainee
3. Stacker operator Initial training x1 trainee
4. Stacker operator retraining x4 trainees

100%Completed

These related measures have been effectively carried out at HTC and the average
employee injury frequency rate (FR) was 0.61 person-time/per million hours
worked, average severe injury rate (SR) was 10.89 days/per million hours worked
in 2017. Should the frequency of disability or injury rise higher than 0.30 million
person/million working hours and the severe injury rate be higher than 1.8 days/per
million working hours, our annual target will have been missed.
In 2017, most occupational injuries were the result of traffic accidents (62 cases)that happened during commutes. There were 11 other injury cases that occurred
within the facility. Falls are the most frequently reported incident (6 cases), with 140
days of labor lost. We will promote safety education for employees who commute to
and from work in the future and will also provide them with work safety concepts
and necessary training. Warning signs are to be placed in conspicuous places toreduce the incidence of accidents.
Average FR in Taiwan Plant in 2017

Q3

1. Radiation operator initial training x5 trainees
2. Stacker operator retraining x3 trainees
3. Organic solvent operation manager retraining x10 trainees
4. Radiation operator initial training in factories x20 trainees
5. Basic rescue technician education training x1 trainee
6. Occupational safety and health management personnel x1 trainee
7. Head of high pressures gas supply and consumption operations(nitrogentank) x1 trainee
8. Fire protection personnel initial training - Hsinchu x1 trainee

Target100%

Occupational Injuries in Taiwan Plant in 2017
ResultInjury Frequency Rate (FR)

0.3

0.61

Fall and slip

Injury Severity Rate (SR)

1.8

10.89

Cut, slit, abrasion

Completed

Note: 1. Injury Frequency Rate, FR=person/total time of work*million hours worked
2. average severe injury rate, SR=days/ total time of work *million hours worked
3. Occupational injuries statistics does not include light damages of less than one
day of loss, excluding traffic accidents.

Q4

1. Dust job supervisor retraining ×3 trainees
2. Dust job supervisor retraining High-pressure gas container operators ×1 trainee
3. Occupational safety and health management personnel ×2 trainees
4. Hypoxic operation supervisors ×2 trainees
5. Construction team assembly supervisor in vocational training ×1 trainee

100%
Completed

Case

%
30.36
25

Hit

8.93

Rrolled and clipped

7.14

Contact with high temperature and low
temperature

5.36

Objects flying

5.36

Others5.36

Dropping, rolling down

3.57

Pierced3.57

Improper action

3.57

Electric shock

1.79

Death

0

Note: The percentage of occupational disasters is calculated in counts.

131

Friendly Workplace

HTC 2017 CSR Report132

Injury Frequency Rate (FR)Injury Severity Rate (SR)

Injury Frequency Rate per Million Hours Worked

Lost Day Injury Frequency Rate per Million Hours Worked

2015

2016

2017

2015

2016

2017

Taiwan

0.37

0.61

0.61

Taiwan

2.78

13

10.89

Taoyuan Plant (Male)

0.63

0.98

1.82

Taoyuan Plant (Male)

4.81

24.87

17.37

Taoyuan Plant (Female)

0.7

0.58

0.39

Taoyuan Plant (Female)

5.73

12.59

16

Taipei HQ (Male)

0.19

0.21

0.21

Taipei HQ (Male)

0.19

0.42

1.25

Taipei HQ (Female)

0

0

0

Taipei HQ (Female)

0

0

0

Management Target

0.36

0.3

0.3

Management Target

2

1.8

1.8

Note: Injury Frequency Rate = Incidence of Lost-Time Injury×1000000/total hours
workedNote: Injury Severity Rate=Days Lost for Lost-Time Injury×1000000/Total Hours
WorkedGRI Injury Indicators
Incidence Rate (IR)Occupational Disease Rate (ODR)
2015

2016

2017

Taiwan

0.09

0.12

0.12

Taoyuan Plant (Male)

0.13

0.2

Taoyuan Plant (Female)

0.14

Taipei HQ (Male)
Taipei HQ (Female)

2015

2016

2017

Taiwan

0

0

0

0.36

Taoyuan Plant (Male)

0

0

0

0.12

0.08

Taoyuan Plant (Female)

0

0

0

0.04

0.04

0.04

Taipei HQ (Male)

0

0

0

0

0

0

Taipei HQ (Female)

0

0

0

Note: Incidence Rate = Total Incidences / Total Hours Worked × 200,000*

Note: ODR = Occupational Disease Cases / Total Hours Worked × 200,000*(*: adjusted for 50 weeks a year, 40 working hours per week, and per 100 employees)

Day Lost Rate (LDR)(*: adjusted for 50 weeks a year, 40 working hours per week, and per 100 employees)

Absence Rate (AR)
2015

2016

2017

Taiwan

0.55

2.6

2.18

TaiwanTaoyuan Plant (Male)

0.96

4.97

3.47

Taoyuan Plant (Female)

1.15

2.52

0.04
0

Taipei HQ (Male)
Taipei HQ (Female)

2015

2016

2017

0.09

0.01

0

Taoyuan Plant (Male)

0

0.03

0.02

3.2

Taoyuan Plant (Female)

0.01

0.01

0.02

0.08

0.25

Taipei HQ (Male)

0

0

0

0

0

Taipei HQ (Female)

0

0

0

Note: LDR = Total Days Lost/ Total Hours Worked × 200,000*

Note: AR = (Total Days Lost/Total Days Worked) ×100%(*: adjusted for 50 weeks a year, 40 working hours per week, and per 100 employees)

In 2017, there were four public injury cases, all male employees. Among them, two were traffic accidents andtwo were minor accidents in the factory, none of which lasted for more than one day. Therefore, IR, ODR,LDR and AR were all 0.

133

Friendly Workplace

HTC 2017 CSR Report134Listening to the Voice of the Employee
HTC employs nearly 10,000 people around the world. The establishment of a sound means of communication
between management and employees is vital to the growth of a company. Therefore, HTC pays great attention
to internal communication with employees to build mutual trust and create a harmonious atmosphere within
the company.
HTC is committed to creating an atmosphere of mutual trust between employer and employees while also
focusing on internal communications. The minutes of these meeting are referred to in the resulting followups, which include any necessary corrective action. In addition to these regular meetings, employees may also
reflect their opinions through various communication channels.
All responses to proposals and the follow-up progress of these meetings are published on the HTC Intranet
website for review by all the employees. According to internal HTC statistics, the issues most frequently
discussed in the labor-management meetings are “the working environment,” “parking and transportation,”and “catering management.” In addition to regular labor-management communication meetings, we also
set up diversified feedback channels, including setting up grievance lines, appeal boxes, e-mail address forcomplaints, and sexual harassment complaint mailboxes. Labor-management meetings and employee opinion
surveys are held regularly as a reference for supervisors, internal operations, improvement of employee
satisfaction levels and improvement of work commitments. A good communications mechanism results inharmonious labor relations. Labor disputes, bad feelings and losses can all be avoided.
Note: HTC’s labor union was established in 2015, but until the end of 2017, no collective agreement has so far been made.

Labor-Management Agreement and Employee Rights

HTC is committed to creating an atmosphere of mutual trust between employer and employees while also
focusing on internal communications. HTC convenes labor-management meetings every two months and at
least six meetings are held every year. Seven representatives are elected by employees for the meetings while
seven others are designated by the company. The minutes of these meeting are referred to in the resulting
follow-ups, which include any necessary corrective action. In addition to these regular meetings, employees
may also reflect their opinions through various communication channels. On the other hand, the shortest
notice period for major operational changes shall be handled by HTC in accordance with Article 16 of theLabor Standards Act.

Employee Satisfaction Survey
Out of consideration for employees’ feeling towards HTC and their willingness to dedicate themselves tothe company, we are searching for factors that could enhance employee willingness to devote themselves tocorporate operations. HTC launch a survey of the opinions of its employees around the world in 2017. The
survey covered a total of 6 aspects of work content, which included work environment, salary and benefits,internal communication, gender equality, and corporate identity. The average score of the survey results was
3.95 points (out of 5 points). The survey results were given to management for review and have become areference for planning the business goals for next year.
In 2014, we offered employees 1 day paid leave (birthday leave) and getting off work at 3 pm the days before
3-major holidays. Until 2017, these happiness measures continue to bring small happiness to the employee’s
body and mind.

135

Friendly Workplace

Effective Advisory and Assistance Channel
To protect the working rights of our employees, we have set up a diversified and smooth communication
channel that an employee can use to pass on information about problems and to receive a response
without delay. In addition to the employee care office in the major units that provide a relaxing space forcommunication, timely help with workplace problems can also be sought using the following channels:

Potential
work
problems

Advisory
andassistancechannelsWork problems

Consultation and Referral to the Employee Assistance
Program(EAP)

Leadership style andcommunication

Production line direct labor should dial extension 38585

Compensation, benefits, andworking hours

Indirect labor should dial extension 28585

Workplace sexual harassment,
sexual abuse, or sexual
discrimination

Open and registration-exempt staff cares office

Employee Help hotline E-mail: HelpMe_8585@htc.com

HTC Employees Notification System APP
To provide employees with a more convenient information network and services, HTC
has built a proprietary company APP to provide staff with readily available services, theseinclude relevant course information, the latest event announcements, staff clinic services,
as well as all kinds of reservations such as regular physical examination, gym courses,
massage appointments, restaurant bookings, employee issues, and immediate feedback.
Mobile APP channel: Employees can download an internal mobile phone application
developed by HTC to take photos instantly and reflect opinions that will then be
handled by the relevant units.
Operating procedures: In addition to responding to employee opinions, information
about improvements made, or which are pending, will be sent to the employee who madethe report. Pending matters will be followed up and monitored on a weekly basis.

HTC 2017 CSR Report136Social Investment
and Contribution ___HTC has long been committed to the social careand public welfare, and supports and sponsors
the “HTC Education Foundation” and the“HTC Social Welfare and Charity Foundation.”
HTC advocates humanitarianism and we havedeveloped our company character culture at a
local level. While we continue to pursue businessgrowth and technical innovation, we care verymuch about disadvantaged families, and give
their children opportunities to receive theeducation. This is a distinctive corporate cultureof which HTC is rightfully proud.
In the meanwhile, HTC also utilizes the industry
characteristic and helps society create more
possibility by R&D and innovation. We havedevoted to inventing novel products not onlywith the target of being in accordance with
Sustainable Development Goals (SDGs) issued
by UN in 2015 but also with the aim of meeting v
kinds of needs in the society and implementingsocial care to actively practice CSR.

HTC Foundation

VisionEveryone has a good personality. People respect and support each other. Let us make theplanet lovely together.

MissionOur mission is to instill core values of integrity, honesty, care, love, positive thinking, andrespect for natural resources by untiring efforts to educate.

Objectives
1. To encourage the development of good campus culture by influential education projects andthe continuous and systematic encouragement of teachers, parents, and students.
2. To encourage the development of good urban character culture by influential education
projects and urging local communities to work towards this end.
The HTC Foundation focuses on promoting character education by working to help children and youngsters
develop good character by supporting both schools and teachers. We place great importance upon building
up moral character and culture for communities and towns in cooperation with local government, care fordisadvantaged families, providing their children with opportunities to receive education, and raising funds forenvironmental and ecological preservation.
We engage in public interest activities to espouse humanitarianism and contribute to a peaceful andharmonious society. The Foundation plays an important part in community engagement and social services
to instill the core values of integrity, honesty, care, love, positive thinking, and respect for natural resources.
The HTC Foundation invested NT$9,895,000 on education in 2017, while HTC Social Welfare and Charity
Foundation spent NT$49,445,000 on charity business.

3. Care for disadvantaged families and the provision of educational opportunities for young
people to give them the knowledge and character that allow them to become contributive
members of the society.

Character Statement
1. To actively and enthusiastically influence others with honesty and good character in both
personal and professional life and to set a good example with our own conduct;
2. To protect the environment and to develop a cultural and aesthetic disposition throughreadings; and3. To be a world citizen, to make reasonable efforts to help the poor and the disadvantaged in
the world, and to encourage people to respect and support one another.
We hope through these actions, people can jointly internalize the core values of integrity,honesty, love, mutual respect, caring for one another, and positive thinking.

139

Social Investment and Contribution

HTC 2017 CSR Report140Many Blessings Courses
The HTC Education Foundation is committed to the development of character education for young
people. It hopes to shape character through joint efforts by schools, parents, and society. Following theprinciple of “lighting a candle rather than cursing the darkness,” the foundation has established the“Many Blessings Course” for junior and senior high school students. These free courses each last for five
weeks. They include three hours of training and activity per week. The students get the energy to move
forward and make changes inspired by their instructors and volunteers, They are encouraged to become
leaders who can actively serve the public and use their own power to change the world.

Summer Institute for Character Education
HTC Foundation has been dedicated to the implementation of character education. For many years, it
has been providing high-quality, systematic, and diverse resources for education and training throughthe “rock education implementation program” to help schools across Taiwan to implement character
education more effectively. To help schools cultivate a character-based campus culture, nurture thoseschool practicing character education, promote academic and practical dialogue for the character
education to strengthen the ability of the schools’ leadership teams in implementation, the foundation
has been inviting Dr. Marvin Berkowitz, lecturing professor on character education from Collegeof Education, the University of Missouri at St. Louis, to give a lecture in the “Summer Institute for
Character Education” in Taiwan since 2012. As of 2017, there have been 220 people in total from theleadership teams made up of school principals and administration members from 33 schools who haveparticipated in the five-day intensive immersion training.
This course has been taught in Missouri and other areas for 19 years. According to feedback from the
27 schools that participated in the last 5 years after the course, the course has been beneficial to boththe participating teams and their members in core topics of the character education and nature of
education or buildup of consensus for the leadership team. HTC Foundation will continue to hold thistraining course through its summer institute. It hopes that this course would help schools build up theirown leadership teams for the character education on their campuses. Through collective efforts by theteam members, the campus-based culture of character would be shaped to cultivate students’ growthand development in characters.

Character Town
HTC foundation not only launches character education in schools but also signs “Character Town”
with various towns in Taiwan. Character Learning Course is launched every month with a way ofcharacter and setting a good example with our own conduct. Group discussion and experience sharing
with different themes and related to work will be arranged timely. Participants include township police
station public hospital fire department land office & household registration office-affiliated institutes.
Parts of institutes turn into membership in the character association. Leaders in the institutes
encourage good deed via communication and integration of thoughts, which becomes the internal
operating mechanism.
“Character First” course emphasizes the concept definition and operational definition with the corevalue of nurturing the leader and team work. Besides, it is believed that people can lead in different
kinds of situation. The main goal of these courses is to nurture groups of the cadre of basic level
equipped with ethics and integrity. Since 2007, the plan has been implemented in 18 institutes in Yuli
Hualien, Yuanlin Changhua and Fuli Hualien etc.

141

Social Investment and Contribution

Other Social Engagement Activities
In addition to sponsoring the social work upheld by the HTC Foundation, HTC also positively engages inpublic interest activities through other channels. In 2017, our accomplishments in social works included:

Social Enterprise Marketplace
In response to the multi-employment development
program by the Workforce Development Agency,
the Ministry of Labor, striving for employment planand social enterprise development, and further
enhancing the unemployed people’s employability
and confidence at work, expanding the possibilityof local industrial culture, we held seven social
enterprise marketplaces in 2017, with a total 38 units
participated from the women’s care associations,agricultural producers’ cooperative and all local
community development associations, created a totalof NTD169,109 benefits, not only to enable employees
to understand the services and products from thesocial enterprise development units through theactivities, but also to participate and support withpractical actions produce more benefits.

Blood Donations
Eight times every year HTC cooperates with theHsinchu Blood Center to hold blood donation drives.
Many of our kind-hearted employees have developed
the habit of regular blood donation since 2006. Everytime the mobile vehicle from the Blood Center comesby our employees all line up to make donations to giveback to society. HTC is recognized by Hsinchu Blood
Center as a standing Honorable Blood Donor Group.
The personnel of the Taoyuan and Xindian plants
donated 161,750 c.c and 126,750 c.c of blood in 2017.

2015

2016

2017

10,609

9,688

9,239

Blood Donation

1,033

857

748

Donation Rate (%)

9.74

8.85

8.10

Number of incumbents

Total blood donation (ml)398,250 311,500 288,500

Sponsorship of Schooling for Disadvantaged Children
For many years, the HTC Foundation has been taking care of disadvantaged, children and providing them withthe opportunity to receive the education. The education program highlights continuous learning and HTC
plays an active part in community engagement and social services. HTC cultivates communication with thechildren and the community to pass on the core values of integrity, honesty, care, love, positive thinking, andrespect for natural resources.

HTC 2017 CSR Report142

The HTC Child Support ClubThe HTC Child Support Club was founded in 2006 as a spontaneous association formed by HTC employees.
The members raise money that is donated to the China Children’s Fund (CCF) to support the sponsorshipof children in need. In 2017, the funds raised by the HTC Child Support Club and the Employee Welfare
Committee came to NT$1,649,440, and was used to sponsor 103 children. Among those, 80 were domestic
children, 15 domestic elites, total 95 children. While 8 of these were from foreign countries, including
Guatemala, Indonesia, the Philippines, Senegal, Sri Lanka, Qirghiz, and Paraguay.

The Love Makes Dreams Soar Program
Christmas is a season to show gratitude and give mutual
blessings. In the Christmas season of 2017, HTC’s employees
jointly participated in the “Love Makes Dreams Soar”
Program to fundraise for “House of Dreams” located in
Ximending, the “second home” that helps disadvantaged and lostyoung people to find their direction again. Each week, nearly 500 young students
find support and encouragement in Dream Home, accompanying more than 5,000 disadvantaged
young people from schooling through employment. We hope to help disadvantaged young people from
Wanhua District through action and provide services to local communities through talent and job training,
giving these young people the momentum to pursue dreams towards a different future. All the employees at
HTC not only enthusiastically participated in the hot-air balloon subscription event that symbolizes young
people’s unlimited potential, but also donated their photography works for charity sale in order to encouragethese young people to bravely pursue their dreams.

143

Social Investment and Contribution

HTC 2017 CSR Report144

Assurance Statement

ASSURANCE STATEMENTSGS TAIWAN LTD.’S REPORT ON SUSTAINABILITY ACTIVITIES IN THE HTCCORPORATION’s CORPORATE SOCIAL RESPONSIBILITY REPORT FOR 2017
NATURE AND SCOPE OF THE ASSURANCE/VERIFICATIONSGS Taiwan Ltd. (hereinafter referred to as SGS) was commissioned by HTC CORPORATION (hereinafterreferred to as HTC) to conduct an independent assurance of the Corporate Social Responsibility Report for 2017
(hereinafter referred to as CSR Report). The scope of the assurance, based on the SGS Sustainability Report
Assurance methodology, included the text, and data in accompanying tables, contained in this report.
The information in the HTC’s CSR Report of 2017 and its presentation are the responsibility of the managementof HTC. SGS has not been involved in the preparation of any of the material included in HTC’s CSR Report of2017.
Our responsibility is to express an opinion on the text, data, graphs and statements within the scope of verification
with the intention to inform all HTC’s stakeholders.
The SGS protocols are based upon internationally recognized guidance, including the Principles contained within
the Global Reporting Initiative Sustainability Reporting Standards (GRI Standards) 101: Foundation 2016 foraccuracy and reliability and the guidance on levels of assurance contained within the AA1000 series of standards
and guidance for Assurance Providers.
This report has been assured using our protocols for:
evaluation of content veracity at a high level of scrutiny for HTC and moderate level of scrutiny for
applicable aspect boundaries outside of the organization covered by this report;
AA1000 Assurance Standard (2008) Type 2 evaluation of the report content and supporting
management systems against the AA1000 Accountability Principles (2008); andevaluation of the report against the Global Reporting Initiative Sustainability Reporting Standards (2016)
The assurance comprised a combination of pre-assurance research, interviews with relevant employees,
superintendents, CSR committee members and the senior management in Taiwan; documentation and record
review and validation with external bodies and/or stakeholders where relevant. Financial data drawn directly fromindependently audited financial accounts has not been checked back to source as part of this assurance process.
STATEMENT OF INDEPENDENCE AND COMPETENCEThe SGS Group of companies is the world leader in inspection, testing and verification, operating in more than
140 countries and providing services including management systems and service certification; quality,
environmental, social and ethical auditing and training; environmental, social and sustainability report assurance.
SGS affirm our independence from HTC, being free from bias and conflicts of interest with the organisation, its
subsidiaries and stakeholders.

VERIFICATION/ ASSURANCE OPINION
On the basis of the methodology described and the verification work performed, we are satisfied that the
information and data contained within HTC’s CSR Report of 2017 verified is accurate, reliable and provides a fairand balanced representation of HTC sustainability activities in 01/01/2017 to 12/31/2017.
The assurance team is of the opinion that the Report can be used by the Reporting Organisation’s Stakeholders.
We believe that the organisation has chosen an appropriate level of assurance for this stage in their reporting. In
our opinion, the contents of the report meet the requirements of GRI Standards in accordance with Core Option
and AA1000 Assurance Standard (2008) Type 2, High level assurance.
AA1000 ACCOUNTABILITY PRINCIPLES (2008) CONCLUSIONS, FINDINGS AND RECOMMENDATIONS
Inclusivity
HTC has demonstrated a good commitment to stakeholder inclusivity and stakeholder engagement. A variety ofengagement efforts such as survey and communication to employees, customers, investors, suppliers, CSR
experts, and other stakeholders are implemented to underpin the organization's understanding of stakeholder
concerns.
Materiality
HTC has established effective processes for determining issues that are material to the business. Formal review
has identified stakeholders and those issues that are material to each group and the report addresses these at
an appropriate level to reflect their importance and priority to these stakeholders.
ResponsivenessThe report includes coverage given to stakeholder engagement and channels for stakeholder feedback.
GLOBAL REPORTING INITIATIVE REPORTING STANDARDS (2016) CONCLUSIONS, FINDINGS AND
RECOMMENDATIONS
The report, HTC’s CSR Report of 2017, is adequately in line with the GRI Standards in accordance with Core
Option. The material aspects and their boundaries within and outside of the organization are properly defined inaccordance with GRI’s Reporting Principles for Defining Report Content. Disclosures of identified material aspects
and boundaries, and stakeholder engagement, GRI 102-40 to GRI 102-47, are correctly located in content index
and report. For future reporting, more descriptions on the evaluation of the performances and specific actions
aimed at improving performances are recommended.

Signed:For and on behalf of SGS Taiwan Ltd.

David Huang, Director
Taipei, Taiwan
08 June, 2018
WWW.SGS.COM

The assurance team was assembled based on their knowledge, experience and qualifications for this assignment,
and comprised auditors registered with ISO 26000, ISO 20121, ISO 50001, SA8000, EICC, QMS, EMS, SMS,
GPMS, CFP, WFP, GHG Verification and GHG Validation Lead Auditors and experience on the SRA Assurance
service provisions.

GP5008 Issue 5

145

Assurance Statement

GP5008 Issue 5

HTC 2017 CSR Report146

GRI 103:
The Management Approach and Its Components
Economic

Standard

Standard

Economic Performance

Material topics

Anti-corruption

How HTC manages the topic

The purpose of the
management approach

Pay attention to corporate
governance and operationaltransparency, and formulate andimplement a corporate governancestructure in accordance with
relevant laws such as the “Company
Law” and “Securities ExchangeAct”, and continuously improve
management performance.

Properly and effectively
assign the powers andresponsibilities of theboard of directors,
managers, andshareholders to establish
and maintain an operatingteam that is accountable
to shareholders.

For the middle- and high-level
executives to implement insider
trading prevention and anticorruption education and training,
and legal compliance training as acompulsory new training course.

Establish and maintaina corporate culture that
promotes due diligenceand the highest ethicalstandards.

In addition to the “Overview
of internal major information
processing and prevention ofinternal transaction management
operations,” the company will
notify all employees of thesubsequent revision processby e-mail and publish it on thecompany’s website for inquiries.

Protect the rights ofinvestors and otherinterested parties
through a comprehensive
and systematic CSR
implementation system.

Related policies“Corporate Governance
Practice Principles”“HTC Code of Conduct”“Anti-corruption
Declaration”“Rules for Derivatives
Transaction”“Credit Policy & Operational
Procedure”“Regulations for the
Appointment of Directors/
Supervisors in Reinvestment”

Grievance mechanisms
Investor Liaison :Telephone: +886-2-8912-4138
E-mail: ir@htc.com
Company spokesperson
and investor relations Shen
Daobang spokesman@htc.
com
Anti-Corruption Grievance
Units: Department
supervisors, Human Resources
Division, and Audit Units
Anti-Corruption Reporting
Mechanism: anti-corruption@
htc.com

Material topics

EnergyHow HTC manages the topic
The use of energy resources
1. Imported ISO 50001, throughthe introduction of energy
management systems to optimize
the process management system
to reduce energy consumption.
2. Use green energy
Carbon emissions
Import the ISO 14064-1 Greenhousegas inventory project.
Effluents and waste
1. Import ISO 14001 environmental
management system and verify itwith external third parties.
2. Set up sewage treatment
equipment in the plant area, andregularly test and report online.
3. Entrust lawful disposal agencies
to properly dispose of wastes, andcarry out irregular inspections

Monitor energy usage.
Reducing waste throughclassification andadvocacy, and increasing
the efficiency of recycling.
Reduce the impact ofoperations on the naturalenvironment.

HTC has a well-established parental leave
application mechanism to protect therights of employees.
Provide diverse and fair employment
opportunities for employees.
The board of directors set up a salarycompensation committee to assess thesalary and remuneration policy and systemof the directors, supervisors, and managers
and achievement of performance goals.

The Ministry of Environmental Protection
and the Department of Labor andSocial Security are responsible for the
implementation of the implementation of
the occupational safety and health andenergy management system and draw up
the annual plan.

Effluents and Waste

The purpose of the
management approach

How HTC manages the topic

The company convenes a labormanagement conference every twomonths and records and tracks problems
and improves results.

Prevent the potential risksof operating caused bycorruption and immorality.

Emissions

Employment
Training and Education
Non-discrimination
Forced or Compulsory Labor
Customer Health and Safety
Customer Privacy

Provide attractive, motivating salary andbenefits programs.

Environmental

Standard

Material topics

SocialRelated policies“HTC Corporate Social
Responsibility Policy”“Process for Removal andHandling Business Waste
Manual”“Procedures for Sewage
System Operation, Repair,and Maintenance”

Grievance mechanisms
Internal: e-mails,
announcement methods,
proposal improvement bills,
or discussions with the Healthand Safety Committee
External stakeholders can filean appeal through Corporate
Social Responsibility
Corporate_responsibility@
htc.com. The case will betransferred internally to the
EA. According to the “EP00000010 Procedures for
the Control of Environmental
documents”

Giving priority to foreign employees’
anti-discrimination, refusal of improper
workplace harassment and improper
discipline.
Forbid all global operating locations andrelated suppliers to employ child laborers
Refer to the “Code of Conduct for
Responsible Business Alliances” toformulate relevant labor regulations in the
HTC Supplier Code of Conduct
The security personnel is required tocomplete pre-employment education
training and courses.
Build inspection standards for hazardous
substances.

Occupational Health and Safety
Diversity and Equal Opportunity
Child Labor
Security Practices
Marketing and LabelingSocioeconomic Compliance

The purpose of the
management approach

Related policies

Ensure the rights andinterests of all employees.

“HTC Corporate Social
Responsibility Policy”

Promote good labor
relations.

“Quarterly Business
Review”

Protect the labor rights ofmultiple employees.

“HTC Code of Conduct”

Reduce the turnover rateof employees.
Reduce the risk ofworkplace hazards toemployees and reduce
occupational hazards.
Attract and retain
outstanding talents.
Child labor is prohibited.
Reduce the potential
risk of excessive use ofviolence or other humanrights violations bysecurity personnel on
duty.
Ensure that the products
are non-toxic andharmless green products
and comply with nationallaws and customer
specifications.
Protect customer healthand safety.

“HTC ESH Policy”

Grievance mechanisms
The grievance mechanism
includes employee
complaint hotline,
complaint suggestion box,
grievance e-mail, and sexual
harassment grievance mailbox

“Safety and Health Rules”

Direct employee of the
production line company
extension 38585“HTC hazardous substancemanagement policy”

Other indirect employee
company extension 28585“HTC Supplier Code of
Conduct”

Employee helpline e-mail
HelpMe_8585@htc.com“ESH Management Manual”

Employee Services APP
notification system
Customer service hotline:
0809-090-166, please call:
02-2162-6788
Set up local customer
service hotlines in 70
countries around the world
Build more than 20
websites in different
countries and provide PR,
Service, Copyright, Security
and other different types of
e-mailProtect customer privacy.
Reduce productharmful substances andpackages. The use ofwood.
Conformity to relevantsocioeconomic
regulations.

Mark product information, and add
environmental protection material
certification on the packaging.
Set up internal control mechanisms tocontrol technical data, software andhardware, and customer patents or
intellectual property rights. Reference
Responsibility Business Alliance Code of
Conduct Developing Corporate Social
Responsibility Policy.

4. Periodic inspections of waste
storage and temporary storage
areas will be conducted throughinspection schedules.

147

GRI Index

HTC 2017 CSR Report148

GRI Standards Content Index

GRI 103: Management Approach

Standard

Material Topic

Mechanism of Evaluation

The Result of Evaluation(referring page)

GRI

Disclosed Topic

Referring Page

Remark

102-01Name of the organization

102-02

Activities, brands, products, and services

102-03

Location of headquarters

10

102-04

Location of operations

10

102-05

Ownership and legal form

7102-06

Markets served

10, 13102-07

Scale of the organization

14, 92

Employment

102-08

Information on employees and other workers

92-94

Occupational Health and
Safety102-09Supply chain

42-49

102-10Significant changes to the organization and its supply chain

102-11

Precautionary principle or approach102-12External initiatives

102-13

Membership of associations

Forced or Compulsory Labor

102-14

Statement from senior decision-maker

5-6

Security Practices

102-15Key impacts, risks, and opportunities

35-36

102-16

Values, principles, standards, and norms of behavior

102-17

Mechanisms for advice and concerns about ethics

102-21

Consulting stakeholders on economic, environmental, and social topics

102-22

Economic Performance

Independent director, supervisor system, the internal
audit system

31-36

Economic
Anti-corruption

EnergyInternal Audit System
Corporate Governance Evaluation of TWSE

33-34

HTC CSR Committee

7
7-12

Responsible Business Alliance (RBA)
Environmental

Emissions

ISO 14001 Environmental Management
ISO 14064-1 Greenhouse Gases

19-20, 55-70

ISO50001 Energy Management System
Effluents and Waste

Training and Education
Diversity and Equal
Opportunity
Non-discrimination

Child Labor

Domestic related environmental regulations

HTC CSR Committee
Responsible Business Alliance (RBA)The Universal Declaration of Human Rights (UDHR)
Corporate Governance Evaluation of TWSEOHSAS 18001 Occupational Health and Safety
Management System
Labor contract
Industry union
Grievance mechanisms
Employee satisfaction survey
Labor-management meetings

21-22, 33, 91,
97-105, 113, 135-136

GRI 102:
GeneralDisclosures
2016

Please refer toMarket Observatory
Post System
35-36
19-20, 42,
48, 53-54, 87
43, 87

SocialCustomer Health and Safety

Marketing and Labeling149

HTC CSR Committee
Responsible Business Alliance (RBA)
IECQ QC080000 Hazardous Substance Process
Management System
UL Certificate
Third-party insititution（TUV/ITS）
Meets California Energy Efficiency Regulations
Meets the SAR standards of the US FCC and EU CE
Customer satisfaction survey●

15-16, 87
34●

18, 23-24●

Composition of the highest governance body and its committees

Please refer to
HTC 2017 Annual
Report P.53, 73●

102-23Chair of the highest governance body

Please refer to
HTC 2017 Annual
Report P.73●

23, 73, 83

Customer Privacy

Information security /privacy management
Corporate custormer satisfaction management50

102-24

Nominating and selecting the highest governance body

Please refer to
HTC 2017 Annual
Report P.75●

Socioeconomic Compliance

Other social and economic related regulations (domestic
and foreign)36102-25

Conflicts of interest

Please refer to
HTC 2017 Annual
Report P.83●

GRI Index

HTC 2017 CSR Report

150

GRI

Disclosed Topic

GRI 102:
GeneralDisclosures
2016

GRI 103:
Management
Approach2016

102-36

Process for determining remuneration

102-40

List of stakeholder groups

102-41

Collective bargaining agreements

102-42

Identifying and selecting stakeholders

Referring Page

Remark
32

●

23-24

●

GRI
GRI 205:
Anti-corruption
2016

GRI 205:
Anti-corruption
2016

Approach to stakeholder engagement

23-24

102-44

Key topics and concerns raised

23-24

GRI 302:
Energy2016

Please refer to
HTC 2017 Annual
Report P.245

102-45

Entities included in the consolidated financial statements

102-46

Defining report content and topic boundaries

20-22

102-47

List of material topics

20-22

102-48

Restatements of informationNone

102-49Changes in reportingNone

102-50

Reporting period

102-51

Date of most recent report102-52

Reporting cycle

102-53

Contact point for questions regarding the report2102-54Claims of reporting in accordance with the GRI Standards

2102-55

GRI content index

146102-56External assurance

150-153

103-1

Explanation of the material topic and its Boundary

103-2

The management approach and its components

103-3

Evaluation of the management approach2

GRI 305:
Emissions
2016

GRI 102:
GeneralDisclosures
2016

Confirmed incidents of corruption and actions taken

21147-148
149

Direct economic value generated and distributed

14201-02Financial implications and other risks and opportunities due to climatechange201-03

Defined benefit plan obligations and other retirement plans

104

205-01

Operations assessed for risks related to corruption

34

35-36

34, 43, 101
None

302-1

Energy consumption within the organization

57

302-4

Reduction of energy consumption

302-5

Reductions in energy requirements of products and services

75

305-01

Direct (Scope 1) GHG emissions

56

305-02

Energy indirect (Scope 2) GHG emissions

56

305-03

Other indirect (Scope 3) GHG emissions

56

305-05

Reduction of GHG emissions

56

306-01

Water discharge by quality and destination

62306-02

Waste by type and disposal method

79

57-61

Topic-Specific Disclosures: GRI 400 (Social Topics)

Once a year

201-01GRI Index

205-032017/6

GRI 401:
Employment
2016

GRI 402:
Labor/
Management
Relations 2016
GRI 403:
Occupational
Health and
Safety 2016

GRI 404:
Training and
Education
2016

GRI 405:
Diversityand Equal
Opportunity
2016
Remark:151

Communication and training about anti-corruption policies andprocedures

RemarkTopic-Specific Disclosures: GRI 300 (Environmental Topics)

23-24

102-43

Referring Page

205-02

No agreement

Topic-Specific Disclosures: GRI 200 (Economic Topics)

GRI 201:
Economic
Performance
2016

Disclosed Topic

401-01New employee hires and employee turnover94

401-02

Benefits provided to full-time employees that are not provided totemporary or part-time employees

105

401-03

Parental leave

402-01Minimum notice periods regarding operational changes

135403-01

Workers representation in formal joint management-worker health andsafety committees

113403-02

Types of injury and rates of injury, occupational diseases, lost days, andabsenteeism, and number of work-related fatalities

132-133

404-01

Average hours of training per year per employee

404-02

Programs for upgrading employee skills and transition assistanceprograms

98-103404-03

Percentage of employees receiving regular performance and careerdevelopment reviews

100

405-01

Diversity of governance bodies and employees

405-02

Ratio of basic salary and remuneration of women to men

110-111104

32, 92-94, 97
105

Topics disclosed voluntarily by HTC.

HTC 2017 CSR Report

152

GRI

Disclosed Topic

Referring Page

RemarkGRI 406:
Nondiscrimination
2016406-01

Incidents of discrimination and corrective actions taken

None

GRI 409:
Forced orCompulsory
Labor 2016409-01

Operations and suppliers at significant risk for incidents of forced orcompulsory labor43, 91

GRI 410:
Security
Practices2016

410-01

Security personnel trained in human rights policies or procedures

113

Assessment of the health and safety impacts of product and service
categories

78

Incidents of non-compliance concerning the health and safety impacts
of products and services

None416-01
GRI 416:
Customer Healthand Safety2016416-02417-01Requirements for product and service information and labeling417-02

Incidents of non-compliance concerning product and service
information and labelingNone417-03

Incidents of non-compliance concerning marketing communications

None

GRI 418:
CustomerPrivacy
2016

418-01Substantiated complaints concerning breaches of customer privacy
and losses of customer data

None

GRI 419:
Socioeconomic
Compliance2016419-01

Non-compliance with laws and regulations in the social and economic
area

None

GRI 417:
Marketingand Labeling
2016

153

GRI Index

84