2016 HTC CSR Report

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

Corporate Social Responsibility Report

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

2016

http://www.htc.com

HTC Corporation

Editorial Principle
Thank you for reading the fifth 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 a comprehensive response to allthese issues.
As a global mobile-device brand, we are ready to confront all the challenges that might present themselves. For eachmajor CSR issue that relates to our future development, we make it clear at the beginning of each section whichchallenge 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 toward sustainable
development, and also let our stakeholders know everything about our performance and the results with respect to
CSR in 2016.
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).

Time Coverage of Disclosure
We plan to issue the HTC Corporate Social Responsibility Report annually. This report generally covers theyear 2016 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 2015 to 2017 May, as well as the HTC CSR management policies, key issues, and performance, responses
and activities for previous years.

Report BasisThis report has been prepared in accordance with the Global Reporting Initiative (GRI) G4 Core Option andAA1000 (2008) standards and has been confirmed by SGS-Taiwan to be in compliance with AA1000AS Type II
top-level assurance and GRI G4 Core option.

Forward-Looking Statements & Statistical Calculations

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 2016 CSR Report is downloadable in PDF format.

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.

Feedback
Should you have any questions about this HTC Corporate Social Responsibility Report 2016, please let us know
to help us make continuous progress.
HTC CSR Report 2016

Contact us
CSR, HTC Corporation
Contact: Huang Ya-Hui +886 (0)3 375 3252 Ext 31529
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.

HQ & Plants

Taipei Office 2
Taipei Office 1

Hsinchu Software R&D Center

Geographic Coverage of the HTC CSR Report 2016
Boundary

AddressTel

HQ & Plants

No 23, Xinghua Rd, Taoyuan City,
Taoyuan County, 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+886-2-89124138
Tainan Software R&D Center

Note: The disposal of part of the land in Taoyuan had been passed by board of directors in 2016, please refer to annual
report 2016 P.219.

001

Editorial Principle

HTC 2016 CSR Report 002

Content
Contents

Editorial Principle001

Statement of the management
Assurance Statement
GRI index

005

127

129

007

About HTC
Product 010
The Smartphone Industry 011
Organization Structure 012
Global Operational Locations 013

019

039

081

Actively Conducting
Innovative R&D 021

The Customer 043

Sustainable Environment 083

Foreign Employees 045

Sustainable Design 095

Contractor Partners 047

Sustainable		
Manufacturing Process 101

Innovative
R&D

Engaging Diversified 		R&D Talent 024

Value
Stakeholders

Supply Chain Partners 048

Re-investment & Affiliated Companies 014
Overview of Financial Performance 014

Sustainable
AgendaSustainable Packing 111
Sustainable Product 115

015

025

055

117

Chronicle of 					HTC Product Development in 2016 017

Corporate Governance 027

A Sound Wage 			and Welfare System 061

HTC Foundation 123

The Pursuitof Brilliance

Responsibility
Management
Risk Management 031
Management of Corporate
Social Responsibility 034

Employee
Relations

Valuing Human Rights 			and a High Standard ofProfessional Ethics 065
Valuing Employee Health 067
Listening to 				Voice of the Employee 075
Complete 			
Education and Training Plan 077

Social Investment
and Contribution
Other Social Engagement
Activities 126

Statement of the management

Thank you for reading the fifth annual HTC CSR report. We continue to follow the information disclosure
requirements as specified in the Global Reporting Initiative (GRI) G4 Guidelines and AA1000 AssuranceStandard. By this means we are able to let all interested parties as well as the general public know what HTC
has been doing with respect to social responsibility and sustainability.
2016 was in many ways a rewarding year for HTC with the fruits of our labour to restructure the Company
starting to pay off, not only in terms of the achievements in operating and process efficiency across HTC, butalso in terms of the remarkable products we released. Over 2016, HTC streamlined its portfolio and sharpened
its focus which, coupled with prudent cost control, led to improved performance over 2015. While the fullyear results were disappointing, the progress we have made in operating efficiency across the Company has
significantly improved our financial position and, more importantly, has created a positive and energetic
environment of innovation across all of our business divisions, and a dynamic attitude to product and market
development that will stand HTC in good stead in the years ahead.
Over the last year, HTC continued to uphold our brand values, the Pursuit of Brilliance, to encourage our
employees implement at both work and daily lives. As a result, in 2016, the HTC 10 premium smartphone andthe HTC VIVE virtual reality system clearly demonstrated our extraodinary abilities in innovation, design,
R&D and manufacture and took more than 100 international awards and excellent reviews by storm, which hasstrongly endorsed the efforts we have made to strengthen our innovation capabilities.
Due to the diversification into virtual reality and connected devices, the extensive review of company structure,processes and operations helped to realign resources and provide greater focus for innovation. In 2016, HTC
teamed up with academic experts and formed the Dynamical Biomarkers team to participate in the worldfamous scientific research competition, Qualcomm Tricorder XPRIZE. This project leveraged HTC’s artificial
intelligence and big data strengths to design and build “Tricorder”, a mobile diagnostic instrument capable ofaccurately diagnosing 13 health conditions and related risks, and as one of the two finalists, winning out morethan 100 groups worldwild. We look forward to develop new markets through team innovation momentum.
Our vision remains to foster human connectiveness, to bring people closer together, and to enable customers
around the world access to the digital universe of information, education, entertainment and diversed
experiences through our products. The company ethos, Pursuit of Brilliance, not only has rooted in ourcompany culture, but also encourage us to keep creativing revolutionary efficacy and smart devices withexcellent experience, to enable our customers to share and pursue wonderful lives.

In every aspect of our operations, we strive to improve ourselves
through a comprehensive program of initiatives to minimize ourenvironmental impact and add value to society. HTC continues
to seek ways to provide a positive impact on the environment,
our employees and the communities around us. From recyclable
packaging through enhancing employee welfare to aggressive
power management at both factory and product level, HTC
strives to improve our carbon footprint and our contribution
to society. HTC worked hard at further improving our energy
management in our manufacturing facilities in 2016, with anelectricity use reduction rate up to 42.26%, compared to 25%
for 2015. The corresponding reduction in carbon emissions
represented a greenhouse gas emission reduction of up to
42.69%, again comparing favorably to 2015’s 26.51%. Progress
was also made regarding the green fields and planted areas
inside the factories, which are irrigated with recycled sewage
water to avoid increasing total water consumption. This
contributed to a sewage recycling rate of 72.54% in 2016, up
from 68.92% the previous year. The HTC Foundation also hada busy year, supporting schools and teachers in Taiwan throughcourses to help children and youngsters develop good characterand motivation.
Throughout all of our operations and partnerships, HTC seeks
to ensure the highest standards of environmental concern aswell as quality, consistency and performance, in line with ourbrand promise to pursue brilliance in all aspects of our business.

HTC Corporation
Chairperson

005

Statement of the management

HTC 2016 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$ 8,423,505,380

The global leader
in innovative mobile phone design - HTC

Product
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.

HTC main Product: Smartphone
Year

Capacity (Thousands)

Output (Thousands)

Output Value (Millions)2014

37,57015,62392,2502015

20,8009,364

49,7962016

18,4007,910

44,885

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

Product Sales: Smartphone and Others (Accessories)
The HTC Corporation (HTC) was established in 1997. As a global leader of innovation and design in thesmartphone industry, HTC has, since our incorporation, embraced a passion for innovation and a visionof changing people’s lives with smart handheld devices. We started by providing global customers andconsumers with the best experience by developing a series of world-class customized and innovative wirelesstelecommunications products for industry and distributors in Europe, America, and Asia.
HTC is driven by the “The Pursuit of Brilliance” to move forward with innovative and revolutionary mobile
devices. HTC explores the unknown and is committed to bringing imaginative and innovative design to life andto devise new ways to link people and their dreams to the world.

Year

Domestic Sales

Export Sales

Volume (Thousands)

Value (Millions)

Volume (Thousands)

Value (Millions)

2014

2,146

18,797

82,181

166,132

2015

70,424

17,62460,183

102,464

2016

1,812

9,844

26,83365,920Note: The figures for the main products do not include income from maintenance and product development.

HTC is a confident industry leader that continues to provide consumer-oriented innovative technology andsuperior designs both inside and out. HTC continues to launch refreshing products and continue to invest in
branding, marketing, and sales management as well as maintaining active communication with our consumers.
HTC is persistent in the sense of caring for colleagues, products, social welfare and environmental protection
programs. The HTC philosophy is based on a spirit of “The Pursuit of Brilliance” to move forward continuously
and to create a better experience for everyone.

009

About HTCHTC 2016 CSR Report010

The Smartphone Industry

Organization Structure

The boundaries between personal computing devices have become blurred and the concept of the mobile PC
has shifted from Notebooks to Chromebooks, phablets and hybrids. A seamless user experience across devices
appears to have been the goal for newly as well as traditional hardware device vendors. The industry is about tobe revolutionized as we shift from a mobile-centric world to a cloud-centric world. In a cloud-centric world, it
is about providing seamless user experiences across devices and, more importantly, across places; to always be
where the users are.

AGM

Board

To keep the top quality in the competitive market, HTC will continue to demand adequate capacity
commitments from all suppliers to ensure on-time delivery of their products. HTC is committed to working
closely with suppliers to raise production efficiencies as well as to lower the production costs to enhance mutualcompetitiveness. In addition, HTC will manage product life cycles jointly with the downstream smartphoneagencies and retailers for a more robust and healthy industrial ecosystem to create a win-win prospect.
Compensation committee

Internal Audit

Chairwoman & Chief
Executive Officer

Smartphone &Connected Devices
Business

Virtual Reality
Buisness

Legal

Operations Center

Finance &Accounting

Human Resources

Please refer to annual report Page.28

011

About HTCHTC 2016 CSR Report012

Global Operational Locations
Copenhagen, Denmark

Re-investment & Affiliated Companies

Moscow, Russia

EurpoeWarsaw, Poland
Utrecht, Netherlands
Paris, FranceFrankfurt, Germany

Slough, UK

ASIA PacificBeijing

Japan, Tokyo

China Shanghai
MEA
Dubai

SuzhouNew Delhi, India

Jidda,
Saudi Arabia
Mumbai, India

HTC’s reinvestment policy focuses on the core business of the organization and the businesses that are
beneficial to long-term development. In 2016, HTC’s strategic investment focused on virtual reality with newinvestments, including game developer Owlchemy Labs, applications developer Modrokkr, Radd3, VRChat,
and Vivedu for application in VR education. HTC also partnered with world’s top-notch leading VR companies
to establish Asia-Pacific VR Alliance and implement the VIVE X accelerator program, with participating new
ventures ranging from software, hardware, ecological circles, education, medical applications, etc.

Headquarter

Taipei, Taiwan
Taoyuan, Taiwan
Hsinchu, Taiwan
Tainan, Taiwan
HO Chi Minh, Vietnam
Hong Kong

Overview of Financial Performance

Chennai, india Bangkok, Thailand
Singapore
Kuala Lumpur, Malaysia
SeattleJakarta, Indonesia

USA

The fierce competition that continued in 2016 in the worldwide mobile market resulted in lower revenues andgross profits than those of 2015. Also, because of the policy of austerity that effectively lowered operating costs,
the difference in operation loss is minor compared to 2015.

San Francisco

HoustonMexicoSydney, Australia

Latin America
Brasil

HTC 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.

Revenues for 2016 totalled NT$78.2 billion, with gross profit of NT$9.4 billion and a gross margin of. 12.%;
however, the operating margin of -18.6% led to a net income of -NT$10.5 billion, corresponding to an earnings
per share of -NT$12.8. We look forward to the achievement in 2017 coupled with continued progress inoperating expenditure control, meanwhile anticipating novel products like virtual reality and connected
devices will provide a boost to revenues.

Unit

2014

2015

2016

Operating Revenue

NT$ Million

187,911

121,684

78,161

Operating Costs & Expenses

NT$ Million

187,242

135,887

92,769

Income Tax

NT$ Million

500

-48

-24

Employee Wages

NT$ Million

17,485

15,781

12,451NT$

0314,6360

NT$ Million

7.01

0

0

Dividends
Social Investment /Donation

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

HTC stands in the immediate presence of our customers and provides
instant service. Offices have been established in all the major markets of
the world, including the USA, the UK, Germany, France, the Netherlands,
Poland, Denmark, Russia, Indonesia, India, Australia, China, Japan, Hong
Kong, Singapore, Thailand, Vietnam, Malaysia, UAE, and Brazil.

013

About HTCHTC 2016 CSR Report014

The Pursuit ofBrilliance ___Future Goal
To increase market share
To strengthen integration of marketing
To deepen the penetration of our brandCurrent Achievement
Creating a global smart phone withexcellent design
The most valuable international
brand from Taiwan

HTC’s
Challenge
How to enhancebrand loyalty

Chronicle of HTC Product Development
1999

2000

2002

First color
palm
size PCFirst
Microsoft
Pocket PC

2005

First Microsoft
First 3G
wireless
smartphone
pocket PC

2007

2008

2009

2010

2012

2013

2014

First Touchsmartphone

First Google
Android
phone

First WIMAX
smartphone

First 4G
Android
smartphone

First smartphonewith Amazing
CameraMost awarded
smartphone that brings
new perspectives onmobile experience

InsideFirst smartphonewith Duo Camera
RE Camera

The core spirit of the “The Pursuit of Brilliance” inspires HTC 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.

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 ofour creative spirit. To this day, we stay committed to our pursuit, believing that thegreatest ideas transcend temporary recognition: they influence behavior, shape lives,and inspire new thinking.

A Refined
Approach

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

017

The Pursuit of Brilliance

2015

2016

UA HealthBox
The smartphone
Smart connectedcrafted withfitness systemobsession

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 ambitious vision and bring a whole new world to consumers.

A Working Environment Incorporating Brand Spirit
HTC regards the creativity that stems from brainstorming as one of our most valuable assets. To
promote interpersonal communication, the R&D headquater in Taipei is configured with many staff
areas that allow our people to interact and talk, this includes interlacing sky bridges between thebuildings that link departments together and interaction rooms that project from the floors liketransparent boxes. We hope that these interaction-oriented spaces will encourage and promote crossdepartment synergism and cooperation, supporting the free extension of creativity.
HTC believes sharing is the best kind of interaction. To this end we will share the lobby on the first floorof the R&D Building with the community, This HTC Gallery will help young local artists show theircreativity 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 thepeople who work in this building can also appreciate being in an “art gallery” that will inspire creativity
and help HTC launch better and more amazing products.

HTC 2016 CSR Report018

Innovative
R&D ___

Future Goal
People-oriented:
Continuous innovation to make themobile phone function meet every
practical need.
Input from wearable devices andInternet of Things (IoT) devices.
Changing the way people interact, andthe technology around the world.

Current Achievement
HTC Vive received “Best In Show”
from Mobile World Congress (MWC).

HTC’s
Challenge
Expediting patent layout
Strengthening advertising ofproduct innovation

Actively conducting innovative R&D
Since our establishment, HTC has invested heavily in cultivating R&D talent and developing technical innovation.
Currently, our in-house R&D employees make up 30% of all HTC’s global employees, the investment of which isabout 14% of the total operating revenue. With this strength of innovation, HTC has special insight into industrial
trends and outstanding capability for meeting consumer demand. This puts HTC always in the lead.
Investment in Innovative R&D
Unit

2014

2015

2016

Fixed R&D Investment

Million (NT)13,047

13,728

10,957

Total Revenue

Million (NT)187,911

121,684

78,161

Percentage

%

7%

11%

14%

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

With this strength of innovation, HTC has special insight into industrial trends and outstanding capability formeeting consumer demand. This puts HTC always in the lead. In April 2016, HTC unveiled the new flagshipsmartphone, the HTC 10. It has been ten years in 2016 since HTC Brand was founded. The HTC 10 justcorresponds with ten years of effort and innovation and have fully demonstrated our insistence on productquality, function and excellent user experience. HTC 10 has realized our commitment to consumers andsupporters in general and the flagship smartphone meets all the expectations of users.
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.

HTC VIVE™
VR (Virtual Reality) is an exciting featureof next generation computing andentertainment. In ordinary VR systems the
position of the user is fixed, and movement
and hand gestures are limited. HTC Vive
allows users to browse through the VR
world, move around in a 15-foot squarespace and use unique hand-simulation
controllers to interact with objects.
In the Consumer Electronics Show (CES) in the U.S. in January 2017, HTC debuted two premium
accessories, the VIVE Tracker™ and VIVE Deluxe Audio Strap™.
VIVE Tracker™

The VIVE Tracker enables motion tracking for entirely new form factors to be trackable within the VR
world. Most important, the VIVE Tracker will integrate with any number of future VR accessories via a
simple connection, ensuring developers and consumers will have a single accessory to unlock thousandsof new experiences.
VIVE Deluxe Audio Strap™

The headstrap eadstrapttluxe Audio Strap is designed with adjustable headphones, allowing you to enjoy
360-degree VR headstrap, ensuring a tighter and more comfortable fit.
In addition, to prompt the promoting the eco-development of virtual reality, HTC has built industry
alliances, such as the Asia-Pacific Virtual Reality Industry Alliance in April of 2016 and also launched an
accelerator program called VIVE X to lead and ensure the robust and sustainable development of global
ecosystem of virtual reality.

021

Innovative R&D

HTC 2016 CSR Report 022

Engaging Diversified R&D Talent
We have a talent-based recruitment policy and engage R&D talent available in the local labor markets wherever
we operate. In 2016, a total of 3,738 R&D workers joined HTC globally. In addition to those in Taiwan, we have
many R&D employees coming from, or based in, other countries, such as Europe, America, and Asia. We expectthat the different 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 andwith different cultural characteristics.

TaiwanOthers2016
R&D Staff
3,738
Taiwan Others

2015
R&D Staff
4,542

TaiwanOthers2014
R&D Staff
4,087

023

Innovative R&D

HTC 2016 CSR Report 024

Responsibility
Management ___We place great importance on corporate
governance and operational transparency,
and have formulated and implemented
corporate governance guided by the Company
Law, Taiwan’s Securities Exchange Act, andother relevant laws to continue improving
our management performance, and protect
the interests of our investors and otherstakeholders through the comprehensive andsystematic implementation of CSR.

Corporate GovernanceTo 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:• 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;• 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;• To cultivate and sustain a corporate culture that advocates accountability and diligence and maintain thehighest ethical standards; and• To encourage the effective and responsible use of resources.

Board of Directors
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 is primarily responsible for setting andmonitoring management goals and long-term business strategy. They are also responsible for maintaining aninternal financial and accounting inspection system, assessing operating risks, and proposing strategies for the
reduction of such risks.

Independent Directors
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 recognize that to achieve good corporate governance, it isnecessary to widen the scope of independent viewpoints in order to win the trust of the public and theshareholders. 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, andimprove the general performance of the Board of Directors.

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 governace organization and members, please refer to Page. 49 in 2016 Annual report.

Supervisors
Composition of HTC Management (Directors/Supervisors) by Age & Gender
Breakdown by Age

Male

FemaleTotal<30 (excluding 30)

0

0

0

30 ~ 50000>50 (excluding 50)

5

1

6

Total

5

1

6

027

Responsibility Management

HTC has an appropriate number of supervisors. These supervisors quarterly review material issues, such as
financial, legal staments 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.

HTC 2016 CSR Report 028

Complete Disclosure

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.

To prevent potential risk of corruption and being unethical, in addition to “Anti-corruption and Bribery
Statemet ” 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

Diversified Channels for Transparent Information Disclosure
Spokesperson & Deputy
Spokesperson
Press Release, Press
Conference & MediaInterview

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

Website Platform

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.

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 inassessment 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.

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 Forum029

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 2016 CSR Report 030

Risk Management
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.

Managemet of Operating Risk
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.

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.

Cause

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 2016, HTC foreign exports accounted for around 87.01% 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 of031

Responsibility Management

Legislative Risk from
Climate ChangeManagement of Financial Risks

Operational 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

HTC 2016 CSR Report 032

Management ofCorporate Social Responsibility
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 brand value.

To ensure effective discussion and treatment of CSR issues, HTC has run a CSR Committee since 2012, and has
also set up a dedicated team for formulating CSR policies, drawing up related action plans, performing crossdepartment coordination, and handling communication with, and feedback from, the external stakeholders
and our key suppliers.

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:

Structure of the HTC CSR Committee
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 IP-related matters, including
patent protection and dispute resolution.

External

Engaging in technical cooperation with leading domestic and foreign research institutions,providing top talents with opportunity to receive practical training in HTC, thereby fueling our
R&D with innovative thinking.

HTC has an active attitude with respect to the enforcement of our patent rights and deals with any
infringement immediately to protect the IP-related rights and interests of the company. For example, toprotect our reputation HTC works closely with the customs department and the police in many different
countries to investigate and eliminate imitations and unauthorized products being sold on the market.
We also actively seek trademark protection all over the world and have registered all the HTC marks, in morethan one hundred countries. This includes all HTC brands, product names (e.g. HTC One), and the names ofvarious parts and technologies (HTC Sense, HTC BOOMSOUND, etc.). When imitations or unauthorized useof our trademarks is found, HTC takes legal action together with the local law-enforcement agencies to protect
our rights and interests.
In addition, HTC also has regulations in position to protect the commercially valuable information that is notcovered by trademark or patent protection, such as copyright of program code, product photos and images, andother trade secrets and information about products to be launched. We use strict employment contracts andnon-disclosure agreements to limit the disclosure of confidential information, and protect our R&D resultsfrom disclosure. The company has a positive attitude and employs mature strategies to protect all kinds ofintellectual property rights that set a firm foundation on which first class HTC brand value can be developed
all around the world.

033

HTC CSR
Committee

Responsibility Management

Employee
Care

MFG

Product

Sourcing

Environment

We use clear organization and work breakdown, through interdepartmental meetings, to integrate CSR work
into the management of related departments, such as legal affairs, compliance, environment, procurement,
human resources, and marketing, to activate overall CSR and innovation. This ensures that CSR policies andmeasures are an integral part of daily operations of the company.

HTC 2016 CSR Report 034

Mechanism for Committee Operation

CSR management procedures

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.

This HTC CSR report is based on the GRI G4 guidelines with a focus on disclosing G4 considerations, mainly
concerning disclosure of material issues related to action, performance and achievement.

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 Outlines
and is signed by the CSR Committee Chairman before publication.

The HTC CSR Committee members met to confirm the impact of the material issues on the internal andexternal organization. In other words, the positive, negative, or potential impact on the economy, environmentand 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. We will graduallyinvite and encourage internal and external entities to join the CSR disclosure process in the future.

Source of internal issues

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 EICC® as a reference for Code of Conduct, Developing HTC as a good corporate
citizen and Participating to international initiatives
Promotion Energy Efficiency, Carbon-Reduction Practices and Various Environmental
Protection activities
Sustainable Innovation from Creation to development
Sustainable Supply Chain Management
Be a Responsible Corporate Citizen, with the Highest Ethical Standards

035

Responsibility Management

Source of external issues

Issue consideration basis
and source

Issue consideration basis and source

HTC Code of Conduct
HTC mid-tern and long-terndevelopment strategy
Departmental		development policy

GRI G4
ISO 26000 Guidelines
Requirements of government regulatory agencies
HTC Customer specifications
Electronic Industry Citizenship Coalition(EICC)The UN Global Covenant
External opinions received by each department

Based onthe degree of public concern over the issues
their importance to the operations

The following procedures were used to determine and confirm HTC 2016 key CSR issues:
1. Consult the representative of each department.
2. Summarize and discuss the feedback from of each stakeholder.
3. List future refinement and improvement activity/direction inaccordance with PDCA management cycles.

HTC 2016 CSR Report 036

G4 Material Issues and Boundary

2016 HTC Material Issues Matrix
High

Level of Stakeholder Concern on the Issues

Impact of products
and services on theenvironmentNon-discrimination
Anti-corrupption
Equal Remuneration for
Women and Men
Responsible investment
Freedom of associationand collective
negotiation

Brand management
Economic performance
Customer health and safety
Customer privacy
Product and service labeling
Employer-employee relations
Labor relations
Occupational health and safety
Forced or Compulsory Labor

Energy and Resources
Material
Compliance with environmental
regulations
Wastewater , Waste and Air emission
Human rights assessment
Grievance for Impacts on 		Society（labor & Human rights）
Diversity and equal opportunity
Brand image
Training
Security

Marketing and broadcasting
regulations
Compliance with regulations of
products and service
Compliance with operational laws
Suppliers’ CSR management(Human right, Environmental)
Assessment Impact from Supply
Chain
Training
Anti-competitive PracticeProcurement practice

EconomyScope

Level of Impact of Issues on HTC’s OperationHigh

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 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.

The Environment
Management System

We strive to minimize the impact of our operation on the environment. In addition toestablishing 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 2016, 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

037

Responsibility Management

R&D Center

Material
Material
Material

Environment

Within the organization

Scope

HQ

R&D Center

Material
Material
Material
Material
Material
Material
Material
Material
Material

Labor conditions

Within the organization

Suppliers

Material

Human rights

Within the organization

Material
Material

Material

Outside the organization
Local
community

R&D Center

Anti-discrimination
Freedom of association and collective negotiation
No childl labor
Forced labor
Human rights assessment
Suppliers human rights assessment
Human rights complaints mechanism

Material
Material
Material
Material
Material
Material
Material

Material
Material
Material
Material
Material
Material
Material

Community

Within the organization
HQ

R&D Center

Anti-corruption
Regulatory compliance

Material
Material

Material
Material

Product liability

Within the organization

Suppliers

Suppliers

Corporate
customers

Consumers

Material
Material

Material
Material
Material
Material
Material

Outside the organization
Local
community

Suppliers

Corporate
customers

Consumers

Material
Material

Outside the organization
Local
community

R&D Center

Customer health and safety
Product and service labelingMarketing and broadcasting
Customer privacy
Regulartory compliance

Material
Material
Material
Material
Material

Material

Material

Material

Material
Material

OthersWithin the organization

Material

Consumers

Outside the organization
Local
community

HQ

R&D Center

Corporate
customers

Material
Material

Material

HQ

Material
Material
Material

Consumers

Material
Material

Material
Material
Material
Material

Conflict minerals
Brand management
Character education

Corporate
customers

Material

Material
Material
Material
Material
Material
Material

HQ

Consumers

Outside the organization
Local
community

Material

Employer-employee relations
Occupational Health and safety
Employee training
Diversity and equal opportunity
Supplier’s labor assessment
Working conditions complaint mechanisms

Scope

Corporate
customers

Material

R&D Center

Scope

Suppliers

Material

HQ

Scope

Outside the organization
Local
community

Material

EnergyWater resources
Emission (Greenhouse gas)
Sewage and waste
Impact of products and services on the environment
Regulatory compliance
The overall environmental situation
Supplier Environmental impact assessment
Environmental complaints mechanism

Scope

ISO50001 inventory the source and amount of greenhouse gas emission according
to ISO14064-1 Standards. The energy management system enables planned energy
management to be realized, thereby supporting sustainable operation.

HQ

Economic performanceMarket image
Procurement practice

Scope

Low

Within the organization

Suppliers

Corporate
customers

Consumers
Material
Material
Material

Material

Outside the organization
Local
community

Suppliers

Corporate
customers

Material

Material

Consumers

Material

HTC 2016 CSR Report 038

ValueStakeholders ___HTC places great value on our communicationand interaction with all other stakeholders.
In addition to the various communications
channels to maintain good interaction, therelevant units are responsible for collecting
suggestions from stakeholders according totheir relevance and potential impact on HTC
operations. The suggestions and responses are
regularly disclosed in the CSR reports.

Value Stakeholder Engagement

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)

Cleaning/ Maintenance
Service Providers
Waste Disposal Vendors

Foreign Labor

Concerned Issues
Communication Channels
and Frequency
041

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

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

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

1. Business review with key
customers (QBR meeting)
Quarterly
2 Reply to customer
inquiries From time totime
3. Customer audit andreplies to customers
questionnaires 		As required by thecustomers
4. Meeting customer
requirements about
environmental and social
responsibilities 		As required by thecustomers

Value Stakeholders

Pre-sales consulting
After-service
Product quality
Service quality

1. Local service hotlines in 70 countries
to provide customers with real-timecommunication and assistance Daily
ongoing
2. Websites in different languages forcustomers to give feedback and toaccess information in a real-timemanner (20 established) Daily ongoing
3. Dedicated email boxes for different
functions (PR, Service, Copyright,
Security, etc.) to provide convenient
customer contact with HTC Daily
ongoing4.
Postal service survey forinvestigating customer satisfaction
Daily ongoing
5. Contacting customers who givenegative feedback in the satisfaction
surveys to address their concerns Daily
ongoing

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

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

Local
Communities
Local Community
Associations
Local Civic Organizations
Local Governmental
Agencies
Local Media

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)
Raw material selection
Working environment & health
Machine/equipment safety
Carbon management training
and contests

1. Supplier communication
conference Irregularly
2. Guidance and audit for
suppliers Annually
3. Cooperation project with
suppliers for addressing
CSR and greenhouse gas
issues Projects issued in2016 include supplier CSR
audit/ carbon footprint
validation/ water footprint
validation/ Beryllium copper(Pneumoconiosis)

1. Induction training
Weekly2. Patrol inspection in
facility Daily

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. 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 2016 CSR Report 042

The Customer
Corporate Customers

General Consumers

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 tomass market around the world.

Protection of Customer Confidetiality
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.
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 2016.

Corporate Customer Satisfaction Management
HTC has established regulations governing the management of customer
satisfaction to meet the specific needs of all our customers and to respond to
customer expectations and requests. A Quarterly Business Review is madeto determine customer satisfaction. Each Business Unit proposes corrective
action for any nonconforming project and follows up any action taken to ensurethat the customer has been perfectly satisfied.
The HTC customer satisfaction management index, in addition to productquality, delivery, and after-sales service, includes evaluation of corporatesocial responsibility. The issues of employee human rights, environmental
management, and energy management targeted by the global supply chain
activated by EICC, are especially important. These have also become mattersof concern and requests by our corporate customers. In this respect, we havedesignated a department to regularly aggregate HTC CSR information forcommunication and response.

2015 SDP Program Gold Award

Participation in CSR program offered by client
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, anti-corruption, supply chain
management, environmental protection, production operation, safety andsanitation, salary and benefits, employee satisfaction and turnover rate,
improvement of the working environment, and employee relations.

2016 SDP Program Gold Award

HTC has set up local service lines in 70 different countries that provide direct communication and assistance,around the clock, seven days a week. Currently, our help desk can serve customers in 20 different languages,
allowing people from far corners of the world to contact HTC and speak in a familiar tongue. We have several
other channels through which customers may contact HTC: email, SMS, and social network sites. We havealso set up websites in 20 different languages that allow our customers to easily obtain information and give
feedback without delay.
In order to get information about consumer satisfaction, each time a customer uses our services, they areinvited to participate in a service satisfaction survey. This gives the customer a chance to give positive or
negative feedback and addresses any concerns they might have. This one of the ways we are able to achieve ourgoal of customer satisfaction.

HTC has promoted 18 CSR projects in 2016. 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(2015-2016).

043

Value Stakeholders

HTC 2016 CSR Report 044

Foreign Employees

Value and Listen
to The Voice of
Our Employees

Making detailed records of their feedback
Quarterly labor-relations meetings
Lending mobile phones to new foreign workers and later return
when departing

Life & Leisure

The 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.
In addition to providing comprehensive orientation, we also emphasize life care for foreign emplloyees.
Apart from hiring translators, administrators and couselors who are skilled in native languages, providing
life, language, culture and mental health assistance, as to daily living, free Internet access, air conditioned
dormitories, libraries, prayer rooms are also provided. Exclusive events for foreign employees, such as New
Year’s Eve celebration, annual company outing and labor-relations meetings, are held on a regular basis asfeedback channels and to enhance physical and mental development.
The health examination program for foreign workers is managed under a dedicated system and is identicalto that for Taiwanese employees without any different treatment. We also manage follow up after the healthexamination, to ensure the state of health of the foreign employees.

045

Value Stakeholders

Offer CHT mobile phone subscription and discounting rate plan
Comfortable dormitories (24-hour air conditioning)
24-hour hot water supply
Free Lesson of learning Chinese

Proper Health
Examination
ProgramTax Refund
Check

Biennial Health Examination Once
Health Examination Follow Up
Provide clear information of taxation principles and period oftax refund in advance
Encourage to keep following tax refund
Follow up of tax refund check

Enhancing
Physical and
Mental Health
Activites

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

HTC 2016 CSR Report 046

Contractor Partners

Supply Chain Partners

HTC focuses on industrial technology and works in collaboration with different professional contractors tojointly 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 healtheducation 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.

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 development of the related sectors. Except for certain key
parts and components, it is 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.

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 contactors every
year. This caused small and medium sized enterprises to work for occupational safety just like a mother hen
leads her chicks.

Measure of Contractor 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; andObtaining the required insurance for contractor employees.

Contractors Health and Safety Audit
Incorporating requirements for safety & health management in the written agreements with all contractors
according to the applicable regulations to clearly define contractor obligation and responsibility, andevaluate all the risks in the working environment including that from dangerous machines, so as to haveproactive control and eliminate potential hazards.
Formulating a system for on-site patrols and inspections according to the applicable regulations andcontractual 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 to be met before, during and after the use of machines, tools and equipment.

047

Value Stakeholders

2016 Supplier Management
Supplier Code

Unit

AmountPercentage of Total Purchase Amount (%)

Interests

A

NT$ Million

7,301

15

None

Others

NT$ Million

40,78285

NoneTotal Purchase Amount

NT$ Million

48,083100

None

HTC is a member of the Electronic Industry Citizenship Coalition (EICC) and has formulated an “HTC
Supplier Code of Conduct” according to the Electronics Industry Code of Conduct, with the aim of working
with our supply chain partners to protect the environment, uphold the human rights of our workers, theirsafety and health, 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 regular assessment of
implementation of the Code as the basis for our further selection of business partners.
The provisions about labor issues, health and safety, and ethics were framed with reference to therelated documents issued by the EICC and United Nations Universal Declaration of Human Rights. For
more information about the “HTC Supplier Code of Conduct,” please see: http://www.csr.htc.com

HTC 2016 CSR Report 048

The green supply chain management system

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 initiatedinvestigation of those suppliers who had implemented CSR. This was not only to verify their understandingof the HTC Supplier Code of Conduct, but also to provide them with consultation and counseling. We hope tobuild and promte concept and actions of CSR with our suppliers.

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
Supplier

Self-assessment
surveyManagement
mechanism

HTC has had a green supply chain management
platform since 2006 to assist R&D engineers selectgreen materials from the product database thatcomply with both International regulations andcustomer requirements. Green materials are usedfrom the start of design to significantly enhance
the reliability and related validation process andschedule of green products.

On-site audit results（total of 315 noncompliance items）

On-site audit

Value Stakeholders“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”.
On-site audit for 20 suppliers had been planned in 2016. ( Note: 18
suppliers had been completed audited and the other two suppliers will
be completed in May 2017 as planned. )Labor Rights

108 cases, mainly about overtime.

Healthand Safety

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

Environment

EthicsTreatment andResponses

049

Weights of CSR-related issues in the supplier’s self-assessment form
have been raised 2016.

46 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.
35 cases, mainly about failure to establish the management procedures for
employees accepting inappropriate payments and gifts
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.

HTC 2016 CSR Report 050

Non-discrimination
Freedom of Association

4%

Stormwater Management

4%

Environmental Permits and Reporting
Air Emissions

Energy Consumption

9%and Greenhouse Gas Emission

0%

Product Content Restrictions

7%

0%

0%

Wastewater
Wages and Benefits

12%

Working Hours

30%

and Solid Waste

9%

Hazardous

Audit Result ofEnvironment

Audit Result ofLabor Rights
Humane Treatment

13%

Substances

54%

Pollution Prevention
Child Labor Avoidance

Freely Chosen Employment

15%

17%

3%
Physically Demanding Work 4%

and Resource

26%

Machine Safeguarding

Occupational Injury and Illness

5%

Industrial Hygiene

7%
Occupational Safety

Audit Result of
Health and Safety

Food, Sanitationand Housing

13%

Business Integrity

9%

Responsible Sourcing of Minerals

9%

43%

No Improper

11%

Disclosure of Information

Emergency Preparedness

051

Value Stakeholders

25%

Advantage

Protection ofIntellectual Property

12%

Protection of Identity

31%

Audit Result of Ethic

14%

Fair Businesses, Advertising
and Competition

14%

HTC 2016 CSR Report 052

HTC
have completed
the development of
products using conflict
free minerals in

2016

OTHERS

Responsible Procurement of Minerals
HTC has responded to the global boycott of conflict minerals, supports the Conflict-Free Smelter Program1,
has promised not to use conflict minerals, and refuses to accept primary ore material from the Congo and theneighboring Central African countries in conflict.
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.
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. Although a tin smelter is located in Luanda, it is still a compliant CFSI smelter as of February 2017.
The intended use of conflict minerals
Summary

Au

Sn

W

Ta

AUSTRIA

4%

BRAZIL

6%

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.

CHINA

42%

TantalumJAPAN

8%

GERMANY

8%

UNITED STATES

18%
6%
2%
UNITED STATES 3%
THAILAND 3%
JAPAN 3%
VIETNAM 5%
OTHERS

MALYSIABOLIVIA

Point of use

14%

BRAZIL

5%

INDONESIA

Tin

44%

8%
CHINA

21%

Result as follows:

2%
BRAZIL 2%
AUSTRIA 2%
GERMANY 3%
RUSSIA 5%
JAPAN 5%

PHILIPPINES2%KAZAKHSTAN 2%
SOUTH AFRICA 2%
ITALY 2%
TURKEY 2%
AUSTRIA 2%

UNITED ARAB EMIRATESOTHERS

15%

CHINA

21%

Gold

4%
RUSSIA 4%
CANADA 4%
KOREA 5%
GERMANY 7%

SWITZERLAND

JAPANVIETNAM

9%

UNITED STATES

11%

19%

UNITED STATES

CHINA

61%

Tungsten

9%

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

053

Value Stakeholders

HTC 2016 CSR Report 054

Employee
Relations ___HTC deeply understands that ‘The key tomaintaining the momentum of innovation in
a company lies in its having competent andtalented employees’. In addition to encouraging
our employees to explore the unknown andcommit 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 the West can try
their best and play to their strengths.

HTC Manpower Overview

Overview of Manpower Structure
HTC recruits promising talent from all around the world. In the end of 2016, HTC global employee workforce
totaled 10,929. Of these, 338 were foreign supervisors, accounting for 22.76% of the total number of executives
worldwide; foreign supervisors and professionals together accounted for 18.23% of the total number of
executives and professionals worldwide and 18.92% of the 1,485 supervisors were women.
HTC’s turnover rate of direct workers in 2016 was 20.6%, 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 19.68%, 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.

057

Employee Relations

Unit

2014

2015

2016

Global Employee (Male)

Individuals

8,699

6,524

5,531

Global Employee (Female)Individuals

8,201

5,918

5,398

Full-time workforce (Male)

Individuals

8,655

6,,493

5,509

Full-time workforce (Female)Individuals

8,149

5,885

5,369

Direct employees (Male)

Individuals

5,131

4,466

1,659

Direct employees (Female)Individuals

3,568

1,768

3,841

Indirect employees (Male)

Individuals

2,091

2,058

3,872

Indirect employees (Female)Individuals

6,110

4,150

1,557

Employees under fixed-term contracts (Male)

Individuals

44

31

22

Employees under fixed-term contracts (Female)Individuals

52

33

29

Percentage of employees younger than 30 years old

%

55.70

47.32

39.69

Percentage of employees aged 30 to 50 years old

%

42.25

49.84

56.27

Percentage of employees older than 50 years old

%

2.05

2.84

4.04

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

Taiwan

Unit

2014

2015

2016

Contingent workforce (Male)

Individuals

328

0

79

Contingent workforce (Female)Individuals

232

0

49

HTC 2016 CSR Report 058

America
RegionEurope,Middle East
& Africa

243

192

America
RegionEurope,Middle East
& Africa

319

The Global
Distributionof HTC Personnel

264
The Global
Distributionof HTC Personnel

in 2016

in 2015

Total

Total

10,92912,442Asia-PacificRegionAsia-PacificRegion11,85910,494

Level

SeniorMiddleGeneral

Total

Male

72

2,580

6,047

8,699

%

0.83%

29.66%

69.51%

100%

11

661

7,529

8,201

%

0.13%

8.06%

91.81%

100%

Sum

83

3,241

13,576

16,900

Male

84

2,477

3,963

6,524

%

1.29%

37.97%

60.74%

100%

15

661

5,242

5,918

%

0.25%

11.17%

88.58%

100%

Sum

99

3,138

92,05

12,442

Year

Year

2014

2015

≦ 29

30~50

≧ 51

Male

4,153

4,411

135

%

47.74%

50.71%

1.55%

Female

5,261

2,729

211

%

64.15%

33.28%

2.57%

Male

2,592

3,802

130

%

29.80%

43.71%

1.49%

Female

3,296

2,399

223

%

40.19%

29.25%

2.72%

Male

85

2,330

3,116

5,531

Male

1,633

3,736

162

%

1.54%

42.13%

56.34%

100%%

29.52%

67.55%

2.93%

14

654

4,730

5,918

Female

2,705

2,414

279

%

0.26%

12.12%

87.63%

100%%

50.11%

44.72%

5.17%

Sum

99

2,984

7,846

10,929

2016

Total

2014

16,9002015
12,442

10,9292016

FemaleFemaleFemaleNote: Senior: CEO, CMO, CFO and other executive positions above Vice GM.
Middle: Department Heads, Managers, and Section Chiefs.
General: Engineers, Overseers, Foremen, Administrators, Assistant Technicians, Trainees, Student workers, and foreign employees.

059

Employee Relations

HTC 2016 CSR Report 060

A Sound Wage and Welfare System
HTC is committed to fulfilling the needs of our employees and provide all kinds of appropriate welfare measures
as well as attractive and motivating compensation and benefits programs. We encourage our employees to dotheir best and share the growing profits with the company. For new employees, we provide competitive salary
based on positions, educations and experience, seniority and no discrimination based on gender, ethnicity,
nationality, age, religion or political affiliation.
What’smore, performance evaluation system is implemented yearly. Wage will be adjusted and bonus will begiven based on employees’ performance, work commitment, accountability ,level of dedication and developmentin the future. In this way, employee’s wage and development will be assured. Performance evaluation system canbe integrated into corporate finance to encourage employee’s persistent devotion and innovation.
HTC salary ratio for men and women in Taiwan
Management salary ratio(male: female)
Male

2016

110

Female100

General staff salary ratio(male: female)Indirect labor
Male

Female121

100

New recruits basic pay andTaiwan minimum wage rate

Direct labor
Male
100

Female100

Type

Basic pay
(direct)

Minimum
wage

1

109

100

2

125

100

Diversified Employee Welfare
In addition to providing Labor and National Health Insurance, a pension fund, commercial group insurance,
meal allowances, annual travel subsidy, physical exams, department’s dinner subsidy, monetary assistance on
the Dragon Boat, Mid-Autumn, and Chinese New Year holidays, the HTC’s Welfare Committee is responsible
for all employee benefit matters, including education scholarships for children, festival gifts, , department
travel subsidies, activity subsidies, and group insurance. The committee is also responsible for the gymnasiumand 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.

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.

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.

Employee salary and benefit increase ratio
2014

2015

2016

Comparison of2015 to 2016

11,126,516,000

10,133,909,000

8,704,953,00086%

Item Description
Total employee salaryand benefits expenses (NT$)

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

Activity Groups
The available clubs are: Badminton, Puzzle Board Games, Orphanage, Hawaiian Guitar, Leisure Fun,
Yuan-Men Tai-Chi, Creative Volunteer, Melody Health, Basketball, Table Tennis, Creative Aesthetics,
Cycling, Music, Photography, Fashion & Beauty, Tai-Chi, Ukulele, HTC Run, and Wine Tasting.

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%.

061

Employee Relations

HTC 2016 CSR Report 062

HTC Family Day 2016
HTC not only values their employees, but also places great value on family relationships. Family Day
events are held annually and all employees and their families are invited to participate. The mission
is to bring the Company and the family closer through the Family Day events and HTC takes thisopportunity to show their appreciation for the loyalty and support of all their employees.

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
also offer group insurance coverage.

On the 2016 Family Day, in addition to DIY activities for children and parents, HTC scheduled fun andinteresting amusement park events for the employees and their family members. HTC Vive Experience
Zone was also designed and given positive feedback by family of employees, which made a wonderful
and interesting memories for employees and their family members. 4,404 employees attended family
day and 8,668 families participated in the event.
Chairwoman Cher Wang stated in the opening speech: ‘Thanks to the support of employees and family
members, we can take the lead in the field of mobile phone and visual reality and be honored withnumerous awards, showing our infinite potential in the future. But for the strong support of family
members, we would not have so many progress. We will keep promoting the spirit of The Pursuit ofBrilliance, embrance our dream together and hand in hand carve out a new future’.
Many charity groups and non-profit group such as the Chinese Christian Relief Association, Qi Zhi
Vocational Training Center, the 1919 Chinese Christian Relief Association and Syin-Lu Social Welfare
Foundation, etc were invited so that during this event our employees and their family members could
show their support and voluntarily devote some care for many more under-privileged groups throughactual participation or donations.

Multiple Communications channels
Employee complaints system that has a complaint hotline, suggestion and complaint boxes, a complainante-mail service, and a sexual harassment complaint mailbox. Labor meetings and employee opinion surveys
are held regularly for reference by supervisors in such matters as leadership, internal operations, enhancing
employee satisfaction, and work input improvement.

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

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

The Meal Subsidy Program
Meal subsidies of NT$55 for lunch, NT$75 for dinner, and NT$100 during holidays are offered to indirect labor.
Meal subsidies of NT$50 for lunch and dinner are available for direct labor working during regular office hours.
HTC also offers afternoon tea every day.

Travel subsidy
Based on seniority
Employee tenure
Basedate: 2016/12/31

Unit

2016
The HTC Employee
Welfare Committee

2016
HTC

2016
Total

Over five year tenure

NTD

4,000

4,100

8,100

Over three year tenure but less than five year tenure

NTD

4,000

1,800

5,800

More than a year tenure but less than three year tenure

NTD

4,000

900

4,900

More than six months but less than a year tenure

NTD

4,000

0

4,000

More than one month but less than six months

NTD

2,000

0

2,000

Less than one month

NTD

0

0

0

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.

063

Employee Relations

HTC 2016 CSR Report 064

Valuing Human Rights
and a High Standard of Professional Ethics
HTC values human rights and equal compensation and does not tolerate gender discrimination. As aninternational corporation, and a member of EICC (to view the EICC membership list please visit http://www.
eicc.info/MEMBERSHIP.htm), HTC strictly follows the related regulations and as a responsible employer
incorporates care for human rights into all aspects of daily operations

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 employess 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.

Valuing Female Employees
HTC regards the female workforce as very important. In view of theincreasingly large number and influence of workingwomen, we havecontinued to improve our software and hardware, in the hope that adiverse culture based on gender equity will help HTC become morecompetitive. The physical and mental caring mechanisms we provide
for our female employees include:

Employees applying
for Family care leave
Year

2014

2015

2016

Male

98

91

56

Female

132

151

144

Total

230

242

200

A female cancer-screening program is part of the annual healthcheck. This includes the choice of a Pap smear, a breast ultrasoundexam, 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, healthknowledge and education, physician consultation or referrals and so on.
We provide a warm and comfortable nursing environment, ultraviolet milk bottle disinfection devices,microcomputer thermos, comfortable sofa, refrigerator for breast milk storage, and infant breast-feedingrelated publications and light music. HTC has 21 Breast feeding room in Taiwan that were visited 54,100
times in 2016.

We encourage and support employees to give birth and raise children. In addition to providing full support for
pregnant employees, we also have an application mechanism for parental leave in place, so that the postpartum
employees can have parental leave and take care of their babies with their future working rights fully assured.

Employment of the Disabled and an Accessible Working Environment
for the Handicapped

Employees applying for Unpaid Parental Leave and Resuming Duty after Leave in 2016

In 2016, HTC hired 142 handicapped people and this exceeded the mandatory minimum number by 44. (Thenumber of people involved was weighted.) As 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 worker. We can also tailor job
descriptions and the working environment, to allow the handicapped to have the opportunity to prove theirabilities. Thorough education and training is also provided to allow the handicapped to make a contribution tosociety and enhance their own quality of life.

Male

%

Female%Total

The Number of Qualified for UPL for Raising Children in 2016

841

62.2

511

37.8

1,352

The Number of Person Actual Applied UPL in 2016

40

23

137

77

177

The Number of Reinstatement-to-be in 2016

51

28

131

72

182

The Number of Application for Reinstatement in 2016

35

28

88

72

Reinstatement Rate in 2016

123
68%

The number of application for reinstatement in 2015

32

25

98

75

130

The Number of Retention Over 1 Year After Reinstatement in 2015

12

14

76

86

88

Retention Rate in 2016

68%

Note : 1. The “number of qualified for UPL for raising children in 2016” was based on the number of employees who had taken maternity or paternity leave within 3 years (2014-2016).
2. The “number of reinstatement-to-be in 2016” includes applied in 2014 and should reinstate in 2016, applied in 2015 and should reinstate in 2016, applied in 2016 and should
reinstate in 2016.
3. The “number of application for reinstatement in 2016” includes applied in 2014 and reinstate in 2016, applied in 2015 and reinstate in 2016 and applied in 2016 and reinstate in 2016.
4. The “Reinstatement Rate in 2016” = Number of employees reinstated in 2016 / Number of employees that should have been reinstated in 2016
5. The “Retention Rate in 2016” = Number of employees who had worked one year consecutively after being reinstated in 2015 / Number of employees reinstated in 2015
6. The “number of application for reinstatement in 2015” includes applied in 2013 and should reinstate in 2015, applied in 2014 and should reinstate in 2015 and applied in 2015 and should
reinstate in 2015.

065

Employee Relations

HTC 2016 CSR Report 066

Valuing Employee Health
HTC regards employees as its
most valuable property. HTC
pays particular attention
to four areas: “healthmanagement,” “healthenhancement,” “vocational
health,” and “employee
assistance.” to ensure theeffective use of support
resources and safeguard thehealth of our employees.

The number of people
treated in the Taoyuan
company infirmary in 2016

Health management
HTC has established a “Staff Clinic” . Professional medical counseling isavailable for staff and there are resident doctors in the clinic. There is also
excellent physical therapy and health management service. Health checkservices 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 atthe staff clinic. The dependents of employees and suppliers (stationed
at HTC to provide service) can be treated at the staff clinic and enjoy thesame benefits and services as HTC employees.
Approximately 8,802 people attended the clinic in 2016. Besides, 698
people attended Taoyuan Health Center and 4,285 people attended
Xindian Health Center.

Category

PeopleGeneral staff
Outpatient
service
Dependents

3,458
50

Suppliers

17

Consulting

2,852

Trauma treatment339

Occupational hazards
and job placement

130

Physiotherapy

1,956

Total

8,802

Total deducted registration fees in 2016 = NT$175,400 (3,508 people)
Total deducted copayment in 2016 = NT$270,700 (5,414 people)

698

443

Health Enhancement Scheme for HTC Employees
Area

The number of people serviced in Taoyuan Health Center

Actions

MUSCLESORENESSAND ACHETOTALOTOLARYNGOLOGYHEALTHCOUNSELING33

DERMATOLOGY

740

974

694
550
409
255

188

156
53
MOTHERHOODPROTECTION

BED RESTMENTALHEALTHCOUNSELINGHEALTHCOUNSELINGMUSCLESORENESSAND ACHE

91
OTOLARYNGOLOGY

26103
DERMATOLOGY22

DENTISTRYOBSTETRICS &GYNECOLOGY

GENERALSURGERY

GENERAL
MEDICINE

Employee Relations

5

The number of people serviced in Xindian Health Center

HEALTHMANAGEMENT

067

0

DENTISTRY

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

3

OPHTHALMOLOGY

Employee
Assistance

19
OBSTETRICS &GYNECOLOGY

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.

3
OPHTHALMOLOGY

Vocational
HealthGENERALSURGERY

HealthEnhancement

Comfortable breastfeeding rooms, Smoking cessation promotion, Weight-loss Classes,
Topic seminars, Blood donation activity.
Influenza vaccination, Cancer screening, Infectious disease control and treatment.
Outdoor fitness equipment settings, Health steps (pictures /music), Aerobics
Family Day.
CPR & AED course design.

GENERAL
MEDICINE

HealthManagement

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.

118

74

HTC 2016 CSR Report 068

Annual Health Check Subsidies

Health Promotion Programs
Health check follow-up
and statistics in 2016

HTC provides health check subsidies to its employees in Taiwan
according to job title and grade. The dependents of the employees
also have access to health checks at any of the HTC contracted
The number of new recruits withmedical institutions. In 2016, HTC spent NT$7,400,000 on
2,745
physical abnormalities follow-up.
subsidized health checks for indirect employees. There were 1,836
The number of employees with
benefited employees. Among them, 79.01% of indirect employees
1,893
physical abnormalities follow-up.
completed health checks and 2,314 direct employees had received
Number of injuries due to fatigue
0
the health check services. Health management and a healtheducation 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.

It is a well known fact that the pressure of a technology industry tends to cause employees to neglect theimportance of their health. For this reason HTC, 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. A total of 91 health promotion events, attended by 2,435 persons, were held in 2016. The averagelevel of satisfaction achieved was 94.31%.
HTC staff clinic FB Fans Website:https://www.facebook.com/HTC.EmployeeClinic

The number of staff members who attended the 2016 Health Promotion Course

HTC Health Check Regulations

623
541

Quit Smoking
Courses

Direct：Arranged by deparments since July 2015

Last checkdate

Indirect：to be continued

Preventive measures against health-endangering heavy workloads
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 madewith medical doctors, or health consultants for employees should a medical check find them to have a healthproblem. A change of work or the adjustment of working hours is usually recommended.
The number ofpeople with healthendangering heavy
workloads
59

116

On Family Day in 2016 the HTC employee staff clinic designed three main themes activities with theaim of guarding your health.
The “Health Gate Keeper” activity was offered by Taoyuan General Hospital, Ministry of Health andWelfare , providing screening tests for oral cancer, colon cancer and blood sugar.

■ The number of people should consult

65■ The number of people have be noticed
31

26

21

25
7

3

Staff Clinic and Family Day

122

23

2

352

Exercise and Diet
Weight Loss Courses

Human Factors
Engineering Courses

Indirect：Staff can have health check in numerous hospitals cooperated with HTC.

377

Infectious Diseases andCancer Prevention

49
First Aid Courses

69

Direct：Implemented by staff clinic

Way

1

56
EPA Propaganda

Article 20 and 46 of the “Occupational Safety and Health Act” (OSHA) and Articles 13-15 of
the “Labor Health Protection Regulations “Regulations

368

Vision Care

Indirect：with one-year seniority and once every two years

Health Enhancing
Promotion

Direct：biennual

Frequency

4

5

6

7

8

9

10

3

5

11

12

“Report body fat” activity was offered by physiotherapist in the staff clinic, providing the analysis ofbody composition and exercise guidelines tailored for the needs of everybody.
“Healthy bone” activity was offered by Taoyuan Min-Sheng general hospital, providing bone mas
measurement, to identify the potential danger in advance and encourage everybody to exercise more inorder to boost the bone mass.

Month

069

Employee Relations

HTC 2016 CSR Report 070

Occupational Health

Drinking water quality control allows employees to drink without reservation

The work environment at the HTC Taoyuan Plant is carefully tested and monitored. In 2016, all 92 workers
engaged in operations that might endanger their lives, such as those involving ionizing radiation, must receive
a thorough health checkup. The number of workers put under Grade 1 Control was 29; Grade 2 Control was 61;
Grade 3 Control was 2. In compliance with Articles 13-15 of the Labor Health Protection Regulations, workers
subject to Grade 2 Control were sent individually to the company infirmary for health consultation with a doctor,
who gave instructions on personal health and how to prevent further problems. The workers under Grade 3
Control, was rechecked by a specialist and found to have recovered enough to be put under Grade 4 Control.All
cases have been finished follow-ups, reasons and we will keep track of managing the health of employees.

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.

A quality workplace to keep employees happy at work

Maternal Health Protection Plan

HTC has set up a fully equipped gymnasium inside the office building in order to encourage and advocate
sportsmanship. For the sake of providing employees with better fitness advice service and environment, HTC
has commissioned professional fitness management consulting firms and professional suppliers to manage
the gym and to provide on-site instructions, fitness curriculum planning, and advice about the prevention ofsports injuries. Employees get help for the establishment of positive sports safety and healthcare. Courses
are planned and arranged on various health topics and activities and employees can participate according totheir preferences.

In 2016, we promoted the “Maternal Health Protection Program” to include female colleagues whoare pregnant, who are within one year of delivery or who continue to breastfeed as the objectives ofprotection. According to the plan to conduct each step of list survey, risk identification, individual
medical counseling and fitness for work, return to work, as of December 31, 2016, there were 91
employees who completed the risk classification and protection measures, all objects of protection are
low risk, showing the environment and content of work are quite safe, and indeed eliminate the safety
and health hazard factors for the female employees.

Employee Assistance Program(EAP)The constant challenge and rapid changes intechnological industry result in rather high job stress.
The avoidance of stress is a major concern at HTC andwe pay constant attention to employee working hours
to steer clear of disorder and the attending stressand fatigue. HTC has been working with the Hsinchu
Lifeline Association since 2009 to provide employeeswith psychological counseling and guidance withrespect to working career, relationships, family andparenting, gender sentiments, mental illness, andphysical and mental stress. All employees are entitled
to six free counseling sessions per year at the expenseof the Company. In 2016, 190 people had taken
advantage of counseling.
Appointment Hours: Monday ~ Friday 9am ~7pm
Reservation Tel: Mobile: 03-260415

071

Employee Relations

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 is done according to drinking water
regulations. The maintenance and care of the drinking fountains is carried out by a professional company andtesting of water purity is carried out by an environmental testing agency that is authorized by the EPA to takeregular samples and perform the tests. The results of the water quality tests are published and the records arealso posted in a prominent position close to the drinking fountains.

In addition, HTC has planned two-month aerobic programs throughout the year and diverse courses, such asyoga, Pilates, dynamic pop dance, spinning bikes, TRX, are offered based on employees’ interest and need. The
employee service APP system is intimately developed for the employees to click on the phone to register, savethe time of waiting in line.

The Employee Assistance Program(EAP) interviews

Use of the Gymnasium

2014

2015

2016

Number of TelephoneCounseling (Free)

82

120

111

Number of Interviews

70

78

79

Location

Number of users

Taoyuan

37,237

Xindian

35,020

Hours of Interviews

79

91

106

Number of Interviews(Male)

38

38

46

Participation in aerobic classes

Number of Interviews(Female)

21

40

33

Location

Number of users

Number of Interviews(Direct Staffs)

16

11

3

Taoyuan

1,655

Number of Interviews(Indirect Staffs)

54

67

76

Xindian

6,254

Invested expense(NTD)

401,200 434,800 443,000

HTC 2016 CSR Report 072

“Café Bar” & “Bakery One” food safety

Food Safety, HTC healthy meals
To ensure our employees have “healthy and satisfying food,” we have engaged experienced licensed chefs fromfive-star hotels and dieticians to design and produce healthy, nutritional, and delicious meals using ingredientsfrom reputable and certified food suppliers. The meals are nutritionally balanced and the number 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 the company and not
outsourced. To safeguard the food safety and health of employees, we avoid all questionable ingredients andinsist that all purchases have CAS, TQF, ISO and HACCP food certification. Branded food commodities are
given top priority and we always support the local agricultural producers.
In order to meet the needs of employees enjoying exotic cuisines without away from home, and take theforeign employees missing their home meals into consideration, we provide a variety of home-style meals forthe foreign colleagues with multinational classical dishes as the main menu scheme in particular, the served
meals include the Spanish cuisine of the Mediterranean flavor, Italian cuisine, American cuisine, European
style delicacies and serve steak meals, showing an enriched exotic food styles.

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 and checks are carried out and all activities are strictly managed fromthe 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.
Following a string of food safety incidents involving the adulteration of cooking oils and the addition of illegal
substances to food in recent years, HTC has taken the initiative to study the feasibility of producing health tea
drinks for employees. In November 2014, retort pouch drinks and other beverages offered free at the office
kitchens were replaced by tea prepared by the staff restaurant. Employees can now enjoy a cup of healthy freshtea. HTC also works with professional restaurants,
meaningful and seasonal activities will be lunchedon holidays to celebrate and enjoy the atmosphere ofholidays with our co-workers.

The HTC cafe and juice bar use only the freshest high-quality
natural ingredients. HTC has strict safeguards for all foodserved and provides employees with healthy meals without any
additions in accordance with the concept of healthy nutrition
and “cooking for families.”
1. Only natural ingredients are used. The cafeteria boils its own
sugar and ensures the safety of additions.
2. Café Bar uses pure coffee beans to make coffee for those whoare lactose intolerant.
3. Soybean milk is made with non-GM soybeans for safety.
In addition, as a response to caring for the earth, kitchenutensils 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. Quit Smoking Clinic has been started at the Employee’s Clinic since
May 2016 to conduct quit smoking treatment through professional physicians,
pharmacists, quit smoking health teachers, to allow the participating 61 employees
to quit smoking successfully.

An Office Environment with Plants and Green Landscaping
We uphold the concept of environmental sustainability and we regularly increase our green space in Taipei
and Taoyuan headquarter. The HTC outdoors green area now totals 30,700 m2 and there are many 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 to their work environment.
To improve air quality, we have planted trees extensively inside the factories and offices to purify the indoor air
by reducing CO2 concentration. The annual management fees for our green environment amounts to NT$2.36
million which is used to provide our offices with green areas to help reduce indoor air pollution.

Green landscaping inside and outside the plants and ecological pool073

Employee Relations

HTC 2016 CSR Report 074

Listening to Voice of the Employee
Smooth 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:

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 convenes labor-management meetings every two months and at least six meetings are held every year.
Before the meetings, we will discuss previous unsettled and newly added issues. In addition to inviting the head ofrelated units to participate in, the minutes of meetings will be disclosed on the intranet for review by employees.
According to the internal statistics, the most frequently discussed issues in the labor-management meetings are“working environment”, “parking and transportation” and “catering management.” Apart from holding labormanagement meetings regularly, we also set up diverse ways to collect opinions, including service line, service
suggestion box, service email and sexual harassment complaints box. HTC holds labor-management meetingsand employee surveys on a regular basis, as reference for the leadership, internal operation, enhancement of
employee satisfaction and improvement of work engagement. A good communications mechanism results inharmonious labor relations and any labor disputes will be handled properly.
Note: HTC’s labor union was established in 2015, but until the end of 2016 no collective agreement has so far been made.

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 2016. The
survey covered many aspects, which included reward and remuneration, training and education, promotion,
audit, learning and communication. The survey results were given to management for review and have becomea reference for planning the business goals for next year.
In 2014, we offered employees 1 day paid leave(birthday leave) and getting off work at 3pm the days before
3-major holidays. Until 2016, these happiness measures continue to bring small happiness for the employee’s
body and mind.

075

Employee Relations

Potential
work
problems

Advisory
andassistancechannelsWork problems

Consultation and Referral to the Employee Assistance Program

Leadership style andcommunication

Production line direct labor should dial extension 38585

Compensation, benefits, andworking hours

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

Workplace sexual harassment,
sexual abuse, or sexual
discrimination

Indirect labor should dial extension 28585

Open and registration-exempt staff cares office

HTC Employees Notification System APP
To provide employees with a more convenient information
network and services, HTC has built a proprietary company APP toprovide staff with readily available services, these include relevant
course information, the latest event announcements, staff clinic
services, as well as all kinds of reservations such as: regular physicalexamination, gym courses, massage appointments, restaurant
bookings, employee issues, and immediate feedback.
Mobile Appeals 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 therelevant units.
Operating procedures: The APP received 194 employee reports in
2016. In addition to responding to employee opinions, information
about improvements made, or which are pending, will be sent
to the employee who made the report. Pending matters will befollowed up and monitored on a weekly basis.

Employee
Services Feedbackin 2016
Category

Number of cases

Others53

Cleaning

7

Repair107

Restaurant

27

Total

194

HTC 2016 CSR Report 076

Complete Education and Training Plan
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 as wellas personal career development. The company strives to provide employees with enhanced professional skills, inaddition to assisting them seek a good career development direction; HTC has classified talent management anddevelopment as an important management indicator. Employees should improve and grow with the company.

Diversified learning channel, providing a comprehensive learning environmeny

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.
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 themto blend into HTC culture
and 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 combined with
HTC core values, organizational development strategy and direction, as well as leadershipand management functions. To ensure that these courses further the daily work of thedirectors and substantiate their leadership and performance, follow-up action plans areformed for each of these learning courses. These are devised to assess performance both
before and after training, in such aspects as the supervisor’s counseling records, subsequent
presentations, and so on.

077

Employee Relations

Comprehensive Education and Training
To develop employee capability to meet global technology challenges and grasp the movement of the industry,
we construct 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.

E-learning Platform
The HTC e-Learning platform 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 thelibrary online. It is very easy and convenient to learn professional and occupational skills without
unnecessary interruption.

E- Library
HTC helps staff develop good reading habits mainly by the provision of a wide range of reading
activities and a rich collection of library resources; employees can enjoy a rich literary atmosphereand reading environment. Electronic magazine services are also made available for employees so theycan view and read the current editions on their computers or mobile phones anytime anywhere. henumber of people subscribing to our electronic magazine reached 22,034 in 2016. We continue holding
reading workshops for writers to share the new knowledge and life experience they put into theirbooks. In 2016, we initiated the free request for back issues of magazines program, which also involves
an exchange of books. Old books and magazines are given new life and the HTC reading culture has also
been given a boost. Starting from the fourth quarter of that year, we introduced “a quarterly selectionof good books,” providing excerpts of the best parts of books to allow the readers to quickly become
members of the informed reading public.

English Leadership Resource and On-job Training Grants
As an international brand, HTC provided “Online English Learning” to encourage staff to learn
continuously and spontaneously. The choice of sessions, the grade of difficulty and the 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. In 2016, online English
language training course participants numbered 160 persons and NT$208,000 in grants was paid by HTC.
In addition, HTC encourages employees to continue to absorb professional knowledge and to match
their study program to their work to ensure growth. We have an on-the-job graduate study grants
program and 87 employees have taken advantage of this since 2011.

HTC 2016 CSR Report 078

Cultivating Key Leaders
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 2016, leadership-training courses were given to 331 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 30 articles shared in 2016.

Training and Performance Intergration
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.

HTC new recruits statistics
Unit

2014

2015

2016

Total number of new recruits (male)Individuals

1,167

901

714

Total number of new recruits (female)Individuals

560

723

371

Percentage of employees under the age of 30

%

74.29

79.74

49.68

Percentage of employees aged between 30 and 50

%

25.01

19.77

49.03

Percentage of employees over the age of 50

%

0.69

0.49

1.29

New employee legal training
HTC emphasizes legal training and we list the legal training for new recruits as necessary lectures.
To prevent insider trading and ensure security and IP rights etc, we invite legal experts to give special
training to company management personnel. The number of employees completed the training courses
in 2016 as follows.
HTC Legal Training in 2016
Numbe ofparticipants

Course Contents

Coursehours

IDL new employee legal training - confidentiality and anti-insider trading493

35 min.

IDL new employees legal training – intellectual property rights

493

40 min.

IDL new employees legal training – US patent litigation

493

35 min.

Special Training Courses
In order to help our employees grasp new knowledge and expand their perspective, we launched Thinker
Forum in 2016 and invited experts and specialists to hold 10 seminars in different fields from around the world
to share industry trends, novel technologies and technological blueprints. Also, HTC has held 5 lectures of
personal development learning since. Employees will cultivate more smooth and efficient way of working fromthe practical cases and experiences sharing.

New Employee Training Courses
New employees receive comprehensive training from the day they first report for duty through several different
learning communication channels. These include new recruit monthly sessions and a variety of practical andonline courses to help new employees adapt to HTC culture and develop a full range of knowledge and skillsin the shortest possible time. In addition, the Buddy campaign encourages new employees to talk to theirpredecessors to share information about the company and to help them join and quickly fit into the HTC family.

Training Result
Between 2014 and 2016, HTC invested nearly NT$31,455,000 in employee training-related programs. Training
hours totaled 665,000 and there were nearly 240,000 attendees, each person receiving 49.55 training hours.
In 2016, HTC male employees received 108,578.91 hours of training and female employees received 84,734.1
hours of training. General staff received 138,304.89 hours of training, supervisors received 54,686.25 hours andmanagement 321.87 hours. The table below lists staff training over the years:
Year

Course (hours)

Number of participants

Average training hours

2014

213,658

98,587

12.64

2015

258,245

62,235

20.75

2016

193,31378,627

17.69

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. Average number of training hours
per person in 2014-2016 = total training hours in 3 years / average number of employees in 3 years.

079

Employee Relations

HTC 2016 CSR Report 080

Sustainability
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
Packing

Sustainable
Product

Environment safety and healthManagement of hazardous
substances
Management of waste andchemicals

Green packaging material

Product Carbon
Footprint
Product Water
Footprint

Sustainable Environment
Response to Climate Change

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

HTC smart mobile devices help reduce the transportation and travel previously needed forcommunication, and consequently the carbon footprint of the user as well. New combinations and new
patterns of operation, livelihood, work, study, and travel involving smart mobile devices help users saveenergy and reduce carbon emission.

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.

To this end, we have devised a dual-aspect strategy composed of “adopting an energy 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.

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

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.

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 production2016 Cooperated withgovernment agencies or schools
to promote environmental
protection2016 Continued helping safety
and health program members
obtain ISO 14001-related
verification

2021-2025
To create low-carbon living
circles through corporate
environmental protection
concepts based on HTC
experience
To help contractors obtainenergy conservation andcarbon reduction action
labels2016 Continued participation
in Enterprise Environmental
Protection Awards
2016 Received Customer
Sustainable Development Award
2017 To apply for Energy
Conservation and Carbon
Reduction Action Label2018 To receive Water Footprint
Third-Party Verification

In 2010, the HTC plants in China were also included in the scope of inspection and disclosure andexternal verification was launched. Electric power was found to be the main source of 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.

2021
l
2025

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.

Reduce power consumption (carbon emissions) by 1%.
Water recycling rate reaches 75%.
Waste recycling rate reaches 80%.

2016
l
2020

Reduce electricity consumption (carbon emissions) by 1%.
Water recycling rate reaches 70%.
Waste recycling rate reaches 72%

2012
l
2015

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

083

Sustainable Agenda

HTC 2016 CSR Report 084

Energy-saving and Carbon Reduction

Energy Consumption analysis

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.

GHG Emission and Reduction
Total greenhouse gas emission by HTC was 35,438.37 t-CO2e in 2016. The majority of emitted gas wereCO2. 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 to include control
over subsidiaries, including comprehensive statistics, and the monitoring of greenhouse gas emissions toimprove the overall energy use efficiency and create better energy revenue since 2014. HTC’s GHG emissions
contained no PFCs, SF6, SOX or other waste gases, and HTC does not use any substances that 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.

HTC GHG Emission (TW)
Total Emission

Unit

Total Emission Scope 1

The power used by HTC is mainly electricity. To decrease the use of electricity, we persistently promotes
various 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 onenergy efficiency contributed to 815,754 degree of reduction, and the total amount of reduction in carbon
emission was 431 tons of CO2e which translates into a saving of NT$2,447,263 during 2016. The electric power
factor of the HTC buildings was 98.38% on average. Taipei headquarters outperformed the others by meansof 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 building and factory in 2016
Total useof electricity(degree)

Total amountof electricity bill
(NTD)

Average electric
power factor(%)

Total amountof savings

TY3 building

13,116,800

35,335,258

99.25

2,163,600.00

H+P building

27,145,600

67,371,610

98.17

258,564.00

Tachih plant

4,374,400

11,410,199

96.92

25,099.20

TPE1

7,877,200

19,176,675

100.00

0.00

2016

2015

2016

t-CO2e2,346.95

2,140.06

TPE2

4,411,000

11,761,630

100.000.00

Total Emission Scope 2

t-CO2e40,142.93

33,298.31

Total

59,455,200

114,934,483

98.38

2,447,263

Eco-Efficiency Value

NT$

2.86

2.21

Total Emission Scope 3

t-CO2e446.44297.17

Emission:CO2

t-CO2e40,897.51

33,995.25

Units

2015(TW)

2016(TW)

Emission:CH4

t-CO2e1,171.74

1,012.36

1,000 kWh/Year

62,276.8

62,482Emission:N20

t-CO2e1.86

1.19

Operating revenue

Million(NT$)

121,684

78,161

Emission:HFCs

t-CO2e418.77429.57

Eco-efficiency value

NT$

1.95

1.25

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. Shanghai plant power emissions coefficient is in compliance with the 2014 China
regional power grid baseline emission factor announcement

Global warming potential

2016 based on IPCC 2007 4 th Assessment Report.
2013-2015 based on IPCC 1995 5th Assessment Report.

Environmental Indicators
Electricity

Note : 1. The eco-efficiency value (revenue generated from each electricity consumption unit) = Operating revenue (millions) / electricity consumption
2. Because Hsinchu and Tainan Software R&D Centers are offices, the electricity comsumption of those two is not significant. In this regard, the comsumption of those isn’t
included in the above.

Note : 1. Eco-efficiency value (revenue generated from each unit of greenhouse gas emission) = Operating revenue (in millions) / greenhouse gas emission
2. Category 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.

085

Sustainable Agenda

HTC 2016 CSR Report 086

TargetEnergy-Saving
reducedcarbon emissions

Energy saving and carbon reduction results in 2016
Program
Switch off TY3
support chiller air
conditioningsystem’s iced
water (December-Febuary)
Energy-saving andenhancing project ofrefrigerated air dryers in
Building H

To create a low carbon life, we use 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.

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 200,840 cubic
meters of natural gas in 2016, this translates into a reduction of 379 kilograms ofCO2, and saved NT$1,948,147.
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).

Cold air heat pumps for
air conditioning

Electric vehicles andbicyclesTaipei 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.
Taipei 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.

Energy-saving Actions
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.

087

Sustainable Agenda

Unitenergy savings rate

432,000.00

283,200.00

kWhenergy savings in kWh

228,096.00

149,529.60

Kg CO2e/ kWhamount of money saved

1,290,000.00

849,600.00

NT$energy savings rate

49,056.00

energy savings in kWh

25,901.57

amount of money saved

147,168.00

Savings

65.56%

32,648.00 kWh
17,238.14

Kg CO2e/ kWh66.55%

97,944.00 NT$

energy savings rate

525,600.00

438,000.00

kWhenergy savings in kWh

277,516.80

231,264.00

Kg CO2e/ kWhamount of money saved

1,576,800.00

1,314,000.00

energy savings rate
Energy saving measures forthe water heater of gym inenergy savings in kWh
Building P
amount of money saved

923.52574.00 kWh487.62303.07

Kg CO2e/ kWh

2,770.00

1,722.00

NT$energy savings rate

49,728.00

33,562.00

kWhenergy savings in kWh

26,256.38

17,720.74

Kg CO2e/ kWhamount of money saved

149,184.00

100,686.00

NT$energy savings rate

1,498.00

1,497.60

kWhenergy savings in kWh

790.94790.73

Kg CO2e/ kWhamount of money saved

4,494.00

4,492.80

NT$energy savings rate

2,530.00

2,529.60

kWhenergy savings in kWh

1,335.84

1,335.63

Kg CO2e/ kWhamount of money saved

7,590.00

7,588.80 NT$

energy savings rate

4,339.00

4,339.20

kWhenergy savings in kWh

2,290.99

2,291.10

Kg CO2e/ kWh 100.00%

amount of money saved

13,017.00

13,017.60

NT$

Mercury street lamps at the energy savings rateparking lot of the company’s
factory on Taoyin Road have energy savings in kWhbeen replaced by metal
amount of money saved
halide lamps

8,316.00

19,404.00

kWh4,390.85

10,245.31

Kg CO2e/ kWh 233.33%

TY3 Air compressor energy
enhancing project

The Use of Green Energy

Projected results Actual Results

Energy-saving measures
havebeen taken for theexhaustwindmills of
Building P
T8 lightings in the hallway
through Building C of 2
Taichi Road have been
replaced by LEDs
Turn off the lighting ofstorehouse in Building C of
2 Taichi Road for 2 hours a
day in rest time
Turn off the lighting ofstorehouse in Building B of
2 Taichi Road for 2 hours a
day in rest time

24,948.00

83.33%

NT$

62.15%

67.49%

99.97%

99.98%

58,212.00 NT$

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 2016:
NT$3/kWh.
2. The CO2 carbon emission coefficient is calculated on a basis of the 0.528 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 through switching off lights at night and in the holidays is calculated through power conversion.
5. The effects achieved through 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 actual uased amount in the same period of 2013.

HTC 2016 CSR Report 088

Green Plant

Resource Consumption Statistics in 2016
Green Plant
City water consumption

Unit

2013
(TW+KQ)

2014(TW+KQ)

2015
(TW)

2016
(TW)

degree/year

1,413,340

1,133,697

553,732

482,277

Waste waterRiver

Total city water discharge

Tonnes

The amount of rainwater
recycled
Total amount of water
recycled/reused

TW: Dongmen River +New Taipei City
dedicated sewer

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.

Dongmen River +New Taipei City
dedicated sewer

KQ: Shanghai City Bailong
Harbor sewage
treatment plant
59,44598,999111,755

73,750Tonnes / year

6,630,400

13,705

12,596,295

5,686

1,000 liter /year

160,985

247,349

247,869

194,868

Ratio of water recycled/reused to total amount ofwater consumed%/Year

23.76%

21.82%

44.76%

40.41%

Total amount of waste
recycled

Kg/ year

3,618,398

2,723,338.5

2,994,625

3,450,697

Total amount of waste
reusedKg/ year

0

0

3,260

0

Total amount of waste
incinerated

Kg/ year

2,385,210

1,454,435

1,363,849

1,143,555

Waste disposal expense

NT$ thousand /year

17,6304,362

5,154.338

6,550,479

Environmental
management andrecycling amount

NT$ thousand /year

257,260

95,71413,086.363

6,838,640

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.
2. Because Hsinchu and Tainan Software R&D Centers are offices, the comsumption of those two is not significant. In this regard, the comsumption of those isn’t included in
the above.

089

Sustainable Agenda

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.

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 efficiency of energy use. The total
amount ccumulated for reduction in carbon emission since inaugurationof the building has reached 9,316 tons of CO2e.
The fully-integrated energy management system is constructed in the
Taipei headquarter, which covers over 7000 spots of on-site monitoring,
total monitered spots amounted to 20,000. Under effective control
and analysis, the EUI (Energy Usage Intensity) of Taipei headquarters
amounted to only 92.9 kWh per meter square annually in 2016, which wasquite a marvelous result.
Building

Unit

TPE1

EUI (average)

TPE2

EUI (average)

2011

25.40

LEED gold
certification

Green Building Label

2012

2013

2014

2015

2016

8.60

7.72

7.51

7.4

7.74

21.57

23.97

22.57

22.1

21.96

HTC 2016 CSR Report 090

Water Resource Management
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 washroom and for other cleaning uses and restaurant
waste water. Domestic waste water is discharged into the sewage
system, which will not have negative impact on any neighboringwater body.

Office/Facility Water Use andWater Conservation Measures
Plant

Use in 2016 (Unit: ton)

Taoyuan

417,622

Sewage Treatment
The wastewater generated by our facilities is mainly domestic sewage from washroom and for other cleaning uses
and restaurant waste water 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 and maintenance in 2016.
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.
Water discharge amount, amount of recycled water and average concentrationof effluent biochemical oxygen demand (BOD)
Unit

2014

2015

2016

Amount of water discharge

Tonnes98,999111,755

73,750

Amount of recycled water

Tonnes

233,644247,869

194,868

Average concentration of BOD

mg/l

16

15.7

14.95

List of the sources of waste water to be discharged
according to the water body that is to receive the waste waterand also provide the source
Plant

Receiving water body

TaoyuanTungmen Creek

TPE1

the New Taipei City custom-built sewage system

TPE2

the New Taipei City custom-built sewage system

091

Sustainable Agenda

Sewage Recycling
The green fields and planted areas inside
the factories are irrigated with recycled
sewage water without increasing thetotal amount of water consumed.
Starting from 2012, HTC drafted andimplemented water conservation plans.
The achievement rate was raised to 60%
in 2013, while that for 2014 was the same.
The actual recovery ratio of waste waterin 2016 was 72.54%. From 2014 to 2016,
676,629 tons of waste water had been
reclaimed for watering purposes.

Sewage recycling strategy and effectiveness in 2016
Strategy and effectivenessSewage recycling

Annual target

70%

Recycled water for irrigation (Tonnes)

194,868

Sewage water output (Tonnes)

73,750

Amount saved (NT$)
Actual waste water recycling rate

2,533,284
72.54%HTC 2016 CSR Report 092

Rainwater Recycling Systems

Rainwater storage and recycling system

Environmental Protection Education
and Promotion

HTC has established a rainwater storage and recycling system to collect rainwater for flushing toilets andwatering plants. In 2016, the Taoyuan plant recycled a total of 3,318 liters of rainwater and the Hsintien officerecycled 2,368 liters for a grand total of 5,686 liters of effectively saved water resources.

HTC continues to promote and enhance environmental
protection consciousness and awareness in employees using adiversified interface. Employees are encouraged to appreciatecompany efforts towards environmental protection using clear,convenient and interactive presentation of information. New
recruits education and training was given to 3,427 employees
in 2016. The training material includes the environmental
protection concept of the plant and a policy card is distributedthat can be retrieved easily from the corporate identity system.

Water-saving Sanitation Equipment
HTC gives top priority to the use of sanitary equipment with a water-saving label. The faucet device installedwith water-saving spiral allows the faucet to reduce the amount of water outflow and each faucet can save
77 liters of water a day. All the toilets and urinals in the bathrooms should be energy efficient and have theWaterSense Label of the United States Environmental Protection Agency.

Photocopying paper Management
HTC aims to reduce photocopying paper consumption by 1% per year and bring the use of paper down to an
absolute minimum. By the end of 2016, cumulative savings of 9,551,500 sheets of paper had been achieved by
optimal paper-saving management. Renegotiations with the photocopy suppliers in 2016 resulted in a unified
unit price which would help save $533,435 (46%) compared with 2015.
Use photocopying papers with carbon footprint label to support green, low-carbon products
Print

1. Using a mobile phone APP to share environmental
protection philosophy
The HTC Employee Services App installed on employee
mobile phones displays a sustainable environmental
protection message each day as a friendly reminder.

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

Fax

Unified management in the entire factory area, select fax function to send fax 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

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

HTC paper-saving performance
Year

2013

2014

2015

Paper Use (piece)

12,345,000

10,640,000

9,112,500

5,102,500-

Paper saving (piece)

2,309,000

1,705,000

1,527,500

4,010,000

9,551,500

Paper saving target

10%

10%

3%

1%

-

Achievement rate

16%

14%

11%

44%

-

312,960

150,965

191,960

533,435-

Amount saved (NT$)

Note: Due to the change of stastical logics, the data has been adjusted.

093

Environmental Policy Card

Sustainable Agenda

2016 Total (Cumulative saving)

Carbon reduction actibities on Family Day

2. Green Energy Pavilion energy-saving and carbon reduction activities
The annual HTC Family Day event at the Green Pavilion presents the environmental protection and energysaving achievements of headquarters and allows those attending to appreciate both the company’s concept ofenvironmental protection and their efforts through interaction.
3. Encourage Employees to Carpool
HTC runs a shuttle bus service on many commuting routes with a daily capacity of 1,380 passengers. Thistransportation arrangement together with car-pooling makes it easy for employees to move to and fromwork. By cutting down on the number of vehicles travelling to and from the plant the amount of greenhousegas emitted, in the form of vehicle exhaust, can be significantly reduced. Fewer vehicles on the road also savecongestion and speeds up the movement of traffic

HTC 2016 CSR Report 094

Sustainable Design
HTC assesses the sustainability of products by an examination of the entire product life cycle. A complete life
cycle assessment and a detailed analysis of the flow of a product help the R&D team understand all the complex
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 materials used in production have low
environmental risk and all comply with internationally accepted regulations on banned substances in accordancewith the Precautionary Principle. HTC makes sure that all the mobile devices they design and manufacture meetthe expectations of their consumers and in particular have a very low impact on the environment.

Green Marks obtained by HTC
Green Mark

Description

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.

UL Environment certificate Platinum RatingBC
In 2016, HTC has received UL Environment certification for the following four mobile
phones, which were all, awarded the highest “Platinum” certification after rigorous
verification procedures.
● HTC 10● HTC 10 evo● HTC Desire 630● HTC Desire 530

These products received “Platinum” certificates for the use of non-toxic and environment friendly
materials and no material used in their manufacture originates in conflict mineral regions. High-efficiency
low-power-consumption chargers and the unified global charging plug are used to ensure compatibility
with other mobile phones. The mobile phone surface material has been rigorously tested and contains norestricted heavy metals, PVC or plasticizer. Product recycling assessment is conducted at an early stageof 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 and recycled paper is also used.
The ISO environmental management system has been implemented in the manufacturing process.
Materials

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 connector.

Recycling 80% of reclaimed
materials.

Phone surface materials

Manufacturing

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

Adoption of the ISO environment
management systems.

095

Sustainable Agenda

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

Hearing aid compliance
HTC meets and exceeds the US Federal Communications Commission (FCC) specification for hearing aid
compliance. The FCC requires that at least one third of a company’s mobile phone products be hearing aid
compatible. All the Smartphones sold by the HTC in the US in 2016 were 100% hearing aid compatible.
Please click on the hearing aid compliance page at:
http://www.htc.com/us/accessibility/hearing-aid-compatibility/

Electromagnetic Compatibility
Among the SAR regulations currently in force, FCC (US) and CE (EU) are the strictest, and all HTC
products satisfy meet these requirements. HTC products also comply with the rules about electromagnetic
interference as issued by all nations, with an EMI value 3dB lower than the criteria of the FCC and CE.

HTC 2016 CSR Report 096

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 substanceswith the serious intention of making our products really green and competitive

Rapid and high energy-efficiency Charger
For issues related to charging the cellphone, we have launched HTC Rapid Charger 3.0, a rapidcharging
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 use of resource, it is also more convenient to carry.

Participation in the Foreign Service Carriers’
Eco-Rating Program
HTC assisted in the “Forum for the Future” to integrate the different
plans of several industries to launch “Eco-rating 3.0” and continued
to participate in the Eco-rating programs promoted by several foreign
telecommunications companies in 2016.
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 comparison at the time of purchase and also encourages the design and manufacture of
products in an environmentally friendly way.

Enhancement of Energy Efficiency
An analysis of energy efficiency starts with the raw material used to product the electronic telecommunications
product, its manufacture, life cycle and disposal. The mobile phones raw material carbon footprint is low, as isthat of the manufacturing process as well as usage, when most of the greenhouse gas is emitted. We concentrateon energy saving from the early design and research and development phase. All power supply devices usedfor HTC products must comply with the relevant international energy consumption specifications: US EnergyStar, 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 specific models meet the 0.03W
standby power minimum energy consumption standard.
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.

097

Sustainable Agenda

HTC 2016 CSR Report 098

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.

Material Recovery Rate Assessment>ABS+PC<

We consider material recyclability in the selection of all materials and product disassembly and analysis
is carried out by an impartial third-party. All current products such as the HTC 10 or Desire 10 lifestyle,allow 80% up material recovery. This significantly exceeds the EU WEEE Directive on the mobile phonematerial recovery standard which is 70%.

Phone and vattery 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 on line 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 2016, the total cumulative units of devices was 19,025 units with the value of US$279,788.
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 totalof 6.3 million kilograms of mobile phones batteries, was recovered through this program in 2016.
As a result of raising customer awareness and the availability od recycle, the weight of recycle has
increased 12% as compared with 2015.
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
weight of the recycled products, while the remaining states allow the mail recycle plan, and pay theannual registration fee, without having to set the recycling target.
For example, in Washington State, we pay a certain percentage of expenses according to the market
share of the tablet PCs, the local government is 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 that the recycling operation is held responsibly andappropriately. From 2015 to 2016, there was a total of 34,000 metric tons of electronic waste recycled
in the Washington state area.

099

Sustainable Agenda

HTC 10Material recovery rate:

84.0%

HTC Desire10 lifestyle
Material recovery rate:

81.2%

Positively Cutting Hazardous Substance
HTC unveiled the world’s first mass-produced RoHS-compliant PDA mobile phone. Today we require that allparts, components, modules, materials, and so on delivered to HTC meet a set of requirements, which are evenstricter. 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) and Brominated Flame Retardant 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 requirementsfrom 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
itself, it can produce beryllium oxide during the recycling process that is harmful to human health. We have thus
decided not to use the material in any of our products since 2016.

HTC 2016 CSR Report100Sustainable Manufacturing Process
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 educational 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.

ESH Management
HTC provides and maintains
a safe and healthy working
environment as part of ourenvironmental protection,
safety and health, and energy
management efforts.

The Labor Safety Committee
The Labor Safety 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 and9 department managers, supervisors and directors.
We work out an occupational safety 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 healthrules; to identify hazards to lower risks; to set up rules for the labeling of dangerous chemicals and a general
understanding of them; the promotion of occupational safety and health information; and the establishmentof 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 disaster, 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 operation procedures. We hold fire all measures impact on the health and safety Of
the workers and also try to least damage or company property.

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, and contractors.
3. We require our employees to comply with regulations and operation standards onenvironmental 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 forenvironmental protection, safety and hygiene and health, and energy efficiency.

101

Sustainable Agenda

HTC has introduced the ISO 14001 Environment Management Systm and verified by third party authorities.
To implement and be in accordance with environmental policy, relevant targets are set up and systemetic
measure of environment management in the daily management.
Environmental expenditure
Year

Unit

2013

2014

2015

2016

Environmental expense

NT$ Thousand

125,700

131,550

80,74368,737

Green purchasing

NT$ Thousand

17,19910,317

302

9,041

Total

NT$ Thousand

142,899

132,973

81,04577,778

HTC 2016 CSR Report102

Note: Due to no new plant construction in 2015, procurement data show a downwards trend.

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

Positively Preventing Occupational Accidents

Perfect Emergency Rescue Measures

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.

A 24-hour emergency rescue Hot Line has been set up as part of a fullycomprehensive emergency notification system.
Sufficient rescue personnel have been lawfully designated and emergency
rescue personnel training courses are held annually.
Twelve Automated External Defibrillators (AED) are available at specificplaces within the company.
Emergency evacuation drills are carried out periodically.

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.

These related measures have been effectively carried out at HTC and theaverage employee injury frequency rate (FR) was 0.61 person-time/per
million hours worked, average severe injury rate (SR) was 13.00 days/per
million hours worked in 2016. 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.

Aspects

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

Education and Training
for Safety and HealthOpen 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 work safety and health, general knowledge of dangerous materials, and theassessment of risk.

Inspectionsfor 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.

In 2016, most occupational injuries were the result of traffic accidents(52 cases) that happened during commutes. There were 15 other injury
cases that occurred within the facility. Falls are the most frequently
reported incident (6 cases), with 239 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 to reduce theincidence of accidents.

Health Managementand Enhancing

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

Taiwan plant

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 and communicate with
employees over work safety. All these efforts are aimed at improving work efficiency.

Full-time Environmental Safety and Health Personnel Training in 2016
CoursesNumberof trainee

Total training time(hours)Operation of forklift truck of more than one ton

3

9Person in charge of organic solvent operations

4

12

Person in charge of organic solvent operations

18

324

Fire protection manager

2

12

Occupational safety and health management personnel

1

6

Occupational health management specialist

1

6

Occupational safety and health affair managers - Class A

1

6

Certificate of completion for occupational safety and health management personnel

1

6

103

Sustainable Agenda

TargetResultInjury Frequency Rate (FR)

0.30

0.61

Injury Severity Rate (SR)

1.80

13.00

Note: Injury Frequency Rate, FR＝person/total time of work*million hours worked
Average severe injury rate, SR＝days/ total time of work *million hours worked

HTC 2016 CSR Report104Injury Frequency Rate (FR)Injury Frequency Rate per Million Hours Worked

Year

2014

2015

2016

Taoyuan

0.47

0.37

0.61

Management Target

0.36

0.36

0.30

Note: Injury Frequency Rate = Incidence of Lost-Time Injury×1000000/total hours worked

Injury Severity Rate (SR) Lost Day Injury Frequency Rate per Million Hours Worked
Year

2014

2015

2016

Taoyuan

15

2.78

13.00

Management Target

2

2

1.80

Note: Injury Severity Rate=Days Lost for Lost-Time Injury×1000000/Total Hours Worked

GRI Injury Indicators
Incidence Rate (IR)
Year

2014

2015

2016

Taiwan

0.1

0.09

0.12

2014

2015

2016

0

0

0

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

Occupational Disease Rate (ODR)
Year
TaiwanNote: 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)
Year

2014

2015

2016

Taiwan

2.99

0.55

2.60

2015

2016

0.09

0.01

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

Absence rate (AR)
Year

2014

TaiwanNote: AR = (Total Days Lost/Total Days Worked) ×100%

105

Sustainable Agenda

HTC 2016 CSR Report106Management of Waste and Hazardous Substances

Waste Recycling Effect and Rate

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 to management measures, besides entrusting legal disposal authorities to properly dispose thewaste in accordance with the governant policy, we also follow disposal trucks to check and confirm theircleaning status on site from time to time. Regarding to plants, we inspect waste storage and temporary storage
zones through inspection checklist regularly, and request correction for non-compiance within a limited time.
We also establish environmental safety and health self-assessment form and perform audits, to accomplish
effective management and evaluation mechanism.

NT dollar%

65,000,000

100.0060,000,000

90.00

55,000,000

80.00

50,000,000
45,000,000

70.00

40,000,000

60.00

35,000,000

50.00

30,000,000
25,000,000

40.00

20,000,000

30.00

15,000,000

20.00

10,000,000

Measures

Methods

Setup recycling bins and commission manual
sorting of domestic waste.

Setup recycling bins and encourage and propagandize
staff to sort domestic waste. The employees recycled
20,000 kg of domestic waste in 2016.

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

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

10.00

5,000,000
0Recycling rate
Cumulative amountof recycling

2012

2013

2014

2015

2016

56.89

62.94

65.82

65.20

70.72

74.43

6,466,984

18,403,308

31,109,190

41,863,673

54,950,036

61,788,676

Kg

Kg

35,000,000

HTC Waste Statistics

20,000,000

11,000,000
8,000,000

2014

2014

2016

Recovery (General)Kg

2,723,338.5

3,037,885

3,450,697

15,000,000

Incineration(General)Kg

1,454,435

1,257,469

1,143,555

10,000,000

Hazardous - Copper-containing waste (Chemical treatment)

Kg

0

0

2,860

5,000,000

Waste Reduction, Recycling and Reuse
HTC waste reduction strategy involves the reduction of the generation of waste from the source by means ofsorting and advocacy. The reuse of waste is also a priority and is essential for an increase in resource recycling
efficiency. The recyclability of waste that cannot be reused can be improved by physical sorting and can be
stored for later disposal and such output is recorded and regularly published on-line.
We have been taking steps to handle the treatment of waste materials according to type. As an example wecommission 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 and the material that is
not recyclable goes to a final destination. We also publish the condition of temporarily stored waste materialon the Internet. Our recycled resources reached 3,450.6977 tons in 2016.

13,000,000
12,000,000

Unit

Sustainable Agenda

14,000,000

25,000,000

Treatment

107

15,000,000

30,000,000

Note: General business waste recycling category includes Tray plate, foam, miscellaneous plastic, waste wood pallets, etc.
General business incineration category includes domestic household wast.

00.00

2011

0

Number ofwaste recycling
Cumulative amountof recycling

10,000,000
6,000,000
4,000,000
2,000,000

2012

2013

2014

2015

2016

2,605,450

2,785,082

2,723,339

3,037,885

3,450,697

2,605,450

5,390,532

8,113,871

11,151,756

14,602.453

0

1. The TY5 Building in Taoyuan and the Taipei Headquarters building both meet LEED construction
standards. As much as 23% of the building material used was recycled and 76% of the waste produced in theconstruction process, such as steel shuttering, steel rebar, concrete, and epoxy, was recycled.
2. In the recycling of plastic trays and sponges, we have adopted a source control strategy. Trays and sponges
are now reused on the production line as many times as possible to reduce the waste of material.
Between 2011 and 2016, the money earned or saved by recycling waste rose year by year to reach NT$6,838,640
by 2016. The waste recycling rate increased from 56.89% in 2011 to 74.43% by 2016 to pass our long-term goalof 80%. By 2016 the accumulated savings and earnings from the recycling of waste had reached NT$61,788,676.

HTC 2016 CSR Report108Harmful Substances and Chemical Control
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 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. Given that international regulations on the use ofchemicals have become stricter, we take the following measures to control the condition of chemicals usedduring the manufacturing of components and parts. These include:
1. Specially-assigned employees make an inventory of the chemicals in the plant on a regular basis. They also
have to 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
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 and health, to corporate social responsibility. This must include the investigation and auditing of
supplier internal management systems and an assessment of the risk levels.

Active Response to Green Product Certification
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 specifications. Our strategy is to buy
environmentally friendly products to substantiate our environmental protection concept of “recyclable, lowpollution, 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 2016 is NT$7,792,000.
Between 2012 and 2016, procurement with green product mark totaled NT$26.71 million.

HTC hazardous substance management policy
HTC analyzes the international environmental protection regulations and complying with theenvironmental protection requirements of international customers, with reference to the relevantinternational technical standards, and then establishing the IP-0106-01 Toxic Substance Control List, andholding 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 control of 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 thematerials used in the product conforms to the international environmental protection specifications.
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.

109

Sustainable Agenda

HTC 2016 CSR Report110Sustainable Packing
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, environmental
friendly, and sustainable. In packaging design, consideration is given to the following:
1. Reduction of the amount of material used;
2. The use of biodegradable raw material;
3. Printing with environmental friendly ink (soy ink);
4. The facilitation of shipment;
5. Mark following recycling symbols on the box to show the consumers recycling packaging material.

All the packaging materials for HTC products are compliable with the EC directive on packaging (EU94/62/EC) and the US requirement on packaging (Model Toxics in 118 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.
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 environment-friendly and are also lighter than regular boxes. Comparing between HTC package
boxes of 2009 and 2016, the weights have been dramatically decreased from 170 grams to 111 grams, with adecrease of 35% of the weight that contributed significantly to reducing carbon footprint in transportation.
HTC has elaborated the energy-saving and power-saving functions in the colored mobile phone box andmanual. The HTC mobile phone box is made with environmentally friendly materials as well as fully recyclable
and biodegradable paper. Furthermore, “Forest Stewardship Council” certified paper, is printed on the box toalert the consumer to the concept of environmental awareness.

111

Sustainable Agenda

HTC 2016 CSR Report112History of HTC “Sustainable Packaging”

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

Transportation

Results

One pallet can carry more
packs and help reduce freightMaterial of VR packaging
Utilize recyclable packaging materials and lightweight design

WeightMaterial

Has been reduced, helps toreduce CO2 emission resulting
from transportation

Dimensions
Weight2009

2013/2014

2015

2016

Hero box

M7 BOX/M8 BOX

M9 BOX

M10 BOX

Dimensions

183x89x60mm

160x160x28mm

160x160x28mm

180.5x150.5x33.5mm

Total Weight

170g

95g

95g

111g

Transportation
Carbon Footprint(kg CO2eq)

1.59

0.89

0.89

1.04

Packagevolumereduced by
50%.

This box is 98%
composed of recyclable
paper and material.

Materials is consist
with current fast
renewable plants.

Materials is consist
with current fast
renewable plants.

It is made at least 75%
from fast-growing
bagasse (a sugar cane
product and bamboo).

No lamination in
top label.

Reduce theprinting area,
printing color.

ECO Features

It was printed using
vegetable-based ink
rather than petroleumbased ink.

2016
Pizza Box

574x420x212mm

415x295x181mm

3,000g1,800g

6pcs

24pcs

28.14

16.88

Fast growing materials(sugar cane, bagasse, bamboo)

Renewable material; more easily recycled with less CO2 emission

Soy inkused forprinting.

2015
Rigid BOX

Less colors.
Top label : from 5
colors to 1 color
printing.

The number of pallets

Transportation
Carbon Footprint(kg CO2eq)

Printed with two color and reducethe ink use.
ECO Features

Volume reduced by 55%.
Weight loss by 40%.
Printed with two color and reducethe ink use.

Do not use glazing
plastic.

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

113

Sustainable Agenda

HTC 2016 CSR Report114

Sustainable ProductIn response to the global warming crisis, HTC constantly looks for ways to reduce the impact and influenceof manufacture, production, and consumption by users, on the environment. The concept of life-cycletime (LCT) is our way of thinking about this and we start with R&D. The R&D engineers are provided withquantified and fully 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 up-stream 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.

The product carbon footprint standard ISO/TS 14067 was announced in May 2013. It specifies theprinciples and guidelines for the calculation and disclosure of life cycle 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.
Ratio of HTC 10 Carbon foortprint

6.1%

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

64.5%

Plan and action for carbon reduction

29.3%
0.1%

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

Product Environmental Declaration (EPD) report:
Resource
extraction

Production

Transport

Usage

End of Life

http://environdec.com/en/Detail/?Epd=8226#.Uzpg5PmSxMU
Carbon footprint report:
http://www.htc.com/assets-desktop/images/csr/tw/download/HTC-OneCFP-report.pdf

115

Sustainable Agenda

HTC 2016 CSR Report116Social Investment
and Contribution ___HTC has long been committed to 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 education.
This is a distinctive corporate culture of 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.

Social Innovation Product(1)-Totspace

VIVEPAPER

Children vaccination can produce antibodies
to avoid illness. A baby from birth to 5 years
old needs to have a total of 23 doses of vaccine.
The complicated schedule causes many novice
parents much trouble. In order to avoid the novice
parents missing the vaccination, HTC healthcare
cooperated with Taiwan Disease Control Center
to develop a special vaccination application“Totspace”. As long as enter the baby’s birthdate,
APP can try to calculate the date of vaccinationfor each dose of vaccine so that parents master thebaby in the growth stage for completing development indicators.

HTC healthcare BU has developed and lauched a novel augmented reality reading system named
Vivepaper. Vivepaper renders virtual multimedia content on a piece of physical paper(card stock). The
paper then appears as a multimedia book when viewed through the display of a head-mount device(HMD). The rendering pipeline of Vivepaper consists of three main components: an HMD with a frontal
camera, a card-stock paper printed with visual fiducial markers, and an HCI module. A user sees avirtual book on the display of a HMD rendered from the physical card stock. The user can interact withthe book through natural hand gestures and eye positioning such as swipe for flipping pages, and pointand-click or staring for selectiong content.

Through a simple user interface and entering the baby’s birthdate, Totspace can automatically calculate
the vaccination time, timely reminders, search for the information on the surrounding area for thevaccination contract institition to facilitate the arrangement and reserve the vaccination appointment.
In addition, the APP also offers a variety of customized features so that parents capture photos, record
growth milestones, but also share with friends and relatives, to create the exclusive growth notes. As ofthe end of 2016, the number of downloads had been over one million.

Social Innovation Product(2)-Mackay Medical Hall
“Medication taking on time ” is one of the criticalpriorities for chronic patients to control thecondition. Many chronic patients are older,memory is not as good as in the past, andsometimes they forgot to take their medication.
In order to solve the problem fro patients, HTC
Healthcare cooperated with Mackay Memorial
Hospital to develop the “Mackay MedicalHall”APP. The patient can use the mobile phone
to scan the QR code on medication bag or chronicprescription to complete personal medication
settings, as long as medication taking time is up,
APP will regularly ring to remind the patient fro
taking medication. If the patient scans chronic
disease consecutive prescription, APP will also remind the medication refill.

Vivepaper turns an ordinary piece of two-dimentional card stock into a doorway to an infinite amountof content in 2D, 3D, VR and any other formant that can be rendered on the HMD display, while
preserving the natural ways of human-book interations. Since its lauch in October 2016, Vivepaper
has been adopted in several domains including education, training, and tourism for making rich media
information immersive and interactive.

Tricoder XPRIZE
Qualcomm Tricorder XPRIZE is the largest international medical competition in history. The 2016
competition title is for designing a mobile instrument below 5 pounds, which can be used to monitor
and diagnose health condition at home. The competition stipulates that the instrument must be 24hour continuously monitor the vital signal and complete the diagnosis of 12 diseases within 90 minutes.
The Dynamical Biomarkers Group (DBG) was co-led by Dr. Edward Chang from HTC and Prof. ChungKang Peng from Harvard Medical School, and invited multidisciplinary teams of clinians, scientists andengineers. The device system designed by DBG stood out from the participating 310 international teams,
finalists before the dinal two. The XPRIZE Foundation will announce the winner in April 2017, with total
prize money of USD 7 million. The organizers also plan to introduce Tricorder into developing countries.

“Mackay Medical Hall”APP won the first prize of the 2016 Young Award for Healthcare Medicine. Thisapp has been downloaded over six thousands until 2016 and will be extended to other hospitals in 2017.

119Social Investment and Contribution

HTC 2016 CSR Report120Surgical Theater
HTC and partner Surgical Theater launched products
can transfer Computed Tomography and Magnetic
Resonance Images into Virtual Reality (Virtual
Reality) content for patient engagement, preoperativeplanning, such as surgical path simulation andsurgery with the combination of endoscope image andnavigation system.
At present, the Standford, UCLA, Mount Sinai, Mayo
Clinic and NYU Langone, five well-known medical
canters have used Surgical Theater products. Before
surgery, the patient can walk into their own brain tounderstand how physician plans to operate through the virtual reality of technology. The surgical teamcan also significantly improve the preoperative patient engagement satisfaction and improve the qualityof surgery through the virtual reality planning and simulation of the operation.
In November 2016, HTC held the “International Summit on Healthcare Innovation 2016” and invited
Neil Martin, UCLA Neurosurgery Director to Taiwan to share the experience of using VR technology toassit brain surgery. In December 2016, HTC also invited Dr. Joshua Bederson, Mount Sinai neurosurgery
director to Taipei to share virtual reality in the application of skull base surgery, how virtual reality
technology to contribute to medical teaching, and effective preoperative surgery planning and exercise tohelp surgeons improve the quality of surgery and patient engagement satisfaction. VR technology not only
meets the needs of medical student training, but also display the unexpected situation during the processof operation, which strengthens the medical staff’s capability to crisis and changes.
At present, HTC Healthcare has begun to promote the educational version of Surgical Theater products
to the medical schools and medical centers in Taiwan and China, to enhace the resifent doctors andmedical students for the brain anatomy of medical education, can significantly shorten the learning
time. At the same time, the clinical version is also applied the certification to TFDA in Taiwan for theactual use of the patient engagement, preoperative simulation and surgical navigation system andendoscope, to help improve patient engagement satisfaction and surgical quality.

121

Social Investment and Contribution

HTC 2016 CSR Report122

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$4,543,000 on education in 2016, while HTC Social Welfare and Charity
Foundation spent NT$48,012,000 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 effort 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.

123

Social Investment and Contribution

HTC 2016 CSR Report124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 forfive weeks. They include three hours of training and activity per week. The students get the energy tomove 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.

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 2016, our accomplishments in social works included:

Social enterprise marketplace

Summer institute for character education
HTC Foundation has been dedicated to the implementation of character education. For many years,
it has been providing highquality, systematic, and diverse resource 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 College of
Education, University of Missouri at St. Louis, to give a lecture in the “Summer Institute for Character
Education” in Taiwan since 2012. As of 2016, there have been 184 people in total from the leadershipteams made up of school principals and administration members from 27 schools who have participatedin the five-day intensive immersion training.
This course has been taught in Missouri and other areas for 18 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 campusbased 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”withvarious towns in Taiwan. Character Learning Course is launched every month with a way of characterand setting a good example with our own conduct. Group discussin 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 institues. 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 internal operating mechanism.

In response to the multi-employment development program by the Workforce Development Agency, theMinistry of Labor, striving for employment plan and social enterprise development, and further enhancing
the unemployed people’s employability and confidence at work, expanding the possibility of local industrial
culture, we held two social enterprise marketplace in 2016, with a total 12 units participated from the women’scare associations, agricultural producers’ cooperative and all local community development associations,created a total of NTD 84,310 benefits, not only to enable employees to understand the services and products
from the social enterprise development units through the activities, but also to participate and support withpractical actions produce more benefits.

Blood Donations
Seven times every year HTC cooperates with the Hsinchu Blood Center to hold blood donation drives. Manyof our kind-hearted employees have developed the habit of regular blood donation. Every time the mobile
vehicle from the Blood Center comes by our employees all line up to make donations to give back 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 177,500 c.c and 134,000 c.c of blood in 2016.

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 education. The education program highlights continuous learning and HTC plays
an active part in community engagement and social services. HTC cultivates communication with the children
and the community to pass on the core values of integrity, honesty, care, love, positive thinking, and respect for
natural resources.

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 sponsorship ofchildren in need. In 2016, 204 HTC employees made donations. The funds raised by the HTC Child Support
Club and the Employee Welfare Committee came to NT$1,862,860, and was used to sponsor 103 children.
Among those, 80 were domestic children, 15 domestic elites, total 95 children. While 8 of these were fromforeign countries, including Guatemala, Indonesia, the Philippines, Senegal, Sri Lanka, Qirghiz, and Paraguay.

“Character First” course emphasize the concept definition and operational denifinition with the corevalue of nurturing the leader and the lead team work. Besides, it is believed that people can lead in
different kinds of situation. The main goal of these courses is to nurture gourps of cadre of basic level
equipped with ethics and integrity. Since 2007, plan has been implemented in 18 institutes in Yuli
Hualien,Yuanlin Changhua and Fuli Hualien etc.

125Social Investment and Contribution

HTC 2016 CSR Report126Assurance Statement

ASSURANCE STATEMENTSGS TAIWAN LTD.’S REPORT ON SUSTAINABILITY ACTIVITIES IN THE HTCCORPORATION’s CORPORATE SOCIAL RESPONSIBILITY REPORT FOR 2016
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 for2016 (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 2016 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 of2016.
Our responsibility is to express an opinion on the text, data, graphs and statements within the scope ofverification 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 (GRI) Sustainability Reporting Guidelines (2013) for accuracy 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 Guidelines (G42013).
The assurance comprised a combination of pre-assurance research, interviews with relevant employees andsuperintendents in Taiwan; documentation and record review and validation with external bodies and/or
stakeholders where relevant. Financial data drawn directly from independently 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 2016 verified is accurate, reliable and provides afair and balanced representation of HTC sustainability activities in 01/01/2016 to 12/31/2016.
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 G4 Core Option and AA1000 AssuranceStandard (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. In the future, HTC may consider having more direct two-ways stakeholder engagements with
documented outcomes.
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 GUIDELINES (G4 2013) CONCLUSIONS, FINDINGS AND
RECOMMENDATIONS
The report, HTC’s CSR Report of 2016, is adequately in line with the GRI G4 Core Option. The material aspects
and their boundaries within and outside of the organization are properly defined in accordance with GRI’s
Reporting Principles for Defining Report Content. Disclosures of identified material aspects and boundaries, andstakeholder engagement, G4-17 to G4-27, are correctly located in content index and report. Disclosures on
Management Approach components for other material aspects, such as goals and targets, may be further
enhanced in next report. Detailed disclosures on LA1 and LA6 are recommended for future reports.

Signed:For and on behalf of SGS Taiwan Ltd.

David Huang, Director
Taipei, Taiwan
19 June, 2017
WWW.SGS.COM

The assurance team was assembled based on their knowledge, experience and qualifications for thisassignment, 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

127

Assurance Statement

GP5008 Issue 5

HTC 2016 CSR Report128

GRI Index
GENERAL STANDARD DISCLOSURES
Indicator

Disclosure Item

Omission
External
and
Assurance
Explanation p.127-128

Page Number

STRATEGY AND ANALYSIS
G4-1

Provide a statement from the most senior decision-maker of the organization

G4-2

Provide a description of key impacts, risks, and opportunities

5-6●

5, 31-33●

Indicator

Disclosure Item

Omission
External
and
Assurance
Explanation p.127-128

Page Number

G4-22

Report the effect of any restatements of information provided in previous
reports, and the reasons for such restatements

85, 93●

G4-23

Report significant changes from previous reporting periods in the Scopeand Aspect Boundaries

No significant
changes

●

41-42

●

STAKEHOLDER ENGAGEMENTORGANIZATIONAL PROFILE
1

●

G4-24

Provide a list of stakeholder groups engaged by the organization

10, 17-18

●

G4-25

Report the basis for identification and selection of stakeholders with whomto engage

41●

Report the location of the organization’s headquarters

1●

Report the number of countries where the organization operates, and namesof countries where either the organization has significant operations or thatare specifically relevant to the sustainability topics covered in the report

G4-26

41-42

●

G4-6

13

●

Report the organization’s approach to stakeholder engagement, including
frequency of engagement by type and by stakeholder group, and an
indication of whether any of the engagement was undertaken specifically as
part of the report preparation process

G4-7

Report the nature of ownership and legal form

9

●

G4-27

41-42

●

G4-8

Report the markets served(including geographic breakdown, sectors
served, and types of customers and beneficiaries)

13, 14●

Report key topics and concerns that have been raised through stakeholder
engagement, and how the organization has responded to those key topics
and concerns, including through its reporting. Report the stakeholder
groups that raised each of the key topics and concerns.

G4-9

Report the scale of the organization

9, 14, 59

●

G4-10

Report the total number of employees

24

●

2

●

2016

●

Every year

●

G4-3

Report the name of the organization

G4-4

Report the primary brands, products, and services

G4-5

G4-11

Report the percentage of total employees covered by collective bargaining
agreements

G4-12

Describe the organization’s supply chain

G4-13
G4-14

G4-15

G4-16

75

The union wasestablished in2015 and there
is no collective
agreements.

●

48

●

Report any significant changes during the reporting period regarding theorganization’s size, structure, ownership, or its supply chain

2, significant
changes●

Report whether and how the precautionary approach or principle isaddressed by the organization

81-101●REPORT PROFILE
G4-28

Reporting period (such as fiscal or calendar year)

G4-29

for information provided

G4-30

Date of most recent previous report

G4-31

Reporting cycle

2

●

G4-32

Provide the contact point for questions regarding the report or its contents

2

●

G4-33

Report the ‘in accordance’ option the organization has chosen

2●

12, 34●27, 35, 48, 65, 100●

GOVERNANCE
G4-34

List externally developed economic, environmental and social charters,
principles, or other initiatives to which the organization subscribes or which
it endorses

43, 48

List memberships of associations and national or international advocacy
organizations

48

●

●

Report the governance structure of the organization, including committeesof the highest governance body. Identify any committees responsible fordecision-making on economic, environmental and social impacts
ETHICS AND INTEGRITY

G4-56

Describe the organization’s values, principles, standards and norms of behavior

IDENTIFIED MATERIAL ASPECTS AND BOUNDARIES
G4-17

List all entities included in the organization’s consolidated financial
statements or equivalent documents

Pleaserefer to annual
report p.157

●

G4-18

Explain the process for defining the report content and the Aspect Boundaries

36

●

G4-19

List all the material Aspects identified in the process for defining report content

37, 38●

G4-20

For each material Aspect, report the Aspect Boundary within the organization

37, 38●G4-21

For each material Aspect, report the Aspect Boundary outside the organization

37, 38●129

GRI Index

HTC 2016 CSR Report130SPECIFIC STANDARD DISCLOSURES
DMA
andIndicators

Disclosure Item

Omission
External
and
Assurance
Explanation p.127-128

Page Number

CATEGORY: ECONOMIC
MATERIAL ASPECT: ECONOMIC PERFORMANCE
G4-DMA

Disclosure Item

G4-EN19

Reduction of greenhouse gas (GHG) emissions

G4-EN21

NOX, SOX, and other significant air emissions●

No emissions●

MATERIAL ASPECT: EFFLUENTS AND WASTE
G4-DMA

90●

G4-EN22 Total water discharge by quality and destination91●

107-109●No
relevant issues

●

115

●

115-116

●

37

●

No
relevant fines●

G4-DMA

94, 115●94, 115●101-102●101-102

●

48

●

48-54

●

75-76

●

No
relevant issues

●

14

●

G4-EC2Financial implications and other risks and opportunities for the organization’s
activities due to climate change

32●

G4-EC3Coverage of the organization’s defined benefit plan obligations

62-64

●

G4-EC4

Financial assistance received from government

No relevant
assistance●

G4-EN23 Total weight of waste by type and disposal methods
G4-EN24 Total number and volume of significant spills
MATERIAL ASPECT: PRODUCTS AND SERVICES

MATERIAL ASPECT: MARKET PRESENCE
G4-DMA
Ratios of standard entry level wage by gender compared to local minimum
wage at significant locations of operation

61

●

61

●

G4-DMA
G4-EC7Development and impact of infrastructure investments and services supported

G4-EC8Significant indirect economic impacts, including the extent of impacts

Energy consumption within the organization

G4-EN5

Energy intensity

G4-EN6

Reduction of energy consumption

G4-EN7

Reductions in energy requirement of products and services●

119-121●

Monetary value of significant fines and total number of significant fines
G4-EN29 and total number of non-monetary sanctions for non-monetary for noncompliance with environmental laws and regulations

125●

MATERIAL ASPECT: TRANSPORT

85, 86●Significant environmental impacts of transporting products and other goods
G4-EN30 and materials for the organization’s operation, and transporting members of
the workforce

85, 86●

MATERIAL ASPECT: OVERALL86●

G4-DMA

87, 90●

G4-EN3198.110-116●

MATERIAL ASPECT: SUPPLIER ENVIRONMENTAL ASSESSMENT

MATERIAL ASPECT: WATER
G4-DMA

Total environmental protection expenditures and investments by type

G4-DMA
91●

G4-EN8

Total water withdraw by source

91●

G4-EN10Percentage and total volume of water recycled and reused

92●

G4-EN33

Significant actual and potential negative environmental impacts in the
supply chain and actions taken

MATERIAL ASPECT: ENVIRONMENTAL GRIEVANCE MECHANISMS
G4-DMA

MATERIAL ASPECT: EMISSIONS
G4-DMA

MATERIAL ASPECT: COMPLIANCE

117

MATERIAL ASPECT: ENERGY

G4-EN3Extent of impact mitigation of environmental impacts of products and services

G4-DMACATEGORY: ENVIRONMENT

G4-DMA

G4-DMA
G4-EN27

MATERIAL ASPECT: INDIRECT ECONOMIC IMPACTS

83-84

●

G4-EN34

Number of grievances about environmental impacts filed, addressed, andresolved through formal grievance mechanisms
CATEGORY: SOCIAL

G4-EN15

Direct greenhouse gas (GHG) emissions (SCOPE 1)

85●

G4-EN16

Energy indirect greenhouse gas (GHG) emissions (SCOPE 2)

85●

SUB-CATEGORY: LABOR PRACTICES AND DECENT WORK

G4-EN18

Greenhouse gas (GHG) emissions intensity

85●

MATERIAL ASPECT: EMPLOYMENTGRI Index

87●

Direct economic value generated and distributed

131

Omission
External
and
Assurance
Explanation p.127-128

Page Number

14

G4-EC1

G4-EC5

DMA
andIndicators

HTC 2016 CSR Report

132

DMA
and
Indicators

Disclosure Item

G4-DMA
G4-LA2

Benefits provided to full-time employees that are not provided to temporary
or part time employees, by significant locations of operation

G4-LA3Return to work and retention rates after parental leave, by gender

Page Number

Omission
External
and
Assurance
Explanation p.127-128

G4-LA5Percentage of total workforce represented in formal joint managementworker health and safety committees that help monitor and advise on
occupational health and safety programs

G4-LA6

Type of injury and rates of injury, occupational diseases, lost days, andabsenteeism, and total number of work-related fatalities, by region and bygender

G4-LA8

Health and safety topics covered in formal agreements with trade unions●

G4-DMA

62-64●

G4-HR366●

MATERIAL ASPECT: FREEDOM OF ASSOCIATION AND COLLECTIVE BARGAINING●

G4-HR4102●

MATERIAL ASPECT: CHILD LABOR

Not doingstatistical
104-105
analysis bygender
No formal
agreements

G4-DMA●
G4-HR5●G4-LA9Not doingstatistical
80 analysis bygender

Programs for skills management and lifelong learning that support thecontinued employability of employees and assist them in managing career
endings

78-80

Percentage of employees receiving regular performance and careerdevelopment reviews, by gender and by employee category100%

G4-LA12Composition of governance bodies and breakdown of employees per employee
category according to gender, age group, minority group membership, andother indicators of diversity

G4-HR6●

G4-LA15Significant actual and potential negative impacts for labor practices in the
supply chain and actions taken

●

●

24

●

24, 27●

G4-HR11Significant actual and potential negative human rights impacts in the supply
chain and actions taken●

65, no relevant
issues

●

75

●

75

●

64

●

65,
no
relevant issues

●

65

●

No
relevant issues

●

65

●

65, 100%

●

48

●

49-54

●

76

●

76, no relevant
issues●30●

MATERIAL ASPECT: HUMAN RIGHTS GRIEVANCE MECHANISMS

Number of grievances about human rights impacts filed, addressed, andresolved through formal grievance mechanisms

48●

G4-HR12

50-54●

SUB-CATEGORY: SOCIETY
MATERIAL ASPECT: ANTI-CORRUPTION●

G4-LA16

Number of grievances about labor practices filed, addressed, and resolved
No relevant issues
through formal grievance mechanisms●

GRI Index

65

MATERIAL ASPECT: SUPPLIER HUMAN RIGHTS ASSESSMENT

G4-DMA

64

133

Total number and percentage of operations that have been subject tohuman rights reviews or impact assessments

G4-DMA

G4-DMA

MATERIAL ASPECT: NON-DISCRIMINATION

Operations and suppliers identified as having significant risk for incidents offorced or compulsory labor, and measures to contribute to the elimination of
all forms of forced or compulsory labor

G4-DMA
G4-HR9MATERIAL ASPECT: LABOR PRACTICES GRIEVANCE MECHANISMS

SUB-CATEGORY: HUMAN RIGHTS

Omission
External
and
Assurance
Explanation p.127-128

MATERIAL ASPECT: HUMAN RIGHTS ASSESSMENT

MATERIAL ASPECT: SUPPLIER ASSESSMENT FOR LABOR PRACTICES
G4-DMA

Page Number

MATERIAL ASPECT: FORCED OR COMPULSORY LABOR●

MATERIAL ASPECT: DIVERSITY AND EQUAL OPPORTUNITY
G4-DMA

Operations and suppliers identified as having significant risk for incidents
of child labor, and measures taken to contribute to the effective abolition ofchild labor

G4-DMA

77

G4-LA11

Operations and suppliers identified in which the right to exercise freedom of
association and collective bargaining may be violated or at significant risk,
and measures taken to support these rights

101

G4-DMA

G4-LA10

Total number of incidents of discrimination and corrective actions taken

G4-DMA

MATERIAL ASPECT: TRAINING AND EDUCATION

Average hours of training per year per employee by gender, and by
employee category

Disclosure Item

55

MATERIAL ASPECT: OCCUPATIONAL HEALTH AND SAFETY
G4-DMA

DMA
andIndicators

G4-DMA
G4-SO3

Total number and percentage of operations assessed for risks related tocorruption and the significant risks identified

30●

G4-SO4

Communication and training on anti-corruption policies and procedures

30●

G4-SO5

Confirmed incidents of corruption and actions takenNo
relevant issues●

HTC 2016 CSR Report

134

DMA
and
Indicators

Disclosure Item

Page Number

Omission
External
and
Assurance
Explanation p.127-128

MATERIAL ASPECT: COMPLIANCE
G4-DMA
Monetary value of significant fines and total number of non-monetary
sanctions for non-compliance with laws and regulations

G4-SO8

DMA
andIndicators

Disclosure Item

Page Number

Omission
External
and
Assurance
Explanation p.127-128

MATERIAL ASPECT: BRAND MANAGEMENT
37●

G4-DMANo
relevant issues●

MATERIAL ASPECT: CHARACTER EDUCATION
G4-DMA

SUB-CATEGORY: PRODUCT RESPONSIBILITY

Conflicts of interest are disclosed to stakeholders

15-18

●

123-125●

MATERIAL ASPECT: CUSTOMER HEALTH AND SAFETY
G4-DMA

95●

G4-PR1

Percentage of significant product and service categories for which healthand safety impacts are assessed for improvement

100, 100%●

G4-PR2

Total number of incidents of non-compliance with regulations and voluntary
codes concerning the health and safety impacts of products and services
during their life cycle, by type of outcomesNo
relevant issues●

95, 96●

G4-PR3

Type of product and service information required by the organization’s
procedures for product and service information and labeling, andpercentage of significant product and service categories subject to suchinformation requirements

96, 100%●

G4-PR4

Total number of incidents of non-compliance with regulations and voluntary
codes concerning product and service information and labeling, by type ofoutcomesNo
relevant issues●

43, 44●MATERIAL ASPECT: MARKETING COMMUNICATIONS
G4-DMA

MATERIAL ASPECT: CUSTOMER PRIVACY
G4-DMA
G4-PR6

Sale of banned or disputed productsNo
relevant issues●

G4-PR7

Total number of incidents of non-compliance with regulations and voluntary
codes concerning marketing communications, including advertising,promotion, and sponsorship, by type of outcomesNo
relevant issues

●

43

●

43, norelevant issues

●

37

●

No
relevant issues

●

53

●

MATERIAL ASPECT: CUSTOMER PRIVACY
G4-DMA
Total number of substantiated complaints regarding breaches of customer
privacy and losses of customer data

G4-PR8MATERIAL ASPECT: CUSTOMER PRIVACY
G4-DMA
Monetary value of significant fines for non-compliance with laws andregulations concerning the provision and use of products and services

G4-PR9MATERIAL ASPECT: CONFLICT MINERALS
G4-DMA135

GRI Index

HTC 2016 CSR Report136