2021 HTC ESG Report

ESG Report
2 0 2 1 Environment, Social, GovernanceEditorial Principle
Thank you for reading the 10th ESG 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 Sustainability matters and offers our stakeholdersa clear picture of all the related issues. Our aim is to use our brand’s influence to integrate our ESG strategies into theorganization, and we start off with a comprehensive response to all these issues.
As a global virtual reality and smart phone brand, we are ready to confront all the challenges that might present
themselves. For each major Sustainability issue that relates to our future development, we make it clear at the beginningof each section which challenge we are facing, our current achievements, and our goals for future development.

Process of Reporting Quality Management
Compile• The report information is provided by each department which is responsible for confirming thecompleteness and correctness of the data. The confirmed information is then submitted to the
ESG Office for compilation.

Edit• The ESG Office will coordinate with all departments to discuss the progress of planned goals andfuture directions.

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 ESG
in 2021.
This report has been prepared in Chinese and English. Both versions are posted on our official
website and are available for download (www.esg.htc.com)

Report Scope and Boundary
The organizational boundary, as mentioned in this annual report, mainly covers the company office buildings andplants in Taiwan: the headquarters in Taoyuan and two office buildings in Taipei. All HTC business operations in Taiwan
are within the boundary. The scope of financial information is consolidated financial disclosure; the scope of humanresources information covers employees worldwide.
HQ & Plants

2021 HTC ESG Report Organization Coverage Information

Taipei Office 1
Taipei Office 2

Boundary

AddressTel

HQ & Plants

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

Taipei Office 1

No 88, Sec 3, Zhongxing Rd, XindianDist, New Taipei City, Taiwan+886-2-89124138

Taipei Office 2

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

Time Coverage of Disclosure
We plan to issue the HTC ESG Report annually. This report generally covers the year 2021 from January 1 to December 31.
However, in order to provide a more complete picture of all our ESG achievements in various aspects to date, the content
and information about some issues refers to work carried out in 2020 to 2022 May, as well as the HTC ESG 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) Standards Core Option andAA1000 standards and has been confirmed by SGS-Taiwan to be in compliance with AA1000AS Type II high-levelassurance and GRI Standards Core option.

Internal
Reveiw• The information required for the Report is gathered by each unit contact, confirmed by therelevant supervisor, then processed and handed over by the Sustainability Office to the Chief
Sustainability Officer for final review.

External
Review• SGS Taiwan verified this report in accordance with AA1000 AS Assurance Standards and GRI
Standards. This report is in compliance with the core options of the GRI Standards and AA1000
Type II High Assurance.

Forward-Looking Statements & Statistical Calculations
In this report, HTC makes some forward-looking statements about future ESG 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 ESG 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.

•
•
•
•

Financial data was checked and confirmed by Deloitte & Touche, and was calculated in NT$
ISO 14064 greenhouse gas emissions and ISO 50001 energy management systems were verified by AFNOR Asia.
ISO 14001, ISO 45001, QC080000, ISO 27001 and ISO 27701 management systems were verified by SGS Taiwan.
The AA1000AS Standard was assured by SGS Taiwan.

Feedback

Contact Us

If you have any questions
about this 2021 HTC
ESG Report please let us
know to help us makecontinuous progress.

ESG Office, HTC Corporation
Contact: Yunyu Chen +886-3-3753252 ext. 36312
E-mail：esg@htc.com
Address: No 23, Xinghua Rd, Taoyuan Dist., Taoyuan City, Taiwan
ESG Website: www.esg.htc.com
HTC Sustainability
Questionnaire001

Editorial Principle

2021 HTC ESG Report002

Statement of the Management
Thank you for taking the time to peruse the 2021 "ESG Report" issued by HTC. We continue to follow the latest "Global Reporting Initiative Standards" and AA1000
standards Type II High Level of Assurance to report information disclosure to the general public and all stakeholders. The relationship communicates with HTC's
commitment and achievements in reflecting social responsibility and moving towards sustainable development.
HTC had an excellent year in 2021, with the launch of focused, highly acclaimed products, the full implementation of the corporate restructure, and robust
improvement in operational performance.
HTC is encouraged by the increasing recognition of its strategy as driving the future of the industry. In early 2018, HTC coalesced the Company around a central,overarching vision of VIVE Reality, whereby merging technology with humanity to unleash the imagination will create a world where technology fades into thebackground and experiences come the forefront. This vision is today being described as the ‘metaverse’. HTC’s version of the metaverse is VIVERSE, an immersive,boundless universe of fantastic new experiences, and a seamless gateway to other content universes created in collaboration with partners.
Against a backdrop of prolonged market disruption caused by the ongoing pandemic, HTC maintained its engineering and design edge, delivering high quality
hardware, software, platforms and services to markets including enterprise, education, arts, entertainment and healthcare. In particular, with business andleisure travel still restricted, practices adopted or accelerated during the first year of the pandemic largely sustained over 2021, and HTC saw virtual reality
embraced by numerous industries and organizations to enhance their business processes.
Environment, Social and Governance (ESG) issues have risen to prominence over the last few years and are now a significant consideration in investment
decisions. As a global citizen, HTC is committed to these principles, and has transformed the original corporate social responsibility committee into the
ESG committee, chaired by the Chairwoman. HTC also appointed its first Chief Sustainability Officer in Senior VP Madeline Chen, who will lead the charge
for sustainability in HTC’s management, design, product, and manufacturing processes as well as in the supply chain, to contribute more actively to HTC’s
environmental protection efforts, social responsibility and corporate governance. In order to achieve the long-term goal of sustainable development throughcontinuous improvement, the ESG committee is working with all HTC colleagues to understand how their work can contribute to these objectives. In April 2022,
HTC received the Silver Award by EcoVadis, the international sustainability rating platform. Among the 90,000 companies participating in the EcoVadis Corporate
Sustainability evaluation in 2022, HTC ranked in the top 15%, highlighting HTC’s continued commitment and efforts to various fields of sustainable development.
HTC strives to increase environmental sustainability across its operations, improving manufacturing processes and quality standards as well as seeking areas
to reduce emissions and increase power efficiency. This year, HTC attained management level (B- grade) in the climate change rating of the Carbon Disclosure
Project (CDP). Waste reduction and resource recycling efforts continued to show results, with HTC’s waste recycling rate significantly increased over the last ten
years, by 87%.
Looking ahead, HTC will continue to uphold VIVERSE's vision and the brand spirit of “Pursuit of Brilliance”, continue to innovate and focus on technology,
optimize organizational resources and create value, uphold the right strategies, world-class talent, innovation and a heritage of innovation that will drive our nextstage of growth. Throughout all of our operations and partnerships, HTC seeks to ensure the highest standards of environmental protection and R&D innovation,with a view to creating a better life for people. HTC strives to become a world’s leading brand, and you are welcome to give us support, encouragement andsuggestions on HTC’s road to a sustainable future.

HTC
Chairwoman and CEO

003

Editorial Principle

2021 HTC ESG Report004

Letter from Chief Sustainability Officer
HTC has been focusing on not only product innovation but also CSR (Corporate Social Responsibility) related topics. In 2012, we set up a CSR Committee to oversee
all the internal and external CSR tasks. As the world continues to pay high attention to the climate change and sustainability, we upgraded CSR Committee to ESG(Environment, Social, and Governance) Committee in the beginning of this year. Our chairperson Cher leads the ESG Committee as the chairperson and all BU(Business Unit) heads participate as members of the ESG Committee. HTC has also appointed a Chief Sustainability Officer role and set up an ESG Office to extend
CSR to more comprehensive ESG strategies and policies. By doing so, we cover all the three aspects of ESG and take sustainability into work and life with fullactions, to build the consensus from HTC fellow employees and lead HTC to keep moving forward.
In terms of the environment, as a citizen of the world, net-zero is our absolute goal. Our achievements so far include the GHG measurement and green productsupply chain. Starting from 2022, we will also begin conducting the product carbon footprint measurement, hoping to find out every possibility of energy
saving and carbon emission reduction by measuring carbon footprint from organization and product level. For example, we have begun investigating thepossible carbon emissions per kilogram of the raw materials used in our products, and then find out more cost-effective and lower carbon footprint materials
for replacement to reduce the carbon footprint from the source. We found that the cost did not necessarily increase but potentially decrease while graduallypracticing carbon footprint reduction. For example, the previous product packaging adopted multiple-color printing and strong structure for great quality andprotection. After redesigning and optimizing the packaging, we adopted high-quality non-colored recycled paper, and at the same time, simplified the printing as
mono color with soy ink. We also improved the package structure design to reduce the package dimension, which also reduces transportation costs while caring
for the environment.
In terms of society, as a leading brand company, we support the basic values of human rights, employ talents with equality and diversity. HTC stands strong on
the ground of gender equality as one of the key human rights. As a well-known female entrepreneur, our chairwoman and CEO is a role model in our efforts
to encourage women to be active in their profession, and we strive to create discrimination-free working environment and empower women to take high-level
managing positions, enabling HTC to be a corporation where female managers and supervisors stand out in number, and parental leave and employment rights
are secured as part of our welfare policy. Employees regardless of genders not only assist and support one another in our organization, but also jointly create asustainable working environment.
In recent years, under the interaction of the COVID-19 pandemic and the global political/economic situation, the overall environment has undergone drasticchanges. Fortunately, HTC has kept the production line in Taiwan, so the environment was relatively stable during the COVID-19 pandemic. We conducted earlymaterial preparation and strategic procurement to avoid supply chain disruption. We also paid more attention on production efficiency and the relationship with
our suppliers, which further strengthened HTC's resilience to various risks. In the future, we will also strengthen our corresponding actions to the risks brought byclimate change, and implement sustainable strategies in Governance. Our continuing internal disclosure of sustainability performance and information sharing
helps raise HTC employees’ awareness on sustainability, bring recognition for our dedication to Environment, Social, and Governance, and makes our employees
proud to be part of HTC.

HTC
Chief Sustainability Officer

005

Editorial Principle

2021 HTC ESG Report006

Contents
055

Editorial Principle 001
Statement of the Management 003

137

ESG Management

Friendly
Workplace2021 ESG Performance

Staff Management

Letter from Chief Sustainability Officer 005
Summary of the communities and associations participate 185
The 2021 apporach and its components 187
2021 Management Approach 189
GRI Standards Content Index 190

ESG Committee

057

058

139

Talent Attraction and Retention

ESG Management Procedures and Systems
HTC 2021 Material Issues and Boundary

060

063

143

Talent Cultivation and Development
Salary and Benefits

145

150

Listening to the Voice of the Employee
Occupational Health and Safety

158

009

067

About HTC

Responsibility Mangement

Social Investment
and Contribution

Global Operation Locations 012

Corporate Governance

HTC Foundation

171

Industry Overview

013

Tax Mangement

VIVE ORIGINALS

173

Product Overview

019

Risk Management

169

069

074
075

VIVE Arts

Overview of Financial Performance 028

Innovative R&D Management

The Pursuit of Brilliance 029

Customer Management

HTC 2021 SDGs Performance

049

092

098

101
Sustainable Agenda
Sustainable Environment
Sustainable Design

104

109

Sustainable Manufacturing Process
Sustainable Product127

Sustainable Supply Chain

131

180

Other Social Engagement Activities

033

COVID-19 Prevention
Management

156

118

184

About HTC –Name
HTC Corporation (TWSE stock symbol 2498)

Address
No 23, Xinghua Rd, Taoyuan Dist.,
Taoyuan City, Taiwan

EstablishedMay 15, 1997

SectorTelecommunications network Industry

Main business
Virtual reality device/Smartphone

Consolidated revenue
NT$8,245,050,000

The global leader in innovative Virtual reality &Smartphone design – HTC

Global Operation Locations

The HTC Corporation (HTC) was established in 1997. HTC brings brilliance to life through leading innovation in smart
mobile device and experience design. Beginning with a vision to put a personal computer in the palm of our customers'
hands, we have led the way in the evolution from palm PC to smartphone, and are now applying that same innovative
approach to connected devices and virtual reality. To date, our Company has been through four major transformations
that have helped us reinvent ourselves and achieve new growth. Starting from the beginning of the company's
professional PDA design, HTC has continued to deepen innovation in R&D technology. HTC's first major turning pointcame in 1999, when the Company moved into the telecommunications arena. HTC was the first to integrate Internet,
entertainment, video and personal assistant functions into a mobile phone with a large dimension onto high resolution
and full-color display panel. Since 2007, the launch of the HTC brand globally has committed the Company to longterm global brand development. In 2014, HTC began to seek new fields to apply our distinguished heritage in design,
engineering and manufacturing excellence as well as innovative thinking. In 2015, we began to enter the virtual reality
industry, and explore and create a new real experience with HTC VIVE.
In 2018, HTC set a new vision: VIVE Reality, cutting-edge technology such as virtual reality (VR), augmented reality (AR),artificial intelligence (AI), 5G high-speed connection and blockchain. Integrate humanity, humanities and imagination toachieve a richer enjoyment of a better life.
At the same time, HTC continued to develop and refine our industry-leading mobile technology expertise. The
smartphone division continues to integrate the latest technologies such as 5G and advanced photographic capabilities
into some of the most beautifully crafted devices on the market. At the same time, HTC created a new division focusing
solely on applying our world-class 5G networking expertise to consumer, enterprise and municipal sectors, supporting
the drive to expedite 5G adoption and solve challenges for business and society.
Human health is fundamental to improving people’s lives, and the HTC DeepQ business embeds advanced artificial
intelligence and VR technologies into a range of hardware and software solutions aimed at raising awareness of healthissues, enabling effective remote healthcare, and supporting the medical profession and government in a variety ofways.

Denmark: Heisler
United Kingdom: Slough*France: Paris

Belgium: Brussels
Germany: Frankfurt

China: Beijing*

Europe, Middle East, Africa

Asia-PacificJapan: Tokyo

China: Shanghai*
Dubai

Hong Kong
India: Gurgaon

Taiwan:Taipei*, Taoyuan*,Kaohsiung

Canada: Vancouver
United States: Seattle*
United States: San Francisco

America
MexicoAustralia: Sydney

The restructuring of HTC over 2021 saw the creation of separate business units out of VIVE Systems, VIVERSE (formerly
Content and Platforms), G Reigns (formerly 5G Solutions), HTC Smartphones and Connected Devices, VIVE Arts, VIVE
ORIGINALS and DeepQ. This new structure gives each business leader greater autonomy and clear focus on their own
portfolio and resources, while obtaining operational support, and guidance on strategy and financing from the HTC
mother company.
The advent of the metaverse sees the Company focused around VIVERSE, whereby the strategic direction of all business
units is to enable, enhance or expand the remarkable wealth of experiences available in the metaverse, which can beaccessed from virtually any connected device.
The pursuit of VIVE Reality sees HTC transition into a complete VIVERSE solution company, creating not only leading
hardware in strategic markets, but also building industry-leading platforms, software, content and services to create newrevenue streams and lay the foundation for our future growth.

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 and integration of
our operational HQ, HTC provides customers with a network of professional
services. Offices have been established in all the major markets of the world,
including the USA, Canada, the UK, Germany, France, India, Australia, China,
Japan, Hong Kong and UAE.
Note: The * is main operating base of HTC, of which "Important Operations Base" is Taiwan.

011

About HTC

2021 HTC ESG Report012Industry Overview
Since its establishment, HTC has had very strong R&D capability that has been clearly demonstrated by producing a
stream of first-class products for the international market. The company creates inspiring products and experiences
through a strong line of mobile solutions, connected devices, and VIVE virtual reality (VR) hardware and ecosystem.
HTC offers a diverse portfolio of mobile and VR hardware, software, and content that transforms the way consumers andbusinesses see and interact with the world and beyond.

013

About HTC

2021 HTC ESG Report014

Virtual Reality
Virtual reality comes from the human pursuit of immersion. VR is also the technology development direction that has
been encouraged by the smartphone industry through the advancement of various display technologies, processors,
controllers and other key components over the past 10 years. While consumers are satisfied with visual effects, they also
hope to experience “new virtual worlds”.
According to IDC’s public release of the 2020 VR industry research white paper, the VR industry chain can be subdivided
into five parts: hardware equipment, software, network, content, and distribution. Each part is linked and inseparable.
The hardware and software sessions can be regarded as the upstream of the VR industry. The hardware includes
component parts like chipsets, displays, optical modules, and sensors, as well as various types of integration with handrecognition, tracking and positioning, and somatosensory interaction; Software includes various development platforms
and tools including OS, cloud platforms, SDKs. The network and content can be regarded as the midstream of the VR
industry, where the network includes operators and various levels of network infrastructure; the content includes
content production related to the VR applications in various industries. Distribution can be regarded as the downstreamof the VR industry, including content distribution platforms, and product distribution channels.

Upstream
HardwareFinished
Product
OutputEquipmentPC,smartphone,
all-in-one
headsetInteractive
Device
OEM/ODM

Components

Mindstream
Software

Network

Content

System &Platform

Network
Service &Equipment

Content
Product &Application

Distribution
Platform

Operators

VR material
acquisition anddevelopment related
content production

Content
Distribution

Chipsets

OS

Displays

Cloud
Platform&Network

OpticsSensors
Bettery

Downstream

SDK/API

Infrastructure

Applications invarious Industries

Distribution

Professional,
Integrated

Service
Operation

DesignProject
Application
Operation

Profuct
Distribution
ChannelOff-line
On-lineEver since the so-called “first year of VR” in 2016, when VR products began to enter the consumer market, first attracted
the public with gaming applications. Playing games with VR not only provides advanced visual stimulation, but alsodelivers a more immersive content experience.
In the past, VR headsets were mainly connected to a computer. A gaming PC with strong graphics capabilities was
required to have a better visual experience. Recently, standalone VR headsets have overtaken the market to become themainstream form factor, as they have matured to include vital features of wireless connectivity, better mobility, accurate
6DoF spatial positioning, and powerful processing performance. Standalone VR headsets allow users to enjoy more
freedom of movement, reducing interference from tethered cables, to provide an overall friendlier user experience.

015

About HTC

To accelerate userbase growth for VR in the consumer segment, Meta (previously Facebook) rolled out Oculus Quest 2 byadopting an aggressively subsidized pricing strategy coupled with upgraded performance in devices. Thus, the overall
standalone VR devices market for consumers also experienced growth after Oculus Quest 2 launched. Applications for
VR is also quickly expanding with the introduction of various features like Passthrough, hand gesture recognition, andvirtual keyboard mapping.
The development of VR hardware depends on the continuous cooperation of software developers. For example,
game applications are represented by the well-known game platform Steam, and HTC cooperates with developers to
independently develop for the VIVEPORT platform so that developers can offer their application services, allowing for
the use of VR not only in games, but also in movies, social media, and other visual mediums. As for VR, we believe thatabundant content and application support is the key to attract consumers and stimulate VR market growth. That’s why
we are building a VR ecosystem that can integrate software and hardware to expand our penetration into the consumer
market.
Another major development direction of VR is to develop useful applications for professional use. From the perspectiveof the currently known application industries, medical and architectural professional fields are especially quick toadopt and apply VR, especially for use cases which require heavy 3D visualization. HTC aims to use VR to make medical
training more efficient and effective. By using VR for surgery simulation and medical equipment operation training, forexample, students and surgeons have significantly increased their surgery success rate and their confidence in how todeal with high-pressure scenarios. With the emergence of the 5G era and the acceleration of network speeds, VR medical
treatment can transmit high-resolution images and data in real time, facilitating real-time multi-party consultations, andeven enable remote surgery.
Entering the new 5G era, 5G technologies and technical demands have contributed to the advancement and popularityof high refresh rate displays and other low-latency components critical for VR. The development of AI and big datatechnology has also accelerated the development of VR from consumer level to large-scale commercial-level applications.
The metaverse has become the focal point of conversations within the tech industry and investors in 2021. Development
roadmaps were planned and announced by top global tech firms. Facebook also changed its name to Meta as a showof determination for their efforts to build their metaverse. The VR / AR industry quickly became the highlight ofmany metaverse market discussions, as this new direction fueled the market and triggered the development of more
immersive applications and the growth of device shipment volume. Gartner projected that 25% of people will spend at
least 1 hour per day for work, shopping, education, social, or entertainment in the Metaverse in 2026.
Since more tech firms and hardware manufacturers are also actively entering (or reentering) the VR industry, headsets
and platforms have more market competitions. To make VR headsets more lightweight, comfortable, and stylish,
manufacturers are trying new innovative designs like offsetting the processor and power from headsets to smartphones— the VIVE Flow immersive VR glasses launched in 2H 2021 from HTC is one such device.
The on-going experience of the global pandemic since 2020 has greatly accelerated the digitization of almost all activities,
which is also simultaneously enriching the Metaverse concept and realizing different use cases for a digital virtual world.
Thus, people see this year as the first year of the Metaverse. The Metaverse is widely regarded as an “always-live” andpersistent virtual ecosystem where people can meet, interact, socialize, work, learn, and play games. These systems will
also have to meet the data demands of millions, billions of people. And that’s where blockchain and cryptocurrencies
come in. The Metaverse will be built on the foundation of blockchain technologies, and cryptocurrencies will enable its
economy. This means that Blockchain and NFTs will play a vital role in the Metaverse, providing verifiable, undisputed
ownership of characters, in-game items, or even virtual real estate.
The metaverse as it is being described today is what HTC has continuously built and heralded as VIVERSE since a few
years ago, the future that’s enabled by the integration of VR, AR, AI, 5G, and Blockchain technologies. HTC has long since
been leading the industry in paving the way to build and enable the metaverse.

2021 HTC ESG Report016

5G, Smartphones and Connected Devices
Over the past few years, smartphones have been constantly and continuously updated with new and innovative
functionality. Smartphones have fully transitioned from traditional feature phones into the touchscreen-enabledcommunication products with independent operating systems we all know today. Consumer demand has led to thedevelopment of components including high-performance miniature camera lenses and powerful batteries, and this has
also greatly accelerated and stimulated the vigorous development of all communications-related hardware industries.
At present, the smartphone industry is already a mature industrial chain with professional divisions of labor. Eachspecialized component integrated into smartphones comes from a different specialized supplier. After being assembled
by the manufacturer, it is then sold by a dealer or a telecommunications company.
Recently the sales growth of the smartphone sector has slowed, partly due to the maturation and standardization of the
hardware functions found on mobile phones, and partly due to developed markets including Europe and the UnitedStates have reached a saturation point, leading to longer life cycles and slower replacement rates for all mobile phone
products.
The smartphone industry welcome new technologies to enter the 5G era in 2020. The global smartphone market was
expected to embrace the new business opportunities with a wave of new 5G smartphone purchases after 5G wascommercially deployed globally in 2020. However, due to COVID-19 since the beginning of 2020, the global smartphone
supply and demand declined, and it also partially delayed the launch of 5G in some regional market. Therefore, global
smartphone shipments continued to decline in 2020. Due to the incentive by the implementation of 5G use cases in
Chinese market, the 2020 global 5G smartphone market still shared a 19% of penetration rate. Especially Chinese
smartphone brands have around 60% of market share.

Time

1980

1991

2001

2008

2020

Technology

AMPS

GSM
CDMA

WCDMA CDMA2000
TD-SCDMALTENew Radio, Low
Latency, Massive
MIMO, Beamforming

Call, Message,internet, 1080P
Video streaming
service

ServiceCallCall, Message,
Text mailSpeed

2 Kbps

10 Kbps

3.8 Mbps

0.1-1 Gbps

1-10 Gbps

800-900 MHz

850-1,900 MHz

1.6-2.5 GHz

0.4 GHz-5.2 GHz

0.4 GHz-52 GHz

017

About HTC

In 2021, the world economy is still heavily impacted by the multiple variations and surge in cases of COVID-19; supply
chain constraints impacted the output of certain components and also caused an increase in prices. Despite all of this,because the market was already at a low point in 2020, and the 5G is more mature with higher coverage and support,
the smartphone market is finally able to get out of the continued period of recession of the previous 3 years.

Re-investment & Affiliated Companies
HTC's reinvestment policy is to provide different solutions for enterprise clients, personal consumers, and telecom
operators, the company continues to deepen the enhancement of virtual reality and augmented reality related newtechnology, application software, and content expansion through strategic investment, to deepen the enterprise market
and mass consumer market. 2021 HTC affiliated companies please referred 2021 annual report P188.

Call, Message,internet, 4K
Video streaming
service, VR
streaming, Auto
Guided Vehicle

Call, Message,internet, Streaming
serviceFrequency

Smartphone market continued paying attention on 5G topic in 2021, while countries recovering back to 5G
infrastructure, mobile processor manufacturers roll out low-end and middle-end processors, global 5G smartphone
penetrate rate rapidly raised to around 40%. It was estimated that 5G smartphone will have larger scope than 4G
smartphone to be the mainstream of the market in 2022.

2021 HTC ESG Report018

Product Overview
HTC has been tapping into the possibilities of smartphones through brand new technology in the telecommunications
area. Extensive and innovative VR, AR, AI, blockchain, and high-speed 5G networks are amalgamated to create HTC’stechnological vision of VIVE Reality.

HTC VIVE™
VR (Virtual Reality) is an exciting feature of next-generation computing and entertainment. HTC VIVE allows users to browse through the VR world and use uniquehand-simulation controllers to interact with objects.

VIVE Pro 2

A sharp, precise, and breathtakingly immersive
device, VIVE Pro 2 pushes the boundaries of
productivity, creation and play, delivering PCVR experiences like never before.
－ CES® 2022 Innovation Awards「Virtual &Augmented Reality」

HTC's flagship PC-VR headset VIVE Pro 2 features a 5K 4,896 x 2,448 display
resolution. The crystal-clear images show amazing details. The astonishing
5K is backed by 120° Field of View to engage real interaction with and easy
immersion in virtual worlds. The 120Hz refresh rate gives ultimate smooth
images.
VIVE Pro 2 enhances the ergonomic design. In addition to the speciallydesigned front and rear balanced weights, the adjustable headband and quick
adjustment knobs provide users with a comfortable experience. VIVE Pro 2
features an adjustable inter pupillary distance (IPD) function, balanced frontrear weight distribution, an adjustable strap and a quickly-scaled knob thatallows adjustment to wearing configurations for different users. Aside fromsupporting third-party earphones, VIVE Pro 2 also features a set of headphonesthat is certified by Hi-Res Audio and capable of delivering 3D spatial audio.
VIVE Pro 2 is compatible not only with the Steam VR system and peripheral
accessories, including Tracker 1.0, Tracker 2.0, VIVE Controller, VIVE Wireless
Module, or VIVE Tracker of whatever generation, and the new VIVE Facial
Tracker, but also with other third-party Steam VR motion sensing accessories,e.g., Valve's Index knuckle controller.
With the above advantages, VIVE Pro 2 was named a CES® 2022 Innovation
Awards Honoree in the Virtual & Augmented Reality category at the Consumer
Electronics Show (CES), the largest international consumer electronics event in
the United States.

019

About HTC

2021 HTC ESG Report020

VIVE Focus 3
VIVE Focus 3
As a flagship-level standalone device, VIVE Focus 3 offers total solutions for commercial
VR activities; it provides an optimum immersive experience and an outstanding
wearing experience through its outstanding visual effects, ergonomic design catering
to human needs, optimum audio effect and advanced inside-out tracking systemand controllers. Featuring an industry-leading 5K resolution, a 90Hz refresh rate,a wide 120-degree field of view (FOV) closest to human eyes and a RGB sub-pixel
display, VIVE Focus 3 offers the optimum visual immersion to an extent that even thesophisticated brushstrokes are well presented, enabling life-like interaction between
the software designer and the user. VIVE Focus 3 is powered by Qualcomm’s updated
Snapdragon™XR2 platform that features stunning performance. Such a platform, if
compared with the one that powered VIVE Focus of the previous generation, featuresa twofold higher GPU and CPU performance and an eleven-fold higher AI processing
performance. In addition, VIVE Focus 3 has heat copper pipes and a cooling fan thatcan keep it cool under intense use.
In order to offer a wearing experience that is most comfortable and convenient andlasts for a longer session, VIVE Focus 3 is equipped with a curved and fitting swappable
battery pack, as well as a new strap that makes the helmet a natural counterweight.
Changing of VIVE Focus 3's battery pack only takes a few seconds; such swift batterychanging enables the continuous use of the device even after it has been used all day
long. In addition, only 30 minutes of recharging is required for reaching a 50% charge;
the LED indicator light instantly shows the battery level.
VIVE Focus 3 is equipped with a new directional speaker that has a pair of built-in
drivers, rendering a life-like and immersive audio effect. Its open-back audio design
allows users to immerse themselves in the VR world while being alerted to externalsounds. Its distinctively directional audio frequency design can reduce sound leakage.
This minimizes the risk that the neighboring person can hear the voice when a meeting
is conducted and so ensures privacy.
The VIVE Focus 3 uses an AI-driven inside-out tracking system for precise tracking; itstores all tracking data in the headset’s encrypted partition (on-device end), as opposed
to any cloud storage spaces to protect users’ privacy. Being among the lightest 6 DoF(degree of freedom) controllers on the market, the redesigned controller offers moreintuitive use experience; one single recharge can last for 15 hours.

VIVE Tracker 3.0
The VIVE Tracker can bring real objects into virtual space with ease,regardless of the objects being a tool, a camera or a person’s fullbody. It is an ideal equipment for simulation and motion capturing
in VR production; yet, this is only the beginning. Compared withVIVE Tracker of the 2018 version, VIVE Tracker 3.0 has the samefunctionalities and precision but is 33% smaller, 15% lighter and 75%
more durable in terms of battery life.

021

About HTCVIVE Facial Tracker
The VIVE Facial Tracker accurately captures the facial expression and lips
movements below the nose; it then authentically presents such capturing in thevirtual world to express the users’ emotions in real-time. The movement of the lips
accompanies the voice, thanks to almost-zero latency. By capturing 38 blends ofthe movements of the lips, jaw, teeth, tongue and cheeks, the VIVE Facial Tracker
is capable of accurately conveying expressions even as subtle as a smile or a lookwithout a care. If working in tandem with VIVE Pro Eye, it can track all facial
expressions.

2021 HTC ESG Report022

VIVERSE
VIVERSEThe VIVERSE business unit (formerly HTC Content & Platforms) is instrumental in the creation of HTC’s content
ecosystem in the metaverse era. Through its advanced content, software and platform technologies, VIVERSE has
maintained steady growth in both VR content and platform on its VIVEPORT platform, leveraging its virtual exhibition
platform for enterprise use cases, and continues to build strong content and hardware partnerships to engage more
end-users and accelerate the expansion of the VR ecosystem.
VIVEPORT has established a library of 3,200+ titles across a variety of genres. In 2021, it launched the Infinity Vista
subscription plan for smart glasses such as the new VIVE Flow immersive glasses. VIVERSE also made its firstinvestment in content IP by co-producing the anime, BIRDIE WING, the world’s first original anime featuring women’sgolf, an important milestone in HTC’s VIVERSE strategy.
Besides the benefits of being eco-friendly by transforming physical to virtual platforms which can effectively
decrease consumption of resources, VIVEPORT also emphasizes equality and mental health in the sustainable field.
All content needs to be confirmed with the “Content Guidelines” of VIVEPORT before being released. If there is any
discriminatory content related to race, ethnicity, social class, or language, etc., it will not be fit for the market. Aftercontent is released, it is still under surveillance for any violations of the guidelines. HTC exists to collaborate with all
developers to create a high-quality virtual content environment.

VIVE ORIGINALS

Virtual reality comes from the human pursuit of immersion. VR is also the technology development direction that has
been encouraged by the smartphone industry through the advancement of various display technologies, processors,
controllers and other key components over the past 10 years. While consumers are satisfied with visual effects, theyalso hope to experience “new virtual worlds”
HTC is the leading corporation in the VR industry. VIVERSE, the metaverse constructed by HTC, features state-of-theart VR, AR, AI, Blockchain and 5G technologies that enable an immersive, highly interactive, in-depth explorable
open ecosystem. In the 2022 MWC, HTC declared the VIVERSE vision: accessibility through any type of device on any
platform. VIVERSE in the near future will present the ultimate colorful entertainment experience; work processing,meetings, trainings and education with high immersive capacity, helping you find the perfect place for your mind,
body and soul while being surrounded by the heartwarming, gentle music provided by the meditation app on
VIVEPORT.
At VIVERSE, everyone is given a unique virtual character and can be active on many platforms, socializing with andexploring virtual worlds created by others. The emerging NFTs can also be traded in VIVERSE, and there are growing
ways to buy digital collections. Other than Ethereum, we have projects in the PoS (Proof of Stake) and PoSA (Proofof Stake Authority) spaces, and blockchains that consume much less energy, acting as platforms for a sustainable
environment. In addition to its entertaining capacity, VIVERSE offers an educational element, especially when using
it to learn about high-risk activity and how to perform surgery, allowing professionals to gain and accumulate
experience in a shorter time. The VIVERSE application is an extension of the vision of VIVE Reality.

023

About HTCHTC VIVE ORIGINALS is a content brand owned by HTC VIVE. It is devoted to original IP development and originalcontent production. It also engages in the distribution and exploration of VR in film, art, animation, music, culturalcollections, as well as industries of cultural creativity and entertainment. VIVE ORIGINALS is also actively building across-domain team to create content and VR technical spec standardization. Moreover, it is aimed at creating content
production SOP (standard operation process), and providing an extended variety of VR solutions. Meanwhile, profit
comes from various channels such as licensing for public broadcasting, organizing exhibitions, and trading for art
collections with cross-domain content. We also actively strive for collaboration with government to garner film andtelevision investments. Additionally, we want to expand the scale of content, create industrial values, and build up
a VIVE Reality ecosystem by content cluster to fulfill the ultimate goal of enriching human cultural life through newtechnologies and creativity.
The brand and goal of VIVE ORIGINALS is to “create entertainment experiences with cultural value in the virtualworld for people”. To deepen the connection between the virtual and the real world, our four pillars of VR technology
development can be applied to cultural and art collections, and video and audio recordings. These pillars are: “Content
Production”

VIVE Arts
HTC launched VIVE Arts in 2017 and kicked off the Global Virtual Reality Art Program. VIVE Arts is devoted to
exploring art and culture ever since it was established. Virtual reality is a new medium full of potential that provides
people with a different perspective of how to appreciate artistic treasures in the world. The revolutionary technology
of VIVE has changed the way in which people can create and experience art. For example, VIVE collaborates withmuseums and content developers to launch their pieces of work in pioneering ways.

2021 HTC ESG Report024

Healthcare

G Reigns, Smartphone
HTC Desire 21 pro 5G Announced
in January 2021, the HTC Desire 21
pro 5G delivers the power of 5G toa whole new audience. HTC Desire
21 pro 5G brings a rich cinematic
display, AI-assisted camera solution
and a big tier-leading battery,augmented by the power of 5G at
an affordable price point.
The Desire 21 Pro 5G boasts a rapid
90Hz refresh rate on a stunning
6.7-inch FHD+ display, providing acompromise-free screen to enjoy
high-fidelity 5G-streamed content.
Dual connectivity support allows
users to be seamlessly transitioned
as 5G infrastructure matures,
ensuring a fast and consistentconnectivity experience.

DeepQ
HTC DeepQ is comprised of cross-domain experts and engineers in areas such as computer science, software
engineering, medicine, regulations, user experience, design, through digital technology, big data and artificial
intelligence technology, all with the goal of developing and providing precision personalized medical products
and services to reduce costs and improve the effectiveness of healthcare.

Medical VR
The HTC Medical VR team is committed to the vertical application of virtual reality to medical education andclinical applications. In addition to greatly improving the interest and effectiveness of medical education, it
can also improve the communication between doctors and patients and the quality of medical care, creating
maximum social well-being. At the same time, the Medical VR team accelerates the development of the global
medical VR ecosystem and cooperates with virtual reality developers to implement the virtual reality of medical
innovation technology in the actual field and integrate it into practical applications. It has established partnerships
with many hospitals and universities. Successfully become a world-class benchmark, and jointly build the world’s
top virtual reality medical teaching center, so that medical education and training can be upgraded to the next
generation.

025

About HTC

The camera setup is led by a huge 48MP main lens, 8MP ultra-wide lens, 40mm macro lens, dedicated depth sensor
and a 16MP front facing lens, allowing users to take excellent photos under all conditions. A suite of cutting-edge
features, including low light, panorama, intelligent photo and pro mode provide users the flexibility to get the bestout of their shots.
To accompany all this, the HTC Desire 21 pro 5G includes a whopping 5,000 mAh battery boosted by Qualcomm
Quick Charge 4.0+, so that users can enjoy the best that the 5G era has to offer- without interruption.
In addition, HTC presented its 5G private network solution to partners in September 2020. The package featured
HTC remote streaming software management, edge computing, open frame standard based 5G network software,
all-encompassing highly secured network system, and one-stop XR service to deliver a 5G standalone private
network of high-transmission, low latency, and broad connections. The application is best appreciated in large
bandwidth, low latency and highly reliable vertical use, from cloud game to cloud VR, smart manufacturing,smart monitor, AGV, to name a few.
On one hand, HTC is committed to CU/DU development and optimization in 5G RAN for above vertical application.
On the other hand, HTC’s designs of 5G RU, Fronthaul switch, Grand Master and COTS server with a number of
Taiwanese hardware makers form a national team and perfect the vRAN environment in Taiwan.
HTC 5G is a Intal FlexRAN based O-RAN option-7.2 compliant vRAN. It has aligned with world noted 5G core
network software makers (Taiwan vendors included) for interoperability, targeting customer’s choices to satisfy
the needs for unique network settings.

2021 HTC ESG Report026

Overview of Financial Performance
HTC's consolidated revenue for the whole year of 2021 was NT$ 5.25 billion, the consolidated gross profit was NT$ 1.64
billion, the consolidated gross profit margin was 31%, the operating income margin was -78%, the net profit after tax was
NT$ -3.1 billion, and the earnings per share (LPS) was NT$ -3.75. Fewer inventory shipments led to a reduction in revenue
in 2021. Nonetheless, changes in product mix resulted in improvements in gross profit and gross profit margin. Operating
expense decreased due to the enforcement of HTC’s austerity policy. Non-operating income increased as a result of adisposal gain recognized on a subsidiary. In 2021, HTC lost control over the subsidiary, subsequently accounting for theinvestment in accordance with the equity method of accounting. HTC’s pre-tax loss was lower in 2021 as compared to
2020.
Unit

2019

2020

2021

Operating Revenue

NT$ Million

10,015

5,806

5,253

Operating Costs & Expenses

NT$ Million

19,865

12,197

9,370

Income Tax

NT$ Million

6

4

3

Employee Wages

NT$ Million

6,476

5,267

3,777

NT$

0

0

0

NT$ Million

0

0

0

Dividends
Social Investment /Donation

Note:
1. The related figures are those listed in the consolidated statement.
2. Final decision after annual shareholders' meeting.

HTC Product: Virtual Reality, 5G, Smartphones and Connected Devices (including Accessories)
Year

Domestic Sales

Export Sales

Quantity (Thousands)

Value (Millions)

Quantity (Thousands)

Value (Millions)

2019

397

1,847

19,385

7,347

2020

168

978

1,559

4,436

2021

90

631

940

4,344

2021 HTC ESG Report028

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

027

About HTCThe Pursuit of Brilliance

HTC is an innovation company, creating powerful new products, solutions, and platforms in mobile and immersive
technologies. Beginning with a vision to put a personal computer in the palm of our customers’ hands, we have led theway in the evolution of smartphones, and are now applying that same innovative approach to connected devices andvirtual reality as we enter the era of VIVERSE, our version of the metaverse.
At the heart of this is a bold innovative spirit of pushing new boundaries, while leveraging our industry-leading
capabilities. The notion of Dare to Dream is at the heart of our daily ambitions. We ask fundamental questions at theintersection of customer aspirations and our capability to delight and surprise with innovative solutions. We challenge
ourselves and our customers to achieve their full human potential. What’s your dream? Can you visualize it? Will it shift
our perspective? Will we feel it? The future belongs to the dreamers to power creation and innovation. Because our
dreams power the future. Dare to Dream.
As we live this philosophy, we employ powerful technologies and combine them in creative new ways in order to deliver
this. At this time in history, building block technologies like VR, AR, 5G, AI, and blockchain are evolving and coming
together in new ways with the potential to deliver utility and experiences previously unavailable. We call this VIVE
Reality.

Future Goal

Today, VIVE Reality is the future that we strive to enable. That means understanding people’s needs and desires, theirhopes and aspirations, and embedding them into the building block technologies of today and tomorrow. Throughcreating wonderful devices, platforms, content and solutions, we can unleash imagination from the bounds of reality
and realize the true potential of technology for the benefit of humankind. Our future is enhanced in a world where
HTC innovation and VIVERSE experiences blend to create a new and better world. These three pillars are central to thatmission:Integrate products and services tostrengthen brand-added value.
Create professional images of
products with strong technologicalcompetency to increase market
shares.

For HTC, our innovation is human-centered in the broadest sense.

HumanityStrengthen marketing resources toelevate the brand's image.

We endeavor to anticipate the needs of people, businesses and society as a whole, andexpand our vision to impact people’s lives in ways never before considered.

Our heritage of and commitment to technology excellence is the great enabler of our
pursuit.

Technology

Current Achievement

We strive for a world in which customers, large and small, have access to the mostpowerful hardware, platforms, tools, and services, a world where the technology becomes
secondary to the experiences that it creates.

Creating a global smartphone with excellent designs
Imagination is one of the most powerful tools we know, and one we seek to unlock.

The most valuable international brand from Taiwan
The world's first virtual reality system VIVE brings real-world interaction andexperience through space-based positioning technology
Through virtual reality and augmented reality, big data, and artificial intelligence
technology, with the goal of developing and providing precision personalized
medical products and services to reduce costs and improve the effectiveness ofhealthcare

HTC's
Challenge
How to enhancebrand loyalty029

About HTC

Imagination

A world where a continuum of immersive realities is possible, and experience isunbounded.
Imagination that invents new ways to make life better for people and enable them tobe the best they can be, help businesses achieve their vision, and solve the greater
challenges faced by society.

This philosophy and approach are reflected in a steady stream of world-class innovation, as we continue to advancenew products in VR, mobile, and 5G with greater capability and convenience. We also continue to advance our societal,
environmental and cultural initiatives, and our support of education. From our people to our products, Dare to Dream
represents a guiding philosophy that energizes HTC as a global organization.
The pursuit of VIVE Reality sees HTC transition into a complete VIVERSE solution company, creating not only leading
hardware in strategic markets, but also building industry-leading platforms, software, content and services to create newrevenue streams and lay the foundation for our future growth.

2021 HTC ESG Report030

“Quietly Brilliant” is deeply rooted within HTC’s corporate culture. HTC strives to unlock the full human potential of ourcustomers, employees, partners, and other stakeholders, and to achieve that, we must strive for our core values of truth,
goodness and beauty in all that we do.

Truth

Truth means being real and authentic. The fields of science and technology are
constantly pursuing truth to solve society’s problems through innovation. This is themost important essence of HTC.

Goodness

Goodness means turning heartfelt ideas into actions that improve people's lives. Suchas, high-quality content that can inspire empathy and compassion, products that canhelp people with disabilities, that serve the elderly or educate young people, and thatsolve problems for organizations.

BeautyBeauty is simplicity and elegance. The simplest structure can hide complex details
that each have a purpose. We design simple and intuitive user interfaces for highquality products that evoke a beautiful reaction in our customers.

Only when we launch excellent products instilled with truth, goodness and beauty can we implement our mission of“combining technology with humanity to unleash the imagination” and achieve our vision of VIVE Reality.
Our vision can best be understood through the VIVE Reality triangle logo mark, which represents the unity of three key
elements – humanity, technology, and imagination – while the center symbolizes a portal to a new world of experiencesthat VIVE Reality delivers. VIVE Reality was born from a faith in humanity and forged by a respect for technology, paving
the way for bringing people closer together, and closer to their imagination, than ever before. VIVE Reality is stimulating
innovation in entertainment, education, training, design, healthcare, art, shopping and social networking, and manyother industries, positively impacting the world, affecting the way we live, learn, and believe.

Authenticity: Being authentically true to the nature of our mission, and the belief that we can improve human lives
and experience while creating value.
Entrepreneurial approach: We are agile, attentive to costs, and aim to achieve maximum effectiveness through an
obsessive and energetic approach to building our brand.
Innovative products: For many customers, our products and services are the most concrete expression of our brand.
By delivering a steady stream of innovation in mobile, virtual reality, 5G, blockchain, and more, we create proof
through action.
Integrated solutions: Far more than just a hardware company, we deliver true solutions through platforms,
software, and services to create positive experiences and net promoter scores with our customers. Our VIVEPORT
store provides access to content, VIVE Studios creates software, and VIVE Enterprise engages business customers withfull solutions.
Broader audiences: By continuing to improve and simplify our products and user experience, and support a broader
range of software, we aim to access new customer segments and solve the challenges they face.
Developing the ecosystem: HTC works closely with partners at each stage of innovation to build the ecosystem
necessary to promote adoption, and actively participates in industry alliances to advance our industry thought
leadership. Through the VIVE X accelerator program, we are supporting the development of the ecosystem foradvancing the key and emerging technologies such as VR, AR, 5G, AI, and blockchain. We create opportunities to work
closely with our portfolio companies to explore mutually beneficial ways to advance entrepreneurial innovation.
VIVEPORT is helping to build an ecosystem of content developers by providing a dedicated VR app store for
consumers and enterprise as well as creating VIVERSE, HTC’s version of the metaverse, while VIVE Wave is enablingother hardware companies to deliver immersive devices to broaden the market and fuel innovation. At every stage of
product development, HTC considers the requirements of the ecosystem in order to drive the innovation.
Smarter communications: We develop the types of products that people love and want to learn more about, thatspark their curiosity and tap into their imagination. These make for great stories and social engagement, which areamong the most effective ways to build a brand, and are a focus of our efforts on that front.
Building communities, forging customer relationships, and offering services that increase lifetime value:
We have moved well beyond the transactional nature of selling consumer electronics to developing an ongoing
relationship with our customers. Through our platform, software, and service offerings, we can continue to engage
with them, as well as increase customer lifetime value.

While we expanded from creating world-class smartphones into the fields of connected devices, virtual reality, 5G
networking, blockchain, and now the metaverse, we are re-energizing the HTC brand story through the notion of an
innovative parent company that will dare to dream, while expanding our brands to new audiences and segments. HTC’s
approach to brand building is both pragmatic and effective, and is based on principles including:031

About HTC

2021 HTC ESG Report032

HTC 2021 SDGs Performance
Taiwan V-Watch – COVID-19 Vaccination Health Report System

The United Nation’s Sustainable Development
Goals

Campus Influenza Vaccine System (CIVS), optimize the vaccination process toimprove the vaccination record
HTC in collaboration with Chunghua Christian Hospital to launch the first crosshospital AI+Blockchain Medical Care Line Bot, Dr. Lan

In 2015, the United Nations passed 17 Sustainable Development Goals (SDGs)
aimed at ensuring peace and prosperity for all people. Each goal also details
specific goals to be achieved in the next 15 years, thereby establishing theguideline and blueprint of the future sustainable development direction, serving
as a global sustainable development agenda and action appeal. In order toachieve a more sustainable future, companies, governments, and society need tofulfill their responsibility and make an effort.
As global citizens, we spare no effort to implement the goals of the United Nations.
We are committed to integrating SDGs into corporate operations and businessdevelopment planning In addition to establishing gender equality in practiceand empowering female employees and providing them with benefits, we also
focus on green sustainability in the manufacturing process, achieving responsible
consumption and production. Externally, the HTC team has also collaborated withexternal institutions on the research and development of products and services
that enhance healthcare quality, making full use of innovative technologies topromote sound health and well-being of people of all ages, while establishingmultiple partnerships with teams from different fields to accelerate theimplementation of goals.

DeepQ AI Platform

Goal of serving the community of The League
Partnerships with all levels of school for XR, VR professional
cultivation

HTC SDGs
indicators
Development of 5G in the Asia New Bay Area with the
Kaohsiung City Government
VIVE Sync- Online Virtual Meetings

VR training simulation system, a 2021 HQIC winning collaboration with VGH, Taichung
VR Forest Disease Preventive Package upgrade with NTU
Food safety VR training for a safer, healthier diet
Incorporate global medical VR ecosphere resources to cultivate medical professionals
VIVE ORIGINALS creates an entertaining experience with cultural values in the virtual world
VIVE Arts, Building a Worldwide Accessible Unique Cultural Experience with Cutting-Edge Technology

033

About HTC

2021 HTC ESG Report034

Ensure healthy lives and promote well-being for all at all ages
With HTC's advantages in communication technology, seamless integration with government agencies andmedical institutions has not only promoted the development of AI in medical technology, but has also madegreat contributions to the electronic integration of medical systems. During COVID-19, the Taiwan V-Watch
was improved with the ability to report vaccination progress, supporting the CDC with vaccination reaction
studies and safeguarding public health.

Campus Influenza Vaccine System (CIVS), optimize the vaccination process toimprove the vaccination record
In order to simplify the procedures of collecting paper consent form from students during October toNovember each year for the school influenza vaccination program, the HTC DeepQ Team and partnered with
the CDC to issue the Campus Flu Shot Electronic System, which documents the whole vaccination process,the consent forms, vaccine inventory, post-vaccination reminders and individual e-records all on a single
platform, offering schools a holistic solution for campus flu shot procedures.

Taiwan V-Watch – COVID-19 Vaccination Health Report System
HTC cares about public well-being, and our HTC DeepQ joined forces with CDC in
2017, and developed “Disease Control Butler”. The new function in Disease Control
Butler 3.0 - Taiwan V-Watch Vaccination Report System in 2021 tracks whether
people have adverse reactions after being vaccinated against COVID-19. The public
can get information and report their health conditions after the vaccination easily
with the official LINE@taiwancdc from the CDC.
Scan the Taiwan V-Watch QR code at vaccination sites to join the report system,
which sends regular notifications as a daily status report. The system then follows
up and gives responses according to the reports it receives. Through such asimple approach, the public can monitor their own health status, while making
contributions to the CDC for their COVID-19 post-vaccination effect studies.

Students and parents learn from the system the injection schedule and more; schools cut down on paperwork
and improve their preparation for the willingness survey, while all jabs are recorded accurately and more
efficiently, allowing individual records to be consulted and injection rates to be easily calculated.

035

About HTC

2021 HTC ESG Report036

Ensure healthy lives and promote well-being for all at all ages

HTC in collaboration with Chunghua Christian Hospital to launch the first cross-hospital
AI+Blockchain Medical Care Line Bot, Dr. Lan
HTC DeepQ launched the Medical Care Line Bot, Dr. Lan - the first AI + Blockchain Medical Care LineBot across 10 hospitals in Taiwan. Through DeepQ’s medical blockchain technology can strengthen theinformation security of inter-hospital medical care networks. Everything from AI medical department
guidance, pre-consultation questions, to personal health education after consultation; this combines medical
blockchain information security to begin comprehensive medical care in 10 hospitals in just one click. It
completely upgrades the quality and experiences of the entire medical care process.
Since the outbreak of COVID-19 in February
2020, the Ministry of Health and Welfare
adjusted the regulation for online diagnosis
for people who underwent home quarantine
or isolation, or who could not go out for
medical purposes. Thus, people who are
home-quarantined can receive medical
services remotely. Chunghua Christian
Hospitals provide remote medical diagnoses
via telephone reservation. Dr. Lan willremind users of the time of the appointment
through the Line Bot, and provide the link
for the online virtual ward half an hour inadvance. During the process, besides being
diagnosed via video conference, the video
will be recorded for the doctors. Because
home-quarantined individuals cannot go
outside, families or relatives can collectthe prescriptions from the “drive-through”
counter with their national health ID without
having to enter the hospital.

DeepQ AI Platform
The future of medical education relies greatly on modern technology. To tackle the learning threshold of medical AI
model training and speed up the inclusion of AI in the medical industry, in September 2019 the HTC DeepQ Teamlaunched the “DeepQ AI Platform” for medical application. It is composed of a DeepQ AIP workstation and NVIDIA DGX1 and is designed to operate inside a hospital IT environment. The acceleration technology features a system/algorithm
optimized training environment through AI models and full automation of parameter adjustment built within, while its
simple user interface mitigates the learning threshold and the cost of AI training models.
DeepQ AI Platform is easy to learn and use, and can complete tasks that used to take ten weeks in three days. Without
having to write or design a deep learning program, DaaD (Doctor as a Developer), a completely new design concept inmedical AI model training applications, enables doctors to teach AI how to determine medical images.
The product was successfully sold to medical centers in Taiwan in 2020, where doctors develop AI models based onclinical procedure needs to cater for clinical studies or work flow improvement. In 2021, the cloud version of “DeepQAI Platform” launched to provide individual doctors or a small number of project teams to easily complete AI model
development without investing high hardware costs.

In June 2021, National Health Insurance
Administration to open telemedicine during
the severe pandemic period. The Linebotof “Dr. Lan” upgraded the telemedicine
again. The doctor can continually stay in theoriginal consultation room to see patients byon-site, video or telephone consultation, toprovide the public with a choice of multiple
consultation methods.
As of the end of 2021, the total number ofusers for Dr. Lan has reached 26,000 people.

037

About HTC

2021 HTC ESG Report038

Ensure inclusive and equitable quality education and promote
lifelong learning opportunities for all
VIVE combines reality and virtual reality, software and hardware to visualize abstract knowledge and the
evolvement of education for the young generation, where learning is an immersive experience in virtual
spaces. The current education pattern will change when VIVE interactive media engages in the classroom,in the community and in work. Partnerships with more universities will help cultivate more VR, XR
professionals, and enhance industry development capacity.

Goal of serving the community of The League
VIVEPORT sponsored the High School Heroes Esports League with 150 VIVEPORT Infinity memberships,
making the total prize for the first season game (June – December) in 2021 even higher. And also helped toachieve the goal of serving the community of The League.
Outrun Digital is the founder of the High School Heroes Esports League, a non-profit, health-oriented, midlevel education body centered on a VR e-sports match. The League is the sole STEM-recognized VR e-sports
league and allowed students to continue with their sporting activities and matches during the pandemic. It
also encouraged educators to learn how to apply VR in the classroom. Moreover, the application expands
to university, community and the workplace, giving solutions to previously un-surmountable issues anddifficulties.

Partnerships with all levels of school for XR, VR professional cultivation
With the advance of the pandemic and better developmentof the global VR ecosphere, Virtual Reality is becoming key
in the work and life transformation. HTC took the initiative
and worked with local and overseas educational bodies totrain VR professionals with abundant learning resources.
The project welcomes new blood to build a stronger team.
A memorandum signed with NDHU(National Dong Hwa
University) in 2020, dedicated to the first VR talent incubatorin eastern Taiwan, strengthening Taiwan’s innovation
power with a good foundation of VR development ability.
In February 2021, HTC announced a collaboration with
NTVS (New Taipei City Municipal New Taipei Industrial
Vocational High School) in the New Taipei City Innovation
Education Accelerator Project and built a VIVE Training
Center for students to learn through progressive program design and practice, expand XR core technology and take root.
This Project also engaged middle schools in the area to design career-exploring programs, in which mid-school students
get their hands on emerging technologies to help cultivate their interest and potential, while also bridging the gap due toeducation resource inequality through industry-academia partnerships.
The age of 5G has arrived, where dreams are made possible with AR/VR. Accompanied by the digital transformation ofbusiness patterns due to the pandemic, the VR industry is expanding its territory at an inconceivable speed, opening
up a great deal of needs for XR professionals and content development. HTC continues to introduce industry-university
cooperation programs in various regions to enable Taiwanese students to understand virtual reality from basic
education, expects to fortify our future manpower in the XR territory by familiarizing students with the idea of virtual
reality and the infinite possibilities of XR technology.

039

About HTC

2021 HTC ESG Report040

Build resilient infrastructure, promote inclusive andsustainable industrialization and foster
HTC has excellent industry experience and uses its experience to support government construction of smart
5G. On one hand, the southern Taiwan technology smart city we built provides employment opportunities
and develops local business; the VR meeting software, on the other, makes face-to-face discussion and virtualinteraction possible, breaking distance limitations with online meetings where people generally speak to thewebcam.

Development of 5G in the Asia New Bay Area with the Kaohsiung City Government
HTC has been working with the Kaohsiung City Government since 2018 on talent cultivation, business matchup, international collaboration, and Front Shop, Back Factory plan, and promoting more innovative Motionsensing Technology applications. In 2021, our efforts with local government continued to boost 5G and XR
applications, injecting a new wave of the digital Motion-sensing Industry in Kaohsiung, expanding the 5G
innovative smart application market, and contributing to the digital construction and development of thecountry. HTC retains and drives talent and business in Kaohsiung, leading the transformation of the city intoa smart technology base that shines on the world stage.
The Asia New Bay Area in the Big South Development-Southern Taiwan Development Project, key in thenational development strategy proposed by the NDC (National Development Council) in 2020, coupled withdigital technology and Kaohsiung Port development to invest in the high-tech industry, including Motionsensing Technology, IoT, and smart cities, focusing on local prosperity, large-scale employment opportunities,
and turning the area into a critical cluster for the development of the southern Taiwan technology industry.

VIVE Sync- Online Virtual Meetings
Since the global outbreak of COVID-19, businesses adopted more online meetings, however when the video is out of sync,
it can pose a problem. To tackle this, HTC VIVE Sync is developed as a VR meeting service for virtual meetings whereparticipants speak face-to-face without delay.
VIVE Sync speaks seven languages and meetings can be arranged with just one click. Individual avatars can be createdusing the Sync XR Avatar Creator, which is available on iOS/Android App; the service caters for up to 20 users in a single
meeting. The service also supports both PC VR and Standalone VR, meeting the equipment requirements of most VR
users today. The photo feature during the meeting helps leave a record with your fellow workers.
VIVE Sync paints as well. Users simply wave
the remote control in the air to create colorful
3D artwork. Other actions such as file sharing,labeling and more are available in this virtual
space, boosting team communication andconvenience. Blend 3D virtual objects, 3D
drawings, share your screen or documents,
or simply play with a PDF are all possible inthis space. To meet corporate needs, VIVE
Sync is MS OneDrive / OneDrive for Businesscompatible, which means you can upload files
to MS OneDrive / OneDrive for Business with
one chain.

Traditional business and new startups can upgrade their technology for free in our first 5G XR O-RAN
Experiment Base in Kaohsiung, a dedicated 5G development platform to support the renovation andevolvement of local industries; the first in Taiwan to combine the 5G Standalone Architecture Private
Network and Edge Cloud VR Solution, the KOSMOSPOT x VIVELAND in Kaohsiung is open to individuals andcorporations in Taiwan for a 5G experience.
HTC has many years of experience in the development and operation of software, hardware and platforms.
Kaohsiung has long been the base for Motion-sensing Industry development, digital content, AR/VR,
blockchain and Fintech supply chains. Together we are committed to a powerful 5G and digital technology
environment in Taiwan, realizing the vision of the “Asia New Bay Area, Technology for a Smart Kaohsiung”.

HTC 5G environment and solutions for businesses in Kaohsiung041

The HTC 5G Standalone and Private
network field

The HTC 5G Standalone private network andEdge Cloud VR solution

Bringing the HTC 5G Standalone Architecture
Network technology and advanced andcomplete end-to-end enterprise private network
solutions together, with the HTC remotestreaming software platform management
service, the all-direction high-security network
protection system, open framework based on 5G
network software, edge computing technology,
and a one-stop XR solution, we present the highspeed, low latency and wide-connection 5G
Standalone and private network.

This is a solution that supports all types of terminal
applications, making real-time video monitor
possible. Engaging multiple people online andrunning applications that require massive trafficsuch as XR, 4K, or even 8K video and audio outputs
by turning plants or office spaces into high-speed,
consistent, secured 5G environments that align withbusiness transformation, all possible within a short
time.

About HTC

Effective training settings can contribute toimproved business performance. Good examples
include the cloud managed educational system forpractice and cooperation that improves employee
work safety through plant site training simulations
and VR group training sessions.

2021 HTC ESG Report042

Strength the means of implementation and revitalize theglobal partnership for sustainable development
HTC works cross-border with several core strategic partners, including schools, medical bodies, food safety
agencies, and the entertainment, culture and arts industry, to expand the VIVE ecosystem using our expertisein VR to improve lifestyles and drive a sustainable world.

VR training simulation system, a 2021 HQIC winning collaboration with VGH, Taichung

VR Forest Disease Preventive Package upgrade with NTU
Working together with the NTU School of Forestry and Resource Conservation, in October 2021, the HTC Medical VR teamcommenced a VR Research & Education Project to launch forestry expertise and VR technology based the VR Disease
Preventive Kit for international students.
During the pandemic, international students had to quarantine temporarily in a hotel following arrival. HTC assisted
students through the stress of this process by inviting them on a trip in the forest in Taiwan to enjoy the beauty of thecountry through NTU's student-made VR natural experience materials, HTC VIVE Flow, and the HTC VIVE Focus VR
Standalone. Users enjoyed the unrestricted beauty of the therapeutic forest of Taiwan from the comfort of their hotel
rooms. Such devices are expected to feature in hospitals and caring homes in future to comfort users.

The HTC Medial VR team cooperated with Taichung Veterans General Hospital to develop a VR hemodialysis
accident simulation training system to solve the inconvenience of physical simulators such as high cost of
consumables, limited space, and a lot of pre-preparation. In 2021, remote instructions were sent cross-hospitalfor the first time to share dialysis techniques and a SOP for emergencies. High-quality educational programs
can continue without the constraints of the pandemic.

In the 2021 Healthcare Quality Improvement Campaign (HQIC) competition, we proposed VR training
simulators as the future, and demonstrated an assessment of and approaches to adverse events during
dialysis with the use of VR materials to reduce simulation costs and enhance caregivers’ reactive capabilities
to minimize incidents and improve patient safety. Taichung VGH’s “Intelligent Dialysis Simulator Incorporated
e-Assessment System in the Application” of Clinical Teaching was awarded the bronze medal in the Smart
Solution category of the 2021 HQIC.

043

About HTC

2021 HTC ESG Report044

Strength the means of implementation and revitalize theglobal partnership for sustainable development
Food safety VR training for a safer, healthier diet
The HTC Medical VR Team partnered with TMU (Taipei Medical University) in November 2021 to establish
the TMU Instructional VR Resource Center for Food Safety for the incubation of food safety (FS) professionals,
and the provision of quality FS training and education through innovative technology, facilitating the smart
transformation of a Taiwanese food factory and a complete upgrade of the local FS industry.
FS education can now be conducted through virtual reality, which replaces physical restaurants, factories
and central kitchens in training and allows sufficient practice of work procedure so food workers can savetime familiarizing themselves with the working environment and equipment. For new employees andstudents, through practice in a relatively safer (virtual) environment, mis-operation of equipment or foodcontamination due to a lack of experience may be reduced.
The Resource Center also discusses with smart food factory administrators the SOP and training proceduresfor employees and develops VR materials accordingly, incorporating in the VR kitchen food material
procedures, pre-treatment, cooking and delivery of meals, as well as providing training for observation andanalysis of critical control points of hazards, and proper procedures for handling rush hour pressure, fires,and other incidents. Trainees gain a lot of experience in a shorter period of time and learn how to handle
crises on-site faster.

045

About HTC

Incorporate global medical VR ecosphere resources to cultivate medical professionals
HTC cooperated with British developer partners to introduce the “VR immersive learning platform - Virti” into medical
education and medical communication training. Not only acknowledged by the country’s National Health Service (NHS),
Virti has since been adopted by Cedars-Sinai Medical Center, a leading non-profit hospital in the United States, wastrained to wear personal protective equipment when fighting against the COVID-19 epidemic. The project contribution ishonored on the Nasdaq Tower of New York's Times Square, and recognized as the most innovative education corporationin 2021 by Fast Company.
The Medical VR team developed customized VR teaching plans through VR workshops with top hospitals and schoolsin Taiwan, such as the National Taiwan University Hospital, Taichung Veterans General Hospital, Far Eastern Memorial
Hospital, National Yang Ming Chiao Tung University, Taipei Medical University, and Chang Gung University, etc., todevelop VR teaching plans for clinical skills training, cross-team integrated care, Da Vinci surgery training, neonatal
emergency care, anesthesiology, medication dispensing handling, dietitian supervision of meals, chronic disease care,and doctor-patient communication, etc. The project improves patient safety and medical services, and contributes tolong-term plans for developing professionals in the industry.

2021 HTC ESG Report046

Strength the means of implementation and revitalize theglobal partnership for sustainable development
VIVE ORIGINALS creates an entertaining experience with cultural values in the virtualworld
HTC VIVE ORIGINALS is a content brand owned by HTC VIVE. It is committed to the development of native
IP, the production and publication of original content, and the exploration of VR movies, art, animation,
music, cultural collections, creative entertainment, and other industries. Furthermore, we want to expand thescale of content, create industrial values, and build up a VIVE Reality ecosystem by content cluster to fulfill
the ultimate goal of enriching human cultural life through new technologies and creativity. Cross-bordercooperations including: Frame-by-frame animation with VR technology, The Sick Rose, VR Interactive Artwork
by Fang-Yi Sheu, BEATDAY Metaverse Subversive Entertainment Experience. More information about VIVE
ORIGINALS in website: https://viveoriginals.com/

047

About HTCVIVE Arts, Building a Worldwide Accessible Unique Cultural Experience with Cutting-Edge
Technology
VIVE Arts continued its mission to enhance cultural appreciation through immersive technology, democratize creativity
and preserve our cultural heritage for the world. VIVE Arts is devoted to a NFT platform that combines the mainstream
art industry and encrypted virtual world, supporting artists to integrate XR and blockchain technology in their practiceand to build a strong and loyal community of artists and collectors. In addition to Ethereum, VIVE Arts plans to support
the more energy-efficient Proof of Stake (PoS) and Proof of Stake Authority (PoSA) blockchains in the future, creating asustainable and environmentally friendly platform for digital arts.
Leveraging VIVE Arts’ extensive network, including museums, culture institutions, art fair and biennale, as well
as galleries and contemporary artists, VIVE Arts is committed to integrating ground-breaking art with cutting-edge
technology, enabling artists to reinvent how we experience art and to build a richer digital art ecology. By providing
valuable support to the most forward-thinking artists of our time, the VIVE Arts program enables the most brilliant digital
innovation in the arts and furthers HTC’s longstanding commitment to arts and culture. More information about VIVE
Arts in website: https://www.vivearts.com/

2021 HTC ESG Report048

COVID-19 Prevention
Management –HTC COVID-19 Executive Summary
Following the further outbreak of COVID-19
in 2021, HTC reinforced pandemic prevention
management inside the Company. Daily bodytemperature and health status checks arecommonplace for our employees. The use of theMicrosoft Teams to discuss work and proximatecontact dividers in meeting rooms minimize thechance of infection, while wearing masks andfrequently disinfecting public areas are further
essential measures we have taken for disease
prevention. Both inside and outside elevator
buttons and panels, doorknobs, tables andchairs of meeting rooms, and exit door knobs oneach floor are sanitized every hour by cleaning
staff. The entire building and its environment
undergo weekly sanitization with disinfectant
as well.

COVID-19 Prevention Management

Second measurement
result beyond
acceptable range

Advise people
with high bodytemperature toleave the premiseand seek medical
advice wherever
possible

Visitor/vendor entry
application completedHealth declaration letter
filled out and signed byvisitor/vendor

Follow up and checkfor status as needed

Employees to rest athome according to
HTC leave regulation

Employee healthrecovered andreturn to post;
observe temperature
measurement andmonitorYes

1. The mutation of the virus in 2021 extended the pandemic and greatly shifted our daily routines and work schedules.
HTC acted following CECC information and pandemic prevention measures, leveraged our previous experience of theoutbreak in 2020 and updated preventive measures accordingly. Extra disease prevention measures implemented
include our employees, visitors and contractors observing preventive measures in our offices, dining area andexercise area.
2. The Chief Global Management Officer supervises the epidemic prevention response team to ensure epidemic
prevention measures and related tasks are implemented and meet the Company's changing needs to stop the disease
from spreading.
3. Additional personal protective equipment such as masks, ear, forehead and infrared thermometers, hand sanitizer,
oximeters, and other eye and face protection are in place as the situation requires.
4. A health declaration letter is mandatory for visitors and contractors entering HTC's premises. Everyone is asked toseek medical advice if they have a fever ( ≧ 37.5 C̊ ), cough, respiratory or other cold-like symptoms.
5. Receptionists, and security, cafeteria and exercise area staff have their body temperatures monitored. If anyone
has a fever ( ≧ 37.5 C̊ ), cough, respiratory or other cold-like symptoms, they will be sent for a medical check and anotification sent to the Health Center.

NormalIntroduce HTC pandemic

051

Temperature
measuring;liquefaction of handsanitizer

preventive measures

As the pandemic worsened, we arranged
several on-site Covid-19 tests with Cardinal
Tien Hospital to safeguard our workers’ healthand safety, as well as our family and friends.
All test results were negative. Rapid test kits
are available at our Health Center if employees
believe they may have Covid-19, and visitorsand contractors are subject to test screening
depending on whether they are vaccinated.
Only people who test negative are allowed on
our premises.

Employee/visitor/vendor
entering sites

Employees are allowed
to enter

When it comes to individual health monitoring,
employees are backed by their healthdeclaration letter. WFH (working from home)
has become an effective approach to work
according to the status of the pandemic.
Such measures help minimize the chances ofgroup infections and reduce carbon emissions
from shuttle buses, MRT, scooters and car.
Those who experience respiratory symptoms,
fever, or other signs similar to those of a cold
after returning from a business trip abroad
should immediately seek medical advice, rest,and commence a 7-day WFH schedule after
notifying our Health Center.

HTC personnel access control measures flow

Visitor data requires
further follow up

NoDemand visitor/
vendor to wear amask and follow
preventive measures

6. Access control has been implemented to limit the number of people in the cafeteria, sports fields and exercise area.
7. Meeting rooms, breakrooms, restrooms, elevators, the cafeteria and exercise area are sanitized with 75% alcohol bycleaning staff. The entire building undergoes weekly sanitization with disinfectant.
8. Our fellow workers are provided with a health self-management report form, health status care and promotional
information, as well guides for a psychological counseling service. If anyone has a fever ( ≧ 37.5 C̊ ), cough, respiratoryor other cold-like symptoms, they should notify their supervisor immediately, will be sent for a medical check and anotification sent to the Health Center.
9. When at home quarantining or under autonomous health management, HR must be notified so staff can WFH
according to the Regulations for WFH due to COVID-19
10. Campaign to remind colleagues to regularly sanitize their hands, and sterilize office desks and chairs, computers,
keyboards, mouse and other electronic devices with 75% alcohol.
11. Rapid test kits are available for employees at our Health Center if they believe they may have COVID-19. Visitors andcontractors must undergo screening depending on whether they are vaccinated, and only those who test negative areallowed on work premises.
12. The Health Center is notified immediately of any suspected cases, contact, and confirmed cases in the Company
and act accordingly. Confirmed cases are required to notify the head of the department and Health Center, and thelatter is to report such information to the Chief Global Management Officer, PR department and HR. The Chief Global
Management Officer considers the actual situation and determines the infected area and countermeasures, reports
to the Company’s highest managerial level, follows health agency guidance and policy, and cooperates in disinfection
work.

End of visits/
Leaving sites

2021 HTC ESG Report052

Human Resource Prevention Measures During the Pandemic

Preventive Measures for Manufacturing Centers

As COVID-19 continued in 2021, HTC followed the CECC information and pandemic measures, and adopted preventive
measures accordingly. We prepared disease prevention items and asked all employees, visitors and contractors to
observe preventive measures.

Strict measures are adopted in manufacturing centers and plants to maintain production while safeguarding thepremises from the pandemic.

Apart from existing Company group insurance, HTC and the Welfare Committee covered all employees under Chung
Kuo Insurance’s pandemic insurance. Those quarantining and confirmed cases are protected and entitled to insurance
proceeds.

1. Sterilizer has been placed at site entrances and the epidemic prevention announcement was played repeatedly. Plant
personnel are required to wear masks, eye protection, gloves and finger cots (cleanroom level) at all times while in theplant. The body temperature of staff is taken two times per day. Travel routes and health status records must also bereported to manage colleagues' current status and minimize production line infection risk.

Recruitment: According to the prevention standards of the CECC, masks are required for interviewees andinterviewers. Interviewees need to fulfill the requirements of the Company’s health investigation and fill in the healthstatement before the interview. Remote interviews will be carried out with Teams if the pandemic worsens.

2. Work shifts at the plants are divided into shift A and shift B. Disinfection of the area is carried out when handing overto the next shift and there is a six-hour gap between each shift to ensure there is no contact with people from one shift
to the other.

Training: Attendees of offline courses need to wear masks and sit separately during the entire session. Offline courses
will be paused if the pandemic worsens.

3. Body temperatures are taken at the cafeteria entrance, which is sterilized with alcohol. Dining hours are scheduledin three sessions. Other measures taken include social distancing along specified routes, dividers on tables, acheckerboard seating plan and regular disinfection.

Conference-related: In response to the severe COVID-19 epidemic, all company meetings are held online using Teamsin 2021.

4. At least one rapid test is required for all colleagues and contractors at manufacturing centers.

Employee Relationships: Collaboration with the health center to ensure the pandemic status and set up a contact
window within the HR department to investigate and control manpower of the Company. At the same time, employee
activities were changed to online activities (such as Mid-Autumn Festival online quiz, Father's Day online photo voting
activities, etc.) to facilitate employees' participation.
Business Trips: During the pandemic, domestic business trips need to be approved by the head supervisor of thedivision, and international business trips need to be approved by CEO. It is necessary to report to the health centerand receive information about precautionary measures when leaving the country. Home quarantine is required by
the CECC when re-entering the country. Additionally, reporting to the supervisor and health center is necessary.

Canteen Preventive Measures
Well-rounded preventive measures have been adopted to people can dine in safety. Only takeaways were offered fromthe cafeteria during the pandemic to avoid group infection, dividers were put up in the seating area and alcohol sprayedon tables, a checkerboard seating plan was implemented to minimize contact and areas were disinfected regularly, foodservice providers' and staff's body temperatures were taken and reported daily and travel routes recorded to check for
close contact, staff followed up after injections, non-kitchen food staff were asked to wear masks, and rapid tests were
provided for food service staff.

Line Bot, Disease Control Butler 3.0+SMS Contact Tracing System the Best Helper for Prevention
In addition to the COVID-19 measures within the Company, in 2020, HTC DeepQ cooperated with the CDC to upgrade
Disease Control Butler (DCB) to provide the latest COVID-19 news, precautionary measures, quick look-up of nearby
pharmacies and mask inventories, government policies and health education, CECC news flashes, COVID-19 live press
conference streams, and a clarification column regarding false information. In May 2021, the LineBot of DCB added thefunction of 1922 SMS Contact Tracing System. The public can use the LineBot of DCB to scan the QR code of the store for
automatically bringing in the place code, and then send it to 1922 to complete the user location and contact information
tracing. It will assist the CDC investigation of COVID-19 infection.
As of the end of 2021, the total number of users for the DCB has reached 10 million people.

As of the end of2021, the total
number of users
for the DCB

053

COVID-19 Prevention Management

has reached

10 million
people2021 HTC ESG Report054

ESG Management –To ensure effective discussion and treatmentof CSR issues, HTC has run a CSR Committee
since 2012, and has also set up a dedicated teamQuality and Sustainability Management forformulating CSR policies, drawing up related
action plans, performing cross-department
coordination, and handling communication with,and feedback from, the external stakeholders andour key suppliers. The annual CSR performanceand next year execution plan will review by the
Auditing Committee under the Board of Directors
at least once annually. After the FSC officiallylaunched the Corporate Governance 3.0 Sustainable Development Blueprint, in addition to
our existing corporate social responsibility, HTC
has also incorporated economic, environmental,
and social-related issues to respond to the
expectations of stakeholders.

2021 ESG Performance
ESG

HTC won the 2022 EcoVadis Sustainability Silver Medal

2021 Performance

GovernanceIn the latest EcoVadis Sustainability rating released in April 2022, HTC
receives silver medal, ranks top 15% among more than 90,000 evaluatedcompanies around the world. In Manufacture of communication equipment
industry, HTC ranks among the top 11%. In the four key themes, HTC ranks
among the top 5% in "Sustainable Procurement" and among the top 13% in"Environment". It reflects our efforts to be a frontrunner in our industry.

NT$ 5.25 Billion

Annual revenue of NT$ 5.25 billion while operating costs and expenses decreased

NT$ 2.26 Billion

The EcoVadis Supplier Sustainability Rating system assesses a wide rangeof sustainability indicators in the core areas environment, labor & humanright, ethics, and sustainable procurement. Founded in 2007, EcoVadis is
one of the world's most trusted providers of business sustainability ratingand has compiling sustainability scorecards for nearly 90,000 companies
in more than 200 different sectors and 160 countries around the world by2022. HTC is one of the global companies committed to effectively driving
sustainable performance.

R&D investment accounted for 43% of HTC revenue

ISO 27001
ISO 27701

Completed the inclusion and audit of ISMS and international standards for Privacy Information
Management

Environment

50％

Inclusion of ecology awareness to extend plant sites’ ISO 14001 coverage.

NT$ 916,524

recycled in 2021, boosting the recycling rate to 86.9%

163,760 kWh

ESG Committeeof Solar energy generation continued in 2021 with 518,048 kWh generated to date

346,135 kWhof electricity conserved with 2021 power conservation measures, achieving 1% power conservationand the goal for the year.

2,965 metric tonsof rainwater recycled in 2021 by the Taipei office showing a great effort in water conservation

SocialNT$ 2,518,708,000

In early 2022, HTC upgraded CSR Committee to ESG (Environment, Social, and Governance) Committee, chaired by the
Chairwoman. HTC also appointed its first Chief Sustainability Officer in Senior VP Madeline Chen, and members ofexecutives as ESG committee members. We established dedicated working groups to respond to various ESG issues andfounded the ESG Office to assist in formulating sustainable strategies, connect sustainable development issues fromvarious departments, and continue to promote sustainable development responsibilities. We hope to implement thesustainable operations of our corporation by striking a balance between the economy, environment, society, etc. areas.
With a clear organization and division of labor, relevant departments can be included in management actions throughinterdepartmental meetings, thereby driving the overall sustainable development and innovation of HTC and ensuringthat relevant policies and initiatives are incorporated into the company’s daily operations.

paid to employees as salary and welfare expanses in appreciation of their contributions

109,250 ml

Structure of the HTC ESG Committeeof blood donated in 2021, showing our care with physical action.

Zero

Chairperson

violations against customer privacy and loss of customer data in 2021.

CDP –Climate Change : B- level
ESG
Rated level B- in Management in the 2021 CDP Climate Change Rating (the international average
Achievements of suppliers is Level B-).

Chief Sustainability
Officer

ESG office

CDP –SER : B level

Rated level B in Leadership in the 2021 CDP Supplier Engagement Rating (the international
average of suppliers is Level B-).

GlobalManagement

5G System
Solution

VIVE R&D

HR

GIT

Legal

Strategic
Procurement

Software Product &Commercialization

SliverAchieved the Silver rating in the EcoVadis Sustainability Rating 2022 for our achievements insustainability indicators

057

ESG Management

2021 HTC ESG Report058

ESG Management Procedures and Systems

The HTC Environment, Social, and Governance (ESG) 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 innovative and quality products, protect theenvironment, care for the health, safety and human rights of our employees, and positively maintain our stakeholders’rights and interests.
This ESG policy helps HTC maintain social responsibility and realize the vision of sustainable development. All our
related business partners advocate and share this policy with us and in this way, we all protect and enhance the rights
and interests of our internal and external stakeholders.
Using Responsible Business Alliance Code of Conduct as a reference for code of conduct, developing HTC as a good
corporate citizen and participating in international Initiatives
Promotion of energy efficiency, carbon-reduction practices and various environmental protection activities
Sustainable innovation from creation to development
Sustainable supply chain management
Be a responsible corporate citizen, with the highest ethical standards

This HTC ESG report is based on the GRI Standard with a focus on disclosing GRI material issues, mainly concerning
disclosure of material issues related to action, performance and achievement.
ESG Material Issues management process followed last year: based on the relevance of the industry, the five key
stakeholders have been identified as employees, customers and consumers, shareholders, suppliers and contractors, andothers (rating agencies, academic bodies, local communities), as well as major issues of concern.
Questionnaires were extensively provided to stakeholders and collected on a designated date to gather statistics. A totalof 152 copies were collected, of which 135 were valid. Thirty-five issues were given in the questionnaire, each with scoresof 1 to 5 to represent importance related to the Level of Concern and ESG Impact Level. Considering that each issue
may represent various degrees of importance to stakeholders, the weighted scores of the Level of Concern applied in
the calculations. Nine issues were identified as material issues with scores of at least 4.2 on average of weighted Levelof Concern and ESG Impact Level. Four topics: Training and Education, GHG Emissions, Energy Management, andPandemic Management were added considering local and overseas trends and risks (such as the 2021 WEF Taiwan’s
concern for risk issues, and the 2020 Ranking of major issues of concern to Taiwan) to result in 14 material issues for the2021 HTC ESG Report.
HTC held a major theme discussion meeting to confirm the impact of the material issues on the internal and externalorganization. In other words, the positive, negative, or potential impact on the economy, environment and society,taken as a whole in accordance with internal considerations, industrial conditions, industrial chain practice, andstakeholders’ suggestions, as well as to confirm the impact of each issue. At the same time, HTC attaches great importanceto communication and interaction with its stakeholders. In addition to setting up various communication channels,
we respond to important suggestions or opinions from stakeholders based on their concerns and impact on HTC'soperational impact. The feedback is submitted to the relevant departments for response and processing, than regularly
disclosed in the ESG report. We will gradually invite and encourage internal and external entities to join the ESG
disclosure process in the future.
In addition, to ensure that the policies and decisions of the ESG Committee can be put into practice, we have divided
ESG 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 been verified as aligned withthe applicable international regulations and standards, and help integrate company policy for sustainability and social
responsibility into our daily operations. ESG annual performance and next year's operational targets will be reported tothe board of directors at least once a year.

059

ESG Management

2021 HTC ESG Report060

ESG related management system and initiative
The Green ProductsManagement System

Green ProductVerification

The Environment
Management System

The Occupational
Safety & HealthManagement System

Since the end of 2007, HTC's HQ & Plants and the Taipei offices have regularly passed
all audits conducted by the international certification agencies, and obtained andmaintained certificates of IECQ QC080000 Hazardous Substance Process Management.
Through HTC's “Hazardous Substances Management Regulations”, we require our
supply partners to comply with the regulations for reducing hazardous substances in
products
To comply with the Restriction of Hazardous Substances (RoHS) of EU, HTC products
are sent to third-party international verification institutions for chemical analysis,
ensuring that the products are free of concerning heavy metals, bromine-containing
flame retardants and plasticizers. The verification on products' energy consumption
in compliance with the US Department of Energy's battery charging and energy
consumption requirements is performed. Verification on power supply's energy
efficiency is conducted to ensure that the energy conversion efficiency of products ishigher than the standards in various countries. The new or revised standards in 2021,
include: TSCA, TPCH, French Product Repairability Index, etc.
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.
HTC was fined NTD 6,000 by the EPB, Taoyuan City, in 2021 for non-registration in
the industrial waste disposal plan of the disposal procedure for waste produced fromafter-sale maintenance. The procedure proposed in the disposal plan has now beenrevised and approved by the EPB. ISO 14001 factory cover rate reach 50%, introduce
environmental awareness through PDCA principles.
To reduce the risks of workplace injury and reduce accidents, the Occupational Safety &Health management system has been established according to OHSAS 18001, and makesure all our manufacturing sites around the world obtain and maintain OHSAS 18001
certificates.
The conversion has been carried out in 2020, and the ISO 45001:2018 certificate has
been successfully obtained. Through the introduction of ISO45001, the HTC factory hasreached the goal of zero occupational disasters in 500 days.

The Energy
Management System
Information Security
and Personal
Information
Management System

ISO 50001 energy management system enables planned energy management to berealized, thereby supporting sustainable operation.
HTC introduced ISMS (Information Security Management System) and PIMS (Personal
Information Management System), which includes 42 management policies andguidelines, such as the HTC personal information protection, Information security risk
inventory and implemented the System in employee education and training, productdevelopment and design, vendor management, and information security incident
management. HTC is BS 10012, ISO 27001, and ISO 27701 certified, and has received ISO/IEC 27001:2013, ISO/IEC 27701:2019 certificates in 2021. The dates of validity are between
08/13/2021 and 08/13/2024.
DeepQ, a subsidiary of HTC, has long been an investor in medical and AI development,
and closely monitors information security and personal information protection within
the medical industry. DeepQ plans to obtain ISO 27001/27701/27799 certification in Q3Q4 2022 having started the process at the end of 2021.

Supplier Management061

ESG Management

HTC conducts supplier audits in accordance with the RBA Code of Conduct and the HTC
Checklist. In addition to routine new supplier audits, it is conducting on-site audits on 6
high-risk suppliers in 2021.

高HTC 2021 Material Issues and Boundary
2021 HTC Material Issues Matrix

2021 HTC Material Issues and Boundary Identification

High

Freedom of Association
and Collective Bargaining

Within theorganization

Socioeconomic ComplianceTraining and Education

Waste

Security PracticeEnvironmental Compliance

Innovation Management

Forced or Compulsory Labor

Rights of Indigenous Peoples

Procurement Practices

Child Labor

Non-discrimination

Customer Health and Safety

Local Communities

Diversity and Equal Opportunity

Indirect Economic Impacts

Market Presence

Low

Level of Impact

High

Social Standard

Tax Practices

R&D
CenterEnergyAnti-competitive Behavior

ESG Management

HQ

Supplier Social Assessment

Water and Effluents

063

Page

Occupational Health and Safety

Environmental Standard

Emission

Environmental

Material issue

Economic Standard

Level of Concern

Human Rights Assessment

Economic

Customtheme

Information Security

P.75-81V

GRI 201

Economic Performance

P.28

V

Customtheme

COVID-19 Prevention
Management

P.51-54

V

GRI 307

Environmental Compliance

P.61

V

GRI 308

Supplier Environmental
Assessment

P.131-132

V

GRI 306

Waste

P.118-121

V

GRI 305

Emissions

P.87

V

GRI 302

EnergyP.89-91

V

V

GRI 418

Customer Privacy

P.98

V

V

GRI 401

Employment

P.141-157

V

V

V

V

GRI 402

Labor / Management
RelationsP.156-157

V

V

V

V

GRI 419

Socioeconomic Compliance P.156-157

V

V

GRI 403

Occupational Health and
SafetyP.163-168

V

V

V

GRI 404

Training and Education

P.145-149

V

V

V

GRI

Anti-corruption

V
V

V

V
V

V

V

V
V
V

V

Local
Community

COVID-19 Prevention Management

Marketing and labeling

Employment

Governmental
Agencies

Labor/Management Relations

Contractor

Materials

Supplier

Customer Privacy
Employee

Supplier Environmental
Assessment

Consumers

Biodiversity

Outside the organization

Corporate
Customer

Information Security

Investor

Economic Performance

V

V
V
V

V

V

V

V

V

V

V

V

V

V

V
V

V
V

Social2021 HTC ESG Report064

Diversified Channels for Transparent Information Disclosure SignificanceInvestors

Enterprisecustomers

GeneralConsumers

Employees

Suppliers

Contractors

Significancefor HTC
Concern Issues

The support ofshareholders andinvestors has positive
impact on HTC's
sustainable operation

The support ofshareholders and investors
has positive impact
on HTC's sustainable
operation
Through cooperation andproduct development,enhance the company's
value and pursue growth,
gradually improving
corporate sustainable
operation

Customers satisfying
with our after-sales
service is essential tomaintain customer
relations

HTC upholds thepeople-oriented
philosophy, the key
to maintaining thecompany's momentum
in innovation comesfrom employees, which
are the company's mostprecious assets

Partner with suppliers is
an indispensable key tothe continuous growth ofbusiness operations

Maintain a safe working
environment in thecompany, strengthen
the company's
cohesiveness andenhance the company's
image

Finance & businessinformation
disclosure

Product quality

Pre-sales consulting

Learning & growth

Raw material quality

Service quality

After-service

Price competitivenessConstruction safety &healthPrice competitivenessProduct quality

On-time delivery

Service quality

Workingenvironment/labor
conditions

Compliance with laws
and regulations
Operation Status

Green products

Corporate
governance

Carbon footprint/
carbon disclosure

Risk management

Restricted substancemanagement

Wage/welfare
Health & safety
Career development
Work-life balance

Corporate responsibility

Governmental
Agencies

Local
Communities

The foundation of theCompany is to build
an excellent external
environment for the
corporation, by following
the legal guidelines,
cooperating withgovernment policies, andearning trust, support,
and collaboration withthe government.

Maintain good
relations with thelocal government
and neighbouringcommunities toenhance the company's
image

Corporate
governanceCompliance with laws
and regulations

Continuously stable supply
Supply chain management

Innovative products
and services

Compliance with various
regulations

Human Rights

Technical capability

Energy and climatechangeCooperation with logistics/
transportation providers to
conduct effective packing

Environmental impact
Shaping the
Corporate image
Economic
contribution
Social concerns
Public welfare
Cultivation of talent

Raw material selection

Human rights

Working environment &healthMachine/equipment safety
Carbon management
training and contests

1. Shareholder
conference YearlyCommunication Channels

2. Annual report
Yearly3. Monthly revenue
statement.
Monthly
4. Visiting investors
Irregular
5. Market Observation
Post System
Irregular
6. Investor RelationshipWebsiteStanding
7. Spokesperson
Standing

1. Business review withkey customers (QBR
meeting).
Quarterly
2. Reply to customer
inquiries.
From time to time
3. Customer audit andreplies to customer’squestionnaires.
By customer request
4. Meeting the customer
requirements about
environmental andESG.
By customer request

Daily ongoing 1. Local service contact
channels in 11
languages to provide
customers with realtime communication
and assistance.
2. Websites in different
languages forcustomers to give
feedback and toaccess information ina real-time manner(59 established).
3. Dedicated emailboxes for different
functions (Support,
Copyright, Security,etc.) to provide
convenient customer
contact with HTC.
4. Automated support
survey invitations
to collect customer
satisfaction feedback.

065

ESG Management

5. Immediate corrective
actions in place basedon custome's insights.

1. Department quarterly
meeting.
Irregular

1. Supplier communication
conference.
Irregular

2. One-on-one interview
with supervisors.
Irregular

2. Guidance and audit for
suppliers
Yearly3. Annual performanceappraisal/ interview.
2/ Yearly

3. Cooperation projectwith suppliers foraddressing CSR andgreenhouse gas issues.
Yearly4. New employee
seminar.
Weekly1. Induction training.
Weekly2. Patrol inspection in
the facility.
Daily

1. Official document
E-mail Visit.
Irregular
2. Meeting such as
Forums Seminars…
etc.
Irregular

1. Positive employee
engagement in public
interest activities.
Irregular
2. HTC cooperation
with governmental
agencies and nonprofit organizationsin eco, environmental
and other publicwelfare activities.
Monthly

5. Employee assistance
hotline and mailbox,
Health Center,
Employee Aid
Scheme.
From time to time
6. Labor-management
meeting.
Quarterly

2021 HTC ESG Report066

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

To achieve this high standard, we formulated the HTC Corporate Governance Framework in 2014, which has been
approved by the Board of Directors and complies with the “Corporate Governance Principles for TWSE/GTSM Listed
Companies” as a basis for establishing an effective corporate governance structure. The objectives being:
1. Protect the rights and interests of shareholders.
2. Strengthen the powers of the board of directors.
3. Fulfill the function of the Audit Committee.

Organization Structure

4. Respect the rights and interests of stakeholders.
5. Enhance information transparency.

AGM

Board of Directors
The Board of Directors are elected by stakeholders and aims to monitor
the management of the Company to ensure the long-term benefits of the
stakeholders. Additionally, it is committed to taking care of various relatedparties including employees, customers, suppliers, government, and thegeneral public.

Board of Directors
Chairwoman

Audit Committee
Compensationcommittee
Internal Audit

There are seven directors on the HTC Board (including three independent
directors), the group of directors includes one female director and isprimarily responsible for setting and monitoring management goals andlong-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.

The composition of HTC
Management (Directors) by Age& GenderAge

Male

FemaleTotal<30(Excluding 30)

0

0

0

30 ~ 50

0

0

0

>50
(Excluding 50)

6

1

7

Total

6

1

7

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 is necessary to widen thescope of independent viewpoints in order to win the trust of the public and the shareholders. During the re-election of
directors in 2019, three independent directors were elected according to the provisions set forth in the Securities andExchange Act. This action served to solidify our corporate governance, strengthen the independence and functions of thedirectors, and improve the general performance of the Board of Directors.

Chief Executive Officer

Compensation CommitteeCore Products
andServices

New Platforms
andInfrastructure

Innovation
Research andDevelopment
CenterCorporate
Functions

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 and objective viewpoint. The
committee also makes suggestions to the Board of Directors for discussing. For HTC corporate governance organizationand members, please refer to P62 in 2021 Annual report.

Audit Committee
HTC established the "Audit Committee" to replace the Supervisors, which is composed of all independent directors. The
Audit Committee assists the Board of Directors in fulfilling the quality and integrity requirement while carrying out
the company's supervision work in accounting, auditing, financial reporting process and financial control. The Audit
Committee has the right to conduct any appropriate audits and investigations, and has direct communication channels
with the company's internal auditors and independent accountants. The Audit Committee convenes a meeting at least
once a quarter. The audit supervisor and accountants should report on audit and financial statement review results, andreport important discussions and resolutions to the Board of Directors.

069

Responsibility Mangement

2021 HTC ESG Report070

Internal Audit System
HTC has set up our internal audit unit as subordinate to the Board of Directors. The internal unit is responsible forassisting the Board of Directors and management in checking any defects in internal control and in the assessment ofoperational efficiency and performance, as well as the accuracy of the financial statements and compliance with therelated laws. The unit also addresses areas that need improvement in a timely manner to ensure internal control is
continuously and effectively implemented. The audit results are used as a basis for the review and amendment of theinternal control system to advance sound management in HTC.

Complete Disclosures
HTC is committed to improving the immediacy and transparency of information disclosure. In addition to the timely
disclosure of important financial and business-related information at the Market Observation Post System in accordancewith regulations, it also actively participates in forums and investor conferences organized by domestic and foreign
securities firms to help investors understand more about HTC's financial and business information.
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 https://investors.htc.com/en/

Transparent Information Disclosure
Spokesperson & Deputy
Spokesperson

In accordance with the "Corporate Governance Principles for TWSE/GTSM Listed Companies", aspokesperson and acting spokesperson are appointed to ensure that information that may affect thedecisions of shareholders and stakeholders can be promptly disclosed.

Press Release, Press
Conference & MediaInterview

The company’s latest developments are also communicated to our investors and the public throughpress releases, press conferences, and media interviews.
HTC has established an Investor Relations Website (in both Chinese and English) through which theinvestors can access and download the company’s financial statements, annual reports, other financial
news, information about investor conferences, and correspondence with shareholders.

Website Platform

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.

Strict Mechanisms for Avoiding Conflicts of Interest
To prevent potential risk of corruption and being unethical, in addition to "Anti-corruption and Bribery Statement"
passed by the chairman of the board, HTC has established "Rules for Derivatives Transaction", "Credit Policy &Operational Procedure", and "Regulations for the Appointment of Directors/Supervisors in Re-investment" and has
revised the "Operational Procedures for Transactions of Specific Companies, Business Conglomerates, and Parties","Regulations for Budget Management", "Regulations for Management of Subsidiaries", and "Operational Procedures for
Processing Internal Material Information and Preventing Insider Trading" as bases for internal operations. Also, in its
Rules of Procedure for Board of Directors Meetings, it has duly set out a system for recusal and avoidance of conflicts ofinterest by directors, for compliance in the operations of the board of directors. And add legal compliance training to thecompulsory training courses for new recruits to strengthen the anti-corruption awareness of new recruits.
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 throughe-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.
A risk evaluation will be carried out every year, including on the impact related to ethical issues. The Legal and other
responsible divisions will provide an advanced analysis according to information collected about anti-corruption andethics. The risk levels assessed these years are relatively low. Thus, those divisions proceeded to risk management forpossible issues, internal trainings, statements of anti-corruption, and control measures according to the processes.
In addition, as clearly set forth in the HTC Employee Manual, involvement in fraud, bribery, embezzlement, and violationof 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. Also, HTC set up an email inbox specifically for corruption reporting (anticorruption@htc.com). Anyone can report via this email with proof, if they are aware of any corruption-related events or
infringement of the Company. The identity of the reporter will remain confidential to prevent inappropriate treatment.
There were no corruption related events in 2021.
When signing procurement contract or engineering contract with the suppliers or manufacturers, HTC will require its
suppliers or manufacturers to sign the “Integrity Policy Statement” or the Letter of Integrity Commitment which specifies
that the cooperating partners should abide by the national laws and shall not acquire business or work advantages
through improper conduct (such as offering kickbacks, banquets, or other improper interests). The contract clearly statesthat HTC will take the initiative to terminate any collaboration with suppliers or manufacturers who violate the “Integrity
Policy”. If damage has been occurred due to violation of the Integrity Policy, reimbursement shall be provided by theviolating party to ensure that both parties are in line with the Integrity Policy.

The Investor Relations Website is continuously maintained and updated with the latest HTC Company
development information.
Press Release, Press
Conference & MediaInterview

071

HTC participates irregularly in international and domestic forums held by foreign brokers. Details ofthese are provided to explain company operation, financial profile, strategic development, and business
policies to the investors.

Responsibility Mangement

2021 HTC ESG Report072

Tax Management
The Company upholds the spirit of tax compliance and corporate social responsibility. Therefore, we aim to create
corporate value and improve tax risk management. We set out tax management and transfer pricing policies to establish
a sound tax stewardship regulation and culture, as well as an instant management process. The Company has formulated
the following tax governance policies to elevate corporate value and carry out corporate sustainability.

Report process of corruption is as following,
Report Channel

Investigation
Principles

Case AcceptanceAny HTC staff found to
be corrupt or partaking inother illegal behavior can bereported through post (No.
88, Section 3, Zhongxing
Road, Xindian District, New
Taipei City, 231), or via email(anti-corruption@htc.com).
Named Report: the reporter
shall provide informationsuch as the name, contact
method, and so on. Clearlystate the facts (people, issue,time, place, and objects), andprovide relevant documents
as evidence.

If the reported content is too
general, unclear, ambiguous,
unreasonable, obviously
slandering, empty, or without
any clues or evidence forinvestigation, it will not be
accepted.

Case Closed
and Filed

Investigators are entitled toundergo interviews with thereporter, the accused, andother related parties. They
are also entitled to request
relevant information.
Related investigators shallkeep the investigation
process and the result of thereported case confidential.

If however, there is a basis forthe claim, an investigation
will take place according to
the reported content.

It is strictly forbidden todisclose the identity of
the reporter to prevent
resentment against thewhistleblower.

Relevant documents shall be
filed after the investigation.

Tax Guidelines

The accused employee will
be punished according to
the Company regulations
if the investigation result isfound to be in violation of theCompany’s internal rules.
If the result is a violation of
criminal law, the accused
employee will be transferredto the legal authority alongwith the relevant evidence.

Comply with the local tax law and the rule of law. Calculate tax carefully and file it before the deadline.
Ensure that experienced and professional internal and external personnel are involved in the evaluation and decisionmaking of tax-related issues.
Ensure that information on tax reports is transparent, such as reports to tax authorities in different countries, master
files, and transfer pricing reports.
Trades between affiliate companies shall follow the principles of transfer pricing of OECD, as well as the Base Erosion
and Profit Shifting (BEPS).

2021 Anti-corruption training rates for Board of Directors and all levels of the Employees in Taiwan
General
Employees

MiddleSupervisors

SeniorSupervisor

Highest Governing
Institution

Number of training recipient

135

43

0

0

Number of employees by grade in Taiwan

435

878

42

7

Recipient rate

31%

5%

0%

0%

Note: The calculation for the training recipient rate at each level is based on the number of person completing the training/ Number of employees by grade in Taiwan. The calculation for the training
recipient rate of the highest governing unit is based on the number of Directors completing the training/the total number of Directors.

Number of participants
2020

2021

2019

2020

2021

General new employees legal training confidentiality and anti-insider trading

329

82

174

36

36

36

General new employees legal training –
intellectual property rights

329

82

0

38

38

0

General new employees legal training – patent litigation

329

82

0

38

38

0

Responsibility Mangement

HTC works with tax authorities in different countries in honesty, integrity, respect, and fairness following three pillars:
mutual trust, information transparency, and legal protocol. In addition, HTC provides solutions for major tax issues tohelp improve the tax system and institution on business environment.

Tax and Risk Management

Course hours(Minutes)

2019

073

Utilize legitimate and transparent tax incentives without tax deductions that violate the rules of law.

All companies in the group appoint a large-scale local accounting firm for their tax visas, and the company provides thetax signature accounting firms with annual financial information for tax signature declaration.

HTC New Employees Legal Training in Taiwan
Course Content

Ensure that the corporate structure and trades are in accordance with the commercial substance. The structuring andtrades are not to be aimed at reducing the tax burden.

Stakeholder Engagement
The major stakeholders are tax authorities in different countries. The Company files and pays its taxes in accordancewith the legal regulations of each country. Furthermore, the Company consults with any of the four major accounting
firms or contacts the authorities directly if there is anything unclear or a lack of understanding about the regulations. For
any tax audit, the Company prepares the relevant information and cooperates with the tax authority after receiving thenotification.

2021 HTC ESG Report074

Risk Management
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 ensuresa rapid response to uncertainty, as well as to any attendant risks and opportunities. Such careful risk management
enhances our ability to create value.

Management of Operating and Financial Risks
HTC has never made high-risk, high-leverage investment, yet, as a part of our long-term business strategy, we are still
positively evaluating the risks and benefits of introducing new technology. To remain responsive to the potential risks
caused by increased costs as a result rapid industrial development, we control operating cost risks by strengthening thefunctions of our products, reducing overall costs, and strictly controlling expenses.
We carefully evaluate all kinds of uncertainties of business operations, and thereafter accordingly formulate control
mechanisms. For example, business continuity planning (BCP) is set up to cope with the uncertainties of different
situations, including risks and opportunities derived, and to increase value-creating ability.
Working capital required to support HTC business operations over recent years has been supplied mainly from cashon hand. As the corporation has not taken out long-term loans, fluctuations in interest rates have had no effect on the
Company’s liabilities. HTC is prudent in its financial policies, and our asset allocation decisions prioritize security andfluidity, with most funds kept in time deposit accounts.
In 2021, HTC foreign exports accounted for around 83% of our total business revenues. HTC’s revenue are denominatedprimarily in the US dollars(USD) and Euros (EUR), the manufacturing costs are denominated primarily in US dollars,so the significant fluctuations in the international exchange rates may affect the operating income, operating costs andoperating net profits in foreign currency denominations. Apart from efficient management of the quality and payment
cycles of its foreign currency denominated accounts receivable, HTC uses forward exchange contracts to minimize its
forex risk.

Privacy protection and information security risk management
Protecting the company's R & D achievements and customer information is the duty and responsibility of all
HTC employees. In order to ensure that information security and privacy protection are fully integrated into theorganization's culture and the company's core values, HTC actively establishes and promotes information security andpersonal data protection policies, ensuring that they are in compliance with relevant information security and privacy
protection regulations from various countries.

Personal Information Management System
Structure of HTC Personal Information Management System (PIMS)
New personal
Informationcollection

Personal
Information
behavior Inventory

Legal basis

Information
protection Impact
analysis

Product Privacy and sercurity (PPNS) design review procedure
Privacy and Information security
monthly report
Annual employee privacy andInformation security educationand training
Personal Information protection
policy and related guidelines
Annual privacy protection andInformation security audlt

Outsourcing
and partner
manageament

Product online

Procedures forthe exercise of
Individual rights

Information
security accident
management

HTC's privacy protection system complies with Taiwan’s Personal Information Protection Act, and refers to applicableinternational privacy protection regulations, such as the General Data Protection Regulation the European Union,
the Children's Online Privacy Protection Act of the United States, and the California Consumer Privacy Act. HTC also
introduced the ISO 27701 Personal Information Management System (PIMS) developed by the British Standards
Association for personal information management based on OECD, APEC and data protection laws, and implemented
these policies in areas such as employee education and training, product development and design, manufacturer
management, and security incident management.
In order to reduce the risk of operation management and ensure the continuous operation of businesses, HTC has moved
the core basic systems to the cloud and introduced various cloud services to create a cloud working environment that
advances with time. By utilizing the flexibility and high availability of the cloud, deploy and disaster recovery can be
performed quickly when failure occurs, effectively improving work efficiency.

Product Information Security
Software Security Control Measures of HTC Products
Legitimate interests assessment
for personal data collection

Security check and problem
follow-ups

Privacy and information
security protection audit

Behavior check for personal dataprocessing

Vulnerability scanningManagement & audit
committee

Penetration test

Risk analysis of privacy impact

Under the influence of COVID-19, HTC strictly protects confidential and personal information and continues to create awin-win situation among HTC, partners, clients, and consumers. HTC is optimizing “personal information management
system” and “information security management system” to control potential risks. The legal, product safety, andinformation security departments are working together as a team to promote privacy protection and information
security.
Requirement
analysis

Design andpractice

Test

Operation

Supervision andmanagement

Privacy and security manual

Internet security

Code review

Log and supervision

Product privacy and security design and audit

Post-disaster recovery plan

Contractor privacy and safety assessment

Security breach patch management
Incident response management

Release product/service

075

Responsibility Mangement

Individual rights of personal data management
Customer use

2021 HTC ESG Report076

HTC requires the development team to strictly comply with information security rules from the design stage of products,
and provides relevant training on product and information security protection measures to the team. The trainingrefers to the laws and regulations of different countries, as well as the most prominent case studies in the industry.
Furthermore, the training materials include a lot of knowledge and experiences in information security which arecontributed by HTC’s internal resources. Hence, trainees can easily absorb and utilize this knowledge.
We require all the data collection, utilization, processing and storage of our products and services to go through the
product privacy and security (PPNS) design review procedure. The products and services include the virtual reality
system - VIVE, enterpries virtual reality solutions, global VR application stores and subscription platform - VIVEPORT, 5G
applications, smartphones, VIVE Arts, VIVE Originals, DeepQ AI Platform. As a result, we can comply with the privacy
protection principles, such as legitimacy and transparency, minimization of data collection, limitations of purposes andstorage, and so on. Therefore, we can ensure the completeness, confidentiality, and accuracy of information.

HTC Security Test Platform (STP) Flowchart

OR

ROM
UploadSTP generates

TEST REPORT!

ATS downloads
ROM from RCMS

Flash ROM into
devices

STP performs
security test

Pull and
Upload APK
files to STP

Structure of Product Information Security
During the development process, HTC introduced automation instruments, such as information security test andweakness scans to verify our products in case any damage by consumers causes a security breach.

Product Security
sub-satellite

satellite

satellite

satellite

Dept B

Dept C

Our management of privacy and information security does not end after the launch of new services or after the purchaseof products. Instead, we continue to work on information security control. We follow up the software patches for security
breaches and provide these to the relevant development teams. We also provide designated contacts for external
personnel to report information security problems. Additionally, we also equip professional teams to conduct theassessments and replies - demonstrating our highest concern for consumers’ privacy and security. The most important
we strive to ensure is that HTC’s services can be provided to our customers correctly and continuously.

Team1
Team4

Team2
Team3
Dept AIn terms of the product security in the structural planning, we have set up security satellites in major development
teams to implement privacy and information security policies more effectively. Besides promoting relevant policies, thesecurity satellites are highly familiar with the products of their own teams and are requested to participate in the PPNS
design review procedure mentioned above. Consequently, we enhance the positive meanings of the effect of the review
procedure.
In the design and development of software, HTC publishes a privacy protection and safe software development manual
to assist the development team for R&D and to execute code reviewing in accordance with the manual. This helps to
avoid the involvement of unstable or malicious codes, as well as to ensure that the developed products comply with the
expectations of consumers and clients regarding the privacy and information security of HTC’s products.

077

Responsibility Mangement

2021 HTC ESG Report

078

In
Ev form
In ent ati
cid soen and n S
ec
tM
ur
an
ity
ag
em
en
t

Business Continuity
Management

HTC’s information security actions are not only internal. We also extend information security measures to externalvendors through holistic inspections of information security controls, which include, but are not limited to: their
Information Security Policy, Information Security Organization, HR Management, Communication and Operational
Security, Information Security Events and Incident Management, Business Continuity Management, PhysicalEnvironment Management, and Access Control. As the pandemic continues to impact the world, so does the digitaltransformation in local and overseas industries, driving IT technology applications forward and forging new patternsof cyberattacks and system vulnerabilities. Thus, the HTC vendor assessment includes whether suppliers are capable ofmanaging public vulnerabilities, and closely monitoring information security incidents within the industry.

079

Responsibility Mangement

Co
an mm
u
d
Se Op nicacuerrity ati tiononalConfidentiality(C)Integrity(I)Availability(A)Privacy (P)Personal Information
Processing (PI)PhysicalEnvironment
Security

HTC requires its employees to abide by the “HTC Privacy Protection System”, and also requires its outsourced vendors aswell as cooperation partners to comply with applicable privacy protection regulations and HTC privacy protection andinformation security requirements to jointly protect privacy and information security.

ion
at
m
or ity ion
Inf cur izat
Se ganOr
Information
Human Resource
SecurityAcceCon ss
trol

y
ph
gra
pto
Cry

are
nt
ftw pme ance
o
S
o ten
vel
De Maindan troln
Co

InformaSecu tion
rity
Polic
y

HTC also sends the Privacy and Security Newsletter monthly, which encloses up-to-date information about privacy andsecurity and summaries of HTC privacy and security policies, and topics in 2021 includes HTC WFH Information Security
Process, caution Phishing Emails and Ransomware, notice on policies updates, sharing of regulations related to privacy
and security, etc.

Vendor Assessment Controls

e
lianc
omp
al C
Leg

In order to ensure that HTC employees comply with the policies and guidelines issued by the “HTC Personal Information
Management System”, all HTC employees must complete privacy protection and information security education, training
and test every year. Training covers following topics: The Importance of Data Protection; Guidelines for Company Data
Handling; Key Information Security Protection and Control; Guidelines for Personal Data Handling; Supplier Evaluation;
Guidelines for Social Media and Marketing Activities; Reminders of Information Security and Personal Information
Protection; and Introduction to Information Security Threats. Other information such as our resources for personal dataprotection and information security are provided as well. People involved in the planning, development and testingof products, or in system management, operations and supplier management are required to attend courses and pass
Safety Procedure Regulation of Products and Personal Information Protection Guide exams. Product development staff
are required to take trainings and Threat Modeling and Secure Coding Standard for Key Coding Languages exams.

As for information security, HTC follows ISO 27001’s information security standard, and establishes and promotes all
kinds of information security management measures. In this way “security” becomes part of employees’ daily life.
Meanwhile, risk assessments, and privacy and security internal audits are conducted annually. Through these audits
we can ensure the implementation of management systems and modify relevant policies to lower the risks in a rollingmanner.

2021 HTC ESG Report080

Management of Climate Change Risk

HTC Privacy and Security Internal Audit

PeopleTechnology

Security

Process

Privacy

Lawfulness,Fairness,andTransperency
Limitations on Purposes of Collection,
Processing and Storage
Data Minimization
Accuracy of Data

Confidentiality
Integrity
Availability

Data Storage Limits
Integrity and Confidentiality

HTC joined the Carbon Disclosure Project (CDP) in 2008. We voluntarily disclose information about our climate risks,
future development opportunities, emissions, and strategic management mechanisms. In 2021, HTC's rating on the CDP
climate change questionnaire reached B- level (the international average level is B-).
In the 2021 CDP Supplier Engagement Rating (SER), HTC was rated as level B (international average is level B-). The
Supplier Engagement Rating uses the responses of the company's CDP climate change questionnaire in terms ofgovernance, objectives, scope 3 emissions, and value chain participation to evaluate the performance of supplierengagement.
In addition, HTC keeps requiring our suppliers to respond HTC Suppliers GHG Emission Survey in 2021, proactively
contributing its corporate influence, and calling on its supply chain partners to work together in carrying out further
assessments and actions for climate change. The supplier response rate in 2021 reached 100%. In 2022, HTC will initiate
a full scope carbon emission analysis, calculation and assessment based on the SBTi methodology, along with thedevelopment of a Net Zero Emissions roadmap, outlining the short-, mid- and long-term decarbonization strategies andmanagement indicators.

Sustainability Management Vision2022-2025
Cyberattacks are among the common risks in the WEF Risk Report. In addition to ISO 27001 daily practice andmanagement to maintain confidentiality, availability and integrity, the monthly security letters to employees also raiseawareness of privacy and information security issues. Other reinforcements include firewalls, intrusion detection andantivirus systems. No material information security event took place in 2021 thanks to our robust security mechanisms.
In terms of reducing operational management risks and ensuring continuous operation, HTC has focused on
cloudification of key core basic systems and introduced various cloud services to create a cloud working environmentthat keeps pace with the times. By utilizing the flexibility and high availability of the cloud, deploy and disaster recovery
can be performed quickly when failure occurs, effectively improving work efficiency.
DeepQ, a subsidiary of HTC, has long been an investor in medical and AI development, and closely monitors information
security and personal information protection within the medical industry. DeepQ plans to obtain ISO 27001/27701/27799
certification in Q3-Q4 2022 having started the process at the end of 2021. This will protect business user and customer
information, while the HTC Personal Data Management System is committed to the security of employees' personal data.
For example, HTC promotes diverse information security protection mechanisms to cope with any possible information
threat. HTC is also dedicated to delivering important messages to employees about how to maintain the “information
security” during the prevention period. In particular, by strengthening information security, such as remote connection
security, remote video conference security, remote communication assistance tool security, system security, network
security, physical security, information security, and so on during WFH, we make “security” part of an employee’s
life. In addition, in the privacy and information security newsletter, HTC reminds employees to be cautious aboutphishing e-mails regarding COVID-19. HTC also ensures that the personal data of staff who go through epidemiologicalinvestigations is processed by specialists and is well-protected in accordance to the CECC’s “contact-based policy”.
Furthermore, we abide by the constraint of data purposes, minimization of data collection, and data deletion principles;
this means that all the data collected for the investigations will be deleted after the storage period is over.

To create low-carbon living circles
through corporate environmental
protection concepts based on
HTC experience
To help contractors obtainenergy conservation and carbon
reduction action labels Reduce
power consumption (carbon
emissions) by 5-8%.
Water recycling rate reaches
75%.
Waste recycling rate reaches
80%.

2026-2030

2031-2050

Gradually increase the use ofgreen electricity

Reduce power consumption(carbon emissions) by 5-8%.

Reduce power consumption(carbon emissions) by 5-8%.

Waste recycling rate reaches
80%.

Waste recycling rate reaches
80%.

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 14064-1:2006 Greenhouse Gases Emissions Verification Opinion
Statement for the planning of energy strategy and action.
All the HTC plants have been included in the Taiwan organizational boundary area and have been subject to inspection
since 2009.
Between 2010 and 2015, the HTC plants in China were also included in the scope of inspection and disclosure andexternal verification was launched. Electric power was found to be the main source of emission.
The ISO 50001 Energy Management System can achieve energy management according to plan. HTC has implemented
the system since 2011 in an effort to reach the goal of sustainable management.
After joining the Carbon Disclosure Project (CDP), HTC is obliged to regularly report its plans, systems, andachievements regarding carbon risk and carbon management. In 2018-2019, HTC participate in CDP Supply Chain
program members and invite suppliers to participate in the carbon disclosure.
The introduction of ISO14064-1:2018 in 2022 is a means to manage carbon emission volume of the organizationand products. The carbon content of the VR product VIVE Flow will be confirmed by the Product Carbon Footprint
certification. Other practices include full scope carbon emission analysis, calculation and assessment based on the SBTi
methodology, the adoption of a Net Zero Emissions roadmap, and short-, mid- and long-term decarbonization strategies
and management indicators.

081

Responsibility Mangement

2021 HTC ESG Report082

Climate-related Financial Disclosure
FrameworkType

HTC Action Plan

1. Capital investment for technology
development
2. New and alternative technology R& D expenditure
3. Decreased revenues due toreduced demand for products
and services
4. The cost for adopting/building
new practical operations andprocesses

Sustainable design of products, such as improving
energy efficiency, recycling and reducing harmful
substances, was implemented to enhance the greencompetitiveness of products.
Improve product applications with an accessory
functionality. Easy replacements and upgrades can
extend the design concept of the product life-cycle.
VIVE Flow has been revamped to a smallersize, which means fewer raw materials and lesspackaging are used. More items in single shipments
has successfully reduced shipping frequency andCO2 emissions.

1. Products with low power
consumption have become
mainstream as consumers’
awareness of carbon emissions
and energy consumption rises.
2. Environmental compliancerequirement for raw materials andsuppliers

Compliance with Energy Star, CEC and ErP, Energy
Efficiency Certificate by third-party certification
bodies, as well Level VI energy efficiency and thehighest level of energy efficiency are required for
power adaptors of all HTC products.
We followed the provisions of the US Departmentof Energy and Natural Resources Canada relating
to product battery requirements, of which the
charging efficiency should be increased as much as
possible, and the energy loss kept low after being
fully charged so the overall energy consumption isminimized.
We joined the CDP and produced regular reports
about carbon risk, and the plan, system andachievement of carbon management.
VIVE Flow is expected to obtain ISO 14067 productcarbon footprint standard verification in 2022.

1. Change in consumer
preferences
2. Industry stigmatization
3. Concerns ofstakeholders

1. R e d u c e d r e v e n u e d u e t ocustomers’ turning to better
energy-saving products.
2. Reduced revenue due to labelingof high carbon emissions in thecompany/industry
3. More or less willing to collaborate
according to stakeholders’concerns about the Company’senvironmental sustainability
efforts

Environmental regulation compliance, supplierenvironment assessment, and management ofwaste, GHG emissions and energy are the material
topics responded to in the 2021 HTC ESG Report.
While HTC operates in a non- high pollution or highcarbon emission industry, nonetheless we do ourbest to extend product life, exclude toxic materials,
reduce product energy consumption, increase
recyclable parts, and mitigate the environmental
impact of manufacturing processes.

Acute risk

1. Decreased revenues due toreduced production capacity(such as production line shutdown,transportation difficulties, andsupply chain interruption)
2. Labor power of employees isaffected, resulting in reduced
profits and increased costs (i.e.,
health, safety, absence from work)
3. Unstable room temperature, which
affects the lifetime of instrument
and equipment. Decreased asset
value or asset useful life leading
to write-offs, asset impairment or
early retirement of existing assets,
which increases the infrastructure
cost

Reservoirs with 4-5 days capacity (2,000 metric tons
in the Taoyuan site and 1,000 in the Taipei HQ) areconstructed in case of emergent water shortages.
Seek water suppliers with purchase volumes anddelivery methods that can be confirmed in responseto the dry season or water restrictions.
Elevators, fire extinguishers, water feeds and drain
motors are equipped with emergency generators.
Critical production lines and IT server rooms are
installed with UPS, which connect to generators
within three minutes and allows in-progressproduction to be completed (general productionlines cease production).
UPS and generators maintenance contracts withvendors for regular maintenance.
In case of natural disasters such as typhoons,infectious diseases and earthquakes, we have inplace contingency plans, emergency identificationand measures and procedures for post-event
review and feedback. In addition, regular drills arecarried out to further ensure the health and safety of
personnel, and to mitigate the impact on Company
property.

1. Unsuccessful
investment in newtechnologies
2. Transitioning to lower
emissions technology
3. Substitution of existingproducts and services
with lower emissions
options

The virtual reality products and smart devices produced by HTC, combined with a new way of operation, life, work,
learning and travel, will help users to achieve the goals of energy saving and carbon reduction. Through continuous
performance demonstration, management mechanism promotion and system establishment, as well as planningat different stages of environmental protection cooperation between society and enterprises, short-, medium- andlong-term goals of sustainable development can be achieved gradually.

Strategy

Responding actions in 2021

Technology

In 2021, HTC CSR Committee members will identify the potential impact of various issues within and outside theorganization based on industry relevance, including the identification and assessment of climate change-relatedrisks, and responses to climate impacts. The CSR Committee reports annually to the Audit Committee of theBoard of Directors on annual ESG performance and targets for the next year, including issues related to climatechange.
In early 2022, the HTC CSR Committee was promoted to the ESG Committee, with our chairperson Cher
leads the ESG Committee as the chairperson. Senior Vice-President Madeline Chen was appointed Chief
Sustainability Officer. Several task forces were placed under the Committee, including the Climate Change andCarbon Management Related Team. The ESG Committee reports directly to the Board.

GovernancePotential financial impact

Climate related risks

In order to identify and evaluate current and future activities related to sustainable operations, and products
and services that may cause significant impacts or risks, the HTC risk assessment team will conduct regularorganizational risk assessments, including climate change status, serving as a basis for formulating policies andgoals. The evaluation results are as follows: In 2022, the risk assessment mechanism recommended by TCFD will
be introduced to assess specific issues of climate change and to understand potential financial impact.

Indicators andGoals

The mid-to-long-term plan is to reduce carbon emissions by 5 ~ 8% in 2025 (2020 is selected as thebasis).
Since 2009, ISO 14064-1:2006 verification statement has been introduced and continuously acquired in orderto fully grasp the energy use. Therefore, energy-saving strategies and actions can be determined and planed in
response to international greenhouse gas and global warming issues.
Since 2011, ISO 50001 energy management system has been introduced so that energy management can be
implemented more effectively, achieving the goal of sustainable business operations.
The carbon content of the VR product VIVE Flow will be confirmed by the Product Carbon Footprint
certification. Carbon footprint inventory procedures will be implemented according to ISO 14067 to monitor
new product carbon emissions, and the emission volumes at each stage of the product life cycle willsubsequently be analyzed. A full scope carbon emission analysis, calculation and assessment based on the
SBTi methodology, along with the adoption of a Net Zero Emissions roadmap, and short-, mid-and long-term
decarbonization strategies and management indicators will be used for the Net Zero Emissions roadmap of
future products.
We are committed to improving the energy efficiency of ourselves and our customers. In addition to setting
carbon reduction goals, waste reduction and water saving goals have also been determined to reduce impact
on the environment.

1. Change of customer
behavior

Transition Risks

Risk
Management

MarketGoodwill

HTC climate-related risks and financial impact
Type

Climate related risks

Potential financial impact

Responding actions in 2021

1. Regulations, carbon fees andcarbon taxation could lead tohigher operational costs (such as
the increase of compliance costs
and raw materials and parts).
2. Writing-off and advance
retirement of the existing assets
due to policy changes
3. Increased costs and/or reduced
demand for products and services
due to fines and court decision

We consider using recyclable green materials in
product design phase, and make compliant material
choices to meet international regulations andcustomers’ requirements.
Through purchasing in volume and purchasing
strategies to reduce unit costs and optimize cost
structures.
Successful conservation of 346,135 kWh, saving NT$
1,038,405 in a 2021 energy saving project.
Partnership with suppliers for regular GHG inventory
and disclosure.
Keep a valid ISO 14064-1:2018 Assurance Statement
to record energy use and ISO 50001 for effective,
well-planned energy management.

Policy and Legal
1. Laws and standards ofenergy-saving products
2. Local regulations(i.e., Greenhouse
Gas Reduction andManagement Act in
Taiwan)Responsibility Mangement

Chronic risk

Physical Risks

Transition Risks

083

Increased severity andfrequency of extreme
weather events such as
typhoons and floods

Changes in precipitation
patterns and extreme
variability in weather
patterns2021 HTC ESG Report084

HTC climate-related opportunities and financial impact
Type

Climate related
opportunities

Potential financial impact

Resource Efficiency
Responsibility Mangement

Continued to use green energy, including the use of low-polluting
energy sources and equipment such as solar panels and heat pumpsystems. Building a low-carbon life through the implementation ofvarious energy-saving measures such as improvement of lightings
and air-conditioning systems, and the offering of shuttle buses forwork.
Solar panels at the Taipei Office convert sunlight to electricity to lightthe stairways and basement. A total of 15,156kWh of electricity was
generated in 2021.
A 180kW-capacity rooftop solar energy system was constructedat the Taoyuan site, creating wholesale solar energy for the power
supply system of TaiPower through the internal parallel circuit. So far,a total of 518,048 kWh of electricity was generated by December,
2021.

Resilience

Energy Source

085

Reduce operating costs(i.e., reduced costs
through the use of solar
energy)Waste reduction strategy was adopted; continue to reduce waste
generation from the source through classification and wastereduction promotion, and take recycling as the first consideration toincrease the reutilization of resources
Continued to promote the management of energy performancethrough various energy-saving improvement and management
programs such as improvement of building lightings and airconditioning systems
Recycled water is used for the landscape, which is in accordancewith the effluent standards of sewage disposal. Therefore, theconsumption of water can be reduced.
SMT scheduling is centralized as double production lines. We saved
a total amount of NT$7,664,298 of nitrogen and electricity in 2021.
HTC developed relevant production and testing equipment that caneffectively share and recycle jigs and accessories simultaneously. As
a result, parts can be recycled with zero waste.
NT$1,140,924 saved in 2021 through material recycling and reusing.
Through improving production process and quality control, HR
educational training, raw material QA control, jig development andimprovement, automated production and testing, and precision
testing, we increase the product life-span and life-cycle, as well
as reducing electronics waste and damage to the environment.
By adjusting trial production lines, we are able to enhance theproduction efficiency.
Install a heat pump system in the Taipei office, which can provide
partial cooling energy in addition to heating energy, and can provide
air-conditioning.
4 Tesla superchargers were installed, and bicycle parking is provided
in our Taipei offices. This encourages our staff to use transportation
vehicles with low emissions and high energy efficiency.
Use photocopying paper with carbon footprint label to support
green and low-carbon products.
Production line optimization and merging of process units of highsimilarity. The merger between warehouse and packaging line in
2021 not only reduced manpower cost in warehouse management
but also conserved NT$ 376,857 worth electricity.
Introduce and continue to obtain ISO 14064-1 verification statement
to grasp the GHG usage status, and introduce ISO 50001 energy
management system to make plans to implement energy
management.

Markets

1. Use loweremission sourcesof energy

Reduce operating costs(i.e., reduced costs
through the use of solar
energy and recycling)
Increase the valueof fixed assets (i.e.,high-efficiency green
buildings)
Benefits to labor
management andplanning (i.e., improved
health and safety,
employee satisfaction),
which reduces costs
Reduce energy
consumption to lower
operational costs and/or
manufacturing costs

Type

Products and Services

1. Use of recycling
2. Move to more
efficient buildings
3. Reduced water
usage and
consumption

Responding actions in 2021

Climate related
opportunities

Potential financial impact

Responding actions in 2021

1. Develop or
expansion low
emission goods
and services
2. Developmentof climate
adaptation,
resilience andinsurance risk
solutions
3. Development of
new products
and services
through R & D
and innovation

Increase revenue
through the demand for
low-carbon products
and services
Increase revenue
by developing new
solutions that meetthe needs of climate
adaptation (i.e., VIVE
product applications
and services)

The use of VIVE product applications and services; Use of digitaltechnology can shorten time and distance, which in turn saves
transportation time and costs.
The BEATDAY holographic concert successfully reduced carbon
emissions from transportation to and from the concert venue.
VIVE enterprise solutions help enterprise users to expand theirbusinesses, creating a framework for enterprise users to reachcustomers, develop products and train employees in the future.
For enterprise users, we published contents for applications that are
related to training, health care, sports and education.

1. Access to newmarkets
2. Use of Publicsector incentives
3. Access to new
assets andlocations needing
insurancecoverage

Increased revenues
through access to newand emerging markets(i.e., cooperate withgovernment, publicagencies, hospitals)
Choosing sustainable
packaging materials andminimal packaging helps
reduce packaging andtransportation costs.

VIVE ORIGINALS- combines films, cultural entertainment and art
industries, and is committed to the production of original content.
We continue to receive subsidies from the Ministry of Culture.
VIVE Arts- uses cutting-edge technology to create unique art andcultural experiences that can be enjoyed all over the world. We
continue to cooperate with the world's top art galleries, museums
and artists.
The VIVE Tracker 3.0 battery stores 75% more energy is analternative in the low-carbon market.

1. Participationin renewableenergy programs
and adoptionenergy-efficiency
measures
2. Resource
substitutes/
diversification

Improve market
valuation throughresilience planning (i.e.,
infrastructure, land,buildings)
Enhance supply chain
reliability and operational
capacity under different
conditions.
Increase income throughresilience-ensured new
products and services.

Using solar power generation systems, and connect the powerlines of the systems to the grid to sell the generated electricity backto Taipower, alleviating the power loading burden in Taiwan andreducing carbon dioxide emissions.
Measures of electricity and paper-saving in manufacturing plants.
Paperless daily/ weekly /monthly report/SOP/testing spec with OQC
introduced. In 2021, we adjusted testing frequency according to thematerial quality risks. Thus, we can reduce the time of equipment
and instrument use. We can save up to 38% of electricity (about 1121
degrees)/ 30% aluminum plate consumption/ elongate 50% lifespanof an X-Ray light pipe annually.

2021 HTC ESG Report086

GHG Emission and Reduction

Energy-saving and carbon reduction Actions

Total greenhouse gas emission by HTC was 10,053.764 t-CO2e in 2021. 2013 continues to be the base year, and thegreenhouse gases inventory in 2021 didn’t exceed over 3% of significance threshold. The majority of emitted gas was
CO2. It is notable that HTC’s GHG emissions contained little percentage of CH4, N2O and HFCs. PFCs, SF6 and NF3 emissions
were maintained at zero.
Besides, we have extended greenhouse gas emission investigation and external verification scope 3 to include control
over subsidiaries, including comprehensive statistics, and the monitoring of greenhouse gas emissions to improve theoverall energy use efficiency and create better energy revenue since 2014. HTC's emissions contained no Sulfur oxides
or other waste gases, and HTC does not use any substances that might endanger the ozonosphere. Moreover, the coolingand air-conditioning systems in HTC's buildings all use environment-friendly coolant R-134a to further preserve theozonosphere.

Total Emission
ISO 140641:2006

ISO 14064-1:2018

Unit

2019

2020

2021

Scope 1

Scope 1 – Direct emission

t-CO2e552.461

372.0549

199.4583

Scope 2

Scope 2 – Indirect Emissions from imported energy

t-CO2e12,601.900

9513.1854

8,124.9297

NT$

0.76

0.59

0.69

Scope 3 – Diesel emission from shuttle bus

t-CO2e149.197

72.0351

69.4247

Scope 3 – Diesel emission from garbage trucks

t-CO2e20.93226.7939-

Scope 3 – Transportation emission during overseas travelt-CO2e1,487.798

276.9665

46.26

Scope 3

Scope 4 – Upstream emission from outsourced electricity

t-CO2e

N/A

N/A

1,493.8865

Scope 4 – Upstream emission from outsourced diesel(mobile)_shuttle bus

t-CO2e

N/A

N/A

36.4931

Scope 4 – Upstream emission from outsourced gasoline

t-CO2e

N/A

N/A

1.4779

Scope 4 – Procurement _ tap water

t-CO2e

N/A

N/A

18.6425

Scope 4 – Waste disposal (and transportation)

t-CO2eN/A

N/A

63.1915Power
resources

Single line
diagramt-CO2e14,417.127

9,602.0662

9,920.9085

Emission: CH4

t-CO2e353.032253.5848

80.2844

Cooling water
systemDetails

Small fans

UPS

Air conditioning
boxes

Electricity
reportEmission: N2O

t-CO2e0.186

0.34450.2385Emission: HFCs

t-CO2e41.94329.2448

52.3328

Emission coefficients

1. Power Conversion CO2 equivalent emissions are calculated
in accordance with the power emission coefficient(0.502)
of the year announced by the Bureau of Energy
2. GHG Emission Coefficient Table, version 6.0.4
3. The scope includes HTC Headquarters & Plant and Taipei
Offices.

087

Responsibility Mangement

AC System

Lighting
system2019-2021 based on IPCC 2014 5th Assessment Report.

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

The power used by HTC is mainly electricity. To decrease
the use of electricity, we persistently promote various
energy efficiency management. We achieve energy
savings through the improvement of the lighting and air
conditioning systems, and the installation of renewableenergy equipment. In 2021, the design on energy efficiency
contributed to 350,250.45 kWh (1.26 GJ) of reduction, andthe total amount of reduction in carbon emission was 170
t-CO2e which translates into a saving of NT$1,050,750.

Energy Saving and Carbon Reduction Resultsof Office buildings and Plants
2021
HQ & Plants

Reducing carbon emissions

Achievement Rate

Real-time information
monitoring system

Emission: CO2

Energy Consumption Analysis

Conserving
electricity

HTC has built a new energy management system for the HQ & Plants area. Through the additional monitoring system, theenergy-consuming equipment inside buildings can be monitored. Through monitoring, control, management, analysis,
and other steps, an insight is gained into equipment operations and energy consumption situations. Then, based on the
judgment made through the comparative analysis of the monitoring system big data, continuous energy conservation
improvement can be made. In addition, according to the equipment deployment and operation time during factory
working hours and off-work hours, the equipment is turned on and off according to the automatic scheduling. This
project was completed in August 2019, and energy-consuming equipment was included in the centralized managementof the monitoring system to achieve the goal of continuous energy saving.

Ice water
system

GWP (Global Warming Potential)

TargetIn order to achieve the goal of saving 1% of electricity consumption,energy management has become our key energy saving direction.
Since the manufacturing center and the factory facilities andcomputer rooms are the places where equipment energy
consumption is concentrated, different energy-saving strategies and measures are adopted according to the conditions ofeach plant.

HTC greenhouse gas emissions in the past three years

Eco-Efficiency ValueHTC 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 longterm improvement goals. And gradually develop and implement
energy-saving action plans with the target of "conserving electricity
and reducing carbon emissions" was set up to eliminate the wasteof energy caused by bad habits or incorrect information.

Water
resources

Two-wire
controlMeter
overview

Air supply
and exhaustGas system

PublicsystemTap water

Parameter
setting

SewageHot spot
analysis

Air pressure
systemNetworksystemEnergyanalysis
Generator

Exhaut gas

AlarmsystemReal-timealart
Alarm record

Boiling watercollecting

Total Use of Electricity (GJ)
TY3 Building

27,320H Building

8,192

Taipei office 1

30,692

Taipei office 2

9,878

Total

76,082

Building H

Building TY3

2021 HTC ESG Report088

The Use of Green Energy

2021 Energy Saving and Carbon Reduction Results
Energy Savings(kWh)

ProgramAmount of Carbon Emission
Money Saved
Reduction(NT$) (Kg-CO2e/kWh)

HQ & Plants
Exhaust System update of toilet in TY3-4F

9,315.65

27,947

4,741.66

CHP5 ice water pump energy saving scheme in ice machine room in H-B1

64,454.40

193,363

32,807.29

Lighting change from T8 to LED in TY4-2F~4F

7,200.00

21,6003,664.80

Lighting change from T8 to LED of Stairwell in H building

10,800.00

32,4005,497.20

Exhaust System update of toilet in TY3-5F

10,742.40

32,227

5,467.88

Exhaust System energy saving of male toilet in TY3-6F B stairs

72.00

216

36.65

Exhaust System update of toilet in H-1F C stairs

1,372.8

4,118

698.76

111,060.00

333,180

56,529.54

Energy saving solution of FFU fan in TY3- 5F C stairs

7,761.60

23,2853,950.65

Energy saving solution of FFU fan in TY3- 5F D stairs

9,504.00

28,512

4,837.54

AHU#1-1 Air Handle Unit energy saving in TY3-1F

11,088.00

33,264

5,643.79

AHU#1-2 Air Handle Unit energy saving in TY3-1F

7,308.00

21,924

3,719.77

MAU#5-1 Make-up Air Unit energy saving in TY3-5F

12,632.40

37,897

6,429.89

Air handling unit energy saving in H-B2F high voltage electrical room

22,608.00

67,824

11,507.47

MAU(Make-up Air Unit) energy saving in TY3-4F

8,019.00

24,057

4,081.67

Lighting change from T8 to LED of ORT office in H-6F

5,486.00

16,4582,792.37#1, #2 Elevator machine room- split-type air conditioner replacement

29,72689,17815,844#3, #4 Elevator machine room- split-type air conditioner replacement

16,98550,955

9,053

346,135.25

1,038,405

177,303.93

Energy saving scheme for secondary ice water pump in ice machine room in H-B1F

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

Descriptions
1. Taipei Office 1 has solar panels that generate electricity used for lighting the staircases andbasement in 2012. The cumulative total number of solar panels since it was built has reached130,235 kWh, including 11,418 kWh in 2019, 14,963 kWh in 2020 and 15,156 kWh in 2021.

Solar panels

2. Taoyuan plant is set to install solar energy system on the roofs; the total capacity is 180kW. By
means of internal line parallel series, the power was sold in bulk and included in Taipower supply
system to solve the power shortage problem in Taiwan.

Heat pumps for air conditioning

We installed a heat pump system in the Taipei offices to provide hot water for showering in the staff
gymnasium and hot water for cleaning in the kitchen. Besides providing heat, it can also provide
partial cooling energy. The iced water produced during the heat exchange can be used for air
conditioning. This system provides hot water and cold air at the same time.

Electric vehicles and bicycles

Four Tesla superchargers were installed, and bicycle parking is provided in our Taipei offices. Thisencourages our staff to use transportation vehicles with low emissions and high energy efficiency.
The total power charged at the superchargers is 408kWh in 2021 (including solar energy).

R22 refrigeration split system air
conditioners are gradually replaced
by R410A

Traditional R22 refrigeration includes chlorofluorocarbons (CFCs), the culprit of ozone layer
destruction. We gradually replaced the current R22 refrigeration split-system air conditioners with
R5410A refrigeration to save the ozone layer that protects the earth against most ultraviolet (UV).
We replaced two 10 kW one to one split-system air conditioners in 2021.

Taipei Office 1

Total

Electric vehicle charging area

Solar Power Generation System

Free bicycles for rides

Solar panels at Taipei headquarters

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 2020: NT$3/kWh.
2.The CO2 carbon emission coefficient is calculated on a basis of the 0.502 kg/kWh standard announced by the Bureau of Energy in 2020
3.Calculation method of estimated value: machine operating power * operating time = actual value

089

Responsibility Mangement

Infrared switch of safety ladderlighting

2021 HTC ESG Report090

Innovative R&D Management
Setup of Renewable Energy Devices
The Taoyuan plant uses the roof of parking lot to install a solar power generation system, replacing the metal roof of theparking shed with solar panels, a total generating capacity of 180KW. By means of internal line parallel series, the power
was sold in bulk and included in Taipower supply system to solve the power shortage problem in Taiwan. This project
was completed in September 2018 and put into parallel trial operation, and started electrical energy in in bulk. From thetrial operation to December 2021, the cumulative total power generation has reached 518,048 kWh.

HTC renewable energy power generation in recent years(kwh)
180,000
159,970

160,000

164,584

163,760

Future Goal
People-oriented:

140,000
120,000

Combining cutting-edge technologies such as VR, AR, AI,
5G, and Blockchain with arts and humanities to unleash
people's imagination.

100,000
800,0060,000Changing the way people interact, and the technology
around the world.

40,00021,58420,000
0

2018

2019

2021

2020

Current Achievement
180kW Solar Power Generation System
Sunlight/thermometer

Parking
shed 130kW
solar power
array

VIVE Pro Eye eyeball tracking upgraded; set a new standard for high-end VR
HMD(Head-Mounted display).
Inverter1

The VIVE COSMOS and the VIVE Reality System has unleashed the unlimited
imagination of the VR world.

R5485

Parking
shed 230kW
solar power
array

Inverter2
R5485

Parking
shed 330kW
solar powerarray

AC boxInverter3
Wholesale
electric meter

R5485

Parking
shed 430kW
solar power
array

Inverter4
R5485

Parking
shed 530kW
solar powerarray

Taipower system

PMP350multimeter

HTC collaborated with content developing partners to create a new pattern of
VR content.
VIVE FOCUS won the gold medal of IDEA 2018 (2018 International Design
Excellence Awards).
VIVE Pro Eye won the “CES 2020 Innovation Awards”.
VIVE Cosmos series won “Fast Company Innovation by Design Awards”.
HTC collaborated with Chunghwa Telecom to launch VIVE Sync- the VR virtual
conferences with 5G network featuring high speeds and low latency.
VIVE Flow won the“2021 Esquire Gadget Award- Best Wearable Tech”
VIVE Pro 2 won the “CES 2022 Innovation Awards”

Inverter5
R5485
R5485

Parking
shed 630kW
solar power
array
R5485

HTC's
Challenge

Inverter6
R5485

Real-time solar information
monitoring system

091

Responsibility Mangement

Expediting patent layout
Strengthening advertisingof product innovation

2021 HTC ESG Report092Engaging Diversified R&D Talent

Smart Innovative Products

In 2021, a total of 937 R&D workers joined HTC
globally. In addition to those in Taiwan, we have
many R&D employees coming from, or basedin, other countries, such as Europe, America,and Asia. We expect that 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 productsthat meet consumer needs in different regions
and with different cultural characteristics.

2021 can be considered as Year One of the Metaverse. As smartphones become part of everyone’s daily lives, thecombination of virtual reality devices with smartphones allows people to truly experience the Metaverse where
virtuality and reality meet. With rich experiences in the VR industry and innovative thinking, HTC created the VIVE Flow,a compact and portable immersive glasses that allows you to access the Metaverse anytime, anywhere simply by using
your smartphone as a controller and projector. This easy accessibility offers infinite applications, including the momentof silence of the meditation app to boost your energy level.

Investment in Innovative R&D
Unit

2019

2020

2021

Fixed R&D
Investment

Million(NT)

5,652

3,585

2,256

Total Revenue

Million(NT)10,015

5,806

5,253

56

62

43

Percentage%

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

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 43% of all HTC's global employees, the investment of which is about
43% of the total operating revenue. With this strength of innovation, HTC has special insight into industry trends and theoutstanding capability for meeting consumer demand. This puts HTC always in the lead.

TaiwanOthersR&D Staff(Number of
Persons)

937

from Taiwan

852

093

Responsibility Mangement  Mobile immersive experience powered by HTC VIVE Flow – a new gateway of the
Metaverse
In HTC’s vision, Metaverse is a lifelike virtual reality
world. We leverage 5G and VR technologies, combining
our expertise in interactivity, diversity and immersive
experiences in building an engaging virtual worldthat consumers can access and explore through theirsmartphones, computers or VR devices.
From there, HTC launched VIVE Flow in 2021. The
immersive glasses weigh only 189g – the weight of a barof chocolate. The product's dynamic balance, dual-hinge
design and soft, magnetic face pad ensure comfort andstability for head shapes. The foldable VIVE Flow goes
where you go. VIVE Flow supports peerless graphics
with a wide field of view up to 100 degrees, sharp
3.2K resolution, and a fluid 75Hz refresh rate. Built-in
premium speakers and noise-cancelling microphonepump out crisp and immersive spatial audio. The wirelessBluetooth earphones create an exclusive immersive
space.
VIVE Flow is a VR device accessible anytime andanyplace, with simple, intuitive control through your Android phone. Find diverse VR experiences on VIVEPORT andthe content subscription service platform to try out exclusive immersive worlds from health and brain training, toproductivity, light games to sitting and relaxing in a cozy café. Video content can also be downloaded through VIVEPORT.
Try Hami Video’s K-POP The Show, international and local sports games, or Cirque du Soleil’s panorama shows, allavailable via the VIVE Flow anytime, anywhere. You can even enjoy selected content of vivid video and spectacular audio
performance from different viewpoints.
Weekend getaways or holiday trips after a busy week of work were impossible during the pandemic. However, with
the VIVE Flow and TRIPP, users can now enjoy immersive meditation and relax in a way like never before, travel along
the scenic US Route 66 with the MyndVR, do Yoga on the Bali coastline, or be surrounded by chirping birds on a snowy
mountain. No matter where you are, you can always stay connected with the nature.

2021 HTC ESG Report094Reduction
Type of parts (unit: piece)

HTC brings a whole new VR experience! The VIVE Flow was selected as the Best Wearable Tech in the 2021
Esquire Gadget Awards. Compared to other VR devices, the light-weight VIVE Flow is lifestyle-centric, making iteasier to engage in an immersive experience, and allowing users to fully relax their body, mind and soul.

VIVE Flow

VIVE Focus

Plastic parts

9

11

18%

Metal parts and components

7

9

22%

Screws

34

71

52%

PCB/FPC

7

11

36%

Protection of IP Rights
More energy-saving and carbon-reducing - VIVE Flow
HTC’s green product design raised the recycle percentage of VR product materials and created the VIVE Flow which isdesigned to uses a smartphone as the controller to replace internal control chips, reducing the product carbon footprint
and power consumption. Within the VIVE Flow, a 5-miniute capacity battery is built in while connecting to a power bankis normally the main power source. For example, a 10,000 mAh capacity power bank can power the device for five hours.
The innovative industrial design of the product saves time and manpower as there are fewer parts to assemble, reducing
carbon emissions and the impact on the environment.

HTC regards R&D and innovation as an essential force needed for the company to remain sustainable and competitive.
In particular, the protection of intellectual property rights is a key to maintaining our brand value. 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:Internal

Positive filing of patent applications to protect the results of our various product R&D and technical innovation.
Organize regular training courses for R&D personnel to promote the company’s intellectual property policy toestablish a correct intellectual property concept.
Encouraging our employees to invent and create.
Setting up a dedicated unit under the Legal Affairs Division for the protection and dispute resolution of intangible
assets such as patents, trademarks, copyrights and business secrets.

External

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

Reduced number of parts and the percentage in making one VIVE Flow compared to previous
VIVE Focus.
Quiescent current reduced by 92%
Standby power reduced by 90%

VIVE Flow

Peak power reduced by 50%

In terms of patents, HTC has not only actively defended patent lawsuits against patent trolls, as well as filing an
infringement lawsuit against HTC in courts in America, China and countries in Europe in order to protect the rights of
HTC. In order to strengthen the competitive advantage of products, HTC has also obtained patent authorization frommajor international companies in order to rule out obstacles of patents.

Power consumption reduced by 25%
Battery capacity reduced by 90%

In terms of trademarks, HTC has actively applied for trademark registration in various countries in order to acquire
important trademark rights. HTC has also actively and closely worked with customs and local police agencies in various
countries to crack down on counterfeited goods and protect HTC’s business reputation. HTC has also actively investigated
the situation of HTC’s registered trademark abuse in various countries, and actively took legal actions with law
enforcement agencies in various countries to protect the company's rights and interests.

Battery weight reduced by 85%
Product weight reduced by 73%
Product volume reduced by 82%(Data compared to VIVE Focus)

VIVE Focus

095

Responsibility Mangement

Additionally, in terms of copyrights and business secrets, HTC clearly stipulates employees' intellectual property rights
in the employment contract and demands employees to comply with HTC's intellectual property related regulations.
The Ministry of Justice also collaborated with the Information Center, strictly restricting employees' internal data accessauthorization, such as software program codes, R&D data, unlisted product business information, etc. In addition, inorder to prevent leakage of business secrets, program codes, or confidential Information, HTC has also set up relevant
regulations for the management and has signed a confidentiality contract with specific persons in order to protect
business secrets.
2021 HTC ESG Report096Customer Management

Overview of Patent Performance and Outcome

HTC’s territory covers not only VR devices and smartphones, but partners with worldwide telecommunication providers
to launch customized or collaborative products to consumer market.

Protection of Customer Confidentiality
HTC makes a promise of “Strict observationof contractual obligations and confidentialitycommitment” to all 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 andsoftware, 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 maintainthe 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 is trained in
all aspects of maintaining confidentiality when working with customers. Under our solid control mechanism, there wasno damage to the rights or interests of any customer caused by a breach of privacy or from lost data in 2021.

Besides applying patents aggressively to protect the R&D achievements of the Company, we also examine theportfolio of patents regularly in line with the direction of product R&D. We adjust the portfolio in accordance tothe principle of survival of the fittest, so that we can maximize the patenting budget more effectively. Towards theend of 2021, HTC owned 8,381 valid patents belonging to 2,017 patent families. 8,247 patents are derived internallyfrom the Company and 134 patents were purchased externally. The number of inventions relevant to 5G has
accumulated to 130 patent families, standing at an irreplaceable position in the development of 5G and patents in
Taiwan.
In terms of awards and recognitions, HTC had received multiple awards in the 2020 National Invention andCreation Awards organised by TIPO on a biannual basis. HTC employees, Li-Wei Chen, Yen-Chun Kuo, HungYu Chen, and Meng-Sheng Chiang won the golden prize of creation category with their head-mounted displayof patent number D190775. HTC employees, Chang-Hua Wei, Shih-Hsiu Li, and Yu-Chuang Chang won the silver
prize of creation category with their head-mounted display of patent number D194927.

097

Responsibility Mangement

HTC introduced the Personal Information Management System (PIMS) in 2018 to protect personal information during the
product and internal management processes. HTC pays close attention to privacy protection laws in different countries(such as the EU, USA, Taiwan, China, Japan, Australia, and New Zealand), the relevant guidelines released by different
authorities (such as regulations regarding cookies or other similar tools), and verdicts made in courts in other nations(such as verdicts regarding cross-border privacy rules in European courts).
For example, to cope with the California Consumer Privacy Act that was activated on January 1st, 2020, HTC set up
several channels for consumers to exercise their rights, depending on their locations. Besides the exclusive email inbox
provided for consumer rights (including the right to know, delete, and modify consumer data that HTC possesses), HTC
added a customer service line for customers in California. In addition, HTC introduced a users’ cookie management
center and brought this mechanism to other countries to give the control of cookies or similar tools back to users toprotect their privacy.

2021 HTC ESG Report098Customer Satisfaction Management

Customer Satisfaction Survey

HTC has established “Customer Satisfaction Management Procedure” to meet the specific needs of all our customers
and to respond to customer expectations and requests. A Quarterly Business Review is made to determine customer
satisfaction. Each Business Unit proposes corrective action for any nonconforming project and regularly track any action
taken to ensure that the customer has been perfectly satisfied.

5.0

The HTC customer satisfaction management index, in addition to product quality, delivery, and after-sales service,includes evaluation of corporate sustainability. We have designated a department to regularly collect HTC ESG
information for communication and response.

1. Customer Warranty Maintenance Service Flow Chart, Locations, and Performance
Customer Service Center：
HTC established customer service centers in five continents around the globe; EMEA (Europe, the Middle East, andAfrica), China, North Asia, South Asia, and South America. We provide multi-language services for communicationaccording to different locations so that the communication barriers between HTC employees and customers is
minimized. Where local traffic and internet are impeded due to natural disaster, such as typhoon, as a result of climatechange, English service is deployed at all area so that customers may be referred to functional partners for follow up. To
cope with firewall settings, Zendesk allows multiple IP addresses even in China.
Scheduled CRM system upgrade in 2022 with the addition of auto-answering robot, instead of life customer
representatives, to give answers to consumers, who no longer need to input keywords to search. Subsequent feedbacks
collected will be used for the next generation of robot customer representatives.

Customer Satisfaction Survey

4.5
4.0
3.5

2017

2018

2019

2021

2020

Note: Calculation Method: The average is calculated by dividing each score with the total number of survey responses.

2. Customer Warranty Maintenance Service Flow Chart
HTC has 79 maintenance offices and 44 collection offices around the globe depending on the country; for example, a pickup and delivery service is available in Taiwan. The services provided differ based on traffic and different regulations inother countries. For example, the number of days needed for maintenance in different locations vary according to such.
HTC provides a pick-up and delivery service in Taiwan for a more convenient and swift maintenance service; thisservice took up to 30% of the total number of maintenance services delivered in 2021. As long as consumers contact
the customer service teams through available contact channels such as email, chat and phone, the customer service
representatives will arrange a pick-up or delivery from or to home, with HTC bearing the shipping expenses bilaterally
when in warranty.
There are various and unique procedures and needs depending on specific country. For instance, customers in the USA
can replace their products with new ones instead of using the traditional repair model. The replacement model took up
to 100% of the total number of repair work done in 2021.

TestimonyOn December 13, 2021, HTC located an issue of smartphone as VIVE Flow controller during an email
correspondence between customer service center and one of the Spanish customers.

Satisfaction survey after receiving customer service
We invite consumers to participate in our service satisfaction survey after an issue is resolved so that we can understandhow satisfied our customers are. Moreover, we take the initiative to contact unsatisfied customers and help them resolve
their issues, to put our promise and goal of understanding our clients into action.

Customer Satisfaction Survey
The customer satisfaction survey is used to understand the overall satisfaction level of the consumer experience of those
who recently contacted HTC. The internal benchmark of the customer satisfaction management index is above 4.0.

When the user tries to enter virtual office for work through VIVE Flow, a button appeared and fixed on screen as“Set smartphone as controller”. The user stated that it had not happened in previous firmware, and also that if
Bluetooth keyboard and mouse could be set up to connect to the device. The customer service team and software
project manager provided with technical support, and offered update of firmware to solve the issue. In the lastemail from the user and after-service survey, the user expressed satisfaction with HTC service team.

Yes, yes, yeah! Now it works. Thank you. Hi,I ran a few tests and it worked beautifully.
Thank you for the attention to this issue. To be frankly, I didn’t expect a solution. Even

though it’s not Christmas, I’d like to put forward a suggestion... It’d be so cool if VIVESYNC could match mouse and keyboard. And, it’d be great, too, if Miracast could be started

from screen, which I am not sure if it could be made possible in the future. Thank you somuch for the team and for everything. Wish you and your team a happy new year.

099

Responsibility Mangement

2021 HTC ESG Report100Sustainable Agenda –HTC
Sustainable
AgendaAs a global leader in the innovative designof virtual reality and mobile phones, HTC
recognizes that by minimizing the environmental
impact of our manufacturing processes, we andour wider 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,
product, and supplier chains” we have put thisconcept of environmental sustainability into
action, have positive control, and are reducing
the impact of our operations on the naturalenvironment.

Sustainable
Supplier
Chain

Sustainable
Environment

Energy and climate change
Green facility
Water resource management
Education and Promotion

HTC Supplier ESG Assessment
and Audit
Responsible Procurement

Note:Energy and climate change related action, please refer “RiskManagement” section.

Sustainable
DesignEnhancement of Energy Efficiency
Eco-design
Management of hazardous
substance
Active in Compliance withStandards

Sustainable
Manufacturing
Process

Sustainable
Product

Management of waste andchemicals

The Green Supply Chain
Management System

Green production processes andsmart factories

Taking circular economy
as the direction fordevelopment
Environmentally friendly
with sustainable
packagingTo honor our commitment to our employees' health and safety and the environment, the Occupational Safety
Department has been established as a legally compliant, dedicated unit responsible for the organization of occupational
health and safety, and the execution of the energy management system. It also supports each site to continue goodpractice in the area of occupational health and safety management, and implement a strong environmental management
system.
Every year, we also formulate an occupational safety and health management plan based on the state of safety andhealth management. The implementation focuses include: compliance with safety and health regulations; hazard
identification to reduce risks; standardization of hazardous chemical labeling and general rules; the promotion ofoccupational safety and health information; and the establishment of a system to manage contractors. All these measures
are aimed at reducing risks.
We have emergency response plans that will be implemented in the event of an emergency caused by human error
or natural disasters, such as fire, explosion, typhoon, an accidental leak, mechanical injury, infectious disease, oran earthquake. As identification of the nature of the emergency, taking the necessary measures and examination ofstandard operating procedures. We hold fire all measures impact on the health and safety of the workers and also try toleast damage or company property.
HTC has introduced the ISO 14001 Environment Management System and verified by third-party authorities. To
implement and be in accordance with environmental policy, relevant targets are set up and the systematic measure ofenvironment management in the daily management.

Sustainable Environment
HTC cares for our nature. Our efforts speak for not only consumers and customer demands, but more importantly, thesustainable environment that are beautiful and with abundant resources for generations to come. The investment inwater improvement and waste management is to make the world greener, and as a model to enable, elevate fellow
workers’ awareness of ecosystem through different approaches that consistently express the fundamental idea ofenvironmental conservation, allow it to grow downward and upward in everyone’s conscience, so that it can befound ubiquitously in people’s daily action, living and carrying out subconsciously through successful environmental
education.

Resource consumption of recent 2 years

City water consumption
Wastewater

HTC Environment Protection,
Occupational Safety, Health, and Energy Policy
HTC strives to provide a safe and healthy working atmosphere for all of our employees while adhering to sustainability
best practices which protect our environment. HTC follows the guidelines below to achieve sustainable development andto ensure a better quality-working environment for our employees, customers, suppliers and contractors.
1.

We regard environment, safety, health, productivity, quality, and effective energy management with equal
importance.

2021

2020
Environmental Indicator

Unit

degree/year

HQ & Plants

Taipei Office

HQ & Plants

Taipei Office

63,13367,77836,00345,203

HQ & Plants- Dongmen Creek
Taipei Office- City dedicated sewerRiver

Total city water discharge

Metric Tons

78,211

54,222.4

42,01938,515.2

The amount of rainwater
recycled

Metric Tons/yearNA

2,673.68

NA

2,965

Total amount of water
recycled/reused

Metric Tons/year

23,741

NA

8,843

NA

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

37.6

3.94

24.56

6.16

Total amount of waste
incinerated Information productKg/year13,9448,455

2.

We regard the safety and health of employees, customers, suppliers, and contractors with equal importance.

3.

We require our employees to observe all guideline regarding safety, operating procedures, environmental
protection, hygiene, health and energy management.

Total amount of waste
incinerated - General

Kg/year504,306

0426,2020

4.

We are committed to preventing foreseeable dangers and loss control.

Total amount of waste reused

Kg/year

0

0

0

0

5.

We are committed to ensuring the organization establishes and implement a process for consultation andparticipation of workers.

Total amount of waste
incinerated

Kg/year135,700

48.32

65,55052,400

6.

We follow required laws and regulations.

7.

We are committed to give priority to the purchase of green products.

Waste disposal expense

NT$/year

828,240

302,400

619,448308,700

8.

We will continue to practice and improve on our environment, safety, health and energy management systems.

Environmental management
and recycling
amount - Information product

NT$/year

Environmental management
and recycling
amount - General

NT$/year

837,591

454,160

0454,602461,9220Note:
1. The total discharge of sewage in the Taipei office is estimated at 80% of the water consumption.
2. Domestic garbage at Taipei Office consists partly of recycled cartons that are unquantifiable. A recycling company has been commissioned for handling.
3. 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, disused desktop computers, disused screens, disused laptops ,kitchen refuse, recycled domestic material and general rubbish.

103

Sustainable Agenda

2021 HTC ESG Report104

Green Facility
The factories and offices disclosed in the boundary organization report this year have been established in industrial andcommercial 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 nosignificant impact on the local ecosystem and animal and plant species.
However, we still encourage all our plants and offices to go on with their efforts to beautify the environment. As for the
new buildings, we aim to improve the employee’s working environment through the introduction of green building
design.

Office Environment with Plants and Green Landscaping
HTC upholds the concept of environmental sustainability and we regularly increase our green space in HQ & Plants andTaipei Office. The HTC outdoors green area now totals 30,700 m2 and the Taipei Office building horticulture planningadhered to the concept of environmental protection and open parks. The planting area on the first floor reached 41%of the total base area. According to the topographic planning, large trees totaling 260 were planted, including camphor
trees, Liquidambar, Podocarpus, Taxodium distichum, and cherry trees. Additionally, the plan designated eight shrub
planting areas and one ecological pool area to plant about 3,200 plants. In HQ & Plants area, there are around 131 tree
species native to Taiwan on the grounds, such as Camphor and the Taiwan Golden-rain Tree. Our employees can enjoy
the lush green surroundings of their work environment.
Taipei Office planning covers B1 to 17F. In every floor, the indoor foliage was widely planted, totaling 450 pots. Different
plants added for different festive holidays in order to enhance different festive atmospheres. In addition, we also planted
beautiful green plants, such as the round pepper, the tiger-tail orchid, the lime pothos, the philodendron, etc., in the lobbyof H Building and TY3 Building in Taoyuan. The 2021 annual management fees for our green environment maintenanceamounts to NT$ 1.42 million which is used to provide a fresh and green office environment for HTC employees.

HTC’s Taipei office, The Golden LEED Certified Green Building
In 2013, HTC's Taipei Office obtained the Green Building
Label of the Ministry of the Interior and the LEED Goldcertification of the US Green Building Council(USGBC),
offering its employees an excellent and comfortable lowcarbon and take the responsibility of environmental
sustainability. The fully-integrated energy management
system was utilized to attain a full real-time management
and enhance the efficiency of energy use. In 2021, thecarbon emission reduction is 1,666 t-CO2e, and thecumulative carbon emission reduction has reached
17,814 t-CO2e.

LEED gold certification Green Building LabelThe fully-integrated energy management system isconstructed in the Taipei Office, which covers over 7,000 spots of on-site monitoring, total monitored spots
amounted to 20,000. The EUI of the Taipei office in 2021 is 164 kWh/m2Yr which is a remarkable achievement.

Green Procurement
Our strategy is to buy environmentally friendly products to substantiate our environmental protection concept of“recyclable, low pollution, and resource-saving”. We express the purchase of environmentally friendly products as apriority in our procurement specifications to firmly integrate the concept into our daily operations.
In 2021, the amount of green procurement reached NT$ 469 thousand. From 2012 to 2021, the accumulated expenditure
for products with green-product stamp was about NT$ 31.92 million.

105

Sustainable Agenda

2021 HTC ESG Report106Water Resource Management
The water used by the HTC headquarters and the factory is used by employees for office and life, and the productionlines are all dry process without generating industrial wastewater which will be no adverse effects to the nearby water
bodies.

Sewage Treatment
We invested NT$ 27,760,000 in building sewage treatment equipment in 2010 and spent NT$ 1,693,226 on operation andmaintenance in 2021.
To substantiate sewage control, we have implemented daily maintenance and inspection in accordance with the“Procedures for Sewage System Operation, Repair, and Maintenance.” We abide by all the laws and regulations 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 and recycled water are in full compliance with all
the standards.
Domestic sewage is discharged into the sewage sewer. Based on the average concentration of effluent BOD and COD from2016 to 2021, there will be no adverse effects on the nearby water bodies. Since 2017, a self-initiated test of effluent heavy
metals has shown ND or lower than the test value. Starting January 2013, the average daily treatment capacity of the
sewage treatment plant reached 604 metric tons, sufficient to replace the use of tap water for park landscape irrigationand for toilet water use.

The Amount of Water Discharge and Recycled Water, and the Average Concentration of BOD
Year

Amount of Water
Discharge(Metric Tons)

Amount of
Recycled Water(Metric Tons)

Average
Concentration of
BOD(mg/l)

Average
Concentration of
COD(mg/l)

The Suspended
Solids(mg/l)

Test of Effluent
Heavy Metals

2019

46,903

26,259

3.38

10.55

<2.5

N.D.

2020

78,211

23,741

5.15

24.28

6.00

N.D.

2021

42,019

8,843

7.9

36.9

7.18

N.D.

Note:
1. Tested items of heavy metals: Cd. Cr. Cr+6. Cu. Zn. Ni.
2. The scope of statistical data is HQ & Plants

Starting from 2012, HTC setup and implemented water
conservation plans. We examine results each year to examine
whether or not to adjust the goals. From 2014 to 2021, thecumulative volume of recycled water used for irrigation was
1,141,662 metric tons, which is equivalent to about 457 standard
swimming pools (each standard swimming pool is calculated at2,500 metric tons)

107

Sustainable Agenda

Water-saving Sanitation Equipment
When making purchases, HTC prioritizes water-saving features or water conservation marks. We have installed faucets
with sensors that dispense less water. By June 2020, a total of 126 old faucets were replaced by those with sensors, saving
70% more water.

Environmental Protection Education and Promotion
HTC continues to promote and enhance environmental protection consciousness and awareness in employees using adiversified interface. Through the new employee educational training and the provided training materials, the idea ofenvironmental protection is promoted within the organization. Moreover, corporate policy posters are displayed on
important bulletin boards to deliver continuously the information on environmental sustainability, allowing employees
to feel HTC's efforts in environmental protection and give their full support through actions as well as everyday life
habits.

Environmental Protection and Safety and Health Education
New employees and on-the-job staff education training in the past 3 years
2019

2020

2021

Person

Total
hours

Person

Total
hours

Person Total hours

OSH Dept.

-

-

120

360

208

624

3

After arriving
at thedepartment ofwork

Equipment
Dept.

54

162

21

63

0

0

General labor safety and healthin-service education training

1

Annual(On-job
training)

MFG

1,694

1,694

988

988

1,138

1,138

Hazardous chemical use notice1

Annual(On-job
training)

MFG

779

779

458

458

222

222

Prevent illegal violations of duties 0.5

Annual(On-job
training)

MFG

1,583

791.5

973

486.5

494

247

Hour

Frequency

Responsible
Unit

3

On board

Operational equipment hazard
notifications

Environmental protection andsafety and health education
training

Effectiveness of domestic sewage
recycling in 2021
Sewage water output (Metric Tons)

42,019Recycled water for irrigation (Metric Tons)

8,843

Amount saved (NT$)

114,959

Actual wastewater recycling rate (%)

21.05

Rainwater monitoring system

HTC has established a rainwater storage and recycling
system to collect rainwater for flushing toilets andwatering plants. A total of 2,965 metric tons of rainwater
was recycled from the Taipei office Building, effectively
saving water resources.

CourseSewage Recycling
The domestic wastewater is discharged into the sewer systemand delivered to the wastewater treatment plant. The treatedwastewater is discharged into the Dongmen River, which
eventually flows into the Nankan River. The green fields andplanted areas inside the factories are irrigated with recycled
sewage water without increasing the total amount of water
consumed. The Taipei building selected water-saving waterequipment, using air conditioning condensate and recovered
rainwater.

Rainwater Storage and Recycling
SystemNote:
1. The number of participants in the course “Prevent illegal violations of duties” in performing duties accounted for the total number of employees in Taiwan: 19.79%
2. For the "Operational equipment hazard notifications", in 2021, since there are no new direct colleagues, the number of people and the total number of training hours is 0.

Note: The estimated savings is estimated at NT$13 per degree of water.

2021 HTC ESG Report108Sustainable Design
HTC starts from the product life cycle, analyzes the product process in detail, and adopts different measures at various
stages through innovative thinking, especially in the product design and development stage, it uses the concept of
The Precautionary Principle to carefully select the ones with lower environmental risks. The material confirms that itcomplies with the internationally Restriction of Hazardous Substances Directive, reduces the environmental impact of
products, and develops sustainable products that are more environmentally friendly.

For the energy consumption during battery charging, we follow the regulations of the US Department of Energy (DOE)and Natural Resources Canada (NRCan) as standards to try our best to improve the efficiency of charging and reduce theloss of energy consumption when the battery keeps fully charged to minimize the overall energy consumption. All VIVE
Focus series fully follow regulations. The new VIVE Focus 3 launched in 2021 has a higher battery capacity and charging
efficiency to reduce energy consumption. The power management technology featured in the new VIVE Tracker 3.0
improves use time by 75% while minimizing energy consumption and power loss during charging.

Green Marks Obtained by HTC

VIVE Focus Series

Green Mark

Description

Applicable Area

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

Power supply units

Verified by a third-party verification company,
through the US Department of Energy (DOE) and theCanadian Department of Natural Resources (NRCan),the energy consumption requirements for battery
products

Smartphones, virtual reality(VR) device,includingAccessories with rechargeable batteries,
etc.

Working with Call2Recyle (RBRC) to properly recycle
used batteries in North America.

Batteries

HTC proactively seeks to reduce the use of environmentally harmful substances, through a design concept that canincrease the recycling rate, increase resource reuse, and reduce its negative impact on the environment. At present,
HTC's actual practice of sustainable design of products mainly focuses on the three major directions of improving energy
efficiency, product recyclability design and hazardous substance management to enhance the green competitiveness of
products.

Product

VIVE Focus Plus

VIVE Focus 3

Year

2019

2021

24-hour energy consumption power (Wh)29.92344.79

Represented value of UEC (kWh/yr)

4.172

1.08

Regulatory limits (kWh/yr)

4.844

1.858

VIVE Tracker

VIVE Tracker 3.0

Product

2018

2021

24-hour energy consumption power (Wh)

9.835

7.38

Represented value of UEC (kWh/yr)

2.023

1.029

Regulatory limits (kWh/yr)

3.359

3.352

VIVE Tracker Series

Enhancement of Energy Efficiency
We concentrate on energy saving from the early design and research and R&D phase. All
power supply devices used for HTC products must comply with the relevant internationalenergy consumption specifications: Energy Star (U.S.), California Energy Commission (U.S.),
Energy-related Products Energy-related Products and are approved with energy efficiency
verification by third-party verification companies, and the energy efficiency has reached thehighest level of Level VI requirements(standby power less than 0.1W), and the currently usedchargers are lower than 0.04W, which has greatly exceeded the standard requirements.
Type

Product
Smartphone(Desire 21 Pro 5G)

CK18W02
TC NE5W
TC NE18W
TC NE30W

109

VR(VIVE Tracker 3.0, VIVE Focus 3,
VIVE pro 2)

Sustainable Agenda

Year

Energy Efficiency

Standby energy consumption(115V)

Level VI<=0.019W

Level VI<= 0.02W

Level VI<= 0.04W

Level VI<= 0.03W

Note: The unit of energy consumption (Represented value of UEC) is tested and calculated according to the regulations of the US Department of Energy. It represents the additional energy consumptionin addition to the power obtained by the battery during the charging process. The lower the number represents the charging process; there is Better power conversion efficiency and lower
standby power

2021 HTC ESG Report110Energy efficiency regulations for battery charging products by the US
Department of Energy(DOE) and Natural Resources Canada(NRCan).
The US Department of Energy (DOE) issued the energy efficiency regulations for battery charging (BC) products
in 2016, which was implemented in June 2018. All BC products sold in the US market must comply with the DOE
regulations and be registered. Natural Resources Canada (NRCan) enforced the same regulations in June 2019.
Prior to this, the California Energy Commission (CEC) began implementing energy efficiency regulations forbattery charging systems in February 2013. These requirements cover almost all electronic products that use
rechargeable batteries, including mobile phones and notebook computers. Nevertheless, the DOE regulation
focuses on the unit energy consumption (UEC), that is, the amount of electricity consumed during the charging
process must not exceed the limit.

The new Desire 21 pro 5G phone product still features a design with a highrecycle rate. Although the new version is slightly heavier than previously
models, the recycle percentage remains the same. In fact, it’s recyclability
is even better than before, tested and validated by an independent body. In
relation to legal compliance, the product received a 7.2/10 green label in themost recent Repairability Index for France 2021, where HTC smartphones
scored high in the ratings of five criteria: manufacturing documentation,
disassembly, availability of spare parts, price of spare parts, and repairs.
The product has a longer life span and a highly rated repair service.

VIVE Tracker Series

EU WEEE
Standard

Product Recyclability Design
HTC takes waste deduction and resource reuse into considerationfrom the first stages of product R&D. We evaluate the productdesign of recycling thoroughly through product breakdown andmaterial simulation, and estimate the material composition andrelative recycling rate of products. The third-party authorities
verify the material recycling rate by disassembling and analyzing
the products. And the recycling rate of all our products, including
VR and smartphones, is largely exceeding to the standard of the
product category set by the EU WEEE regulations (55%). In the
future, as a principle, we will continue to design our new productsin the direction of decreasing the weight and increasing the recycling rate.

33% Smaller size
20% Lighter
weight
15% Increase
recycling rate

2018 VIVE Tracker
Weight 90.2 g
Recycling rate 75.3%

2021 VIVE Tracker 3.0
Weight 72.6 g
Recycling rate 87.2%

VIVE HMD- VIVE Pro Series

EU WEEE
Standard

The VIVE Tracker 3.0, the new generation of the HTC VR series, is another innovation. Compared to the previous version,
the product has an improved size, weight, and 3R percentage, allowing an even better recycle rate when the productenters the recycle system after use, promoting the circular economy.
Compared to the previous version, the new VIVE Pro 2 VR headset has improved specification and features, and ismade with more recyclable materials, which though add weight to the headset, have a higher recycle percentage rate.
Equipped with the VIVE Tracker 3.0 and facial expression detection kits, the environmentally-friendly VIVE Pro 2.0 has
extensive applications and a long product life cycle.

55%

2018 VIVE Pro
Weight 755.5 g

55%

Recycling rate 75.2%

2021 VIVE Pro 2
Weight 815.3 g
Recycling rate 75.5%

Smartphone- Desire Series

EU WEEE
Standard

2020 Desire 20 Pro
Weight 137.7 g

55%

Recycling rate 89.5%

2021 Desire 21 Pro 5G
Weight 143.9 g
Recycling rate 90.0%

Note: 3R includes Reuse, Recycling and Recovery ratios, which are defined in the EU WEEE Directive (2012/19/EU).

111

Sustainable Agenda

2021 HTC ESG Report112

Phone and Battery Recycling
To properly fulfill their responsibilities as a manufacturer, HTC, which is 100% in line with EU WEEE
requirements, has also promoted the US and Canadian related electronic product recycling program. To reduce
the undue disposal or handling of old mobile phones and the impact of this upon the environment.
1. HTC began operating its own mail back device recycling program from 2020. Customers can contact HTC’s
customer care team and request a free mailing label to send their phone, tablet, or VR headset to our ISO 14001
certified recycling partner for proper disposal. For more details, see「https://www.htc.com/us/recycling/」
2. HTC also participates in the industrial management program Call2Recycle that is currently implemented in the
United States. The program provides for the collection and recycling of batteries, including cell phone lithiumion batteries, as well as the recycling of cell phones in Canada. We pay a fee to Call2Recycle for every mobile soldin the United States and Canada. The COVID-19 pandemic and stay home orders impacted Call2Recycle program,the project recycled 3.67 million kilograms of batteries in the United States and Canada in 2021, an increase of
3.2% compared to 2020. For more details, see http://www.call2recycle.org/

Hazardous Substance Management
During the initial product design stage, HTC considers the impact of the production process on the environment andwhether it is harmful to users. Therefore, all the used parts, modules, and materials are compliant with the HTC’s
specifications of hazardous substance management list. The list covers not only the ten items restricted by the Restrictionof the use of Certain Hazardous Substances Directives, RoHS, but also those flagged by international environment
protection regulations and international customers. For instance, we ensure to enforce the ban of PVC, halogen-free ofbrominated flame retardant, and pollution-free gas, and waste that contaminates the environment and ecosystem is
not produced during the production process. We uphold the goal of being pollution-free, environmentally friendly, andsustainable in operation. We also request that our upstream and downstream suppliers to work together to comply with
relevant regulations, to ensure that our consumers are free from hazardous substances.
Even though virtual head-mounted displays are not categorized by China RoHS, the new 2021 VIVE Flow voluntarily
submitted China's RoHS certification and passed RoHS hazardous substances tests in China. All VIVE Flow parts are
HTC toxic-free, and the finished product complies with regional regulations on hazardous substance control around theworld, making the VIVE Flow a toxic-free, human- and environmentally-friendly product.

Description of the HTC product lifecycle and its different stages

3.HTC participates in state-run e-waste programs in 20+ states in the US, for responsible recycling of its Nexus-9
tablet computers. Due to successful lobbying by the cell phone industry, only three states (New Jersey, West
Virginia, and Maryland) require cell phones to be recycled under their laws. All the other states’ laws covercomputers, televisions, and various other electronic devices. A few states have begun including VR headsets(with internal processor) in their definitions of Computer or Video Game Console. Thus far, we have submitted
registrations in New York, Illinois, and Maine with VR hardware included. We are keeping an eye on other states
as regulations continue to evolve and more and more states consider adding video gaming consoles to theirprograms.

Raw materials/parts

Production

Green product design and verification

HTC forbids restricted materials.

Chemical inspection laboratory
in the plants.

International third-party companies do thechemical analysis to ensure products comply
with the EU RoHS regulations; that is, that
products do not contain relevant heavy
metals, bromide fire retardants, and plasticizer.

Waste/recycle

Use

Transportation

International third-party
companies verify that our
products are subject to the EU
WEEE recycle standard.

In accordance with therequirements of energy lossof charging batteries in the
USA and Canada, standards ofpower efficiency in the EU, andinternational safety standard
IEC 62368.

Each state has a different setup for ensuring end-of-life electronics are recycled responsibly. The states use
various mechanisms for determining how much manufacturers must recycle each year – many states determine
a company’s annual obligation of pounds of e-scrap to collect based on its market share. Some states simply bill
manufacturers for the recycling of returned electronics on a per-pound basis. Other states allow HTC to simply
operate a mail back program, and pay an annual registration fee, with no target of pounds to collect. For example,
in Washington state, HTC pays fees based on our market share for tablet computers, with local governments
operating collection locations throughout the state. Washington’s Dept. of Ecology registers recyclers to manage
Washington’s e-scrap, and ensures these recyclers are using responsible practices. Over 200,000,000 kilograms of
e-scrap have been recycled from Washington residences since the program began in 2009. For more details, see
https://ecology.wa.gov/Waste-Toxics/Reducing-recycling-waste/Our-recycling-programs/Electronics-E-Cycle

113

Sustainable Agenda

Improvement on packaging
design.

2021 HTC ESG Report114

HTC Hazardous Substance Control schedule

EU WEEE
2020

Prepare the EU REACH SCIP database declaration

2015

Beryllium copper alloy was replaced by other safer materials

2012

Declared that new smartphones meet halogen-free requirements

At the design stage, HTC chooses materials that are easy to recycle and reuse. Besides marking products in the
EU market with recycle labels, products are also verified by third-party companies to ensure that they are inaccordance with the 3R recycle rate. As a result, we can reduce the number of final-stage electronics scraps todecrease contamination of the environment whilst enhancing the use of natural resources.

2009

1997

WEEE is the abbreviation of Waste Electrical & Electronic Equipment. The major directive numbers include
2002/96/EC and 2012/19/EU. In the Directives, electronics manufacturers in the European Union (EU) shall bear the
expenses of scrap recycling, processing, and reuse. Products sold in the market shall have corresponding labels.
Electrical and electronics equipment shall meet the objectives of reuse, recycling, and recovery (3R).

Banned the use of PVC USB cable, and introduced
halogen-free plastic housing and PCB board

HTC established

EU REACH

2006

Established the green supply chain
management platform

REACH (Registration, Evaluation, and Authorization of Chemicals) are regulations governing chemical productregistration, evaluation, authorization and limitation. In 2020, 209 substances of very high concern (SVHC) havebeen announced, and it is expected to be enforced on January 5th, 2021 that products/parts that contain 0.1% SVHC
to pass the SCIP (Substances of Concern In articles as such or in complex Products) database for more information.
This measure prompts the use of alternative substances to replace hazardous chemicals to further enhance asafer circular economy system.

2011

External parts were replaced by alternatives with non-plating process

2013

Banned the use of n-hexane in the process

2017

Strengthen the control measures for plasticizer

2021

Complete the REACH SCIP database declaration for all products exported to the EU.

EU RoHS-Restriction of the Use of Hazardous Substances
RoHS is the abbreviation of the Restriction of the use of certain Hazardous Substances in electrical and electronicequipment. Currently, the major Directives include 2011/65/EU and EU 2015/863.
In the Directives, Pb, Cd, Hg, Cr6+, PBBs, PBDEs, and four newly added plasticizers, DEHP, BBP, DBP, and DIBP
are all restricted. HTC had already published the latest HTC Toxic Substance Control List R7 edition in 2018. The
content includes ten restricted substances outlined by RoHS, and it enforces suppliers to provide test reports
as necessary documentation for parts approval procedures. In the future, HTC will continue to pay attention to
new entries of legal regulations to ensure our Toxic Substance Control List is updated in line with international
standards.

115

Sustainable Agenda

HTC requests that our suppliers provide the latest data related to SVHC, and encourages them to reduce the use ofsuch chemical substances. On the other hand, all products exported to the EU have completed the SCIP databasedeclaration in 2021.

On the other hand, all products exported to the EU have completed the
SCIP database declaration in 2021.
On July 6th 2005, the European Parliament confirmed a new framework of directives to set mandatory ecologicalrequirements for energy-using products. On July 22nd in the same year, the new energy-using product Ecodesign
Directive (2005/32/EC) was announced. The Ecodesign Directive EuP was replaced with the new Energy-Related
Products directive (ErP) 2009/125/EC. Among them, the new version of the external power supply regulation (EU2019/1782) has been enforced on April 1, 2020.
HTC’s AC adapters have been upgraded to the latest ErP standard in accordance with the regulations of the new
directive governing efficiency requirements for external power supplies. Compulsory new labels are introduced
and energy performance technical documents are required. The new AC adapters will fully comply with the new
directive in the future.

2021 HTC ESG Report

116Sustainable Manufacturing Process

EAC RoHS
Beginning on March 1st 2020, RoHS certification will be mandatory for electronics and radio-electronic productsthat are placed on the market in the Eurasian Economic Union. Products must conform to the TechnicalRegulation (EAEU TR 037/2016) – Restriction of Hazardous Substances (EAC RoHS).
Based on the EU RoHS testing foundation, products of HTC sold in Europe and Asia must submit documentscomplying with RoHS to ensure they are in accordance with the local requirements for certifications and EAC
RoHS.

Repairability Index for France
Since January 1 2021, France has implemented a Repairability Index on packaging, labels or the website of fivecategories of electronic devices: washing machines, lawnmowers, televisions, laptops and smartphones. The index
assesses five criteria: use and repair description of the product by the manufacturer, disassembly difficulty of the
product, spare parts availability on the market, price difference between spare parts and finished products, andmaintenance and upgradability after purchase. The rating ranks from 1 to 10, of which 10 is the best repairabilityof a product.
HTC smartphones for the French market underwent repairability labeling in 2021, showing consumers a range of
information on recyclability and repairability. The product was granted a 7.2 green label.

Active in Compliance with Standards
All HTC mobile phones are verified by international public certification companies, such as SGS, TUV, and ITS.
Chemical analysis is carried out to ensure compliance with the EU environmental directives. In addition, a brand newinternational product safety standard IEC62368, entered into effect on December 20th 2020. This new standard aims
at mandating manufacturers to build a safer environment for product design on the basis of known hazards. HTC has
updated to the latest version of IEC62368 for all products in the market with CB certificates provided.

117

Sustainable Agenda

VR devices produced by HTC assist users in consuming less energy and produce a lower carbon footprint through green
product design that aligns with people's new approach to life, work, learning and travel. We work to revamp process
management system of potential consumption of energy and resources during the production process that reduces
energy consumption and implements waste control through management improvement mechanisms with the input of
the Operation Control Center (OCC).

Hazardous Waste Management
HTC’s main manufacturing business is the assembly of virtual reality devices, we process and dispose of waste according
to our self-regulated “Process for Removal and Handling Business Waste” and practice good resources recycling to ensurecleanliness of the working environment and reduce environmental impact.
Regarding management measures, besides entrusting legal disposal authorities to properly dispose of the waste inaccordance with the government policy, we also follow disposal trucks to check and confirm their cleaning status on sitefrom time to time. Regarding plants, we inspect waste storage and temporary storage zones through inspection checklist
regularly, and request corrections for non-compliance within a limited time. We also establish environmental safety andhealth self-assessment form and perform audits, to accomplish effective management and evaluation mechanism. In theevent of environmental concerns, HTC can be reached via the information on the company's website to ensure that we
respond and handle it promptly.
MeasuresSet up recycling bins and commission manual sorting ofdomestic waste.
Used batteries, light tubes and information technology
objects must be recycled.

Methods
Set up recycling bins and encourage and propagandize staff to sort
domestic waste. The employees recycled 426.202 kg of domestic waste in2021.
We have recycling stations for used batteries and light tubes available to theemployees

In the process of virtual reality device assembly /manufacturing, HTC inevitably generates general business waste andsmall amounts of harmful business waste. HTC upholds and implements proper disposal of waste, commissioning legal
waste removal and processing companies and choosing the best handling approach based on the nature of waste.

2021 HTC ESG Report118

HTC Waste Statistics
Type

Recovery Operations

Offsite Weight (Outsourcing)(Unit: Metric tons)

Remark

2020

2021

0

0

0

958.273518.25405.645

Other: Incineration

170.51100.64

65.55

Other: Landfilling

0

35.06

0

Waste Bakelite

Other: Recycling

146.343

57.51329.012

Kitchen leftover

0

0

0

Recycling -E-0217

28.58513.752

7.606

Scrapped electronic parts and components, leftover
scrap and defective goods.

Recycling -E-0221

12.11

1.347

0.00001

Scrapped metal containing PCBs and scrapped powder

Recycling -E-0222

0.458

0.123

0.055

Scrapped PCBs containing parts and components

0.215

C0110- Harmful waste liquid containing copper
The chemical treatment shall be conducted once every
two years for the treatment according to "Methods
and Facilities Standards for the Storage, Clearance andDisposal of Industrial Waste".

0.31

C0301- Harmful waste liquid
The chemical treatment shall be conducted once every
two years for the treatment according to "Methods
and Facilities Standards for the Storage, Clearance andDisposal of Industrial Waste".

Preparation for reuse
Recycling

Hazardous waste

Chemical treatment-C0110

2.78

0

2.17

Domestic garbage

Note:
1. The computer host and screen are estimated based on the weight information obtained from the official website.
2. Preparation for reuse: Checking, cleaning, or repairing operations, by which products or components of products that have become waste are prepared to be put to use for the same purpose forwhich they were conceived.
3. Recycling: Reprocessing of products or components of products that have become waste, to make new materials.
4. The method of estimating the weight of food waste: It is used as a feed additive by legal livestock farms, and it is calculated as 189 kg per barrel.

306-1

Materials mining & production
306-1

Ptoduct components

REPORTING ORGANIZATION
HTC

306-3

306-3

Non-hazardous waste

Hazardous waste

306-1

Products & packaging

306-4

DOWNSTREAM IN VALUE
CHAIN

Chemical treatment-C0301

1.785

Including Tray plate, foam, miscellaneous plastic, waste
wood pallets, Computer peripherals (host, screen,
laptop, electronic waste)

OWN
ACTIVITIESPreparation for reuse

Flow chart of activities for significant waste-related impacts in 2021

UPSTREAM INVALUE CHAIN

Non-hazardous waste

2019

Recycling

306-1(E-0271)

7.606 Metric tons

Others29.012 Metric tons

Recycling

Consumption

306-4(E-0221)306-40.00001 Metric tons

Recycling

Recycling

405.645 Metric tons

306-4

Downstream waste(E-0222)0.055 Metric tons
306-5

306-5

Chemicaltreatment

Landfilling(C0110)0 Metric tons

0.215 Metric tons
306-5

306-5

Chemicaltreatment

Incineration(C0301)65.55 Metric tons

0.31 Metric tons

Other disposal
operations

119

Sustainable Agenda

Landfilling

Recycling

Preparation for reuse2021 HTC ESG Report120

Waste Reduction, Recycling and Reuse

Hazardous Substances and Chemical Control

HTC waste reduction strategy involves the reduction of the generation of waste from the source by means of sorting andadvocacy. The reuse of waste is also a priority and is essential for an increase in resource recycling efficiency.
We have been taking steps to handle the treatment of waste materials according to type. As an example, we commission
contractors to collect and recycle waste trays. In addition, a number of other licensed contractors are employed torecycle other material and much of the waste is purified and turned into industrial raw material. Other waste goes
through physical classification which increases reusability. For example, the source control strategy is adopted when therecyclable plates and sponges can be recycled to the production line for reuse. The material that is not recyclable goes toa final destination. We also publish the condition of temporarily stored waste material on the Internet. In 2021, the total
amount of non-hazardous waste recycled is about 434.657 metric tons, accounting for about 86.9% of the total waste.
From 2011 to 2021, a series of measures such as sorting and recycling, the money earned or saved by recycling wasterose year by year to reach NT$916,524 in 2021. The recycling rate of non-hazardous waste increased from 56.89% in 2011
to 86.9%. By the end of 2021, and the accumulated recycling income reached NT$91,060,798 in 2021.

HTC Hazardous Substance Management Policy
HTC analyzes the international environmental protection regulations and complying with the environmental
protection requirements of international customers, with reference to the relevant international technicalstandards, and then establishing the IP-00000106-01 Toxic Substance Control List, and holding suppliers meeting
regularly to work with parts suppliers together seeking for the use of non-toxic materials under the Company's
hazardous substance control policy with green supply chain management, so that the procurement of raw
materials, that is, using the principle of the source management to conduct strict 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 the materials used in the product conform to theinternational environmental protection specifications.
In terms of production management, factories regularly conduct hazardous substance tests on materials
according to the “Incoming Toxic Substance Control Work Instructions”. This is done to ensure that thesematerials comply with the RoHS 2.0 requirements, are all non-toxic, and are harmless green products.

Waste Recycling Effect and Rate

X-ray fluorescence analyzer testing heavy metals and halogen elements

million
100

100%

90

90%

80

80%

70

70%

60

60%

50

50%

40

40%

30

30%

20

20%

10

10%

0
Cumulative Amount ofRecycling in NT$
Recycling Rate

2011

2012

2013

2017

2018

2019

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

66,983,184

70,874,331

88,852,523 90,144,274 91,060,798

56.89% 62.64%

78.09%

81.02%

84.53%

65.19%

2015

70.72%

74.43%

2020

2021

2016

65.82%

2014

Sample preparation

Sampling analysis

Element data acquired

TD-GC/MS is used to check plasticizer

0%78.80% 86.90%
million4,000,000

25

3,500,000
20

3,000,000
2,500,000

15

2,000,000
10

1,500,000
1,000,000

5500,000
0
Total Weight of Waste Recycling
Cumulative Weight of Wastes
Recycling

121

2018

2019

2020

2021

2,605,450 2,785,082 2,723,339 3,037,885 3,450,697 2,434,060 1,771,481

958,273643,753434.657

2012

2013

2,605,450 5,390,532

Sustainable Agenda

2014

8,113,871

2015

2016

2017

11,151,756 14,602,453 17,036,513 18,807,994 19,766,267 20,410,020 20,844,677

HTC understands that in the green competition between corporations around the world, the active management ofharmful substances and chemicals is the only way to ensure the reliability of the manufacturing process and productcompliance with the standards of the different countries and customers. In so doing, we reduce the legal risks that our
products might suffer。We completely banned four chemical substances, including n-hexane, n-heptane, benzene, andtoluene. According to customer requirements, international standards, and domestic regulations, we restricted the useof 527 chemical substances such as hydrazine and dichlorobromomethane. Besides, we take the following measures tocontrol the condition of chemicals used during the manufacturing of components and parts. These include:

0

1. Specially-assigned employees make an inventory of the chemicals in the plant on a regular basis. They also have toinspect the chemicals and ascertain their condition. Including:
Use types, quantities and the storage status of the chemicals (includes storage container management)
2021 HTC ESG Report122

Information system process optimization

Whether the chemical's label of the using unit is complete.
Whether the information about the chemicals is complete, such as the safety data sheet (SDS, Safety Data Sheets)
Personnel are required to wear basic safety protective gears when using the chemicals.
2. Compressed gas fire extinguishers should contain safe eco-friendly agents: Replace CO2 fire extinguishers with safe
halogen compound fire extinguishers.
3. Emergency lights should be powered by eco-friendly batteries: Replace lead-acid batteries with nickel-cadmium
batteries. If there is any scrapped nickel-cadmium battery, it will be delivered to a qualified Class E waste treatment
plant for disposal.
4. Set up regulations for the management of chemical agents for cooling water towers: Choose cleaning solutions withsafety 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 anassessment of the risk levels.

Control Center
The control center shows instant testing statuses and defective conditions of various products and testing stations. It also
shows specific equipment environment calibration displays and warning notifications. We continue to expand functions,such as equipment traceability, maintenance records, and instructions.
In addition to the existing instant testing statuses and defects of various products and testing stations in 2020, the OCC
installed a big screen in 2021 for easier reference, replaced hourly productivity manual records with online instantgraphics and charts, and operates a new statistics report output feature to greatly reduce data processing time.
Tasks in 2022 include continuous improvement of the OCC functions, the addition of real-time equipment maintenanceand repairs, instant alarms for repetitive testing of issues for engineers to gauge the issues right away and begins repairs
as needed to minimize downtime.

Green Production Process and Smart Factories
A Combination of Human and Material Resources
Our Taoyuan plant provides stable job opportunities, salaries andbenefits, as well as an excellent job environment and opportunities for
growth and learning for locals. We comply with the relevant regulationsof labor law, create good interactions with communities, and promotelocal economic development. We combine human resources andsystems automation to increase efficiency, whilst simultaneously
decreasing human capital loss.

The process of receiving company products is adjusted to lead to electronic sign-off for material requisitions, and theconcept of proper storage of company assets shall be strengthened. All products of the receiving company shall be inaccordance with the standard process, and must be registered by the custodian for safekeeping. The custodian shallapply for the return or disposal of products after use. If this is not done, the custodian must bear the responsibility ofstorage or reparation of those products. In order to reduce manual upload errors and improve accuracy, each systemprocess has been combined and officially launched. This can speed up the production process and reduce the waste ofmanpower.

Production Line Combination And Energy Saving Plan
Production Line

Manpower saving ratio(Test function)

PCB Plant

80%

System Plant VR
production line

60%

System Plant SP
production line

68%

We centralize the SMT scheduling and production with double production lines. We saved a total amount of NT$4,080,410
on nitrogen and electricity in 2021. HTC also developed relevant production and testing equipment that can effectively
share and recycle jigs and accessories at the same time. As a result, parts can be recycled with zero waste.

Automation
HTC introduced test automation procedures on the product line. We use robotic arms to test different functionalities
using the appropriate jigs and equipment to replace traditional repetitive human operation. By doing so, not only do weelevate test efficiency, save testing manpower, and operate 24 hours, but we also lower the margin for human errors inoperations or the wrong judgment of testing results. We also introduced the “one out of ten” random test at the end ofplates to enhance testing efficiency.

Aluminum extrusion and recycled materials dismantled from old
project stations are re-assembled as new ones.

123

Sustainable Agenda

CCD camera modules dismantled from old jigs are applied 100%on new project stations, and are re-designed as new equipment.

2021 HTC ESG Report124Renovation Project: Test Station for the Cooperation of Dual-arm Manipulators

Meal pre-order system for MFG center

To reduce the transportation of products between test
stations, use less space, and promote efficiency, HTC built a
new test station using computers, robot manipulators andother objects and materials from old product test stations. In
the new station, dual-arm manipulators cooperate to performdifferent tests, such as an IMU (inertial measurement unit)
non-defective unit test and 6DOF tests.

To reduce food waste, on May 18, 2021, we began to use an Android meal ordering app and Excel VBA program to assist
Restaurant TY3 6F in making the precise number of meals required and facilitate an efficient meal ordering process for
employees in the Manufacturing Center.

The renovation was successfully certified on March 30, 2021,
and will begin its work at the VIVE Focus Plus IMU+6DoF test
station
VIVE Focus plus dual-arm test environment

Adoption of 8-CCD at the VIVE Wrist Tracker IR-LED test station
It took 250 seconds to complete a test on the Focus 3
Controller’s LED with a manipulator to rotate the DUT, anda single CCD camera to take pictures from six angles. Now
with CCD, and aluminum extrusion material and cloth fromold product test stations, it takes only 100 seconds for a DUTof the VIVE Wrist Tracker’s LED to be tested while eight
CCD cameras capture a fixed DUT from eight angles in one
shot, saving nearly 150 seconds. This setting commenced
operations on January 14, 2021.

Android meal ordering app

Excel VBA program summing up the orders of the day of the MFG Center

Material Recycling And Reuse
Manipulator test setting in the dark room for the Focus 3
Controller's LED

NT$ 1,140,924 saved in 2021 from recycled of aluminum plates, solder paste, solder spatter and steel plates, and reuse ofmaterials in the M/B process, FPC process and Synthetic Stone Carrier.

Improvement of Production and Enhancement of Yield Rate
Through the overall improvement of the production, quality,
personnel educational training, raw material quality control,
jig improvement, production automation and testing, andprecision testing, etc., we increased the life and lifecycleof products, and decreased electronic waste that damages
the environment. In addition, we increased the production
efficiency through trial production line adjustments.

Annual
Basic
Return
rate

2020

2021

VIVE

0.36%

0.24%

Smartphone &IOT

4.66%

2.71%

Trend

Energy and Paper Saving Measures
Paperless routine report report/ SOP/ testing specs with OQC were introduced. Around 15,000 pieces of A4 paper (70kg)
were saved annually. In 2021, we have adjusted the testing frequency according to material quality risks so we canreduce the time taken to use equipment and instruments. Annually, we can save up to 30% of electricity (about 1,200
degrees), 30% aluminum plate consumption, and extend the lifespan of X-Ray light pipes by 35%.
Production line optimization and merging of process units of high similarity. The merger between the warehouse andpackaging line in 2021 not only reduced manpower costs in the warehouse but also conserved NT$ 376,857 worth ofelectricity.
Exterior of 8-CCD test equipment for the VIVE Wrist Tracker

125

Sustainable Agenda

Exterior of 8-CCD test equipment for the VIVE Wrist Tracker

2021 HTC ESG Report126Sustainable Product
The Green Supply Chain Management System
HTC has setup the Green Supply Chain Management
platform since 2006 to assist R&D engineers to select green
materials from the product database that comply with bothInternational regulations and customer requirements. Green
materials are used from the start of design to significantly
enhance the reliability and related validation process andschedule of green products.

Carbon Footprint and Lifecycle Assessment Related Planning andReporting Memorabilia
HTC has been conducting product environmental impact investigation and analysis in accordance with life cycle
assessment methods since 2010. The annual action plans are set out below:
1. In 2010, we participated in the Product Environmental Information Disclosure Program of the Industrial
Development Bureau MOEA and completed the Environmental Protection Declaration (EPD) with 19 suppliers.

Since 2018, the CDC (Component Data Collection) subsystem
has been added to the Supplier Portal System to address
the issues required by the Supplier Code of Conduct, suchas conflict minerals, banned and restricted substances, andgreenhouse gases Emissions, etc., set the annual suppliertargets, tracked and summarized through the system.

2. In 2011, we participated in the Low Carbon Product Design Program of the Industrial Development Bureau
MOEA, and completed carbon footprint analysis and low carbon design counseling with 15 major suppliers.

The survey of new suppliers shall comply with the HSF scoring standard. As for the existing suppliers, the HSF
performance evaluation was added to the Supplier Performance Management System since 2016. Improvements arereviewed and checked via the implementation of the quarterly supplier meeting.

5. In 2015, cooperated with 8 suppliers, fulfilled two products carbon footprint inspection.

Joint effort with supply chain members in increasing our ESG performance in the 2022 supplier inclusion andperformance rating.

7. Starting from 2016, the supplier GHG autonomous inventory was initiated. Suppliers are required to submit
GHG inventory data in the first half of each year. The response rate in 2021 reached 100%.

3. In 2013, we cooperated with 11 suppliers to complete the ISO/TS14067 product carbon footprint inspection.
4. In 2014, our main action plan is to establish carbon reduction targets and action programs by providing the
major suppliers with detailed life cycle investigation data analyses.

6. In 2016, water footprint inspection and third-party verification have been accomplished.

8. In 2018/2019, HTC join a CDP supply chain program member. In the first year, major suppliers were invited toparticipate in the CDP Carbon Disclosure Questionnaire and the annual response rate reached 48%. In 2019,invited more major suppliers to participate in the survey and the annual response rate reached 61%.
9. In 2022, we plan to carry out product carbon footprint certification for the VR product - VIVE Flow to grasp the
carbon content of the product.

Environmentally friendly with sustainable packaging
Taking circular economy as the direction for development
In order to achieve the goal of sustainable development, the thinking of circular economy is adopted to design andmanufacture HTC products. We think about how to use the limited resources of the earth cautiously so that maximum
efficiency can be generated and the effectiveness can be maintained within the industrial system to achieve sustainable
operation. The following are our practices:
Maximal use of single plastic material helps make recycling easier. Exclusion of materials made with hazardous
chemical substances and lightweight products are the future product design.
Extended product lifecycle; use of modular designs for hardware upgradability and for changing spare parts.
Product energy-saving design.
Use recycled materials for manufacturing and packaging.
Reduce the environmental impact of the manufacturing process, use recycled water and renewable energy.

127

Sustainable Agenda

The packaging material used for HTC smartphones is subject to product safety and appearance requirements. We take
into account the impact of packaging material on the environment. We uphold the promise of being environmentallyfriendly and sustainable. Thus, we make efforts to reduce product packaging. Our considerations include:
1. Reduction of the amount of material used.
2. The use of biodegradable raw material.
3. Printing with environmentally friendly ink (soy ink).
4. The facilitation of shipment.
All the packaging materials for HTC products are compliable with the EC directive on packaging (EU 94/62/EC) and the
US requirement on packaging (Model Toxics in Packaging Legislation of USA). The printing ink used on the packaging
material is low-volatility ink or soy ink certified by the American Soybean Association. By utilizing recyclable packaging
materials and lightweight design, we minimize the environment impact with our product packaging design.

2021 HTC ESG Report128History of HTC “Sustainable Packaging”

WeightHas been reduced, helps toreduce CO2 emission resulting
from transportation.

The material of VR packaging- Utilize recyclable packaging materials and lightweight design

Transportation

Dimensions

One pallet can carry more packs andhelp reduce freight2015

The number of pallets

574x420x212mm
Weight (g)Recycling Weight (g)Recycling Rate (%)

Chipboard

89

71.2

80

calendered paper

20

0

0

Anti-scratch film

1

0

0

Black cards

43

36.55

85

corrugated fiberboard

477

357.7575

PP material

1.32

1,188

90

Sum

631.32466.68

73.9

2016

6pcs
Volume reduced by 55%.
Weight loss by 40%.
Printed with two colors and reduce the ink
use.

1,800

Pizza Box
415x295x181mm

2017

ECO Features

Printed with two colors and reduce the ink
use.

3,000

Rigid Box

2021 Smartphone Packaging Material Analysis
Material

Weight(g)24pcs

Reduce printing with ink.
Share to reduce the generation of new
packaging materials.

2,250

Pizza Box
532x344x185mm

20pcs

2021 VR Packaging Material Analysis-VIVE FOCUS 3
Weight (g)Recycling Weight (g)Recycling Rate (%)

2018

White cards

508.3

0

0

Pizza Box

E flute

281.2

281.2

100

Others (Such as calendered paper,PET
membrane of plastic bags..etc.)

25

0

0

Sum

814

281.2

35

Material

Recycling Weight (g)Recycling Rate (%)

120g Kraft paper

24.2

3.6~7.315-30400g Kraft paper

29.3

0

0

Chipboard

122.3

122.3

100

5

5

100

White Cards

27.9

0

0

PS Tray

23.8

0

0

PE bag

3.5

0

0

Sum

236

125.9-129.6

53-55

129

Sustainable Agenda

2019 /
2020

30pcs

Reduce inner packaging with plastic.
Use higher recycled materials on the outer
box.

1,570

520x302x182mm

Weight (g)F flute418x338x188mm

Pizza Box

2021 VR Packaging Material Analysis-VIVE FLOW
Material

Reduce printing with ink.
Extremely simplified packaging design.

1,200

2021

24pcs

820

Pizza Box
(FOCUS 3)
375x338x126.5mm

2021

54pcs

Monotone color print for a minimalist,
sophisticated design.
Optimized space allocation, light andcompact outer design to change perceptionsof a heavy VIVE series.

240

Rigid Box
(VIVE Flow)
184x91x123mm

Use higher recycled materials on the outerbox.
Use of corrugated board that is lighter yet
sturdier.
Best pallet pattern to reduce carbon
footprint.

420pcs2021 HTC ESG Report130Sustainable Supply Chain
Suppliers are a vital factor for the continued success of HTC, we were founded in Taiwan and are a Taiwanese company
whose operations and procurement drives the development of the related sectors. Besides key components, we try
to purchase local raw materials and related equipment. The amount of local raw materials purchased accounted for
62.88%. While demanding high-quality services and products, we also use high ethical and environmental standards tomanage our supply chain.
HTC follow the Responsible Business Alliance Code of Conduct and formulated an “HTC Supplier Code of Conduct”,
which aims to protect the environment with our supply chain partners, safeguard the human rights of our workers, theirethics, safety and health, and extend this social responsibility to the supply chain system. And organize irregular suppliermeetings every year to promote relevant topics.

HTC Supplier Code of Conduct HTC

The HTC Supplier ESG Assessment and Audit
In addition to implementing corporate social responsibility of our own brand, HTC also delivers the concept andrequirements of ESG to the supply chain. We established the responsible unit in 2010 and then initiated investigationsof those suppliers who had implemented ESG. This was not only to verify their compliance of the HTC Supplier Code of
Conduct, but also to provide supplier consulting and coaching functions to build and enhance ESG concepts and actions.

A Quick Look at the HTC Supply Chain Management

Definition of HTC Critical
Supplier

The HTC Supplier Code of Conduct details the responsibilities and regulations that have to be followed by all
suppliers doing business with HTC. In addition, HTC also conducts a regular assessment of the implementation of
the Code as the basis for our further selection of business partners. At the end of 2021, there were a total of 106
suppliers signed the Supplier Code of Conduct, with the rate of signing reached 100%.
The provisions about labor issues, health and safety, and ethics were framed with reference to Responsible
Business Alliance Code of Conduct and the related documents issued by the United Nations Universal Declarationof Human Rights. For more information about the “HTC Supplier Code of Conduct,” please visit www.esg.htc.com

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 components which vary based on technology, markets and purchase annually, ESG Officeand sourcing departments define critical suppliers of current year based on different situations every year.

Self-assessment
SurveyAll candidate suppliers are required to fill in the Self-assessment. Since 2016, the weightof ESG-related questions in the Self-assessment survey for new suppliers was increased.
During each quarterly supplier review meeting, the ESG-related performance of major
suppliers will be check and the results will act as the reference for the supplier screening
process.
For new suppliers, the CSR self-assessment questionnaire must be filled and returned.
The content of the questionnaire is designed based on the five major aspects of
HTC’s Supplier Code of Conduct: labor, environment, health and safety, ethics andmanagement system. Supporting information is provided for inspection.

On-site Audit“Supply Chain CSR Compliance Audit” has been implemented since 2011, based on initialrisk determination (including geographic, location, products, news, etc.)
In 2017, added new audit item for the RoHS and REACH directives, hazardous substances
subject to control are required to be audited in the manufacturing process.
In 2021, a total of 106 suppliers will conduct risk assessments, and 6 high-risk suppliers
will be selected for on-site audits. Due to the COVID-19 epidemic, the implementation
will be postponed to 2022Q1~Q2. As of the end of March, on-site audits of 4 suppliers
have been completed.

Labor Rights

17 cases, mainly about wages and benefits and overtime issue.

Health and Safety

33 cases, mainly on insufficient occupational safety measures in the operating
environment.

Environment

14 cases, mainly about Inadequate hazardous waste management measures.

Ethics5 cases, mainly for the failing of establishing management procedures for employees to
accept inappropriate payments and gifts

Treatment andResponses

In response to the above findings, besides requesting the suppliers to respond withimprovement measures, HTC also provided management system and implementation
experience to suppliers for reference and put them in the priority list for on-site audit innext year in order to prevent similar incidents from happening.

Management
Mechanism

Goals for Supplier Management2021
1. First-tier suppliers sign the "Supplier
Code of Conduct", with a signing
rate of 100%
2. First-tier suppliers response rate for
the GHG Emission Disclosure survey
form -100%
3. 100% no conflict minerals (3TG)
4. First-tier suppliers response rate for
new conflict mineral, cobalt -100%

131

Sustainable Agenda

2022
1. First-tier suppliers sign the "Supplier
Code of Conduct", with a signing
rate of 100%
2. First-tier suppliers response rate for
the GHG Emission Disclosure survey
form -100%
3. 100% no conflict minerals (3TG)
4. First-tier Suppliers response rate forconflict mineral, cobalt -100%2025
1. First-tier suppliers sign andabide by the "Supplier Codeof Conduct", with a signing
rate of 100%
2. Promote first-tier suppliers to
implement power saving: theresponse rate of the supplier
GHG survey form is 100%, andthe supplier’s implementationof power saving rate accounts
for 50%On-site Audit Results(Total of 69
Noncompliance
Items in 2021)

2021 HTC ESG Report132

No conflictminerals productused at HTC in

2021

Responsible Procurement of Minerals

Distribution map of countries where smelters mainly use minerals

HTC supports the global boycott of conflict minerals and states in procurement contracts, the Supplier Code of Conduct,
Provisions of Purchase Orders and the Supplier Social Responsibility Audit the issues of conflict minerals and endorses
the Conflict-Free Smelter Program, committing to the use of non-conflict minerals and not to primary minerals
originating from Congo or other nearby conflict countries in Central Africa.
Based on the Conflict Minerals Reporting Template, HTC has set up KPIs, tracking the progress of sign-back to effectively
manage the supply chain and reduce the risk of breaching contracts. We completed the development of products using
conflict-free minerals in 2016. All minerals used in HTC products from the end of 2017 are CFSI/ RMI qualified smelters.
In response to international trends, HTC began to investigate the sources of "cobalt" metal mines of all suppliers since2020, and the response rate of the CMRT and Cobalt in 2021 reached 100%, and will continue to be updated every year in
the future.

GERMANY 5.2%
KOREA 6.4%

CHINA

UNITED STATESOF AMERICA 8.1%

INDIA 8.7%

15.6%

Gold

The intended use of conflict minerals

Au

Point of use:
Contact in the circuit boards
Intended use:
As circuit board contacts toensure proper connection.

Sn

Point of use:
Soldering in the circuit boards

JAPAN

12.7%

OTHER

43.3%

Intended use:
Solder to mount circuit board
electronic components.
VIET NAM 5.5%

W
Ta

133

Point of use:
Tantalum-Capacitor
Intended use:
An element used intantalum capacitors.

Sustainable Agenda

Point of use:
Tungsten Alloy used in Vibrator
Intended use:
Tungsten alloy used in the phone vibration motor.

Co

Point of use:
Used on lithium batteries

BRAZIL 9.9%

INDONESIA

38.4%
CHINA

22.0%

OTHER

24.2%

Tin

Intended use:
As electrode material for
lithium battery

2021 HTC ESG Report

134VIET NAM

6.8%

RUSSIAN FEDERATION

9.1%
UNITED STATESOF AMERICA

9.1%

OTHERS

Tungsten

CHINA

50.0%

CHINA

36.8%

OTHERS

18.4%

25.0%

GERMANY

7.9%

BRAZIL

7.9%

JAPAN

13.2%
Tantalum

UNITED STATESOF AMERICA

15.8%

Note:
In the smelter country display graph, the others category is countries with a percentage value of less than 5%. The countries of conflict mineral smelters in this category are as follows:
1. Smelter countries of Gold include: Russian Federation, Switzerland, United Arab Emirates, Italy, Brazil, Canada, Kazakhstan, South Africa, Turkey, Belgium, Colombia, Mexico, Taiwan, Uzbekistan,
Uganda, Zimbabwe, Andorra, Australia, Austria, Chile, Czechia, Indonesia, Kyrgyzstan, Lithuania, Malaysia, Mauritania, Netherlands, New Zealand, Norway, France, Ghana, Philippines, Poland,
Saudi Arabia, Singapore, Spain, Sudan, Sweden, Thailand
2. Smelter countries of Tantalum include: Estonia, India, Kazakhstan, Mexico, North Macedonia, Russian Federation, and Thailand.
3. Smelter countries of Tin include: United States Of America, Bolivia, Japan, Malaysia, Spain, Thailand, Belgium, India, Myanmar, Peru, Philippines, Poland, Russian Federation, Rwanda, Taiwan
4. Smelter countries of Tungsten include: Germany, Japan, Korea, Austria, Brazil, Philippines, and Taiwan.

135

Sustainable Agenda

Friendly Workplace –Staff management
Human Rights and a High Standard of Professional Ethics

Overview of Human Resource Structure

HTC is an international corporation, and follow the Responsible Business Alliance Code of Conduct, we attach great
importance to the human rights of labor, and the principle of equality and anti-discrimination is our core concept for
multicultural employees. We provide equal and fair employment opportunities for employees. There is no race, gender,
age, physical and mental disabilities, religion, ethnicity, or any other form of discrimination protected by relevant laws.

HTC recruits promising talent from all around the world. At the end of 2021, HTC global employee workforce totaled 2,178.
Of these, 27.59% were foreign supervisors, accounting for the total number of global executives above manager level;
foreign supervisors and professionals accounted for 17.55% of the total number of global executives and professionals,
and 26.24% of the supervisors were women.

HTC is committed to the highest standard of social care, environmental protection, and ethical integrity. We fully respecthuman rights and workplace rights. We have zero tolerance of any form of abusive labor conditions. HTC requires
all suppliers to maintain the same standard of corporate responsibility and announces the “Modern Slavery Act
Transparency Statement”. We collaborate with suppliers to abide by the latest statement to embody justice and humanrights.

HTC’s turnover rate of direct workers in 2020 was 8.31%*, 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 22.92%, with the statistical frontier covering the world.
*Note: Turnover rate= the number of employees leaving the company/ the total average number of employees per year. The figure does not include employees who were involuntary resigned
employee.

2021 HTC Human Resource Structure Overview

No Child Labor

Male

HTC strictly prohibits the use of child labor in our own manufacturing facilities as well as those of our manufacturing
suppliers. We mandate proof of age for employment to ensure we meet all local labor laws and the requirements of thejurisdictions where we operate. Even student workers need to be 16 years old.
Employee Job TypeHTC 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 the performance of their work. Every
person in our employment, in any of our branches and subsidiaries, no matter their position, level and location, mustcomply with these ethical standards. In countries where HTC has a manufacturing presence, this Code is higher than
any local regulations unless a provision is inconsistent with a legal order issued by the local government. In any case of
conflict with the laws in force in places where HTC operates, the local HTC HR team shall submit the context 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 toserious disciplinary action, including the termination of employment.
To ensure that the “HTC Code of Conduct” is fully implemented, we conducted the external third-party complianceverification for the implementation of the “HTC Code of Conduct” in 2018. The verification was passed and relevant
certificates were obtained. We will continue to improve and practice the Code of Conduct in the future.
New employees undergo an orientation training session on the same day they report for duty. They learn about the
HTC corporate policy, the Employees Code of Conduct, ESH policy and ESG, and also including anti-corruption, sexual
harassment and human right issues such as Prevent illegal violations of duties courses. An e-learning program for new
employees is also provided that explains the HTC corporate principles using exemplary cases.

139

Friendly Workplace

Employment Type

Employment Contracts

Total

Person%Person%Person%Manufacturing employees

169

7.76

346

15.89

515

23.65

General employees

294

13.50

198

9.09

492

22.59

Middle supervisor

784

36.00

332

15.24

1,116

51.24

Senior supervisor

43

1.97

12

0.55

55

2.53

Full-time employees

1,270

58.31

874

40.13

2,144

98.44

Dispatch employees

0

0.00

0

0.00

0

0.00

Part-time employees

20

0.92

14

0.64

34

1.56

Employees under indefinite contract

1,265

58.08

878

40.31

2,143

98.39

Temporary Employees under fixedterm contracts

25

1.15

10

0.46

35

1.61

5

0.39

5

0.56

10

0.46

1,290

59.23

888

40.77

2,178

100

Employees with physical or mental disabilities

Employee numbers

FemaleGlobal Employee

Note:
1. Manufacturing employees: Leader, Foremen, Operators, Technicians.
2. General employees: Engineers, Specialist, Leader, Foremen.
3. Middle supervisor: Director, Managers, Assistant Manager, Supervisor and Special Assistant.
4. Senior supervisor: CEO, CMO, CFO and other executive positions above Vice GM.
5. The dispatch personnel worked as supportive assistants. No dispatch personnel in 2021
6. Regular contracts include 35 staff

2021 HTC ESG Report140  The Global Distribution of HTC Personnel

By Citizenship
Domestic Employees

2021 HTC employee position distribution by age

Male

Male
Manufacturing
Employee

General Employee

Middle Supervisor

Senior Supervisor

Total

Age

Person%Person%Person%Person%Person

%

≤29

22

1.01

157

7.21

19

0.87

0

0.00

198

9.09

30~50

136

6.24

135

6.20

697

32.00

28

1.29

996

45.73

≥51

11

0.51

2

0.09

68

3.12

15

0.69

96

4.41

Total

169

7.76

294

13.50

784

36.00

43

1.97

1,290

59.23

FemaleManufacturing
Employee

General Employee

Middle Supervisor

Senior Supervisor

Total

Age

Person%Person%Person%Person%Person

%

≤29

17

0.78

89

4.09

15

0.69

0

0.00

121

5.56

30~50

260

11.94

105

4.82

300

13.77

6

0.28

671

30.81

≥51

69

3.17

4

0.18

17

0.78

6

0.28

96

4.41

Total

346

15.89

198

9.09

332

15.24

12

0.55

888

40.78

Manufacturing
Employee
Year

2019

2020

2021

General Employee

Middle Supervisor

Senior Supervisor

Total

%

Person%Person%Person%Person

%

Male

359

9.19

707

18.10

1,180

30.22

58

1.49

2,304

59.00

Female

709

18.16

432

11.06

444

11.37

16

0.41

1,601

41.00

Total

1,068

27.35

1,139

29.17

1,624

41.59

74

1.90

3,905

100.00

Male

209

8.02

401

15.39

901

34.59

46

1.77

1,557

59.77

Female

417

16.01

256

9.83

362

13.90

13

0.50

1,048

40.23

Total

626

24.03

657

25.22

1,263

48.48

59

2.26

2,605

100.00

Male

169

7.76

294

13.50

784

36.00

43

1.97

1,290

59.23

Female

346

15.89

198

9.09

332

15.24

12

0.55

888

40.77

Total

515

23.65

492

22.59

1,116

51.24

55

2.53

2,178

100.00Male

FemalePerson%Person%Person%Person

%

2019

1,856

47.5%

1,285

32.9%

448

11.5%

316

8.1%

2020

1,312

50.4%

888

34.1%

245

9.4%

160

6.1%

2021

1,097

50.4%

756

34.7%

193

8.8%

132

6.1%

%

Total

By area
APAC

AmericaYear

Person

2019

3,603

92.3

2020

2,418

92.8

2021

2,005

92.1

94

%

EMEA

Person%Person

196

5.0

106

2.7

3,905

103

4.0

84

3.2

2,605

4.3

79

3.6

2,178

2021 HTC New Recruits of Employees Worldwide Statistics
APAC
Male

PersonNote:
1. Manufacturing employees：Leader, Foremen, Operators, Technicians.
2. General employees：Engineers, Specialist, Leader, Foremen.
3. Middle supervisor: Director, Managers, Assistant Manager, Supervisor and Special Assistant.
4. Senior supervisor: CEO, CMO, CFO and other executive positions above Vice GM.

FemaleYear

Note: The calculation method of the proportion is the number of persons in this category / the total number of employees at the end of the period

HTC's total employees by job title in the past 3 years

Foreign Employees

America
FemaleMale

EMEA
FemaleMale

FemaleAge

Person%Person%Person%Person%Person%Person

%

≤29

71

3.54

59

2.94

1

1.06

1

1.06

3

3.80

3

3.80

30- 50

76

3.79

46

2.29

17

18.09

6

6.38

3

3.80

5

6.33

≥51

2

0.10

0

0

1

1.06

0

0

0

0.00

0

0

Sum

149

7.43

105

5.24

19

20.21

7

7.45

6

7.59

8

10.13

Total by Region

254

26

14

New Recruits of
Employees %

12.67

27.66

17.72

Note:
1. Percentage of new hires by each age range = number of new employees in each category / total number of employees in each region
2. Total number of employees by region at the end of the period: 2,005 in APAC; 94 in the America; 79 in EMEA

2021 HTC Turnover of Employees Worldwide Statistics
APAC
Male

America
FemaleMale

EMEA
FemaleMale

FemaleAge

Person%Person%Person%Person%Person%Person

%

≤29

128

6.38

74

3.69

0

0.00

0

0.00

1

1.27

4

5.06

30- 50

281

14.01

217

10.82

22

23.40

8

8.51

12

15.19

4

5.06

≥51

18

0.90

15

0.75

5

5.32

0

0.00

2

2.53

0

0.00

Sum

427

21.30

306

15.26

27

28.72

8

8.51

15

18.99

8

10.13

Total by Region

733

35

23

Turnover of
Employees %

36.56

37.23

29.11

Note:
1. Percentage of turnover by age = number of retired employees in each category / total number of employees in each region
2. Total number of employees by region at the end of the period: 2,005 in APAC; 94 in the America; 79 in EMEA

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2021 HTC ESG Report142Talent Attraction and Retention
HTC is aware that the power of innovation comes from its employees, and therefore we encourage employees to explore
the unknown and bring innovative design into daily work. HTC has built a workplace that is diverse, challenging,
dynamic and positive. With an open, inclusive attitude, we give colleagues sufficient authority and space to develop andgrow so we can attract the best talent from around the world.

Attracting Talent – Frontline Supervisors are the Best Brand
Ambassadors
While most businesses tend to focus on environmental protection and social welfare when executing ESG goals, HTC
is committed to cultivating talent as a corporate responsibility priority. In this changing era when talent poaching
challenges the entire industry, HTC believes that front-line supervisors are the best brand ambassadors. We adhere to
our most important corporate value – communication and influence, which are key to the continuous investment anddevelopment of forward-looking technology.
In 2021 we had several supervisor starters and organized a front-line partner recruiter to share their thoughts on
cultivating talent, helping managerial staff design questions to include in the HTC competence requirements. By
extended questioning skills and avoiding blind spots and misunderstandings, supervisors can learn how to recruit thebest people for roles. A recently launched course received positive feedback of 4.7/5.
The partner recruiter also checks on supervisor’s interview skills by conducting joint interviews, and gives individual
feedback to help them improve their talent screening abilities. After all, the decisive factor of corporate competence
relies on talent. In addition, people of diverse backgrounds and expertise are the formula for creative ideas and thepower to drive innovation, shaping the charm of our Company and fulfilling our mission: “Let's Bring People Together”.

Diverse Recruitment Approaches to Put the Spotlight on Brand
Value
Combining products with technology trends in recent years, HTC provides careers that are meaningful and worth
developing, excellent employee benefits, and a valuable work-life balance. We promote these themes on Facebook,
LinkedIn and YouTube to bring people's attention to the benefit of working with us and to help build our brand image toreach our maximum recruitment potential.

Remote Interviews and On-boarding
The global industry took a great hit in 2020 due to Covid-19. The post-pandemic era propelled forward the digitaltransformation, driving technology manpower needs. Taiwan entered a level 3 alert in May 2021, so recruitment
work came to a stop for many corporations. We took the opportunity to interview candidates remotely using video
call software and continued to fill roles while offering the employment market decent job vacancies.
Our groundbreaking online on-boarding system allowed recruits to sign and submit all paperwork with one
click from the comfort of their own homes, deliver notebooks with same-day delivery so they were prepared
to commence orientation and training with all the Company information needed. The system greatly increased
application numbers and even went viral, demonstrating our awareness of best practice during unprecedented
times.

  Youth Empowerment Around the Globe
Our employment policy looks at potential talent around the globe and recruits regional elites in AR/VR, 5G, blockchain
and AI fields. Recruitment information goes on our website and social media, as well recruiting talent on campuses,
forums and in technology seminars, where students engage and interact with HTC. Online interviews with video calls
enable us to interview people from around the world and enlist a wider talent pool.
Moreover, we have fixed vacancies for internships every year that connect student knowledge and techniques withindustrial practice, boosting students' learning as they familiarize themselves with our corporate culture and build afoundation for their future careers. Through academic partnerships, HTC explores and cultivates talent at an early stage
to offer immediate career opportunities after completing their education.

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2021 HTC ESG Report

144

Talent Cultivation and Development
As HTC advances and pursues profit, it also values individual growth, and therefore has built a fine environmentand culture for advanced studies. We connect industrial needs and career development and encourage employees tostrengthen their professional knowledge. Talent development comprises one of our key management indicators and we
expect reciprocity between employees and the Company.

Goals
Execution of
95% of annual
training
coursesResult100%of annual training courses carried out

Five Core Competencies
To empower HTC employees with sufficient professional knowledge and allow them to engage in different challenges
and stay ahead of the industry, we developed a learning roadmap based on five core competencies. The roadmap
incorporates internal and external training, and a diverse learning platform, comprising an employee cultivation
program that boosts learning results.

Diversified Learning Channel, Providing a Comprehensive Learning Environment
The design of the internal training courses is centered on the five core occupational functions and the learning effect issubstantiated through a series of diversified channels.

Driv
Re ing f
o
su
lts r

ork
mw
Tea

HTC Core
CompetenciesPl& O annin
g
rga
niz
ing

n
tio
a
g
ic
un ncinmm lue
Co Inf&Customer Focus

Talent is HTC's greatest asset, and the key to outstanding innovation and sustainable operations. Our comprehensive
talent development system aligns with the Company's business development strategy, outlines key learning points foreach level and a corresponding training course, expanding manpower assets and bolstering competitiveness. In addition,knowledge-sharing and practice in the workplace also further develops professional know-how, driving employee
learning and improvement.

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There are physical and online courses for learning skills and drills.
Hold the creative thinking forums, inviting experts from various fields around the world to share industry trends and futuretechnology blueprints.
Library (physical and online magazines) and online learning platforms and other tools to encourage employees to learn
independently

General
Employees

The
Management

New Employees

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 leadership and management functions.
To ensure that these courses further the daily work of the directors andsubstantiate their leadership and performance, follow-up action plans
are formed for each of these learning courses. These are devised toassess performance both before and after training, in such aspects as thesupervisor’s counseling records, subsequent presentations, and so on.

All orientation and new employee training are finished within one month, during which new hires receive a weekly newsletter
introducing them to HTC's culture, Company vision, and products of different business groups. Various resources are available tosupport employees and help them work on their professional development.
Newly hired executives receive a customized one-on-one orientation program to onboard them quickly.

2021 HTC ESG Report

146

Cultivating Key Leaders
HTC proactively promotes company culture in the face of rapid changes in the global industry and new patterns ofglobal enterprise competition and cooperation. HTC quickly adapts to a constantly changing environment and cultivates
management talent with an international vision, expecting their excellent managers to become present and future
drivers who will continuously lead HTC towards steady growth and development in times of hardship and challenge.
In order to cultivate key leadership teams, the company has tailored a series of leadership courses for leaders at different
levels, and strengthened the three functional aspects of company leadership management:
Leading People
Leading Change
Strategic Thinking & Decision Making
PMR Program

Meticulous talent cultivation and development system
BU and Function head VP and above

LEAD Program（Learn、Engage、Accelerate、Develop）

Director and AVP

HILL Program
Manager level

PMR Program（People Manager Ready）

An executive cultivation program designed for key talent to take over criticaloperational positions in the future. Inspires executives to deepen their learningand increases awareness of a people-leading, corporate-leading, and self-leading
mindset through the Global Leadership Summit, operation training and study
groups.
A series of extensive in-depth courses scheduled to begin in 2022 to train the
future talent cohort to take over important roles. Program planning began
in the second half of 2021 and emphasizes three key capabilities of midlevel supervisors: professional operations and management, a pioneering andinnovative mindset, and people-leading and influencing.
Quarterly topics from Problem Analysis and Solutions to Labor Relations,Leading, Communication, Interview and Talent Selection enable quick adaptationof management tasks, interpersonal skills, and group communication techniques
for first-time supervisors. There were nearly a hundred newly on-boarded
supervisors in attendance in training sessions in 2021. The series received positive
feedback of 4.7/5 overall.

Training and Performance Integration
Along we grow the organization, we reaffirm our resolution to accelerate innovation and share with all our employees amutual sense of common goals; the core of HTC's performance management system. Through performance management,
employees set targets against their tasks, and mark standards for their performance. There are also several indicators to
support employees in focusing and planning their tasks throughout the year.
HTC's performance management system aligns with the training and development structure. Employees can stay on
track and know at which level they are performing by checking their individual performance targets set at the beginningof a year, clarifying areas that require improvement or training, and reviewing their tasks and targets with their
immediate supervisor at the beginning of the 3rd quarter. They can also recalibrate key work points and arrange theirwork schedule accordingly. At year-end, employees conduct self-assessments on their progress, and then have an indepth discussion with their supervisor about their performance targets and key improvement points for the following
year. The 2021 overall employee performance development audit scored almost 100%.
The Performance Development Program was updated at the end of 2021. Feedback from cross-unit supervisors andcolleagues was incorporated, giving a general assessment of employee work and team achievements as well as employee
yearly targets, self-assessment and current performance records. This serves as the core tool for connecting employee
development, salary design and training programs.

Individual Contributor

Highly Effective People

Thinker ForumThe Thinker Forum is a way through which employees stay in the know about novel knowledge and diverse applications.
In 2020, the Forum invited Dr. Yuan Tseh Lee to discuss Global Warming and Sustainability in Taiwan, and what weshould know from the global shift and energy transition in Taiwan. In January 2022, the Forum went online withPeter Pu, who spoke about the 2022 Latest Global Risk Trends – Sustainability Challenges and Opportunities with theDevelopment of Technology, exposing employees to substantial learning and trends for the next 25 years of HTC.

English Leadership Resource and External Training Subsidy
As an international brand, in order to encourage employees to continue learning and providing themes needed for workso that employees can improve their English proficiency. All courses are guided by professional foreign teachers and the
topics of discussion are based on situations that may be encountered in the workplace. Topics of the courses that haveoffered include: business email, business negotiation, customer complaint handling, business meetings, etc., allowing
employees to make full use of the weekly gathering at noon to strengthen their English communication skill and apply itin the workplace!

LEAD Program

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In addition, HTC encourages employees to continue to absorb professional knowledge and to match their study program
to their work to ensure growth. Also encourages employees to improve their professional knowledge via schools orother academic institutions, and apply the acquired knowledge to their work. The cost of the external training can bereimbursed at the end of the training upon application (reimbursement is based on the actual expenses). The subsidy
provided for external training in 2021 was about 2.23 million.

2021 HTC ESG Report148

Salary and Benefits
e-Library
The HTC library closed in 2021 due to the pandemic to minimize the risk of infection from close contact, but continued
providing e-journals so that content and information could still be accessed by employees, promoting good reading
habits and continuous learning. By the end of 2021, the number of users of the e-journal service had reached 2,131.

Training Result
The 2021 average training time of HTC employees was 11.42 hours, down by 35.52% compared to 2020 as a result of thesuspension of the majority of in-person courses due to the pandemic.

HTC Taiwan Employees Training Hours in the Past 3 Years	
Course (Hours)

Average Training Hours

2019

73,249

22.71

2020

39,054

17.71

2021

21,26911.42

HTC appreciates each and every worker. We show our gratitude through a generous compensation package, proper
benefits and sharing profits. The remuneration package adheres to regional labor laws, and does not discriminate
based on gender, race, nationality, age, religion and party affiliation. The Performance Development Program, market
standards, and future development are referred to when salary adjustments are considered. Incentives are provided tomatch pay with organizational performance. The Company drives innovation by retaining and inspiring its talent.

Competitive Compensation
Our pay system is well organized and focused on building a workplace of exceptional and diverse talent. Every year wetake an international salary survey to update market standards, offering a basic pay superior to the average. The current
average basic pay of HTC employees is higher than the median of the internal salary survey, of which the basic pay of
employees of many units exceeds the average of the high salary end of the market.
Proper pay adjustment improves talent retention. The adjustment assessment considers individual yearly performanceand market salary predictions. Key employees of critical product technologies receive a retention bonus and long-term
incentives spanning 1-3 years. Non-managerial positions are also entitled to stock warrants, so that employees havea deeper interest between team performance and Company economic growth, and are motivated to reach their fullpotential and contribute to teamwork.

Note: Total number of training hours of the year/total number of Taiwan employees of the year end of period = average number of training hours per person of the year

Mean and median of full-time employees in non-supervisory positions
Employees Training Hours and Sex Ratios at Taiwan All Levels in 2021
Total Training (Hour)

Average Training (Hour)

Item

2019

2020

2021

2021 v.s. 2020

Full-time employees

3,447

2,481

1,786

72%

Male

FemaleMale

FemaleAverage salary (NT$)

1,097,000

1,125,000

1,175,000

104%

4,968.7

11,003.4

30.11

32.17

Median salary (NT$)

790,000

886,000

949,000

107%

1,269.8

1,024.5

4.79

6.03

Middle supervisor

1,927.2

866.6

3.02

3.63

Senior supervisor

185.0

24.0

5.61

2.67

Level/ Gender
Manufacturing
employees
Generalemployees

Note: This data is audited by accountants.

2021 HTC Regular Earnings Ratio for Men and Women in Taiwan
New Recruits Basic Pay / Taiwan Minimum Wage Rate

Note: Total number of training hours of the year/total number of Taiwan employees of the year end of period = average number of training hours per person of the year

Five-day workweek scheme

1.00

Monthly rotating shift scheme

1.04

Note:
1. Regular earnings include a base salary with additional benefits.
2. The 2021 Taiwan minimum wage is NT$24,000.

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2021 HTC ESG Report150Meal subsidy program

HTC Average Compensation Ratio for Men and Women in Taiwan
Average Compensation Ratio (Men: Women)
Category

General Employees

Manufacturing Employees

Mid-Level Management

High- Level Management2019

1.01:1

1.16:1

1.24:1

1.31:12020

1.01:1

1.15:1

1.17:1

1.06:12021

1:1

1.24:1

1.24:1

1.26:1Note:
1. The average base salary includes regular earnings and non-regular earnings. For example, an overtime premium.
2. Calculations are based on the monthly salary of employees in service in December 2021.

Total employee salary and benefits
expenses (NT$)

Transportation Vehicles
HTC offers the shuttle bus service as the safe alternative for our employees to commuting to work and promote the idea
of car-pooling and carbon reduction. Employees can conveniently keep track of a shuttle thanks to GPS at shuttle stops.
Following a questionnaire on the Company internal website and at shuttle stops, the service is improved through user
feedback. The Company also delivers documents between sites using the shuttle service to save waiting time.

HTC Employee Salary and Benefit Increase Ratio in the Past 3 Years
2019

2020

2021

2021 v.s. 2020

4,201,438,000

3,485,698,000

2,518,708,000

-28%

Item

Generally, employees receive NT$130 for the whole day on weekdays, and the maximum subsidy for lunch and dinner
on holidays is NT$100. Clock-in employees and manufacturing employees go to work during normal attendance hours,with subsidies ranging from NT$35 to 50 depending on the shift schedule, and provide daily afternoon tea.

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

Diversified Employee WelfareGroup Insurance
HTC and the Welfare Committee buy group insurance for employees, so that an employee who is hospitalized forsickness, injury, or who dies, can still provide some security and protection for their families. In light of the severity ofthe pandemic in Taiwan, HTC provided pandemic insurance to all employees in 2021 to double employee security andsafety.

Staff Emergency Relief
In the event an employee falls ill, gets injured, becomes disabled or dies as a result of a job-related hazard, HTC provides
compensation according to the Labor Insurance Act or other applicable regulations. HTC may offset the expense if
the compensation for the same accident is made by the Company, and expresses sympathy through group insurance
proceeds.

Education Scholarships for Children
The HTC Employee Welfare Committee provides scholarships for the children of employees from elementary school tocollege. Those who meet the application criteria can apply: NT$800 for elementary school students, NT$1,600 for juniorhigh school students, NT$2,000 for high school and vocational education students, including first, second and third year
college students; and NT$3,000 for college students in their fourth and fifth year. A total of 342 person applied for childeducation scholarship for the first semester of 2021, while 309 person applied for the second semester.

Travel subsidy
The HTC travel subsidy increases
according to seniority to acknowledge
long-term contribution, and to encouragesocial activities and relaxation throughtravel.

Based on seniority, 2021 travel subsidy details as below:
On Board before 2015/12/31

9,100

On Board between 2016/1/1 to 2017/12/31

6,800

On Board between 2018/1/1 to 2019/12/31

5,900

On Board between 2020/1/1 to 2020/12/31

3,000

On Board after 2021/1/1

None

A Five Star Gym
In order to encourage and promote the sports atmosphere and allow employees to develop good exercise habits, HTC
has set up a fully equipped professional fitness space in office buildings, Various modern fitness equipment including
free weight training equipment and weight training mat floor. HTC has commissioned professional fitness management
consulting firms and professional suppliers to manage the gym and to provide full-time services. Six coaches with
an emergency card or sports injury protection license are on shifts at site to provide onsite fitness instruction, fitness
curriculum planning, and advice about the prevention of sports injuries. This provides employees with the best healthconsulting services and the environment, and the establishment of positive sports safety and healthcare. The gym wasused 14,664 times in 2021.
In addition, the gym's courses are planned and arranged on various health topics and activities, such as two-month
aerobic courses throughout the year to provide a diverse curriculum for employees. There are Yoga, Pilates, flywheel,core muscle group TRX, Body Combat, and muscle sculpture courses available. Employees can participate through aneasy-to-use online registration. In addition, employees have access to the elevated sports space on the 17th floor of theTaipei office to play indoor basketball and badminton by simply registering. However, in 2020-2021, the pandemic
measures impacted the gym. The number of users had to be controlled, and every other fitness machine was switched off
to prevent close contact between people when exercising. Antibacterial sanitizer and pure water wipes were available atall equipment for users to wipe down the equipment both before and after use. Trash cans with sensors were available
to throw away used wipes without touching the surface of the trash can. Reminders were posted on site about social
distancing in the gym to enjoy a safe, healthy workout. In 2021 the gym remained open to encourage good workout
habits but training sessions were reduced to avoid crowd infections.

Activity Clubs of HTC
The Badminton Club, Child Support Club, The Way, and Basketball Club, are just a few of the different clubs available soeveryone can fit in some socializing after work, enjoy life and find a balance. Through club activities employees also havethe opportunity to meet and interact with other people from different units, creating a healthy, broad network of people.

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2021 HTC ESG Report152

Encouragement for Senior Employees
HTC respects the long-term effort of our employees, andacknowledges their hard work with longevity bonuses and a thankyou card at 5, 10, 15 and 20 years of continuous service. In 2021, a
video was recorded interviewing senior colleagues to appreciate
everyone's service. HTC also has an internal replacement system toprovide the necessary assistance to staff needing to be transferred,or to those making application for transfer, or who are seeking job
enrichment or a change of career.

Retirement Benefits
Since day one, HTC's pension plan has been in place in compliancewith the regulations. 2% of annual salary paid was set aside from
November 1999 for the pension fund. Since 2004, 8% of annual salarypaid was handed over to the Labor Pension Reserve Supervision
Committee to deposit and make payments from a dedicated account.
On July 1, 2005, the New Labor Pension Scheme became effective, and
HTC started setting aside part of the salary of employees who chosethe new scheme for their pension fund. After careful calculations
and consideration and approval by the competent authority, the
8% appropriation of old scheme was revised to 2% for those who
remained on the old scheme. In May, 2021, the accumulated funds
appropriated reached the legal standard, and hence HTC applied tothe authority to suspend appropriation. The request for a one-year
suspension was approved.

HTC Gallery
Due to Covid-19, some of the exhibition and opening ceremonies in 2021 were cancelled. However, HTC still
aspires to enrich employees' lives with imagination and creativity, bringing new waves of art, culture andinnovation to the workplace.
The exhibition in February 2021 included a cross-territory collaboration. Land in the Microscope is a collection cocreated by artists Chit Yeung and Jyun-Han Lu. The traditional ink painting of the former and acrylic and mixed
media of the latter inspired a series of work that contains both extremes, showcasing beautiful mountain views
and the texture of the earth of Taiwan.
In November, the Gallery resumed in-person operations. Award-winning young talent Yu-Kai Chen showed us“reborn” pieces of art from a new perspective through collecting, disassembling, and pounding. Much like Taiwan
and HTC now, we all need strength to rise from this severe environment.
Despite the Gallery being put on hold for most of 2021, artwork was still displayed on the myHTC website,allowing colleagues to appreciate art even when working remotely by enjoying virtual visits and the benefits art
provides beyond space restriction.
Land in the Microscope, joint exhibition by Chit Yeung and Jyun-Han Lu, 2021

Creating a Happy Workplace
A Working Environment Incorporating Brand Spirit

Reborn, solo exhibition by Yu-Kai Chen, 2021

HTC regards the creativity that stems from brainstorming as one of our most valuable assets. To promote interpersonalcommunication, the R&D headquarters in Taipei is configured with many staff areas that allow our people to interact
and talk, this includes interlacing sky bridges between the buildings that link departments together and interaction
rooms that project from the floors like transparent boxes. We hope that these interaction-oriented spaces will encourageand promote cross-department synergism and cooperation, supporting the free extension of creativity.
We believe sharing is the best way to interact, so at the Taipei office we have designated a space for the HTC Gallery – avenue for art to support local young artists in demonstrating their creativity and work. The Gallery is open to community
school groups and the public, serving as a hotspot for community interaction between HTC and society.

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2021 HTC ESG Report1542021 Online HTC Town Hall

Work-life Balance Support

Considering the pandemic, HTC’s End-of-the-Year Appreciation Banquet of 2020 was adjusted to an online assembly inJanuary 2021. During the 2021 online HTC Town Hall, the chairman shared the Company’s vision and future, as well asawarding 20 senior employees. Additionally, the Company and chairman hosted a global lucky draw after the online HTC
Town Hall in order to thank all the employees for their contributions during the year. The spirit of the Chinese traditionand lucky draw was expanded to share with all our international staff. Besides the top four cash prizes in live stream,
there were several different ones, including the chairman’s hike, and 300 HTC 5G smartphones in the lucky draw. Eachdepartment arranged its own Appreciation Banquet while following preventive measures to reduce crowds.

In addition, in order to encourage and support
employees to raise the next generation with confidence,
HTC has a perfect application system for parental leaveto protect employees' work rights so that parents cantake care of their newborns with ease.

Employees applying for Family care leave
Year

Male

Female

Total

2019

42

103

145

2020

26

54

80

2021

15

31

46

Employees Applying for Unpaid Parental Leave and Resuming Duty after Leave in 2021

Employee activities in 2021
Mother's Day

Mother's Day 2011 was celebrated by gifting hand cream to each employee, a makeup course, and an online'Moment of Happiness” photo show, so everyone could experience some heartwarming moments fromcolleagues during the stressful pandemic.

Father's Day

The “Much like Daddy” online photo vote provided our colleagues with the chance to work with their child(ren)and take a picture together at home. Some went through old photos in the process, making this day anunforgettable one.

Moon Festival

A three-day festive celebration with lots of fun prizes for winners and a quiz was arranged to celebrate theMoon Festival. 1,954 people attended the event, and got to know more about the Company history and its
products and services through games and activities. More pages of the Company's history have been filled in byemployees so everyone has contributed to HTC's story.

Year-end GatheringWith restrictions slightly eased at the end of the year, Chairperson Wang personally paid for 1,100 tickets to three
PLG games, inviting employees to watch matches with their families at Xinzhuang Sports and Recreation Park.
It was a relaxing and comfortable 218 m2 space for everyone who attended to enjoy. The December “Match of
Taipei and New Taipei” game was joined by actors of TVBS' Youngsters On Fire. The charity received strong
support from HTC colleagues.

Valuing Female Employees

Female

Total

149

110

259

2

9

11

1.34%

8.18%

4.25%

The Number of Reinstatement-to-be in 2021

3

32

35

The Number of Application for Reinstatement in 2021

2

26

28

66.67%

81.25%

80.00%The number of application for reinstatement in 2020

4

34

38

The Number of Retention Over 1 Year After Reinstatement in 2020

4

8

12

100%

23.53%

31.58%The Number of Qualified for UPL for Raising Children in 2021
The Number of Person Actual Applied UPL in 2021
UPL Application Rate in 2021

Reinstatement Rate in 2021

Retention Rate in 2021

Note:
1. The “number of qualified for UPL for raising children in 2021” was based on the number of employees who had taken maternity or paternity leave within 3 years (2019-2021)
2. The “UPL Application Rate in 2021”＝ The Number of Person Actual Applied UPL in 2021 / Number of Qualified for UPL for Raising Children in 2021 × 100%
3. The "Reinstatement Rate in 2021" = Number of employees reinstated in 2021 / Number of employees that should have been reinstated in 2021 × 100%
4. The "Retention Rate in 2021" = Number of employees who had worked one year consecutively after being reinstated in 2020 / Number of employees reinstated in 2020 × 100%

Listening to the Voice of the Employee

HTC emphasizes the professional value of our female
employees, and makes adjustments and improvements
to care for the needs of women during pregnancy andparenting to achieve true corporate gender equity. Carefor female employees includes:
A female free cancer-screening program is part of theannual health check. This includes the choice of a Pap
smear, a breast ultrasound exam, or a mammogram.

Male

HTC employs nearly 2,000 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.

Car/scooter parking spaces near the parking lot entrance/exit for pregnant women.

HTC convenes labor-management meetings every quarter and at least four 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.
Before the meeting, we will discuss the previous unclosed case and the newly added issues this time. In addition to
inviting the relevant authority and responsibility unit directors to participate, all responses to proposals and the followup progress of these meetings are published on the HTC Intranet website for review by all the employees. According
to internal HTC statistics, the issues most frequently discussed in the labor-management meetings are “the working
environment”, “employee benefits” and “catering management”.

Seven breastfeeding rooms in the offices in Taiwan, each equipped with ultraviolet milk bottle boxes, a microcomputerwater boiler, comfortable couch, refrigerator to store breast milk, and relaxing music. These facilities were used 7,818
times in 2021.

Employees have the right to voice their concerns, and to protect such right, HTC has a fair employee grievance procedure,
under which there is a direct line, grievance box, email, and sexual harassment box for employees to express concerns.
Regular labor meeting and employee opinion surveys are also used as an important reference to improve practices.

The Mother Health Protection Plan kicked off in 2016 and covers pregnant women, mothers within the first year ofgiving birth, and mothers who are breastfeeding. The Plan made an inventory, underwent risk identification, andoffers individual medical consultations, work adjustments and a reinstatement program following pregnancy.

HTC recognizes the importance of employment relations, and conducts immediate, legal labor negotiations when
disputes occur. Material changes to operations are managed in line with the Labor Act. In 2021, there were threeviolations of the Labor Act, amounting to NT$408,000 in penalties. The fines have been paid, and the management teamcontinues to improve communication with employees and reinforce relevant management campaigns.

Accessible parking spaces for pregnant women and people with adisability.

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.

Note:HTC's labor union was established in 2015, but until the end of 2021, no collective agreement has so far been made.

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2021 HTC ESG Report156

Occupational Health and Safety
Effective Advisory and Assistance Channel

Food Safety - Hearty and Healthy Meals at HTC

The Employee Care Room in every manufacturing site allows our employees to take a break from the work pressure.
We also partnered with the EAP (Employee Assistance Program) team to provide consultation service for our employees.
In 2021, the feedback from employees and consultation received were mainly related to work practice, leadership andcommunication style of supervisors, salary, benefits and work hours, and sexual harassment at workplace.

HTC works with food providers and dietitians on a food menu for
employees that prioritizes seasonal local ingredients and CAS, TQF,
ISO and HACCP certified food. We use only Ractopamine-free pork. A
variety of healthy drinks and teas to help boost health and nutrition
are also offered. Our restaurant uses reusable, recyclable tableware.
Employees can enjoy a discount when they bring their own reusable
cup for drinks.

Advisory and Assistance Channels
Manufacturing employees: dial extension 38585.
General employees: dial extension 28585.

Food Safety
and HealthManagement

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

We safeguard food safety and employee
health through a thorough checklist, andkeep records of food safety related control,
and audits.

Employee Satisfaction Survey

HTC Employee Restaurant Food Safety and HealthManagement

HTC is aware that employee satisfaction is an indirect indicator of work performance and turnover rate, and therefore
sends employee satisfaction surveys every year so we can understand how employees feel working with HTC. The survey
helps us make progress and improvements. The 2021 survey covered six areas: job content, the work environment, pay
and benefits, internal communications, gender equality and company recognition.
Of all 474 manufacturing staff, the survey sampled 96 people, and retrieved 96.88% of the questionnaires. The target
scores were 3.7/5, and actual result was 3.77, higher than the annual target. In the survey, “Proper job content thatmeets expectations”, “A gender equality compliant workplace”, and “Proper work environment and communication”
scored higher than the others. As the lower end, organizational identification and pay and benefits scored less, and these
aspects will be assessed following analysis, and improvement actions passed to senior management for review andincorporation into decisions so the workplace is improved.

3.90

3.83

3.80

3.88
3.76

3.70

3.74

3.70

3.77

3.60

3.60

HTC has set up a comprehensive water fountain inspection plan to ensure the standard of purity of drinking water.
Regular maintenance, water sample testing, and records disclosure are done according to the Drinking Water
Management Act. A professional company carries out the maintenance and care of the drinking fountains and testing ofwater purity is carried out by an environmental testing agency that is authorized by the EPA to take regular samples andperform the tests every 3 months. The results of the water quality tests are published and the records are also posted ina prominent position close to the drinking fountains. The total bacteria count of drinking water and E. coli colonies havepassed the test in 2021.

Environmental Sanitation AgentsThe manufacturing employee’s questionnaire survey conducted in 2021
4.00

Drinking Water Quality Control

We do regular inspections for any stagnant water around plant sites to prevent vector-borne diseases such as dengue
fever. Quarterly vector control by certified companies further limits the number of vector gnats, ensuring a clean,hygienic environment for employees and the local community.

3.50
3.40
3.30

Job Content

157

Friendly Workplace

Work
Environment

Salary& Benefits

Internal
Communication

GenderEquality

Organizational
Commitment

Average
Score

Environmental Expenditures
Year

2019

2020

2021

Environmental expenses (NT$ Thousand)

41,792

34,752

30,1122021 HTC ESG Report158

Valuing Employee Health
HTC promotes various health programs with the four main directions of "Health Management", "Health Promotion","Occupational Health" and "Employee Assistance Program (EAP)" to help employees achieve a balance between workand life. Maintaining physical and mental health and ensuring the health of every employee.

After completing a health check, the employee clinic conducts management classification according to the resultsof the health check. If employees are classified as abnormal in terms of their health, they will be dispatched forindividual counseling depending on the severity of their health concerns. Alternatively, they will be given relevant
health management and health education. Through constant care and follow-ups, we manage to control the recovery
period of employees. Health checks and follow-ups of employees with anomalous health concerns would be carried out
continuously. Therefore, employees can receive extensive health care through the health checks and follow-ups from theCompany.

Health Enhancement Scheme for HTC Employees
Health center for managing and planning affairs related to employee health.

HTC General Health Check Rules in 2021

General and outpatient rehabilitation services.
Health Management

Health Promotion

Regulations

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

Comfortable breastfeeding rooms, Smoking cessation promotion, Weight-loss
Classes, Topic seminars, Blood donation activity.

Way

The health center will contact the hospital to offer
health check service

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

Influenza vaccination, Cancer screening, Infectious disease control and treatment.

Frequency

Once every two years after arrival

With one-year seniority and once every two years

CPR & AED course design.

% of people with abnormal
health check

11.6%

9.4%

Establishment and maintenance of HE Database for Special-Operation Staff.

Top 3 abnormal items

Triglycerides, Low hemoglobin, High cholesterol

Low-Density Cholestero, High cholesterol, Abnormalliver function

Follow-up

Based on health diagnosis and hierarchical management, it provides consulting services, health education,etc., to help employees manage health-related matters.

First-aid training, Prevention and treatment of occupational injuries and illness,
Workers return to work management.
Mental consultations, Special counseling.

Employee Assistance Program

General employees

Management/tracking for abnormal HE results, Special care and case follow-up
management.

Aerobics

Occupational Health

Manufacturing employees

Health exam and management for staffs.

EAP promotion activities and leaflets for new employees, Annual EAP promotion
course.

Health Promotion
Health Management
Following the provisions of the Occupational Health and Safety Act and Labor Health Protection Rules, the HTC HealthCenter arranges health improvement events, health checks and management of diagnoses to support every worker's
health. We particularly focus on improving hazards and the risk of overwork-related illnesses, CTD (Cumulative Trauma
Disorders), and Maternal Health.
Regular visits by doctors of the CGH, Linkou, provide services to address health inquiries, conduct health checks, andpromote good health management for our employees. HTC's Taoyuan Health Center had 603 visits in 2021, while the one
in Xindian had 3,419.

Annual Health Check Subsidies and abnormal tracking
HTC provides health check subsidies to its employees in Taiwan according to job title and grade. The dependents ofthe employees also have access to health checks at any of the HTC contracted medical institutions. In 2021, HTC spent
NT$3,413,200 on subsidized health checks for employees in Taiwan. There were 848 benefited employees. 523 employees
qualified for a biannual health check this year, of which 403 underwent the examination; a 77.06% completion rate. All
445 qualified manufacturing employees (100%) took advantage of the consultation. No over-work related injury wasreported in 2021.

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Friendly Workplace

Employees in the technology industry are prone to overlooking health management than in other high-pressure
workplaces. To mitigate this, HTC provides healthcare consultations and two educational courses. In 2021 these courses
covered how to prevent musculoskeletal disorders, the pains and discomfort due to improper at-home office settings,
and disease prevention rules during the pandemic to mitigate the risk of isolation and quarantine.
The Health Center abides by strict principles and requires employees who overlap with the central authority's declared
routes to take a rapid test before appearing at the Center to minimize the risk of infection, and seek medical assistancewhen developing cold-like symptoms. Employees may only enter the work area when they test negative for Covid-19 asconfirmed by a hospital.

Occupational HealthSpecific Health Check
In 2021, the work environment at the HTC Taoyuan Plant was carefully tested and monitored. Special health hazardous
operations, such as those involving ionizing radiation, dust and MDI, must receive a thorough health sweep. In addition,according to the regulation that “Employers Shall Provide Certain Health Examinations to Its Employees who do LongTerm Night Work” issued by the Ministry of Labor on January 5, 2018, employees who are engaged in night work were
provided with specific health examinations with a completion rate of 100%. The 12 employees qualified for the secondlevel management and the 12 employees with abnormal results from night work health examination were asked to visit
to the health center individually, and health consultation service was offered by doctors, providing them personal healthguidance and strengthening their disease and health related knowledge. The follow-up environmental inspection andcause review were completed to continue monitoring the health of our employees.

2021 HTC ESG Report160

Maternal Health Protection Plan

2021 HTC Specific Health Check Implementation
No. of people requiring aSpecific Health Check
Employees engaged in special health hazardous operations

18

Employees engaged in Long-Term Night Work

19

Inspection completion rate

100%

When health and safety related factors cause adverse effects on employees who are pregnant or breastfeeding, we makeadjustments to ensure maternal health is covered. HTC has since June 2016 launched the Motherhood Health Protection
Program, which includes all female employees one year after childbirth or breastfeeding women as protected subjects.
In accordance with the Program, the list survey, risk identification, individual medical consultations, work assignment
and work/ return to work, and other procedures were carried out. By the end of 2021, 11 employees completed the risk
classification and protective measures, indicating the considerably safe work enjoyment and contents.

2021 HTC Specific Health Check Results
Female worker maternal health risk assessment and its processes are as follows:
Employees under Grade 1 Control: all categories normal, or
no abnormal results as declared by a physician
Employees under Grade 2 Control: part or all categories
declared abnormal and not related to work

6 people

12 people

Arrange a professional consultation with a physician
according to Labor Health Protection Rules so
employees receive specific health instructions andreinforced their health education.

HTC’s health center and human resources division planed the Protection Program in four themes, which was
implemented gradually since 2016.
Organizer

Abnormal Workload-triggered Disorders
Maternal Health Protection Plan

Health Center

Preventing and Managing Musculoskeletal Health
Execution Infringement Prevention

HTC follows the laws and regulations for substantial measures of health and safety and disease preventive practice.
Employees with abnormal physical health results are encouraged to speak with a physician to receive specificinformation related to their health. They may change their work or make adjustments to their working hours. This is
usually the recommended approach. Of the 29 employees identified with high-risk health issues, none were due to anabnormal work-related injury following the physician's consult in 2021.

Preventive measures against health-endangering heavy workloads
Identify and assess

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

Health management

Health education and counseling service will be arranged for employees with physical abnormaliities
and a change of eork or the adjustment of working hours is also recommended.

Set up preventive plan

Make preventive measures against health-endangering heavy workloads

Effectiveness assessment

Assess the effectiveness of plan and make improvement plan

Friendly Workplace

Yes

No

Any health and safety risk factors

3. Risk Communication
4. Work Adjustment

5. Risk Communication and Adjustment Report
6. Performance Evaluation and Review

HR division

Abnormal Workload-triggered Disorders prevention

161

Evaluate workplace health and safety risk factors
Any health and safety risk factors

2. Hazard Control

Emerging Health Issues

Topic

1. Workplace Risk Assessment

Continue with regular examinations

Preventing and Managing Musculoskeletal Health
HTC Ergonomics Hazard Prevention is a precaution based on the provisionof the Occupational Safety and Health Act 6.2.1 to prevent musculoskeletal
disorders induced by repetitive operations and related work. We undertakethe following procedures: provide a survey to manufacturing employees
during the annual physical exam, email the survey to general employees
every other year to monitor musculoskeletal symptoms, assess the pains
experienced by employees, give instructions to improve work postures,
and adjust the work environment accordingly. In 2021, there were 1,988
employees (from all Taiwan sites) who participated in the survey, and those
who experienced abnormal pains will be re-evaluated after consulting aphysician and work adjustments made accordingly.

Musculoskeletal Symptoms Survey

2021 HTC ESG Report162

Employee Assistance Program (EAP)HTC has been working with the Hsinchu Lifeline Association since February 2009 to provide employees withpsychological counseling and guidance with respect to working career, relationships, family and parenting, gendersentiments, mental illness, and physical and mental stress. Each year, employees can enjoy unlimited telephone
consultations and 6 free face-to-face consultation services, which are paid in full by the company. The analysis andrecommendation on employee consultation topics are reported regularly to the Occupational Safety and HealthCommittee. In 2021, a total of 905 employees used the telephone consultation services.
As COVID-19 pandemic remains volatile and to minimize work stress and restore work performance we pay attention
to employees' health and provide EAP services for those who are affected on work level and in their personal life tohelp employees balance their physical and mental health, and boost production and competence. Starting from 2022,
there will be an online employee consultation service applicable to those working from home, and those who are
isolating or quarantining at home. The EAP is extended to offer assistance to employees on issues which may affect work
performance, helping workers get their lives and work back on track and stay healthy despite the pandemic.

Professional Security Service Team

Employee Assistance Program (EAP)
2019

2020

2021

Number of Telephone Counseling (Free)

532

690

796

Number of Interviews

129

116

109

Hours of Interviews

132

124

118

549,600

674,625

623,700

Invested expense (NT$)

Regularly organize fire drills and exercise evacuation status

Occupational Safety and Health Committee
The Occupational Safety and Health Committee has 13 members and regular meetings are held every quarter. Amongthem, there are 6 labor representatives, which accounted for 1/3 of the total number, 1 healthcare professional, 2 labor
safety related engineer technician and 4 department managers, supervisors and directors.
All our facility management systems comply with the ISO45001 Occupational Health and Safety Management. The scopeof system management includes all operations and contractors within the factory area. We have published the "ESH
Management Manual" and "Safety and Health Rules" on our Intranet website for employees to consult at any time. New
hires undergo comprehensive occupational health and safety training before entering our worksites to ensure worker
safety. Every year we set up an occupational health and safety management plan that covers health and safety regulation
compliance, hazard identification to reduce risk, standardization of hazardous chemical labeling and general rules,
disseminate safety & health information, and implementing contractor management.
We also provide training to cover negligence, emergencies and natural disasters, such as a fire, explosion, typhoon,
accidental leakage, mechanical injury, infectious diseases and earthquakes, so employees understand what to do in an
emergency. We also provide training on contingency plans, emergency identification, emergency response, post-event
review and feedback of procedures, including drills and evacuation practice to safeguard our personnel and mitigate theimpact on Company operations.

At HTC, the mission of security guards is not only to maintain security, but also to uphold a service-oriented work
attitude. With regard to the handling of and responses to all matters, they need to maintain HTC's assets and equipment
as if they were family property, while all employees and visiting VIPs and manufacturers should be seen as relatives andfriends in order to demonstrate that it is a trustworthy and professional security service team.
The salary of security guards must not be deducted for any cause other than their due labor insurance and National
Health Insurance (family members included). For labor insurance and National Health Insurance, employees should
be insured according to the salary level. In addition, according to the provisions of Article 8-2 Security Service Contract,pre-employment education training, three-day symposiums (36 hours), and Party A hazard notification course must becompleted before being allowed to be stationed. The professional skills training course content includes security guard
duty principles and special response methods, such as the pregnant women screening procedure requiring pregnant
women's label to be checked while refraining from contacting or holding a security bar during the inspection.
Due to the pandemic, the 2021 trainings were rescheduled to the beginning of 2022. All security supervisors completed a
one-hour training on the SOP of their job duties and on-duty conversation manners. A daily 15-minute pre-work briefing
was given before going on duty to review recent deficiencies.

Positively Preventing Occupational Accidents
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 selfinspection to achieve our zero-accident goal.
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 the comprehensive prevention ofoccupational accidents.
The 2021 hazard identification is Class 2, Class 3 and Class 4, which are medium to high risk. The types of injuries withhigher severity are falling, electric shock, fire, coil clamp and confined-space operations. The current control methods
include implementing checkpoints before/during/after operations, education and training, and promotion.

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2021 HTC ESG Report164Comprehensive Emergency Rescue Measures

In the event of an occupational injury, our notification procedure is as follows

Traffic accidents outside the factory area

NotifyImmediately notify
the supervisor or theforemanCall the police
Call the police to filethe case
Triplicate form of casereportGo to a hospital
Injury treatment
Proof of diagnosis

A 24-hour emergency rescue Hot Line has been set up as part of a fully comprehensive emergency notification system.

RecordSufficient rescue personnel have been lawfully designated and emergency rescue personnel training courses are held
annually.

Prepare theoccupational injury
investigation andanalysis report

16 Automated External Defibrillators (AED) are available at specific places within the company.
Emergency evacuation drills are carried out periodically.
Since 2010, CPR seminars are held regularly each year

Accidents in the factory area

NotifyImmediately notify
the supervisor or theforeman

Go to a hospital
Injury treatment
Proof of diagnosis

RecordContractor Management

Prepare the occupational injury investigation andanalysis report
Carry out improvement based on the hazard factor

AspectMeasureManagement of Safety and HealthIf there is any change in the organization or addition of new business units, this has to be reported
to the authorities concerned. Such information ranges from hazard statistics, hazard investigation
analysis, meetings convened by 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 Health

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

Standard Operating Proceduresand Job Safety Analysis

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

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

Emergency Response

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

Health Management andEnhancing

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

Safety and Health Campaign

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 workplace safety. All these
efforts are aimed at improving work efficiency.

HTC attaches great importance to the safety of contractors. Each year, according to the status of contractor safety andhealth management, a complete occupational safety and health management plan is drawn up to prevent and prevent
occupational disasters. During the operation of the contractor, project officer will be at the site. If there is an accident,
the project officer can call 831919 to ask the medical staff to perform treatment at the site or take the injured contractor
to HTC employee clinic for treatment. As long as the injury is due to work, whether it is small or severe, the notificationmust be completed and recorded.
In the case of severe injury, an accident investigation will be conducted to examine and analyze the cause of the incident,
and correction or improvement is required for the site. In addition, HTC has passed the ISO45001:2018 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 andthe relevant safety regulations. They all know the location of fire-fighting facilities and how to use it.

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.

2021 Full-time Environmental Safety and Health Personnel Training
License type

Personnel access control.
Person

Hour

Total

Health and Safety Education and Training For Class-1 Managers of Occupational Health and
Safety – Preliminary Training

2

42

84

Scaffolds assembly works supervisor retraining

1

6

6

Scaffolds assembly works supervisor training

1

18

18

Hypoxia operations Supervisor training

1

18

18

Organic solvent operation manager retraining

7

3

21

Radiation workers receive continuous training and retraining

12

3

36

Supervisors in charge of roofing operations are retrained regularly

1

3

3

Stacker operator (>1 ton) retraining

1

3

3

165

Friendly Workplace

Ensuring construction site safety.
Conducting safety and health management
for new facility construction.
Obtaining the required insurance forcontractor employees.

Contractors Healthand Safety Audit
Incorporating requirements for safety & health managementin the written agreements with all contractors according to theapplicable regulations to clearly define contractor obligation
and responsibility, and evaluate all the risks in the working
environment including that from dangerous machines, so as tohave proactive control and eliminate potential hazards.
Formulating a system for on-site patrols and inspections according
to the applicable regulations and contractual requirements
about labor safety & health. On-site inspections and audits are
conducted on a regular/irregular basis., working precaution,
records of the safety & health education of the workers, and allsafety requirements to be met before, during and after the use ofmachines, tools and equipment.

2021 HTC ESG Report1662021 Occupational injury in Taiwan
The main types of occupational injuries in HTC plant and for contractors include falling over, clamping, colliding, cutting,etc. Among them, clamping is an occupational hazard that causes serious occupational injury. When occupational
hazards occur, machines and equipment must be shut down, first-level troubleshooting is conducted, and employees
are reminded to be aware of machines still in operation. In the future, we shall continue our work safety precaution
campaign, provide training, and add visible precautions in the workplace to mitigate occupational safety risks.
The main types of occupational injuries in HTC plant and for contractors include falling over, clamping, colliding, cutting,etc. Among them, clamping is an occupational hazard that causes serious occupational injury. When occupational
injuries occur, should shut down machines immediately and perform simple remediation. Operators should be advised
to pay attention to the conditions of the machine/equipment to minimize the risk.
These related measures have been effectively carried out at HTC. In 2021, most occupational injuries were the resultof colliding, with 3 cases in the HQ & Plants and zero case in the Taipei Office. There were 3 injury cases that occurred
within the HQ & Plants and there was no accidents in the Taipei Office. Falls are the most frequently reported colliding(2 cases), with 5 days of labor lost. In 2021, the average employee injury frequency rate (FR) of HTC employees was 1.02
person-times/million man-hours for the HQ & Plants, and 0 for the Taipei Office. The average injury severity rate (SR) of
HTC employees was 4.07 days/per million hours for the HQ & Plants, and 0 for the Taipei Office.

Recordable injuries and the severity of injuries that resulted in disability of HTC and non-HTC
workers in the past three years
Year

2019

2020

2021

ObjectRecordable
Recordable
Severity
Severity
Total working
Occupational Injury Occupational Injury Occupational Injury Occupational Injury
Hours (Unit: Hours)
Count
Rate
Count
Rate

Staff

4,387,255.30

14

3.19

0

0

Non-staff worker

Untraceable

0

0

0

0

Staff

2,416,264.25

5

1.24

0

0

Non-staff worker

Untraceable

0

0

0

0

Staff

1,966,666.85

3

1.53

0

0

132,927

0

0

0

0

Non-staff worker

HTC does not engage in any heavy polluting or environmental hazardous work so there were no occupational diseases in
2021 due to the work nature or workplace conditions.

Note:
1. Employee working hours are calculated as the sum of working hours of a year = no. of employees by the end of every month x monthly working days x daily working hours (subject to employee
type)
2. Working hours of non-HTC workers: provided by contractors and punch cards of short-term workers
3. Days away from work: days unable to work (rest days): includes occupational disaster rest days and excludes sick leave and menstrual leave.
4. Recordable injury rate: (recordable cases x 1,000,000) / total working hours
5. The Disability Severity Rate is the frequency of severe injuries per Million Hours Worked(exclude death) = Disability Severity Injuries ×1,000,000/Total Hours Worked; severe occupational injury
refers to a disability caused by an occupational injury or injury that continues to affect the employee for longer than six months.
6. 1,000,000 work hours rate indicates the occupational injuries of every 500 full time workers in one year, based on 2,000 working hours per full time worker.
7. 0 deaths caused by occupational injuries in HTC/non-HTC workers in 2021.

2021 Main types and statistics of occupational injuries Disability injury frequency and Disability Severity Rate of HTC and non-HTC workers in the past
three years(unit: person)

Death

Injury resulting in disability-

Clamping

Falling over

CollidingCutting

Staff

0

0

0

2

1

Non-staff worker

0

0

0

0

0

Year
2019

HTC Description of Occupational Injury Types and Improvement Falls, electric shocks, fire,clamping and confined work space
Type of injury
that resulted indisability

Description

Collision

During production, a labeling machine got jammed. The head of theequipment returned to position when the machine was shut down. A
member of staff was hit on the right shoulder.

1. Interconnection of switches
2. Post notices on machines
3. Education and reminders.

Collision

A man pulled a tube material cart back to the work area by himself. The cart
was on a slope when the wheel shaft connected to the cart's upright column
broke and collapsed, crushing his right knee and ankle.

1. Fix the metal plate that sticks out
on slopes.
2. Thorough maintenance and repairof the wheels of carts.
3. Education and reminders

Cuts andscratches

When flattening empty boxes, an employee cut their left index finger with autility knife when removing scotch tape from the box.

1. Reminders when working withutility knifes.

167

Friendly Workplace

Improvement

2020

2021
TargetObjectTotal working
Hours(Unit: Hours)

Injuries that
resulted indisability

Days awayfrom work
due to injury
that resulted indisability

Staff

4,387,255.30

14

20

3.19

4.56

0.004

Non-staff worker

Untraceable

0

0

0

0

0

Staff

2,416,264.25

5

117

1.24

48.42

0.06

Non-staff worker

Untraceable

0

0

0

0

0

Staff

1,966,666.85

2

8

1.02

4.07

0.06

132,927

0

0

0

0

0

-

-

0.3

1.8

-

Non-staff worker

FR

SR

FSI

Note:
1. Occupational accidents, as any diseases, injuries, disabilities, or deaths of workers caused by buildings, machinery, equipment, raw material, material, chemical, gas, vapor, dust or other at theplace of duty, or as a result of work activities, or due to other occupational causes, should be included in the calculation of the disability injury rate/ Disability Severity Rate. Injuries caused bypersonal factors, such an injury during the commute to work, is not included in occupational disaster statistics.
2. Working hours of non-HTC workers: provided by contractors and punch cards of short-term workers
3. Working hours of non-HTC workers: provided by contractors and punch cards of short-term workers
4. Days away from work: days unable to work (rest days): includes occupational disaster rest days and excludes sick leave and menstrual leave
5. FR(Disabling Injury Frequency Rate): (Injury Frequency Rate per Million Hours Worked) = Incidence of Lost-Time Injury×1,000,000/total hours worked
6. SR(Disabling Injury Severity Rate): (Lost Day Injury Frequency Rate per Million Hours Worked) =Days Lost for Lost-Time Injury×1,000,000/Total Hours Worked
7. Frequency-Severity Indicator (FSI)√(FR × SR) ÷ 1,000
8. 1,000,000 work hours rate indicates the occupational injuries of every 500 full time workers in one year, based on 2,000 working hours per full time worker.

2021 HTC ESG Report168Social Investment and Contribution –HTC has long been committed to the social careand public welfare, and supports and sponsors
the "HTC Education Foundation" and the "HTC
Social Welfare and Charity Foundation." HTC
advocates humanitarianism and we havedeveloped our company character culture at a
local level. While we continue to pursue businessgrowth and technical innovation, we care verymuch about disadvantaged families, and give
their children opportunities to receive theeducation. This is a distinctive corporate cultureof which HTC is rightfully proud.
In the meanwhile, HTC also utilizes the industry
characteristics and helps society create more
opportunities through R&D and innovation. We
are committed to inventing novel products, notonly to achieve the Sustainable Development
Goals (SDGs) issued by the UN in 2015, but also
to meet various needs of society and implementsocial care to actively practice Corporate
Sustainability.

HTC Foundation
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 characterand culture for communities and towns in cooperation with local government, care for disadvantaged families, providing
their children with opportunities to receive education, and raising funds for environmental and ecological preservation.
We engage in public interest activities to espouse humanitarianism and contribute to a peaceful and harmonious society.
The Foundation plays an important part in community engagement and social services to instill the core values ofintegrity, honesty, care, love, positive thinking, and respect for natural resources. The HTC Foundation invested NT$ 22.61
million on education in 2021, while HTC Social Welfare and Charity Foundation spent NT$ 38 million on charity business.

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

MissionOur mission is to instill core values of integrity, honesty, care, love, positive thinking, and respect for natural resources byuntiring efforts to educate.

Objectives
1.To encourage the development of good campus culture by influential education projects and the continuous andsystematic encouragement of teachers, parents, and students.

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 the principle of “lighting
a candle rather than cursing the darkness,” the foundation has established the “Many Blessings Course” for juniorand senior high school students. These free courses each last for five weeks. They include three hours of training
and activity per week. In 2021, a total of 7 classes of four schools will be implemented, and a total of 215 students
will be benefited. The students get the energy to move forward and make changes inspired by their instructors
and volunteers, They are encouraged to become leaders who can actively serve the public and use their own
power to change the world.

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

2.To encourage the development of good urban character culture by influential education projects and urging local
communities to work towards this end.
3.Care for disadvantaged families and the provision of educational opportunities for young people to give them theknowledge 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 through readings.
3.To be a world citizen, to make reasonable efforts to help the poor and the disadvantaged in the world, and to encourage
people to respect and support one another.
We hope through these actions, people can jointly internalize the core values of integrity, honesty, love, mutual respect,
caring for one another, and positive thinking.

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2021 HTC ESG Report172

VIVE ORIGINALSVIVE ORIGINALS

The vision of VIVE ORIGINALS is to create an entertaining experience with cultural values in the virtual world. To
deepen the connection between the virtual and real world, VR technology can be applied in culture and art collections,as well as video and audio recordings through our four pillars of development. The four pillars are content production,business channels, solution provision, and platform services.

VIVE ORIGINALS VISION
Create an entertaining experience with cultural values in the virtual world

Solution Provision

Content Production

Theatre Management System

Flim

Solution

Volumetric Capture StudioContents

Content Production

HTC VIVE ORIGINALS is a content brand owned by HTC VIVE. It is committed to original IP development andoriginal content production. It also engages in the distribution and exploration of VR in film, art, animation, music,
cultural collections, as well as the cultural creativity and entertainment industries. In 2021, VIVE ORIGINALS
launched the AR Pop-up Story Book and the new original IP interactive product.

Platform Services

HTC VIVE ORIGINALS expects to create new cultural experience through technology, bal-ancing interactivity anddegrees of freedom in this immersive entertaining time. To bring development into the Taiwan Metaverse and VR
entertainment industry, VIVE ORIGINALS created BEATDAY, the first global music Metaverse brand brining a newentertainment experience to the world.
VIVE ORIGINALS not only builds a cross-platform virtual entertaining mode dedicated to the music industry,
but also using blockchain and concert-exclusive NFT technology BEATDAY has broken into the Metaverse.
Other than Ethereum, we have upcoming projects that support PoS (Proof of Stake) and PoSA (Proof of Stake
Authority), blockchains that consume much less energy, building platforms that also contribute to a sustainable
environment.

Solution Provision

Cross-platform multi-content to construct a new Metaverse world: people can access the virtual world on PCs,
smartphones, tablets and VR and experience BEATDAY music in the Metaverse without fuss, helping users
discover more about immersive entertainment and build their interests.
Holography for reality simulations: BEATDAY holographic content is created using the most advanced volumetriccapture technology to combine movement, CG animation and real time engine, making perfect records of theperformer's facial expression and body movements, giving the audience the best immersive, reality simulating
performance and blurring the line between virtuality and reality.

Business Channels

We want to expand the scale of content to include various channels such as licensing for public broadcasting,organizing exhibitions, art collection and trading, and technology application with the government, to make aprofit and provide industry value. We also aim to provide cross-domain opportunities and build a VIVE Reality
ecosystem through virtual technologies and creativity.

Animation
Interactive Art
Music

Pan-entertainment
IP with cultural andentertainment value

Business Channels
VR Theatre
Exhubition

Channels

Platform

Platform Services
Blockchain XR Content
Trading Platform
Online Virtual Concert

HTC VIVE ORIGINALS is a content brand owned by HTC VIVE. It is devoted to original IP development and originalcontent production. It also engages in the distribution and exploration of VR in film, art, animation, music, culturalcollections, as well as the cultural creativity and entertainment industries.
To provide an extended variety of VR solutions, VIVE ORIGINALS is also actively building a cross-domain team to create
content and VR technical specifications standardization. Moreover, it aims to create a content production SOP. Profit
comes from various channels, such as licensing for public broadcasting, organizing exhibitions, and trading for art
collections with cross-domain content. We also actively strive for government collaborations to garner film and television
investments. Additionally, we want to expand the scale of content and build up a VIVE Reality ecosystem by content
clustering to fulfill the ultimate goal of enriching people's cultural life through new technologies and creativity.
2021 marks the start of metaverse, and VIVE ORIGINALS built the first BEATDAY music platform of metaverse. With the
combination of volumetric capture, blockchain and XR, BEATDAY opens the gate to a new business pattern of the novel
music industry. Create your character on the platform and begin your show or concert, attend events or take on missions,interact with friends, buy items and enjoy a new music experience, all with “BEATDAY”- the music metaverse.

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Social Investment and Contribution

2021 HTC ESG Report174New & Original IP Content: VR Interactive Artwork by Fang-Yi Sheu

New original IP content: Frame-by-frame animation with VR technology,
The Sick Rose

The VR creation chronicled her pursuit of artistic achievement. With the use of volumetric capture, Sheu walks
users through her path toward ambition, accompanied by her account of words and body movement. Users areencouraged to talk to their own body, their own being; let down shackles and allow the wounds one picked up
along the journey to heal, and finally embrace future in a purer, better self.
Sheu became aware of the close connection between body and mind after years of world-traveling performance,and believed that “every body is capable of making happiness”. In 2012, the well-known dancer began her project
Body for Joy, and brought the concept with her into cities and villages, sharing how people can move their bodyto set free physically and mentally; the project was embodied two years later, as a dance class in the project’s
name. Today, the approach takes the form of virtual reality, where VR users relax their limbs and torso under
the guidance of a master, creating wonderful sights and audio effects to gain healing energy from beautiful VR
creations.

In 2021, VIVE ORIGINALS launches the world’s first animation work - The Sick Rose, a combination of VR
technology and stop-motion puppets. With the creativity of thinking out the box, integrating traditional
craftsmanship and macro photography technology, the animation film presents the audience with a new look into
the traditional stop-motion animation which stuns the world.
Not only was the animation selected for the “VIRTUAL REALITY IMMERSIVE STORY PROJECTS” in the 77th VENICE
GAP - FINANCING MARKET SELECTION 2020, it was also shortlisted for major international film festivals in 2021.
The VIVE ORIGINALS continue to perform well at international film festivals and let the world see how strong
Taiwan’s VR technology is.
78th Venice Film Festival: Venice VR Expanded
2021 Raindance Film Festival: Raindance Immersive
50th Festival du Nouveau Cinéma: EXPLORE
2021 Red Sea International Film Festival: RED SEA: IMMERSIVE
2022 SXSW: XR Experience Spotlight
After the VR puppet animation The Sick Rose was debuted in a physical exhibition in Taiwan in November
2021, we’ll be launching the Sick Rose AR stereo audiobook in 2022 with both the AR and VR versions from theSXSW Film Festival XR Competition. With this, we aim to continue increasing the popularity of The Sick Rose atinternational film festivals.
The “Sick Rose” AR Stereo audiobook is based on the Kneading Puppet Stopmotion VR animation's soundtrack. This audiobook is a new product withcross-border and multi-forms; by combining puzzles, picture audiobook,games, AR technology and APP, this product cleverly integrates art andhumanistic education with a touch of technology. With the entry of
the AR 3D audiobook Sick Rose into the retail channel, we expect
it to provide the audience with the opportunity to experience
both an AR Stereo audiobook and a VR animation work at thesame time while reading this original story about Taiwan's
traditional craftsmanship which echoes with the global
situation in a diverse way.
An illustration of The Sick Rose AR Stereo
audiobook with pictures and jigsaw puzzles

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Social Investment and Contribution

2021 HTC ESG Report

176

The 2021 TCCF Taiwan Creative Content Fest

Brand value maker BEATDAY launches to reform the entertainment
experience
BEATDAY, the Metaverse of Music: Set
free your live concert and go on a wild
entertainment journey
Immersive technology and the Metaverse are on theup, and technology companies are building their own
Metaverse for entertainment and financial systems.
The pandemic has also spurred the need for live
concerts to get revamped and there opens the gate
for the VR world with its high degree of freedom andinteractivity while ensuring social distancing.

BEATDAY LOGOVIVE ORIGINALS created the world's first Metaverse music brand BEATDAY, and expects to change the way
culture affects us through novel technology. BEATDAY enhances the entertainment experience, and is driving thedevelopment of the VR entertainment industry in Taiwan. Moreover, VIVE ORIGINALS further elevated BEATDAY
to the Metaverse through blockchain technology, releasing concert NFTs and all phenomenal, rich experiences in
the Metaverse. Other than Ethereum, we have upcoming projects that support PoS (Proof of Stake) and PoSA (Proofof Stake Authority) blockchains that consume much less energy, building sustainable platforms for the digital arts.

2021 BEATDAY Exclusive Holographic Test Concert
Fans enjoyed free entry to nine Metaverse holographic
concerts held in 2021 by BEATDAY, the Bisiugroup
Amazing Show and THE RAPPERS, a Taiwanese talentshow.

The Sick Rose on display, TCCF Future Content ThemeThe 2021 Taiwan Creative Content Fest (TCCF) is a national exhibition where the TAICCA gathers cultural content
from all industries with the goal of igniting cultural-based creativity and national brands that advocate Taiwaneseculture.

Bisiugroup Amazing Show's holographic concert is acombination of volumetric capture, blockchain and
XR and comprises three scenes – Cyber Shimenting,Dead Corp Zone, and Imaginary Number Site, eachwith their own songs and exclusive items and moves
for fans to enjoy in the virtual world. At THE RAPPER
holographic concert, BEATDAY created a Hip Hop
Avenue and dedicated items, allowing the audience toexperience a Hip Hop festival from home.

BEATDAY Bisiugroup Amazing Test Concert

Other than concerts, Live Party was online during theevent for singers and fans to look for hidden treasuresand explore the scenes, discovering the power ofvirtual equipment while immersing themselves in theintersection between virtuality and reality.

Setting of The Sick Rose, TCCF Future Content Theme

Physical Scene of The Sick Rose, TCCF Future Content Theme

In The Sick Rose, a sick child journeyed to hospital to find her mother. What she encountered on the way issomewhat related to our experience of the pandemic. The frame-by-frame animation was processed in VR
panorama, with 35 ball-jointed characters to perform a never-before immersive doll animation. The film
portrayed not only the exquisiteness of Taiwanese dexterity, but also the temperature of novel technology.

177

Social Investment and Contribution

Bisiugroup Amazing Show launched a limited NFT
package on the eve of the BEATDAY concert. The
package contains Bisiugroup Amazing Show virtual
NFT SUPER POWER 2.1
dolls, best for the digital collection, and the exclusive
SUPER POWER 2.1, which can be used freely during the holographic test concert.
With a presence of nearly 20,000 people, the test concert went green, mitigated the risk of spreading infection
during the pandemic, and reduced energy consumption and carbon emissions that ordinarily would have been
associated with a physical event.

2021 HTC ESG Report178

Volumetric Capture Application – Enhanced BEATDAY Metaverse Music
Platform Virtual Experience

VIVE Arts
VIVE Arts sees it our mission to tie art with state-of-art technology, remove geographical restrictions so that art reaches
every corner of the globe, and is appreciated in brand new channels. The ever-advancing technology has enabled therealization of an immersive virtual gallery, joining the effort of countless top artists, more than 50 museums and cultural
bodies, including London's Tate Museum, the V&A Museum, Musée du Louvre, Musée de l'Orangerie, Musée d'Orsay, theMuseum of Natural Science in the US, the National Palace Museum of Taipei, the ArtScience Museum of Singapore, andVenice Biennale, among others.
Digital innovation makes creation accessible to most people, and alters the way art influences us while we are also able
to preserve and view history. In 2021, our breakthrough and innovation on various media channels are furthered withtechnology through the efforts of Marina Abramović, Anish Kapoor, Laurie Anderson, Hsin-Chien Huang, Dominique
Gonzalez Foerster and Kuo-Chien Tsai.
Our new trading platform dedicated to artwork launched in 2021, providing the world with a digital-creativity
collaboration platform that features physical displays and online marketing. This well-constructed ecosystem is a new
approach to the exchange, exhibition and sale of artwork by artists and art-culture agencies. On December 17, we worked
with the Mucha Foundation for the first sale and included a NFT of Alphonse Mucha's Art Nouveau collection in responseto the physical display of his works in Taipei – Timeless Mucha-Mucha to Manga: The Magic of Lines. Each month during
the exhibition there was an additional NFT of his paintings and an auction at the end. Other than Ethereum, we haveupcoming projects that support PoS (Proof of Stake) and PoSA (Proof of Stake Authority), blockchains that consume muchless energy, building sustainable platforms for digital arts.
VIVE Arts continues to evolve and work with the world's top museums, cultural bodies and artists to make art enjoyable
and culture from something new, displaying HTC's capacity and influence to the world with emerging technologies toconnect people on international level.

London V&A Museum VR Experience - Alice: Curiouser and Curiouser
4D Views studio performs 360 degree capture of all directions, allowing the perfect embedding of reality in virtual surroundings.

As the production center for XR creative content, VIVE ORIGINALS studies and experiments with the mostadvanced Volumetric Capture studio for cross-territorial development, devoting countless effort, time and funds
to generating content, elevating the immersive process and digital content production at all aspects to drive a panentertainment industry.
VIVE ORIGINALS engineered a virtual, diverse holographic platform for BEATDAY's concert for those with apassion for music and games. Before the concert begins, performers pre-record their show in the volumetricstudio, then add in virtual content to complete a playable, holographic stage. From there, the audience can join inand move around in the concert space through own characters.
In future applications, 360-degree photos, CG animation, motion capture, instant engine and other tools andtechniques will be incorporated in the production of videos, educational content, games and motion-sensing
interactivities to discover a multitude of possibilities. High performance computing and 5G transmissions are key
to a multi-senatorial experience, linking virtuality and reality on a deeper level.

179

Social Investment and Contribution

In celebration of the London V&A Museum's 2021 show
Alice: Curiouser and Curiouser, VIVE Arts and V&A
made a VR preview of Curious Alice on VIVEPORT and
Steam in 2020.
Kristjana S. Williams built the scenes for Curious Alicebased on the original work, where participants help
the White Rabbit when searching for gloves, cracking
down on the Caterpillar's puzzles, and dropping by
the Queen of Hearts' croquet garden, while going
through all world-renowned sites and scenes of Alicein Wonderland. V&A and VIVE Arts took advantage
of some most advanced technologies and created an
extraordinary dreamland for those far away from the physical show, exploring infinite possibilities with themarriage of art and technology.

2021 HTC ESG Report180

CAI GUO-QIANG:SLEEPWALKING IN THE FORBIDDEN CITY
Asian artist Cai Guo-Qiang's
retrospective exhibition,"Odyssey and Homecoming",featuring a virtual reality
work, “Sleepwalking in
the Forbidden City,” incollaboration with HTC VIVE
Arts kicked off at the Palace
Museum in Beijing in 2020.
The exhibition comprisesof three elements, a large
marble model of the
Forbidden City, cascading fireworks, and a VR work that is fused with all elements. The
production process incorporates 3D scanning and modeling, 360-degree filming, and CG
technologies.
The VIVE Pro headsets take the audience back to periods hundreds of years ago.
Audiences can experience the grand opening composed with golden, silver, and red
fireworks, to glittery sparks, and then to the sun shining on the double-eaves roof of thepalace. Colorful smoke and pigments fall on audience’s white world, transforming the
Forbidden City’s architecture into a phenomenal 3D gunpowder paining.

TIMELESS MUCHA
Timeless Mucha, is part of a major collaboration between the Mucha Foundation and VIVE
Arts, which will offer an exciting new way for audiences around the world to discover
the artistic work of Art Nouveau pioneer Alphonse Mucha and to engage with the Mucha
Foundation and the Mucha Family Collection. Bringing the physical and virtual worlds
together, the event will take place in parallel with the exhibition Mucha to Manga – The
Magic of the Line, organized by the Mucha Foundation. The exhibition will invite visitors to
see the development of Alphonse Mucha’s signature linear style and how it has influenced
subsequent generations,
During the exhibition, visitors can link to the "Global NFT Artwork Trading Platform" throughthe VIVE Arts website to purchase NFT collections. The inaugural sale will be followed by
new NFT drops on the platform at the start of each month, throughout the duration of theexhibition, featuring iconic works such as Zodiac, The Moon and the Stars series, Job and thetheatrical poster for Gismonda, starring the most famous Parisian actress of the time, Sarah
Bernhardt. The final sale will take place in April 2022, with a special two-week auction, which
will commemorate the 110th anniversary of the completion of the first three paintings ofMucha’s monumental series The Slav Epic in 1912, which were gifted to the City of Prague
that year. All proceeds from the NFT sales will support the mission of the Mucha Foundation.

HTC VIVE Arts gave the world the Global NFT Artwork Trading Platform
At the end of 2021, HTC VIVE Arts gave theworld the Global NFT Artwork Trading
Platform and held and auction with supportof the Mucha Foundation to bid on NFTsof selected artwork of the late Czech artist
Alphonse Mucha, bringing blockchain a new
possibility in digital art creation.
The VIVE Arts platform diversely serves
creators and collectors on customized leveland ensures privacy and trading traceability
through blockchain encrypted artwork. The
technology encrypts and writes artworkin the Proof-of-Work blockchain trading
records, creating a transparent digital art
market.

Art Goddesses “Music, Poetry, Painting, Dance”, Alphonse Mucha

The platform accepts and displays VR-, AR- and XR-based digital artwork, and creators can decide on the number of NFTs and sales form. The platform
supports payments in legal currency and encrypted currencies. Other than Ethereum, we have upcoming projects that support PoS (Proof of Stake) and
PoSA (Proof of Stake Authority), blockchains that consume much less energy, building sustainable platforms for digital arts.
Image credit: Stills for VR work Sleepwalking in the Forbidden City, courtesy CaiStudio181

Social Investment and Contribution

In the future, VIVE Arts plans to include the Metaverse for users to explore arts and culture, perfecting an all-dimension art and culture immersed
ecosystem.

2021 HTC ESG Report

182

JAKOB KUDSK STEENSEN: LIMINAL LANDSVIVEPORT to Visualize the CAT ART Metaverse

Liminal Lands is the new creation of Danish’ artist
Jakob Steensen' in 2021. The new masterpiecepresented a multiplayer virtual reality installation.
It featured at LUMA Arles in France in the exhibition
Prélude in June 2021, supported by HTC VIVE Arts.

In the waves of art industry digitalization, VR is an advancing force. In September 2021, CAT ART had its first
online show, Step into Cat Art, which created a “CAT ART” Metaverse for cats around the world, giving a whole
new life to art. Step into Cat Art is the world's first interact-able virtual exhibition, and through smartphones, PCsor VR devices, the audience interacts with cats in paintings. VIVEPORT used VR technology to embed actions andvoices to these classic cat paintings, directing the characters in three dimensions, reducing the distance between
the audience and cats, and enabling people through these immersive galleries to make contact with an animal
and repose in the healing energy.

Steensen's passion for environmental issues isexpressed in the detailed observation of tinyorganisms. His new conception, Liminal Lands, washis brain-child from his residency at LUMA village,
where he reimagined Salin-de-Giraud, the salt field in
the wetland of Camargue through photographs. In the
artwork, natural elements of the sky, land and water exist independently of people, delivering a coexistence withnature. In this series of non-lineal micro-observations, Steensen's detailed examination exposed the unseeable
transformation in the formation of life through VR equipment. Participants enter new worlds with shifts of angles,
perhaps diving into a bush of seaweed, or being in a feather, finding oneself in multiple, immersive spaces full of
sensorial experiences.

Planet City Plans a Journey of VR on ADAE

Other Social Engagement Activities
Blood Donations
Virtual Architect and Director Liam Young's works focuses on design, virtuality and the future. His first VR work,
Planet City, is VIVE Arts based, and was on display at the Asia Digital Art Exhibition in Beijing's Times Art Museum.
The Planet City virtual city has a 10 billion population cap (about the same as that of Earth), and it represents
merely a small part of the Earth. The remaining area is deserted to allow it to return to a primitive life. Narrated
by renowned young actress Chloe Coleman, scores and songs by Forest Swords and EMEL, respectively, fictionis brought to life through VR equipment, allowing people to look up at buildings through windows, walk among
them, or cast your eyes down from high levels, experiencing a very unusual VR space.
The girl telling the story is not only one of the first citizens of the city, but she represents a young, energetic climate
activist, a role that used to be dominated by elder politicians or spokesperson of well-established institutions. The
story is about modern people trying to navigate their own future, trying to reflect on present challenges throughtheir imagination of what the future looks like.

Every year HTC cooperates with the Taipei Blood Center and Hsinchu Blood Center to hold blood donation drives. Manyof our kind-hearted employees have developed the habit of regular blood donation since 2006. Every time the mobile
vehicle from the Blood Center comes by our employees all line up to make donations to give back to society. Thanks
to our employee's participation, every year we are honored with the Hsinchu Blood Donation Center's Certificate ofAppreciation. In 2021, employees responded enthusiastically to blood donation activities and donated 109,250 in Taiwan
alone. In 2021, employees responded enthusiastically to blood donation activities, the total blood donated in Taiwan was
109,250 ml
2019

2020

2021

3,226

2,206

1,865

Blood Donation

799

553

278

Donation Rate(%)

24.76

25.06

14.90

300,250

205,000

109,250

Number of incumbents

Total blood donation (ml)Note: The annual number of incumbents only counts the number in Taiwan

183

Social Investment and Contribution

2021 HTC ESG Report

184

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 Taiwan Fund for Children and Families (TFCF) to support the sponsorship of children
in need. In 2021, a total of 43 children were adopted, including 35 in China and 8 in foreign countries (including
Guatemala, Jordan, the Philippines, Senegal, Sri Lanka, Kyrgyzstan, and Paraguay etc.).

HTC Christmas Event: Passing on Well-Wishes
Affected by Covid-19 in 2020 and 2021, life not only changed in Taiwan but also in many other countries. It was atime when we learnt how to live with our closest ones, and social distance from others to protect society.
HTC and its people worked as a team to safeguard our office space. On Christmas Eve, we put together an event tothank every employee and their family for their support and selfless effort over the past few years.
On the day of the event, the Taipei New Life Church celebrated with talented performers, providing enjoyableshows and creating fun memories to encourage people to push through difficult times.

Summary of the communities and associations participated
Organization Name

Membership

SDA (Secure Digital Card Association)

General member

Wi-Fi ( WECA Wireless Ethernet Compatibility Alliance)

General member

GSM Association
TAICS (Taiwan Association of Information and Communication Standards)
Khronos Group-OpenGL(Open Standards for media Authoring and Acceleration)(The Industry's Foundation for High Performance Graphics)

Member
General member
MemberNMEA (New Media Entertainment Association)

Group member

JBRC (Japan Battery Recycling Collection)

General member

Taoyuan importers & exporters chamber of commerce

General member

China Communications Standards Association

General member

Bluetooth SIG (Bluetooth Special Interest Group)

General member

CTIA (Cellular Telecommunications Industry Association)

185

Social Investment and Contribution

Operators and industry member

The 2021 management approach and its components
Standard

Material topics

Information Security

How HTC manages the topic

The purpose of the management approach

Follows ISO 27001 to implement all information security management systems. Annual internal
audits of risk assessment, privacy and information security.

In order to ensure that information security
and privacy protection are fully integrated
into the organization's culture and thecompany's core values, HTC actively
establishes and promotes information
security and personal information
protection policies, ensuring that they arein compliance with relevant information
security and privacy protection regulations
from various countries.

HTC Information Security Policy

Internal: e-mail, announcements

Personal Information Protection
Management Policy

Outside channel (info-security):
global-privacy@htc.com,
security@htc.com

Properly and effectively assign the powers
and responsibilities of the board of
directors, managers, and shareholders toestablish and maintain an operating teamthat is accountable to shareholders.

Corporate Governance Practice Principles

Contact for Investors:

HTC Code of Conduct

Tel: +886-2-8912-4138

Rules for Derivatives Transactions

e-mail: ir@htc.com

Incorporation of the Personal Information Management System, and Information Security
Management System. The Legal Department, Product Safety and Information Security Department
to protect privacy and information security as one team.

Economic

Economic Performance

Values corporate governance and operational transparency, adopts and implements the corporate
governance framework pursuant to the “Company Act” and “Securities and Exchange Act” toenhance management performance.

Comprehensive systematic execution of
ESG to ensure the rights and interests ofinvestors and other stakeholders.
Pandemic Management

Refer to Covid-19 Prevention and Management for pandemic management information.

Environmental
regulation compliance

Inclusion of ISO 14001 and an independently certified management approach.

Supplier environmental
assessment

Sewage prevention and control equipment at plant sites; regular detection and report online.

WastesEnvironmental

GHG emission
Energy Management

Inclusion of ISO 50001 for energy management.
Classification and minimization to reduce waste; engage certified cleaning services for proper
handling of waste and spot checks to ensure compliance.
Regular patrol with an inspection list to check waste storage and temporary storage area.
Thorough improvement of manufacturing processes and quality, staff training, raw material quality
control and management, jig development and improvement, automatic production and tests, andprecision examinations to extend the product life time and life cycle, and reduce environmental
hazards.
Establishment of a supplier assessment, audit and management system. All new suppliers mustmeet the HSF rating criteria. Quarterly ratings for existing suppliers to assess HSF performance.
Starting from 2022, a higher percentage of suppliers and performance assessments will bedominated by the carbon emission management system and improvement plan.
Joins the CDP and provide regular reports about carbon risk, and the plan, system and achievementof carbon management.
In the HTC Supplier Code of Conduct, environmental regulations are made based on the
Responsible Business Alliance (RBA), and we conduct regular assessments to ensure suppliercompliance and implementation.

187

The 2021 apporach and its components

Related policies

Privacy Policy
Patent Management Policy
Notice and procedures for copyright
infringement complaints

Grievance mechanisms

Outside channels (intellectual
property rights): GlobalCopyright@htc.com

Referral Policy

Company Spokesman andRegulations for the Appointment of
Directors/Supervisors of the Re-Investment Investment Relations
Board of Directors Rules of Procedure

Shen Daobang
spokesman@htc.com

Establishment of a contingency plan andmanagement measures in response to
Covid-19.

COVID-19 response plan

Health Center

Effective prevention of the advance andinfection of the disease to safeguard thehealth of personnel.

COVID-19 health self-management

Waste classification; reminders to keep
waste to a minimal; increase recycle andreuse rate.

EHS Management Manual

Reduce operational impact on theenvironment.
Extend social responsibility awareness to
suppliers and ensure a responsible supply
chain.

The management measures of Covid-19
Suspected and confirmed caseInternal channel: e-mail,announcements, improvement
proposals, discussions during
Process for Removal and Handling Business
Health and Safety Committee
Waste Manual
meetings.
Procedures for Sewage System Operation,
External stakeholders may file
Repair, and Maintenancean appeal through esg@htc.com,
HTC Supplier Code of Conduct
where cases are directed to the
OSH unit and followed up pursuant
Vendor Management Procedure
to the EP-00000010 Procedures
Vendor Survey Procedure
for the Control of Environmental
Supply Chain CSR and QMS Audit
Documents.
Procedure
HTC ESG Policy

Contractor EHS Management Procedures
EHS and Energy Regulations Requirements
Management Procedures
Supplier ESH and Energy Management
Procedures

2021 HTC ESG Report188

Standard

Material topics

How HTC manages the topic

The purpose of the management approach

Related policies

Employment
relationship

HTC has a well-established parental leave application mechanism to protect the rights of
employees.

Ensure the rights and interests of all
employees.

Labor relationship

Provide diverse and fair employment opportunities for employees.

Promote good labor relations

The Compensation Committee under the Board of Directors evaluates the remuneration policy andsystem and measures the performance of directors, supervisors and managers.

Protect the labor rights of multi-ple
employees.

HTC ESG Policy

Attractive and motivational salary package

Reduce the turnover rate of em-ployees.

Employee Grievance Procedure

The company convenes a labor-management conference every quarter and records and tracks
problems and improves results

Reduce the risk of workplace hazards
for employees and re-duce occupational
hazards.

HTC ESH Policy

Occupational safety andhealthTraining and education
Customer privacy
Socioeconomic
Compliance

The Occupational Safety Department is responsible for the implementation of the occupationalsafety and health and energy management system and draw up the annual plan.
Establish a multi-faceted employee complaint channel
The five core competencies based on internal training courses to boost learning through diverse
approaches.
Leadership training combines HTC's core values and organizational development strategy anddirection, emphasizing the three competencies of HTC's leadership and management.
Set individual targets at the beginning of the year and conduct mid-year and year-end performance
audits with immediate supervisors.
HTC's commitment to customers: strict adherence to contractual agreements and confidentiality.
Set up internal control mechanisms to control technical data, software and hardware, and customer
patents or intellectual property rights.
RBA-based ESG policy; establishment of a supplier assessment, audit and management system

SocialIn the HTC Supplier Code of Conduct, the labor rights, code of ethics, and health and safety are
adopted based on the RBA, and we conduct regular assessments to ensure supplier complianceand practice.
HTC provides a Conflict Minerals Survey to conduct annual assessments of suppliers' mineralsources. Establishes KPIs, and feedback mechanisms to effectively manage the supply chain.

Attract and retain outstanding talent.
Reduce the negative impact the end ofcareers.

HTC Code of Conduct
Customer Satisfaction Management
Program Specification
Modern Slavery Act Statement

ESH Management Manual
Health and Safety Rules
HTC hazardous substance management
policyHTC Supplier Code of Conduct
An environment of free commu-nication for
employees to im-prove work motivation and HTC Information Security Policy
effi-ciency.
Personal Information Protection Management Policy
Empowers HTC employees with sufficient
professional knowledge and allow them toPrivacy Policy
take up different challenges and industry
Customer Service Privacy Protection
movement
Declaration
A series of leadership course to build a key
Vendor Management Procedureleader team.
Vendor Survey Procedure
The systematic performance man-agement
Supply Chain CSR and QMS Audit Prosystem and practical tools help employees
cedureset up work targets that adhere to theCompany's opera-tional guidelines, improve
perfor-mance, and achieve overall good operational performance.

Grievance mechanisms

The grievance mechanism
includes employee complaint
hotline, complaint suggestion
box, grievance e-mail, and sexual
harassment grievance mail box
Manufacturing employees ofthe production line company
extension 38585
Other general employees
company extension 28585
Employee helpline e-mail
HelpMe_8585@htc.com
Customer service hotline: 0809090-166, please call: 02-21626788
Set up local customer service
hotlines in 11 countries aroundthe world
Build more than 59 websites indifferent countries
Provide PR, Service, Copyright,
Security and other different
types of e-mailHTC Conflict Mineral Procurement Policy
Supplier EHS and Energy Management
Procedures

Inclusion of the personal information
management system to protect personal
information in the product and internalmanagement procedure.
Incorporation of the User Cookie
Management Center to leave control
rights to cookies and similar tools tousers to protect user privacy.
Ensure products are non-toxic andharmless green products that comply
with national laws and customer
specifications.
Protect customer health and safety.
Protect customer privacy.
Reduce harmful substances and packagesof products.
Conformity to relevant socioeconomic
regulations.

189

The 2021 apporach and its components

2021 HTC ESG Report1902021 Management Approach
Standard

Material Topic

Mechanism of Evaluation

Disclosed Topic

The result of Evaluation (referring page)

Referring Page

RemarkGRI 102 : General Disclosures 2016
Information Security

Economic

Economic performance

COVID-19 Prevention
Management
Environmental Compliance

Environmental

Supplier Environmental
Assessment
Waste

Emissions

EnergyCustomer Privacy

Employment

SocialLabor Management
RelationsOccupational Health and
SafetyISO 27001 Information security
management systems
ISO 27701 Privacy Information Management
System

P.75-79 Privacy protection and information security
risk management

Independent director,
Audit committee, Internal Audit System
Corporate Governance Evaluation of TWSE

P.28 Overview of Financial Performance
P.69-73 Corporate GovernanceCorporate Management Office
Health Center

P.51-54 COVID-19 Prevention Management

HTC ESG Committee
Responsible Business Alliance (RBA)EU WEEE- Waste Electrical & Electronic
Equipment
France Repairability Index
EU RoHS / EAC RoHS / China RoHS
ISO 50001 Energy Management System
ISO 14001 Environmental Management
ISO 14064-1 Greenhouse Gas Emissions
Carbon Disclosure Project, CDP
Supplier assessment and management
mechanism.
Domestic related environmental regulations

P.60 ESG Management Procedures and Systems
P,82-86 Management of Climate Change Risk
P.87 GHG Emission and Reduction
P.103 Sustainable Agenda
P.105 Green Facility
P.109-117 Sustainable Design
P.118-120 Hazardous Waste Management
P.131-132 Sustainable Supply Chain

ISO 27001 Information security
management systems
ISO 27701 Privacy Information Management
SystemCorporate customer satisfaction
management
General Data Protection Regulation(GDPR)
Domestic and foreign related capital
regulations

P.75-79 Privacy protection and information security
risk management
P.96 Protection of IP Rights
P.99-100 Customer Satisfaction Management

HTC ESG Committee
Responsible Business Alliance (RBA)The Universal Declaration of Human Rights(UDHR)
Corporate Governance Evaluation of TWSE
ISO 45001 Occupational Health and Safety
Management System
Labor contract
Industry union
Grievance mechanisms
Employee satisfaction survey
labor-management meetings

P.58 ESG Committee
P.69-71 Organization Structure
P.139 Human Rights and a High Standard ofProfessional Ethics
P.151-153 Diversified Employee Welfare
P.156-157 Listening to the Voice of the Employee
P.157 Employee Satisfaction Survey
P.163 Occupational Safety and Health Committee

Other social and economic related
regulations (do-mestic and foreign)P.60 ESG Management Procedures and Systems
P.72-73 Strict Mechanisms for Avoiding Conflicts ofInterest
P.76 Structure of HTC Personal Information
Management System
P.109 Sustainable Design
P.132 The HTC Supplier ESG Assessment and Audit
P.139 Human Rights and a High Standard ofProfessional Ethics
P.156-157 Listening to the Voice of the Employee

Socioeconomic
ComplianceTraining and Education

191

GRI Standards Content Index

Annual Training Program

2021 Management Approach

102-1

Name of the organization

P.9 About HTC

102-2

Activities, brands, products, and services

P.9 About HTC

102-3

Location of headquarters

P.12 Global Operation Locations

102-4

Location of operations

P.12 Global Operation Locations

102-5

Ownership and legal form

P.9 About HTC

102-6

Markets served

P.12 Global Operation Locations

102-7

Scale of the organization

P.9-12 About HTC
P.28 Overview of Financial Performance
P.140-142 Overview of Human Resource Structure

102-8

Information on employees and other workers

P.140-142 Overview of Human Resource Structure

102-9

Supply chain

P.15-16 Virtual Reality
P.17-18 5G, Smartphones and Connected Devices

102-10Significant changes to the organization and its supply Please refer to Market Observatory Post System: http://
chain
mops.twse.com.tw

102-11

Precautionary Principle or approach

P.74 Tax and Risk Management
P.82-86 Management of Climate Change Risk

102-12External initiatives

P.33-48 HTC 2021 SDGs Performance
P.59 The HTC ESG Policy
P.131-132 Sustainable Supply Chain

102-13

Membership of associations

P.185 Summary of the communities and associations
participated102-14

Statement from senior decision-maker

P.3-4 Statement of the Management
P.5-6 Letter from Chief Sustainability Officer

102-15Key impacts, risks, and opportunities

P.74 Tax and Risk Management
P.82-86 Management of Climate Change Risk

102-16

Values, principles, standards, and norms of behavior

P.29-32 The Pursuit of BrillianceP.59 The HTC ESG Policy

102-17

Mechanisms for advice and concerns about ethics

P.69-73 Corporate Governance102-18Governance structure

P.58 ESG Committee
P.69-73 Corporate Governance102-19

Executive-level responsibility for economic,
environmental, and social topics

P.58 ESG Committee

102-20Consulting stakeholders on economic, environmental,
P.58 ESG Committee
and social topics

102-22Composition of the highest governance body and its
committees

Please refer to HTC 2021 Annual Report P.30-69

102-23Chair of the highest governance body

Please refer to HTC 2021 Annual Report P.30-35

102-24

Nominating and selecting the highest governancebody

Please refer to HTC 2021 Annual Report P.36

Note:means GRI core options ;means material topic

P.145-149 Talent Cultivation and Development

2021 HTC ESG Report

192

Disclosed Topic

Referring Page

102-25

Conflicts of interest

Please refer to HTC 2021 Annual Report P.71

102-26

Role of highest governance body in setting purpose,values,and strategy

P.70 Board of Directors

102-32Highest governance body’s role in sustainability
reporting.

P.58 ESG Committee

102-36

Process for determining remuneration

P.70 Compensation Committee

102-40

List of stakeholder groups

P.65-66 Diversified Channels for Transparent Information
Disclosure Significance102-41

Collective bargaining agreements

P.157 Effective Advisory and Assistance Channel

102-42

Identifying and selecting stakeholders

P.60 ESG Management Procedures and Systems

102-43

Approach to stakeholder engagement

P.65-66 Diversified Channels for Transparent Information
Disclosure SignificanceKey topics and concerns raised

P.60 ESG Management Procedures and Systems
P.63-64 HTC 2021 Material Issues and Boundary
P.65-66 Diversified Channels for Transparent Information
Disclosure SignificanceP.187-190 The 2021 management approach and its components
P.191 2021 Management Approach102-44102-45102-46

Entities included in the consolidated financial
statements

Please refer to HTC 2021 Annual Report P.312-314
The main manufacturing and operating bases of the scope
disclosed in the ESG report: Taiwan

Defining report content and topic Boundaries

P.1 Report Scope and Boundary
P.63-64 HTC 2021 Material Issues and Boundary
P.65-66 Diversified Channels for Transparent Information
Disclosure SignificanceRemarkDisclosed Topic

Referring Page

Topic-Specific Disclosures: GRI 200 (Economic topics)
GRI 201 : Economic-Performance 2016
201-1

Direct economic value generated and distributed

P.28 Overview of Financial Performance

201-2

Financial implications and other risks andopportunities due to climate change

P.82-86 Management of Climate Change Risk

201-3

Defined benefit plan obligations and other retirement
plans

P.150-151 Salary and Benefits
P.151-153 Diversified Employee Welfare

GRI 202 : Market-Presence 2016
Ratios of standard entry level wage by gendercompared to local minimum wage

202-1

P.150 Competitive Compensation

GRI 204 : Procurement Practices 2016
204-1

Proportion of spending on local suppliers

P.131-132 Sustainable Supply Chain
GRI 205 : Anti-Corruption 2016

205-2

Communication and training about anti-corruption
policies and procedures

P.72-73 Strict Mechanisms for Avoiding Conflicts of Interest

205-3

Confirmed incidents of corruption and actions taken

None

GRI 207 : Tax 2019
207-1

Approach to tax

P.74 Tax Guidelines

207-2

Tax governance, control, and risk management

P.74 Tax and Risk Management

207-3

Stakeholder engagement and management ofconcerns related to tax

P.74 Stakeholder Engagement102-47

List of material topics

P.63-64 HTC 2021 Material Issues and Boundary

102-48

Restatements of information

None

Topic-Specific Disclosures: GRI 300 (Environmental topics)

102-49Changes in reporting

None

GRI 302 : Energy 2016102-50

Reporting period

P.1 Time Coverage of Disclosure

302-1

Energy consumption within the organization

P.87 Energy Consumption Analysis

102-51

Date of most recent report

2021/06

302-4

Reduction of energy consumption

P.88-89 Energy-saving and carbon reduction Actions

102-52

Reporting cycle

P.1 Time Coverage of Disclosure102-53

Contact point for questions regarding the report

P.2 Contact Us

305-1

Direct (Scope 1) GHG emissions

P.87 GHG Emission and Reduction

102-54Claims of reporting in accordance with the GRI
Standards

P.1 Report Basis

305-2

Energy indirect (Scope 2) GHG emissions

P.87 GHG Emission and Reduction

102-55

GRI content index

P.192-196 GRI Standards Content Index

305-3

Other indirect (Scope 3) GHG emissions

P.87 GHG Emission and Reduction

102-56External assurance

P.197-199 Assurance Statement

305-5

Reduction of GHG emissions

P.88-89 Energy-saving and carbon reduction Actions

GRI 305 : Emissions 2016

GRI 103 Management Approach 2016
103-1

Explanation of the material topic and its Boundary

P.63-64 HTC 2021 Material Issues and Boundary

103-2

The management approach and its components

P.82-86 Management of Climate Change Risk
P.187-190 The 2021 management approach and its components

103-3

Evaluation of the management approach

P.191 2021 Management Approach

Note:

193

means GRI core options ;means material topic

GRI Standards Content Index

RemarkGRI 306 : Waste 2020

306-1

Waste generation and significant waste-related
impacts

P.118-120 Hazardous Waste Management

306-2

Management of significant waste-related impacts

P.111-112 Product Recyclability Design

Note:means GRI core options ;means material topic

2021 HTC ESG Report194Disclosed Topic

Referring Page

306-3

Waste generated

P.118-120 Hazardous Waste Management

306-4

Waste diverted from disposal

P.118-120 Hazardous Waste Management
P.121 Waste Reduction, Recycling and Reuse

RemarkDisclosed Topic

Referring Page
GRI 405: Diversity and Equal Opportunity 2016405-1

Diversity of governance bodies and employees

P.70 The composition of HTC Management (Directors) by Age& GenderP.140 Overview of Human Resource Structure
P.141-142 The Global Distribution of HTC Personnel

405-2

Ratio of basic salary and remuneration of women tomen

P.150 Competitive Compensation

GRI 307 : Environmental Compliance 2016
Non-compliance with environmental laws andregulations

307-1

P.60-61 ESG Management Procedures and Systems

GRI 410: Security Practices 2016

GRI 308 : Supplier Environmental Assessment 2016308-1

New suppliers that were screened using environmental criteria

P.132 The HTC Supplier ESG Assessment and Audit

308-2

Negative environmental impacts in the supply chain
and actions taken

P.132 The HTC Supplier ESG Assessment and Audit

410-1

Security personnel trained in human rights policies orprocedures

GRI 417: Marketing and Labeling 2016
417-1

Requirements for product and service informationand labelingP.128 Environmentally friendly with sustainable packaging

GRI 40 : Employment 2016

417-2

Incidents of non-compliance concerning prod-uct
and service information and labeling

None

417-3

Incidents of non-compliance concerning mar-keting
communications

None

New employee hires and employee turnoverP.141-142 The Global Distribution of HTC Personnel

401-2

Benefits provided to full-time employees that are notprovided to temporary or part-time employees

P.150-151 The Global Distribution of HTC Personnel
P.151-153 Diversified Employee Welfare

401-3

Parental leave

P.156 Work-life Balance Support

GRI 418: Customer Privacy 2016
418-1

Substantiated complaints concerning breaches ofcustomer privacy and losses of customer data

Minimum notice periods regarding operationalchangesP.156-157 Listening to the Voice of the Employee

GRI 403 : Occupational Health and Safety 2018403-1

Occupational health and safety management system

P.163 Occupational Safety and Health Committee

403-2

Hazard identification, risk assessment, and incident
investigation

P.164-166 Positively Preventing Occupational Accidents

403-3

Occupational health services

P.159 Health Management

403-4

Worker participation, consultation, and communication on occupational health and safety

P.163 Occupational Safety and Health Committee

403-5

Worker training on occupational health and safety

P.164-166 Positively Preventing Occupational Accidents

403-6

Promotion of worker healthP.160 Health Promotion

403-7

Prevention and mitigation of occupational healthand safety impacts directly linked by business
relationships

P.122-123 Hazardous Substances and Chemical Control
P.132 The HTC Supplier ESG Assessment and Audit
P.166 Comprehensive Emergency Rescue Measures

403-9

Work-related injuries

P.167-168 2021 Occupational injury in Taiwan

403-10Work-related ill healthP.167-168 2021 Occupational injury in Taiwan

None

GRI 419: Socioeconomic Compliance 2016

GRI 402 : Labor Management Relations 2016
402-1

P.164 Professional Security Service Team

Topic-Specific Disclosures: GRI 400 (Social topics)

401-1

Remark

419-1
Note:

Non-compliance with laws and regulations in thesocial and economic areameans GRI core options ;P.156-157 Listening to the Voice of the Employeemeans material topic

GRI 404:Training and Education 2016
404-1

Average hours of training per year per employee

404-2

Programs for upgrading employee skills and transition
P.145-149 Talent Cultivation and Development
assistance programs

404-3

Percentage of employees receiving regularperformance and career development reviews

Note:

195

means GRI core options ;P.149 Training Result

P.148 Training and Performance Integrationmeans material topic

GRI Standards Content Index

2021 HTC ESG Report196

Assurance Statement

ASSURANCE STATEMENTSCOPE OF ASSURANCE AND REPORTING CRITERIA
The scope of the assurance included evaluation of quality, accuracy and reliability of specified performance
information as detailed below and evaluation of adherence to the following reporting criteria:

Reporting Criteria Options
1. GRI Standards (Core)SGS TAIWAN LTD.’S REPORT ON SUSTAINABILITY ACTIVITIES IN THE HTCCORPORATION’S SUSTAINABILITY REPORT FOR 2021
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 Sustainability Report for 2021 (hereinafterreferred to as the ESG Report). The scope of the assurance, based on the SGS Sustainability Report Assurance
methodology, included the sampled text, and data in accompanying tables, contained in the report presented
during verification. SGS reserves the right to update the assurance statement from time to time depending on thelevel of report content discrepancy of the published version from the agreed standards requirements.
INTENDED USERS OF THIS ASSURANCE STATEMENT
This Assurance Statement is provided with the intention of informing all HTC’s Stakeholders.
RESPONSIBILITIESThe information in the HTC’s ESG Report of 2021 and its presentation are the responsibility of the directors or
governing body (as applicable) and the management of HTC. SGS has not been involved in the preparation of
any of the material included in the Report
Our responsibility is to express an opinion on the text, data, graphs and statements within the scope of verification
with the intention to inform all HTC’s stakeholders.
ASSURANCE STANDARDS, TYPE AND LEVEL OF ASSURANCEThe SGS ESG & Sustainability Report Assurance protocols used to conduct assurance are based uponinternationally recognized assurance guidance, including the Principles contained within the Global Reporting
Initiative Sustainability Reporting Standards (GRI Standards) 101: Foundation 2016 for report quality, and theguidance on levels of assurance contained within the AA1000 series of standards and guidance for Assurance
Providers.
The assurance of this report has been conducted according to the following Assurance Standards:

Assurance Standard Options and Level of AssuranceA.

SGS ESG & SRA Assurance Protocols (based on GRI Principles andguidance in AA1000)

B.

AA1000ASv3 Type 2 High Level(AA1000AP Evaluation plus evaluation of Specified Performance Information)

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Assurance Statement

2. AA1000 Accountability Principles (2018)•••

evaluation of content veracity of the sustainability performance information based on the materiality
determination at a high level of scrutiny for HTC and moderate level of scrutiny for applicable aspectboundaries outside of the organization covered by this report;
AA1000 Assurance Standard v3 Type 2 evaluation of the report content and supporting management
systems against the AA1000 Accountability Principles (2018); andevaluation of the report against the requirements of Global Reporting Initiative Sustainability ReportingStandards (100, 200, 300 and 400 series) claimed in the GRI content index as material and inaccordance with.

ASSURANCE METHODOLOGY
The assurance comprised a combination of pre-assurance research, interviews with relevant employees,
superintendents, ESG committee members and the senior management in Taiwan; documentation and record
review and validation with external bodies and/or stakeholders where relevant. In response to COVID-19
pandemic situation the assurance process was conducted via Teams.
LIMITATIONS AND MITIGATION
Financial data drawn directly from independently audited financial accounts, Task Force on Climate-related
Financial Disclosures (TCFD) and SASB related disclosures have not been checked back to source as part ofthis 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.
The assurance team was assembled based on their knowledge, experience and qualifications for this assignment,
and comprised auditors registered with ISO 26000, ISO 20121, ISO 50001, SA8000, RBA, QMS, EMS, SMS,
GPMS, CFP, WFP, GHG Verification and GHG Validation Lead Auditors and experience on the SRA Assurance
service provisions.
VERIFICATION/ ASSURANCE OPINION
On the basis of the methodology described and the verification work performed, we are satisfied that the specified
performance information included in the scope of assurance is accurate, reliable, has been fairly stated and has
been prepared, in all material respects, in accordance with the reporting criteria.
We believe that the organisation has chosen an appropriate level of assurance for this stage in their reporting.

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AA1000 ACCOUNTABILITY PRINCIPLES (2018) CONCLUSIONS, FINDINGS AND RECOMMENDATIONS
Inclusivity
HTC has demonstrated commitment to stakeholder inclusivity and stakeholder engagement. A variety ofengagement efforts such as survey and communication to investors, customers, consumers, employees,
suppliers, and communities are implemented to underpin the organization's understanding of stakeholder
concerns.
Materiality
HTC has established 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.
Impact
HTC has included in this report the disclosures of the organisation’s impacts on stakeholders and on theorganization itself. Measurements and evaluations on potential impacts, such as direct and indirect, intended
and unintended, and positive and negative impacts and the relevant management process to address these
impacts are to be further described in future report.
GLOBAL REPORTING INITIATIVE REPORTING STANDARDS CONCLUSIONS, FINDINGS AND
RECOMMENDATIONS
The report, HTC’s ESG Report of 2021, is adequately in line with the GRI Standards in accordance with Core
Option. The material topics and their boundaries within and outside of the organization are properly defined inaccordance with GRI’s Reporting Principles for Defining Report Content. Disclosures of identified material topics
and boundaries, and stakeholder engagement, GRI 102-40 to GRI 102-47, are correctly located in content index
and report. For future reporting, it is recommended to have more descriptions of HTC’s involvement with theimpacts for each material topic, including how it has identified actual and potential, negative and positive impacts
on the economy, environment, and people, including impacts on their human rights, across its activities andbusiness relationships.

Signed:For and on behalf of SGS Taiwan Ltd.

David Huang
Senior Director
Taipei, Taiwan
13 June, 2022
WWW.SGS.COM

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