2018 HTC CSR Report

CORPORATE SOCIAL RESPONSIBILITY REPORTHTC Corporation2018

Editorial Principle
Thank you for reading the seventh Corporate Social Responsibility (CSR) Report issued by the HTC
Corporation (HTC). HTC has an open and honest approach to the review and disclosure of our executive
performance related to all CSR matters and offers our stakeholders a clear picture of all the related issues. Our
aim is to use our brand’s influence to integrate our CSR strategies into the organization, and we start off with acomprehensive response to all these issues.
As a global mobile-device brand, we are ready to confront all the challenges that might present themselves. For
each major CSR issue that relates to our future development, we make it clear at the beginning of each section
which challenge we are facing, our current achievements, and our goals for future development.
By understanding and commitment to these issues, HTC will define and confirm our direction towardsustainable development, and also let our stakeholders know everything about our performance and theresults with respect to CSR in 2018.
This report has been prepared in Chinese and English. Both versions are posted on our official website and areavailable for download (www.csr.htc.com).

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

The HTC 2018 CSR Report is downloadable in PDF format.

Time Coverage of Disclosure
We plan to issue the HTC Corporate Social Responsibility Report annually. This report generally covers theyear 2018 from January 1 to December 31. However, in order to provide a more complete picture of all our CSR
achievements in various aspects to date, the content and information about some issues refers to work carriedout in 2017 to 2019 May, as well as the HTC CSR management policies, key issues, and performance, responses
and activities for previous years.

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

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

Feedback
Should you have any questions about this HTC Corporate Social Responsibility Report 2018, please let us know
to help us make continuous progress.
HTC CSR Report 2018

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

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

HQ & Plants

Contact us

Taipei Office 1
Taipei Office 2

Hsinchu Software R&D Center

Geographic Coverage of the HTC CSR Report 2018
Boundary

AddressTel

HQ & Plants

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

Taipei Office 1

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

Taipei Office 2

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

Hsinchu Software
R&D Center

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

Tainan Software
R&D Center

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

001

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

HTC 2018 CSR Report 002

Content
Editorial Principle001

Statement of the Management005

GRI 103:
The Management Approachand Its Components 152
GRI 103: Management Approach
GRI Standards Content Index
Assurance Statement

154

155

159

007

035

Responsibility
Management

About HTC
Global Operation Locations

Corporate Governance010

Product and Industry Overview

Risk Management

011

Overview of Financial Performance
The Pursuit of Brilliance

095

037

018

Staff Management

041
043

104

Complete Education and Training Plan

Contractor and Supplier Management
Customer Relations

097

Talent Attraction & Retention

Innovative R&D Management

016

Friendly Workplace

048

056

A Sound Wage and Welfare System

019

Corporate Social Responsibility
Management

The Mechanism for Committee Operation

021

CSR Related Management Procedures and Systems
HTC 2018 Material Issues and Boundary023

The United Nation’s Sustainable Development Goals

057
Sustainable Agenda

Sustainable Design

089

093

147

Other Social Engagement Activities

079

Sustainable Packaging
Sustainable Product124

Social Investment
and Contributions

HTC Foundation

060

Sustainable Manufacturing Process
027

121

145

Sustainable Environment
022

114

Listening to the Voice of the Employee
Occupational Health and Safety

105

085

150

Statement of the Management

Thank you for taking the time to peruse the 2018 “Corporate Social Responsibility Report” issued by HTC.
We continue to follow the latest “Global Reporting Initiative Standards” and AA 1000 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 andmoving towards sustainable development.
In the past year, we have promoted two major changes to provide new impetus to the company, and to makeall teams move in the same direction, making HTC an innovative company with dynamism. First of all, for the
new vision set last year: VIVE Reality, we have made relevant adjustments for the company as a whole. VIVE
Reality is the integration of cutting-edge technologies such as virtual reality (VR), augmented reality (AR),artificial intelligence (AI), 5G high-speed connectivity and other emerging technologies such as blockchain,creating rich and profound the immersive experience realizes the pursuit of creating a better life for mankind.
We continue to integrate the development of these cutting-edge technologies into our product, while HTC will
also focus on investing in innovative technologies and talent development.
The second shift is to make HTC a complete ecosystem company. We not only integrate our expertise inhardware and software integration, but also actively extend our content creation and platform activities toprovide our virtual partners with high value-added services to our important partners. It also accelerates the
popularization of these technologies. In order to maintain an absolutely critical role in the advancement of
VIVE Reality, HTC is creating many opportunities to increase revenue and profit in the medium to long term.
To achieve this goal, we have redesigned the hardware development process and combined our optimization ofsoftware, platforms and services to increase our knowledge base to provide the necessary resources for key fields.
In 2018, we also had a bumper year in the HTC VIVE virtual reality business, presented in many of ourrevolutionary hardware, application content services and platforms. In terms of enterprise users, we launched
VIVE Pro at the Consumer Electronics Show (CES) in 2018, and pushed VIVE Pro Eye one year later. This isa VR head-mounted display designed for high-quality professional users. It has precise eye tracking and gazepoint rendering to provide better display performance, and get more feedback in the developed content.
The HTC DeepQ Healthcare business unit consists of interdisciplinary experts and engineers, such as
computer science software engineering, medicine, regulations, user experience and design, through virtual
reality, augmented reality, big data and artificial intelligence technologies. Develop and deliver products andservices that are accurate and personalized, and thereby achieve cost control and quality improvement inhealth care. In recent years, we have also announced several innovative technologies for artificial intelligence,
including medical service chat robots for general health care, epidemic prevention and disease management.
5G is a new generation of high-speed wireless connectivity technology, and our smart phone and connected
devices team continues to invest considerable research and development resources. The high bandwidth andlow latency of the 5G ultra-high speed network will revolutionize industrial and home applications. HTC’s
advanced development capabilities in communications technology have been widely recognized around theworld and can be demonstrated by many of the initiatives we have created in the mobile communicationsindustry. The first product in this new series, the HTC 5G Hub, was first released at the end of 2018 andpublicly displayed at the Mobile World Congress (MWC) in 2019, and has attracted many of the world’s leading
telecom operators to join the common published partners. This innovative 5G mobile smart hub delivers an
all-new user experience that is more intuitive and convenient for families, business users and out-of-homeneeds. With the launch of the HTC 5G Hub worldwide, we are excited and look forward to building deeper
partnerships with global carriers.

005

Statement of the Management

HTC continues to focus on the automation of production
and testing of all product lines, while continuing to
improve customer satisfaction with high-quality products
while changing the structure of business costs. In thesecond half of 2018, manufacturing cost reductions
have comfortably exceeded strict target levels. Now, thecooperation between the manufacturing department
and the R&D team is closer, optimizing production andcontinuously improving the manufacturing process.
In addition to the continuous introduction of innovative
products, HTC has long been committed to bringing
positive impact to our environment, communities andcolleagues, and strictly requires all operating units to
reduce their environmental impact and actively contributeto society. HTC continues to work to improve energy
management. Planting in the plant is based on recycling
water for irrigation, which reduces overall water use byincreasing wastewater use. In 2018, a total of 60.13% ofelectricity consumption was saved in the manufacturing
plant, a significant improvement compared with 49.83%
in 2017; GHG emission reductions also increased from50.20% to 60.36%.
Looking ahead, HTC will continue to uphold the brandspirit of “Pursuit of Brilliance”, the right strategies, worldclass talent, innovation and a heritage of innovation thatwill drive our next stage of growth.
Throughout all of our operations and partnerships, HTC
seeks to ensure the highest standards of environmental
protection as well as R&D and innovation. HTC strives
to become a world’s leading brand, for our Pursuit ofBrilliance in all aspects of our business is never-ending.

HTC
Chairwoman & Chief Executive Officer

HTC 2018 CSR Report 006

About HTC ___Name
HTC Corporation (TWSE stock symbol 2498)
Address
No 23, Xinghua Rd, Taoyuan City, Taoyuan
County, Taiwan
EstablishedMay 15, 1997
SectorManufacturer of computers and consumer
electronics (handheld smart computers andwireless communication products)
Main business
Smartphone/HTC phones and accessories
Consolidated revenue
NT$ 8,188,134,550

The Global Leader in Innovative Mobile Phone Design – HTC

Global Operation Locations

Denmark: Heisler
United Kingdom: Slough*France: Upper Seine

Belgium: Brussels
Germany: Frankfurt

Spain: Madrid

Mainland China: Beijing*

Asia-Pacific

Europe, Middle East, Africa
Dubai

Mainland China: Shanghai*
Mainland China: Suzhou
Hong Kong
India: Gurgaon

Japan: Tokyo

Taiwan:Taipei*, Taoyuan*,
Hsinchu, Tainan, Kaohsiung

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

America
United States: Houston

MexicoAustralia: Sydney

The HTC Corporation (HTC) was established in 1997. HTC brings brilliance to life through leading innovationin smart mobile device and experience design. Beginning with a vision to put a personal computer in the palmof our customers’ hands, we have led the way in the evolution from palm PC to smartphone, and are now
applying that same innovative approach to connected devices and virtual reality. To date, our Company has
been through four major transformations that have helped us reinvent ourselves and achieve new growth.
Starting from the beginning of the company’s professional PDA design, HTC has continued to deepen
innovation in R&D technology. HTC’s first major turning point came in 1999, when the Company moved into
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 long-term 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 andhumanities to achieve a richer enjoyment of a better life.

HTC is headquartered in Taiwan. Driven by effective branding, HTC
now has operations, sales, and services covering most areas in the world,
including Europe, the Americas and Asia. With the coordination andintegration of our operational HQ, HTC provides customers with a
network of professional services.
HTC stands in the immediate presence of our customers and provides
instant service. Offices have been established in all the major markets of
the world, including the USA, Canada, the UK, Germany, France, India,
Australia, China, Japan, Hong Kong, Vietnam, and UAE.
Note: The * is main operating base of HTC, of which “Important Operations Base” is Taiwan.

009

About HTCHTC 2018 CSR Report010

Chronicle of HTC Product Development

Product and Industry Overview
Since its establishment, HTC has had very strong R&D capability that has been clearly demonstrated byproducing a stream of first-class products for the international market. HTC has persisted in a consumeroriented approach to continuously provide real cutting-edge smartphones and demonstrate our commitment
to both users and shareholders through our growing global marketing and service network.

Product Sales: Smartphone and Others (Accessories)

We believe that only a deep, sincere, innovative, and unique experience can truly stand out in competition. In
this regard, HTC mobile phone design extends the texture and craftsmanship of products and integrates thedesign, hardware, user interface, software, applications programs, and cloud service flawlessly.

Year

Domestic Sales

Export Sales

Volume (Thousands)

Value (Millions)

Volume (Thousands)

Value (Millions)

2016

1,812

9,844

26,83365,920

2017

1,221

6,869

23,34352,725

2018

791

3,432

14,917

19,552

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

HTC Main Product: Smartphone
Year

Capacity (Thousands)

Output (Thousands)

Output Value (NT$ Millions)2016

18,4007,910

44,885

2017

9,600

5,015

42,760

2018

7,200

1,673

16,137

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

011

About HTCHTC 2018 CSR Report012

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 unique hand-simulation controllers to interact
with objects.

● VIVE Pro Eye● VIVE Cosmos

The VIVE Pro for professional VR users has evolved. It is equipped with the VIVE Pro Eye that enables theeye tracking feature to provide a more intuitive way of interaction, including visual control menu navigationand controller-free mode. With the eye tracking feature, corporate users as well as developers can improvetraining simulation scenarios, facilitate computer and VR performance optimization, and provide deeper
feedback to product design and research teams through the collection of adequate usage data.

VIVE Cosmos is the first VIVE head-mounted device equipped with the "VIVE Reality System" for new VR
experience. It is the latest head-mounted display product in the VIVE series to provide maximum comfort,
easy installation and great operation experience, allowing users to quickly enter the VR world anytime andanywhere. VIVE Cosmos does not require any external positioning device, and can utilize the physical spacewith maximum flexibility. It can be used at home or on the go. It also provides a computing power alternative
other than gaming computers. Through the launch of Cosmos, we will redefine VR in terms of installation andoperation environment convenience.

VIVE Pro Eye will bring several immediate benefits to corporate users, including performance,
convenience and training application content enhancements, while helping developers to significantly
reduce the computing resources required for processing high-level VR content.

013

About HTCHTC 2018 CSR Report014Industry Overview

Re-investment & Affiliated Companies

Smart phone industry overview
HTC designs and manufactures personal computing devices in various form factors, with smartphones being
the primary device. Personal computing devices have evolved over time. The implementation of 5G will enable
even greater human-machine interactions, and open up endless new possibilities with ubiquitous connections.
Personal Computing Devices Evolving Over Time

1960s

1980s

2000s

FutureReal-time display

Mouse & GUI

Touch screen & gesture

Ubiqutious computing

HTC’s reinvestment policy focuses on the core business of the organization and the businesses that are
beneficial to long-term future development. In addition, through appropriate financial assessments andanalyses of industry trends, market competition, team experience, businesses models, and risk assessment,
strategic investments have been carried out through equity investment or mergers and acquisitions. The
specific objectives are to continue to enhance product and service quality, strengthen the developmentof key technologies, and grasp the future market demand, thereby continuing to enhance the corecompetitiveness of HTC.
In 2018, the company continued to expand and deepen the ecosystem of virtual reality (VR) and augmented
reality (AR), through strategic investment and the VIVE X accelerator program, to partner with incredibly
talented and promising teams in VR and AR around the world to solve industry pain-points and improveuser experiences across AR and VR and move the whole industry forward. Currently, VIVE X operates insix major cities: Taipei, Beijing, Shenzhen, San Francisco, Tel Aviv, and London being the newest addition
to the VIVE X program in 2018 with a focus on helping European developers, VIVE X is designed to provide
funding, training, and resources to help newcomers from around the world to build and improve theecosystem of virtual reality (VR). In 2018, VIVE X recruited 17 startups for its forth batch, making a total of
97 teams since the initial launch of the VIVE X Accelerator Program.

HTC’s upstream suppliers provide components parts and operating systems. Downstream channels include
telecom service providers, distributors and retailers (see Figure 2). HTC has continued to work closely with
upstream partners to ensure the high quality of our products, and retains good relationships with traditional
telecom partners and distributors around the world. HTC has also put emphasis on online as well as offline
retail distribution, reflecting the global trend towards omnichannel sales of consumer goods.

Overview of Financial Performance

Industry Relationship Chart

In 2018, the competition in global mobile phone market continued to be intense, resulting in reduced
revenue and gross profit as compared to those in 2017.

Upstream suppliers

Manufacturers

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

HTC VIVE first started shipping in April 2016, to unprecedented media and consumer acclaim. In 2018, HTC
continued to focus on technological innovation and stable growth in this nascent industry, and explored new
ways to develop the virtual reality industry ecosystem. Looking forward to 2019, the trend of the all-in-one will
be more accepted by the market. On the other hand, the VR industry will enter the 5G VR first year, and thefuture VR equipment will be lighter, more convenient and cheaper.

About HTC

Unit

2016

2017

2018

Operating Revenue

NT$ Million

78,161

62,12023,740Operating Costs & Expenses

NT$ Million

92,76979,54537,704

Income Tax

NT$ Million

-24

-38

5,204

Employee Wages

NT$ Million

12,451

11,825

8,730

Dividends

NT$

0

0

0

Social Investment /Donation

NT$ Million

0

0

0

· Retailers

Virtual Reality015

In 2018, HTC’s consolidated revenue was NT$23.7 billion, consolidated gross profit was NT$515 million,
consolidated gross profit margin was 2%, operating profit margin was -58.8%, net profit after tax was
NT$12.0 billion, and earnings per share after tax (LPS) was NT$14.72. We look forward to the results of ourlean operation planning in 2019. We also expect that our new products such as virtual reality and smart-life
connecting devices can make significant contribution to HTC’s revenue and profitability in the coming future.

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

HTC 2018 CSR Report016

The Pursuit of Brilliance
HTC is an innovation company, creating powerful new products, solutions, and platforms in mobile computing
and immersive technologies. 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 sameinnovative approach to connected devices and virtual reality.
At the heart of this is a bold entrepreneurial spirit of pushing new boundaries, while leveraging the capabilities
we have developed in our history in the pursuit of brilliance.
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 creationand innovation. Because our dreams power the future. Dare to Dream.

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

As we live this philosophy of Dare to Dream, we employ powerful technologies and combine them in creative
new ways in order to deliver this. At this time in history, mobile, VR, AR, 5G, AI, and blockchain are evolving
and coming together with the potential to deliver utility and experiences previously unavailable. We call thisVIVE Reality.
Our future is enhanced in a world where HTC innovation and VIVE experiences blend to create a new reality.
There are three important pillars to ensuring our approach is true to our intentions:

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

Current Achievement

Humanity

Creating a global smartphone with excellent designs

We endeavor to expand our vision to impact people’s lives in ways
never before considered.

The most valuable international brand from Taiwan
The world’s first virtual reality system VIVE brings real-world interaction and experiencethrough space-based positioning technology

Technology

Through virtual reality and augmented reality, big data, and artificial intelligence
technology, with the goal of developing and providing precision personalized medical
products and services to reduce costs and improve the effectiveness of healthcare

HTC’s
Challenge
How to enhancebrand loyalty

017

About HTC

Imagination

Our history and commitment to technology excellence is the great
enabler of our pursuits.
We strive for a world in which customers, large and small, have accessto the most powerful hardware, platforms, tools, and services.

Imagination is one of the most powerful tools we know, and one weseek to unlock.
A world where a continuum of immersive realities is possible, andexperience is unbounded.

This Dare to Dream philosophy and approach are reflected in a steady stream of world-class innovation, as
we continue to advance new 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.

HTC 2018 CSR Report018

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

CSR Related Management Procedures
and Systems

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

Employee Care

MFG

Product

Sourcing

Environment

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

This HTC CSR report is based on the GRI Standard with a focus on disclosing GRI topics, mainly concerning
disclosure of material issues related to action, performance and achievement.
Based on the relevance of the industry, the stakeholders have been identified, and the issues of concern have been
included in the major issues. In 2018, online survey questionnaires were sent out extensively and a total of morethan 70 responses were received. The HTC CSR Committee members met to confirm the impact of the material
issues on the internal and external organization. In other words, the positive, negative, or potential impact on
the economy, environment and society, taken as a whole in accordance with internal considerations, industrial
conditions, industrial chain practice, and stakeholders’ suggestions, as well as to confirm the impact of each issue.
At the same time, HTC attaches great importance to communication and interaction with its stakeholders. In
addition to setting up various communication channels, we respond to important suggestions or opinions fromstakeholders based on their concerns and impact on HTC’s operational impact. The feedback is submitted to therelevant units for response and processing, and regularly disclosed in the CSR report. We will gradually invite andencourage internal and external entities to join the CSR disclosure process in the future.
In addition, to ensure that the policies and decisions of the “CSR Committee” can be put into practice, wehave divided CSR activities into four areas, “green products, environmental protection, occupational safety &health, and social responsibility,” and have set up a dedicated management system for each. These have beenverified as aligned with the applicable international regulations and standards, and help integrate company
policy for sustainability and social responsibility into our daily operations. CSR annual performance and next
year’s operational targets will be reported to the supervisor of the board of directors at least once a year.
CSR – Related Management Systems
The Green ProductsManagement System

Green ProductVerification

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

The Environment
Management System
The Occupational
Safety & HealthManagement System
The Energy
Management System

021

Corporate Social Responsibility Management

Since the end of 2007, HTC’s Taoyuan facility and the Taipei building have regularly passed
all audits conducted by the international certification agencies, and obtained and maintained
certificates of IECQ QC080000 Hazardous Substance Process Management. In May 2017,
IECQ officially released the fourth edition of the international standard (IECQ QC080000:2017
edition 4.0). We have completed the educational training and the internal audit process for thelatest edition of the international standard in 2018. It is expected that the certificate of the latest
hazardous substance process management system can be obtained in 2019.
To comply with the Restriction of Hazardous Substances (RoHS) of EU, HTC products aresent to third-party international verification institutions for chemical analysis, ensuring thatthe products are free of concerning heavy metals, bromine-containing flame retardants andplasticizers. 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 is higher than the standards in various countries.
We strive to minimize the impact of our operation on the environment. In addition toestablishing the ISO 14001 environment management system, and make sure all our
manufacturing sites around the world obtain and maintain ISO 14001 certificates. From 2011 to
2018, there were no penalties for breach of regulations or laws.
To reduce the risks of workplace injury and reduce accidents, the Occupational Safety & Healthmanagement system has been established according to OHSAS 18001, and make sure all our
manufacturing sites around the world obtain and maintain OHSAS 18001 certificates.

ISO50001 inventory the source and amount of greenhouse gas emission according toISO14064-1 Standards. The energy management system enables planned energy management
to be realized, thereby supporting sustainable operation.

HTC 2018 CSR Report 022

HTC 2018 Material Issues and Boundary
2018 HTC Material Issues Matrix

Material Topics and Boundary Identification

High
Material issue

Corresponding
page number

Within the
Organization
HQ

Compliance with
Socioeconomic
Regulations

R&D
Corporate
Investor
CenterCustomers

Customer Privacy
Customer Health and Safety

Occupational Healthand Safety

Outside the Organization
Consumers

Employee

Supplier Contractor

Local
Community

Economic Standard

Economic Performance

Economic
PerformanceMarket Presence

16, 114

V

114

V

V

V

V

V
Environmental Standard

Level of Stakeholder Interest

Labor/Management
Relations

Supplier environmental
assessment

Training and Education

Supplier social assessment

Wastewater and Waste

Employment

Wastewater andWaste

73-74, 85-87

VSupplier
environmental
assessment

48, 50V

Market Presence

Employment

101, 114-118,
120

V

V

V

Labor/
Management
Relations

121

V

V

V

124, 141-143

V

V

V

105-113V

V

V

Customer Healthand Safety

83

V

V

V

V

Customer Privacy

56

V

V

V

V

Supplier social
assessment

48, 50, 53-55

V

Compliance with
Socioeconomic
Regulations

39-40, 47,
56, 79-81, 88,
97, 123V

Training and
Education

Level of Impact of Topics on HTC’s Operation● Economic023● Environment

V

V

V

V

V

V

V

V

Social Standard

Occupational
Health and Safety

Low

V

High

V

● Social

Corporate Social Responsibility Management

HTC 2018 CSR Report 024

Diversified Channels for Transparent Information Disclosure

Investors
General Shareholders

Enterprise
Customers

GeneralConsumers

Employees

Suppliers

Contractors

Corporate Shareholders

Corporate Customers

Dispatch manpower

General Employees

Raw material suppliers

Construction Contractors

Rating Agencies

Telecom Distributors

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

Cleaning/ Maintenance
Service Providers
Waste Disposal Vendors

Foreign Labor

Concerned Issues
Communication Channels
and Frequency
025

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

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

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

Pre-sales consulting
After-service
Product quality
Service quality

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

Corporate Social Responsibility Management

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

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

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

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

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

1. Supplier communication
1. Induction training
conference Irregularly
Weekly2. Guidance and audit for2. Patrol inspection in
suppliers Annually
the facility Daily
3. Cooperation project with
suppliers for addressing CSR
and greenhouse gas issues
Projects issued in 2018
include supplier CSR audit/
GHG disclosure (Including
CDP questionnaire replied)/investigation of toxicologicaland allergenic substances

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

HTC 2018 CSR Report 026

The United Nation’s
Sustainable Development Goals
In 2015, the United Nations passed 17 Sustainable Development Goals (SDGs) aimed at ensuring peace andprosperity for all people. Each goal also details specific goals to be achieved in the next 15 years, thereby
establishing the guideline and blueprint of the future sustainable development direction, serving as a global
sustainable development agenda and action appeal. In order to achieve a more sustainable future, companies,
governments, and society need to fulfill their responsibility and make an effort.

to encourage the development of more virtual reality content and technologythat produce a positive impact. Since the release of the plan, we have received
much feedback from the media and the industry. So far, more than 800
developers and organizers have expressed great concern, hoping to work with
HTC to bring real influence to the world.

As global citizens, we spare no effort to implement the goals of the United Nations. We are committed tointegrating SDGs into corporate operations and business development planning. In addition to establishinggender equality in practice and empowering female employees and providing them with benefits, we also focus
on green sustainability in the manufacturing process, achieving responsible consumption and production.
Externally, the HTC team has also collaborated with external institutions on the research and development of
products and services that enhance healthcare quality, making full use of innovative technologies to promotesound health and well-being of people of all ages, while establishing multiple partnerships with teams fromdifferent fields to accelerate the implementation of goals.

HTC VIVE partnered with the World Economic Forum (WEF) to promote theinitiative and development of the VR/AR for Impact Project and showcased its
latest achievements at the WEF 2018 United Nations (UN) Sustainable Impact
Hub in Davos. We strongly believe that the virtual reality introduction program
will be a powerful tool to raise the awareness of 17 UN sustainable development
goals. The end of 2018 is the transition period for the VR for Impact Project.
We evaluate carefully various projects, identify the advantages, and dedicate tocarry out improvements. In 2019, we continue to bring innovation to accelerate
our development.

VR for Impact Project
HTC believes its unique virtual reality technology can bring unprecedented change to the world. Throughthe interactive and immersive experience that HTC VIVE can provide, we hope to change developments in
education, health, medical care, art, and many other fields. In response to the United Nation’s sustainable
development goals of eradicating poverty, protecting the earth, and ensuring peaceful and prosperous life of
mankind, HTC announced the VR for Impact Plan in 2017, providing US$10 million in funding and technology

For more information on VR for Impact, please visit our website: https://vrforimpact.com/
Corresponding
project

SDGs ItemSDG 13:
Climate Action

TreeAllow the audience to experience the virtual reality of
deforestation in tropical rain forest, hoping to raise theattention of the public on global climate change.

SDG 15:
Life On Land

The
Extraordinary
Honey BeeThrough the perspective of bees, we can learn more about
the challenges faced by bees, and understand the potential
harm to human caused by the endangering of bees aroundthe world. We hope that virtual reality can be used tocultivate next-generation bee protectors in making changes
to save bees.

OrthoVR

Through virtual reality and 3D production tools, prosthetic
orthotists around the world can utilize their practicalexperience and skills in the digital environment to improvethe capability of clinical staff without compromising quality,
thereby enhancing the usability of prosthetic limbs indeveloping countries.

LIFE (Life-saving
Instruction For
Emergencies)

It is a new mobile VR platform developed by the University of
Oxford. The personalized simulation training and advanced
learning analysis allow all types of health-related workers
to become more familiar with the medical treatments inemergencies, improving the capability and possibility of
expanding life-saving knowledge in low-income countries.

ElectroVR

It is the VR Physics Lab developed by the MIT Media Lab.
Users can experiment, explore, and discover the principles
of static electricity, concretizing the traditional concept ofstatic electricity which is intangible. Moreover, the interactionof users can be recorded which can be used as reference forindividual user model creation or teaching purposes.

SDG 3:
Good Healthand Well-Being

SDG 4:
Quality
Education

027

Corporate Social Responsibility Management

Description

HTC 2018 CSR Report 028

HTC’s Performance in Response to the UN’s Sustainable Development Goals

Goal 3:

Good Health and Well-being

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

the Disease Manager to learn about related information on epidemics and epidemic prevention; information such as whether
vaccination or preventive medication is needed before travelling abroad and checking the nearby hospitals in the travelling
destination. In addition, when the users sets the trip dates, the Disease Manager will take the initiative to remind the user of
epidemic prevention precautions and protective measures within 45 days of going abroad, and will notify them of take selfhealth management tips after returning from their trip.
The “Disease Manager- UP UP 2.0" achieves enhanced language interaction through the use of medical natural language
processing (MNLP) and artificial intelligence training. With the thoughtful user experience design, the Disease Manager
can become smarter as more and more questions have been asked. Through the personalized epidemic prevention services
provided by the Disease Manager, users can be guided to acquire complete and accurate information on infectious diseases.

By the end of 2018, the total number of users has reached 78,789 person-time.

The first AI personalized caring Chat Robot in Taiwan - "Wan Xiao-Fang"

Following the collaboration of HTC DeepQ and Taipei Municipal Wanfang Hospital to launch the first artificial intelligence (AI)medical service Chat Robot Wan Xiao-Fang in 2017, HTC announced in 2018 that it will be upgraded to AI personalized caring Chat
Robot “Wan Xiao-Fang 2.0”, which is the first Chat Robot in Taiwan with complete medical care services. Its features include:• AI hospital division guidance: Guiding users to register appropriate division in the hospital for diagnosis and treatment,
offering caring services.
• Pre-diagnosis notes: Systematically ask questions about patients’ previous visits to the hospital, improving the efficiency ofpatient-doctor communication and the quality of diagnosis as well as treatment.
• Post-diagnosis care management: Allow user to intelligently manage personal medication records, remind them when to taketheir medication, and enable them to search for their blood testing reports. Wan Xiao-fang will also ask patients actively tofind out if their symptoms have been improved, and recorded the changes in symptoms, which will serve as reference

Virtual Clinic to Emphasize the Doctor-Patient Shared Decision Making
HTC DeepQ is committed to creating a virtual clinic that implements Shared Decision Making (SDM). Besides the opening of
the virtual clinic in the Tri-Service General Hospital, we will also collaborate with Taipei Municipal Wanfang Hospital to create
the “VR Group Health Education Clinic” in 2019.
By adopting the VIVE Focus in the clinic and using the VR human body model to communicate diagnosis and treatment
content, doctors and family members can break the limitations of time and space. After wearing the VIVE Focus, users canenter the same virtual reality world to hear doctor explaining about organ structures and surgical methods. With

this advanced VR technology and the interactive interpretation by the doctor, the best communication anddiagnostic/treatment results can be achieved.

for the next visit.

By the end of 2018, the total number of users has reached 13,246 person-time.

The Upgraded Disease Manager Chatbot-UP UP 2.0
In 2017, HTC DeepQ partnered with the Centers for Disease Control to develop a disease prevention chatbot and released a
2.0 upgraded version of the chatbot in September 2018. In addition to the original feature of flu vaccination service, the 2.0
version mainly expands the inquiring services of more than 90 infectious diseases, including the prevention of Dengue fever, theunderstanding of Enterovirus symptoms, and the searching of nearby hospitals. Before travelling abroad, users can also consult029

Corporate Social Responsibility Management

DeepQ Medical Encyclopedia
DeepQ Medical Encyclopedia is committed to provide the general public with content that is reliable and easy-tounderstand to reduce the general public’s burden from reading medical science related articles. From the needs
and perspective of the general public, an encyclopedia consisting of 1,000 articles on diseases has been created
to enable the general public to quickly and accurately grasp the definition of the disease, symptoms, etiology,
diagnosis, treatment, and medicine references. After the publication of DeepQ Medical Encyclopedia, it received
a majority of the public’s response. In the future, it will combine with medical artificial intelligence and medical
services to become a medical education platform for interaction between the public and medical personnel.
HTC 2018 CSR Report 030

Goal 4:

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

HTC Partnered with National Taiwan University
to Organize the First DeepQ Deep Learning Competition
The artificial intelligence platform, DeepQ AI
Platform, developed by HTC DeepQ Healthand Medical Division is provided free of charge
for the artificial intelligent related courses
in the Department of Electrical Engineeringand the Department of Computer Science &Information Engineering in National Taiwan
University (NTU), and the Department ofElectrical Engineering in National Tsing Hua
University (NTHU). The goal is to accelerate andsystematically train the depth of networking.
It is expected to help reducing students’ modeltraining time, allowing them to concentrate on
learning. In addition, the on-demand feature of
DeepQ also meets the requirements of students
to share computing resources in the class, allowing students to have flexible and sufficient computing resources while learning.
In addition, we also held the first DeepQ Deep Learning Competition in 2018. This competition is based on the two major themes ofMedical Image Analysis and Augmented Reality, hoping that accurate medical annotations can be generated automatically, and thechallenge of insufficient data during training can be solved, respectively. Under the participation of more than 70 NTU students innearly 20 groups, a total of 27 students won the award.

Making Virtual Reality Medical Teaching Materials with VIVEPAPER
1. Advanced Cardiovascular Life Support
HTC collaborated with the Center for Education in Medical Simulation, Taipei Medical University to produce the virtual
reality teaching materials for Advanced Cardiovascular Life Support (ACLS). With the help of panoramic film, users canchoose different perspectives via scenario design and simulation, clearly observe how the emergency team can work together
smoothly cooperate and successfully torescue patients who have lost their pulse due
to myocardial infarction.

to-use interface, instant preview of the VR effects, one-click publishing to a dedicated bookshelf, and support for both
Windows and Mac systems.
2. Central Taiwan University of Science and Technology Established the First VR Self-Learning Center in
TaiwanFollowing the establishment of Taiwan's
first virtual reality anatomy and physiology
laboratory in 2017, HTC DeepQ andCentral Taiwan University of Science andTechnology (CTUST) further establishedthe first VR Self-Learning Center in
Taiwan in 2018. By adopting the HTC VR
head-mounted display with VR medical
education application, students canlearn independently and "walk into"
human anatomical models, overcoming
the bottleneck of traditional learning of
anatomical model.
In addition, VR Self-Learning Center also organizes teaching materials production courses through VIVEPAPER,
allowing teachers and students to produce VR teaching materials easily by using different materials, such as photos, 360
panoramic videos, 3D models, texts, etc. The produced teaching materials can also be published on the online library of
VIVEPAPER, serving as the VR online learning platform for the next generation.
In the future, a multi-user version will be built, allowing teachers and students to break the space limitation, and teach/learn inthe same virtual reality classroom through VR. Users can also bring home the wireless version, VIVE Focus, for studying before
class or review after class.

Combined with the Anatomy and Physiology Teaching System– Launching of the 3D Organon in Fu Jen Catholic University Medical Camp
The “Fu Jen Catholic University Medical Camp” jointly organized by the College of Medicine of Fu Jen Catholic University(FJCU), TVBS Health 2.0, and Taiwan Health Education Association, is the first virtual reality (VR) medical camp with
anatomy course in Taiwan. Here, the world's first fully functional VR anatomy and physiology teaching system – 3D Organon is
introduced to the education of general science through the medical camp.
Compared with the traditional 2D films or plan drawings, the 3D Organon VR anatomy and physiology teaching software candisassemble and rotate more than 4,000 body structures. It enables users to adopt different viewing modes, allowing users
to go around, disassemble, and even penetrate the human body structures in a virtual world. It also allows the users to sense
directly the relative position between tissues and organs, and contains other related courses including VR, electrocardiogram,
sphygmomanometer, ultrasound, first aid, etc. Surveys show that up to 98% of the elementary school students agree to use VR
in classes which can enhance their interest in learning. This not only makes the enrollment of the class full instantly by parents,
but also makes the VR course ranking first among the favorite courses of elementary school students.

HTC DeepQ uses the VIVEPAPER platform
to create the teaching materials without
the need of a joystick. The system can be
operated directly by using hand gestures,
allowing users to experience reading that isdifferent from traditional way. The editor
used in the production also supports all kindsof media including photos, videos, music and
3D models. The characteristics include easy-

031

Corporate Social Responsibility Management

HTC 2018 CSR Report 032

Goal 17:

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

HTC Partnered with Taipei Medical University
to Establish the World’s First and Largest VR Anatomy Classroom
HTC has reached cross-bordercooperation with Taipei Medical
University to establish the world’s firstand largest VR (virtual reality) anatomy
classroom. The classroom is equippedwith 10 sets of VR head-mounted display
VIVE Pro and VR anatomy teachingsoftware. Besides self-learning forindividual person, multiple users canbe connected to the same virtual reality
space simultaneously to hear teacher’s
lecture about the anatomical structure.
The breakthrough technology of virtual
integration has completely changed the
traditional anatomy course, overcoming
the challenge of students in learning
Stereoscopic anatomy.

2018 VIVE Ecosystem Conference (VEC2018)
The 2018 VIVE Ecosystem Conference (VEC2018) not only showcased the seamless connection between mobile devices andimmersive experiences, but also announced a number of HTC’s cross-industry strategic partnerships:• Major League Baseball (MLB): The baseball-themed VR park and reality show will be launched in China. The application of
VR not only will increase the interest of teenagers in sports, but also help the users to improve their training skills.
• Formula One (F1) Team McLaren: HTC collaborated with F1 Team McLaren to build VR products and VR/AR content,
bringing a new viewing and interactive experience to more than 500 million fans around the world. Moreover, the world’s
first VR competition with real professional sports will be jointly organized.
• iQiyi: VIVE Focus users can comprehensively experience the immersive iQiyi VR applications, including popular variety
shows, movies, and videos.
In addition, it is announced at the Conference that VIVEPORT platform will offer 100% of the profit to content developers,
which is the only platform ever to give the content owners 100% of the profit. It is hoped that through the VIVE X accelerator
program, not only professional knowledge and resources can be provided to VR startups, but the development of the VR
ecosystem can be further promoted. By integrating the advantages of VR, AR, 5G and AI technologies, HTC will work with
global partners to create a richer ecosystem and realize the beauty of VIVE Reality!

VIVE Arts Uses Cutting-Edge Technology to Create
Unique Cultural Experiences that Everyone Around the World Can Enjoy
VIVE Arts is designed to promote, preserve, and advocate the use of innovative technology in art creation, and promote theappreciation and understanding of cultural heritage from audiences around the world with diverse backgrounds throughdigital technology. Through the use of VIVE ecosystem, the audience is expanded and the human cultural heritage is preserved
and interpreted, enriching public and educational activities and making it easier for viewers who are financially or physicallydifficult to appreciate the artwork or cultural experience. In 2018, VIVE Arts collaborated with museums and artists around theworld, including the National Palace Museum in Taipei, the Musée de l’Orangerie in France, and the Art Basel in Hong Kong.
For more information on VIVE Arts please visit our website: https://arts.vive.com/tw/

Through using the VR anatomy teaching software, a unique immersive learning environment can be created to improve student
participation. The software can be applied for various learning methods and it can support multi-user simultaneous connection for
up to 300 people. While in the VR environment, the users can disassemble and rotate more than 4,000 body structures.
The medical equipment certification license that the DeepQ team is applying for will be obtained in 2019. It is expected that thesoftware will be introduced into the VR application training program for the clinical skills of domestic medical institutions in thesecond half of 2019.

HTC Collaborated with the National Defense Medical Centerto Establish the Precision Anatomy Education Innovation Lab
In 2018, HTC signed a MOU with the National Defense Medical Center, hoping to strengthen the development of medical
education technology and cultivate medical innovation internship talents. The establishment of the Precision Anatomy
Education Innovation Lab allows the transformation of cadaver into virtual reality and 3D printing model, which enables
medical students and doctors to accurately study the anatomical parts, achieving the goal of virtual integrated innovative
teaching. Furthermore, through the use of the virtual reality anatomical teaching system, 3D Organon, students can learn thecorrect Chinese and English anatomical terms and pronunciations, improving medical quality to create Asia’s top Precision
Anatomy Education Innovation Lab.
In order to cultivate next-generation medical talents in Taiwan, HTC DeepQ started the medical innovation internship programin 2016. The National Defense Medical Center took the initiative in establishing a teaching and learning cooperation program with
HTC DeepQ. Through this student internship program the academic and industrial digital medical applications were connected.
Participants of this program also involved in the creation of the DeepQ Medical Encyclopedia plan, helping more patients.

033

Corporate Social Responsibility Management

HTC 2018 CSR Report 034

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

Organization Structure

AGM

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

Board of Directors
Board of Directors
Chairwoman

Compensation
Committee

Internal Audit

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

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

Male

Female Total<30 (Excluding 30)

0

0

0

30 ~ 50000>50 (Excluding 50)

5

1

6

Total

5

1

6

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

Chief Executive
Officer

Compensation Committee
The Compensation Committee is set up under the HTC Board of Directors. The committee is comprised of an
independent director, and two independent external experts. The Compensation Committee assesses the salary
remuneration policies and system of the Company directors, supervisors, and managers from a professional andobjective viewpoint. The committee also makes suggestions to the Board of Directors for discussing. For HTC
corporate governance organization and members, please refer to Page 28 in 2018 Annual report.

Supervisors
Core Products
andServices

New Platforms
andInfrastructure

Innovation
Research andDevelopment
CenterCorporate
Functions

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

Please refer to annual report Page.28

037

Responsibility Management

HTC 2018 CSR Report 038

Complete Disclosures

Strict Mechanisms for Avoiding Conflicts of Interest

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

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

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

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

Press Release, Press
Conference & MediaInterview

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

Website Platform

1. HTC has established an Investor Relations Website (in both Chinese and English)
through which the investors can access and download the company’s financial
statements, annual reports, other financial news, information about investor
conferences, and correspondence with shareholders. In the “Investor Service”
section, contact information and electronic forms are provided for investors tomake contact with the Investor Relations Division by phone or by email.
2. The Investor Relations Website is continuously maintained and updated withthe latest HTC Company development information.
HTC will continue maintaining and updating relevant and material company
information, so that investors can get the latest news.

Investor Conference &International/Domestic
Investor Forum039

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

Responsibility Management

After the establishment and subsequent revision of the “Operational Procedures for Processing Internal
Material Information and Preventing Insider Trading,” the company makes internal announcements to all
employees through e-mail, and also posts related information to our Intranet website. Furthermore, the latest
version of the rules is always accessible for immediate reference on the corporate website and on the Intranet.
In addition, as clearly set forth in the HTC Employee Manual, involvement in fraud, bribery, embezzlement,
and violation of business competition limitation may lead to a punitive dismissal. Any reports about the above
offenses may be sent to the heads of the related departments, the Human Resources Division, or the auditing
unit. The Human Resources Division is responsible for disciplinary action. A dedicated reporting channel(anti-corruption@htc.com) has also been established for employees to expose any improper behavior thatcomes to their attention. There were no corruption related events in 2018.
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 notacquire business or work advantages through improper conduct (such as offering kickbacks, banquets, or otherimproper interests). The contract clearly states that HTC will take the initiative to terminate any collaboration
with suppliers or manufacturers who violate the “Integrity Policy”. If damage has been occurred due toviolation of the Integrity Policy, reimbursement shall be provided by the violating party to ensure that bothparties are in line with the Integrity Policy.

Internal Audit System
HTC has set up our internal audit unit as subordinate to the Board of Directors. The internal unit is responsible
for assisting the Board of Directors and management in checking any defects in internal control and in theassessment of operational efficiency and performance, as well as the accuracy of the financial statements andcompliance with the related laws. The unit also addresses areas that need improvement in a timely manner toensure internal control is continuously and effectively implemented. The audit results are used as a basis forthe review and amendment of the internal control system to advance sound management in HTC. There wereno anti-corruption related risks in 2018.

HTC 2018 CSR Report 040

Risk Management

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, weare still positively evaluating the risks and benefits of introducing new technology. To remain responsive to thepotential risks caused by increased costs as a result rapid industrial development, we control operating costrisks by strengthening the functions of our products, reducing overall costs, and strictly controlling expenses.

In 2018, HTC foreign exports accounted for around 82.36% of our total business revenues. HTC’s revenue
is mainly based on the US dollars and Euros, the manufacturing costs are also based on US dollars, so thesignificant fluctuations in the international exchange rates may affect the operating income, operating costs
and operating net profits in foreign currency denominations. In addition to strengthening the control of
quality and collection cycle of foreign currency accounts receivable, we also mainly avoid the operational riskof operations with the Foreign Exchange Forward Contract. In the future, we will strengthen the automatic
hedging effect of foreign currency claims and liabilities offset, using auxiliary tools such as derivative financial
products to conduct hedging under the appropriate risk guidelines.

Management of Climate Change Risk
As an answer to requests from customers, HTC joined the Carbon Disclosure Project(CDP) in 2008. We voluntarily disclose information about our climate risks, future
development opportunities, emissions, and strategic management mechanisms.
In the 2018 CDP Supplier Engagement Rating (SER), HTC was rated as level
B (international average is level C). 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 supplier engagement.
In addition, HTC has officially become a CDP supply chain program member since
2018, and has required its major suppliers to respond to the CDP questionnaire,
actively contributing its corporate influence, and calling on its supply chain partners
to work together in carrying out further assessments and actions for climate change.

041

Responsibility Management

Legislative Risk from
Climate Change

Due to fast and fiercely changing global financial markets, foreign exchange movements will trigger thechallenge of business operation and thus influence shareholder’s rights. As a result, HTC has adopted relevantrisk management policies and standards for measurement of risk. In this regard, we have set up the funds
management practice, which clearly stipulates the tools and decision-making processes.

Risk Factor

Operational Risk from
Climate Change

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

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

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

Opportunity

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

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

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

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

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

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

Carbon Disclosure and Innovative Supply Chain
Carbon Management Meeting"Supply Chain ESG Management" has become a key concern ofcorporate social responsibility in recent years. In May 2018, HTC
was invited to participate in the “Carbon Disclosure and Innovative
Supply Chain Carbon Management Meeting” held by the Sustainable
Alliance for Low-Carbon Economy. During the Meeting, the “Carbon
Disclosure Project" (CDP) representatives shared with each other on
how to extend corporate carbon management strategies and actions tothe supply chain, and internalize them into corporate products and services. Through effective supply
chain management, the sustainability labeling of products and services is implemented to improve thecommunication with internal and external stakeholders.
HTC took the initiative to propose the concept of "Sustainable Agenda" which turns the conceptof environmental sustainability into action through the five supporting elements of "sustainable
environment, sustainable design, sustainable process, sustainable packaging and sustainable products".
We are committed to regulate and reduce the impact of operations on the natural environment, andfurther integrate them with the applications of VIVE product, responding to the UN Sustainable
Development Goals through the VR for Impact program.

HTC 2018 CSR Report 042

Innovative R&D Management
Engaging Diversified R&D Talent

Future Goal
People-oriented:
Combining cutting-edge technologies such as VR, AR, AI, 5G, 		
and Blockchain with arts and humanities to unleash people’s imagination.
Changing the way people interact, and the technology around the world.

Current Achievement
VIVE Pro Eye eyeball tracking upgraded; 					set a new standard for high-end VR HMD(Head-Mounted display).
The subscribed VIVEPORT Infinity contents and services are unlimited;the contents to be experienced can be selected freely anytime.

In 2018, a total of 1,821 R&D workers
Investment in Innovative R&D
joined HTC globally. In addition to thosein Taiwan, we have many R&D employees
Unit
2016
2017
coming from, or based in, other countries,
Fixed R&D Investment
Million (NT)10,957 10,440
such as Europe, America, and Asia.
We expect that the different cultural
Total Revenue
Million (NT)78,161 62,120
backgrounds of our diverse employees will
Percentage%
14
17
fuse and fuel innovative thinking, so as
to support HTC in the development andNote: The related figures are those listed in the consolidated statement.
launch of products that meet consumer
needs in different regions and with different cultural characteristics.

2018
7,070
23,74130

Since our establishment, HTC has invested heavily in cultivating R&D talent and developing technicalinnovation. Currently, our in-house R&D employees make up 37.86% of all HTC’s global employees, theinvestment of which is about 30% of the total operating revenue. With this strength of innovation, HTC has
special insight into industry trends and the outstanding capability for meeting consumer demand. This puts
HTC always in the lead.

TaiwanOthersThe VIVE COSMOS and the VIVE Reality System 				has unleashed the unlimited imagination of the VR world.
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).
In January 2019, the HTC VIVE team won 36 global awards 		
at the Consumer Electronics Show (CES) in the United States, 		
an increase of 14 awards from last year.

HTC’s
Challenge
Expediting patent layout
Strengthening
advertising of productinnovation

043

Responsibility Management

2018
R&D
Personnel
1,821

Taiwan Others

Taiwan Others

2016
R&D
Personnel
3,865

2016
R&D
Personnel
3,738

HTC 2018 CSR Report 044

Smart Innovative Products
With this strength of innovation, HTC has special insight into industry trends and the outstanding capability
for meeting consumer demand. This puts HTC always in the lead.
In 2018, HTC have released a number of smart phones, covering all market segments and price bands: HTC
U12+ with flagship, HTC U12 life with high-end, and HTC Desire 12 | 12+ with National Machine. With
customer feedback an integral part of the development process combined with an obsessive attention to detail,HTC delivers everything that consumer would want.

Furthermore, HTC also devotes to the wisdom of the medical field by creating HTC Healthcare business unit
through virtual reality / augmented reality, big data and artificial intelligence technology, with the goal ofdeveloping and providing precision personalized medical products and services to reduce costs and improvethe effectiveness of healthcare.

First Blockchain Mobile Phone – HTC EXODUSHTC Project EXODUS is a smart phone solution that will support decentralized networks. For morethan 20 years, HTC has laid a solid foundation for global smart mobile devices and virtual reality
technologies. Through HTC EXODUS, we are committed to investing in the development andapplication of blockchain technology, leading the safe storage and trading of data into new fields, andtaking the lead in introducing blockchain technology into smart mobile devices.
In October 2018, HTC released the first blockchain smart phone HTC EXODUS 1, equipped with HTC
flagship class performance and high quality design, combined with cutting-edge blockchain technology
and necessary application software, built-in security structure (Secure Enclave) independent of theAndroid operating system, fully securing user's secret key. Whether it is currency or non-replaceabletokens (NFTs), or digital electronic data in mobile phones, there is security. HTC EXODUS 1 is also theworld's first Web 3.0 blockchain mobile phone, fully utilizing the advantages of the Web 3.0 network,and equipped with HTC's self-developed hardware wallet - Zion Vault. The Zion Vault provides users
with a secure and convenient private vault on the blockchain, keeping everyone's personal informationand privacy in their hands.

HTC Launched the DeepQ AI Platform
In May 2018, HTC’s Health and Medicare Division, DeepQ, released
the artificial intelligence (AI) platform – DeepQ AI Platform, which
provides a fast, easy and efficient solution for problems encounteredduring the deployment of artificial intelligence (AI), stimulating moreinnovative AI applications.
The DeepQ AI Platform can dramatically reduce the learning thresholds and the cost of AI training
models through optimized training environment, built-in multiple AI models, fully automatedparameter adjustments, and simple user interface. Different from the AI training platforms and services
available on the market, the users of DeepQ AI Platform can quickly convert their own tagged data into
deployable AI models without having to write and design deep learning programs.
The DeepQ AI Platform not only allows general users and business users to operate easily, but also
effectively reduces the labor and time costs for developers who have AI related expertise and experience.

045

Responsibility Management

HTC 2018 CSR Report 046

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

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

Internal

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

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

External

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

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

047

Responsibility Management

HTC Supplier Code of Conduct
The HTC Supplier Code of Conduct details the responsibilities and regulations that have to be followedby all suppliers doing business with HTC. In addition, HTC also conducts a regular assessment of theimplementation of the Code as the basis for our further selection of business partners. In 2018, thesupplier's code of conduct reaches 100%.
The provisions about labor issues, health and safety, and ethics were framed with reference to
Responsible Business Alliance Code of Conduct and the related documents issued by the United
Nations Universal Declaration of Human Rights. For more information about the “HTC Supplier Codeof Conduct,” please see: http://www.csr.htc.com

2018 Supplier Management
Amount (NT million)

Percentage of Total
Purchase Amount (%)

Interests with HTC’s
stockholders

Supplier Code A

2,104

16

none

Others10,94584-

Total Purchase Amount

13,049100-

Note: Supplier Code A is a supplier whose purchase amount accounts for more than 10% of the total purchase amount.

HTC 2018 CSR Report 048

The Green Supply Chain Management System

The HTC Supplier CSR Assessment and Audit
In addition to implementing corporate social responsibility of our own brand, HTC also delivers the concept
and requirements of CSR to the supply chain. We established the CSR unit in 2010 and then initiatedinvestigations of those suppliers who had implemented CSR. This was not only to verify their compliance ofthe HTC Supplier Code of Conduct, but also to provide supplier consulting and coaching functions to buildand enhance CSR concepts and actions with.
A Quick Look at the HTC Supply Chain Management
Owing to differences of industry characteristics and supplier category, HTC
identifies critical supplier and major audit for reference by following two
principles:
1 Suppliers’ annual amount of transaction representing more than 10% of
total purchase.
2. According to the mechanical components which vary based ontechnology, markets and purchase annually, CSR and sourcing
departments define critical suppliers of current year based on different
situations every year.

Definition of HTC
Critical Supplier

HTC has had a green supply chain management platform since2006 to assist R&D engineers to select green materials from theproduct database that comply with both International regulations
and customer requirements. Green materials are used from thestart of design to significantly enhance the reliability and related
validation process and schedule of green products.
The survey of new suppliers shall comply with the HSF scoringstandard. As for the existing suppliers, the HSF performance
evaluation was added to the Supplier Performance Management
System since 2016. Improvements are reviewed and checked via
the implementation of the quarterly supplier meeting. All suppliers
achieved their targeted performance in 2018.

Self-assessment
SurveyAll candidate suppliers are required to fill in the Self-assessment. Since
2016, the weight of CSR-related questions in the Self-assessment survey
for new suppliers was increased. During each quarterly supplier review
meeting, the CSR-related performance of major suppliers will be checkand the results will act as the reference for the supplier screening process.

On-site Audit“Supply Chain CSR Compliance Audit“ has been implemented since2011. 20 major component suppliers will be chosen every year to accept“Supply Chain CSR Compliance Audit“ based on initial risk determination(including geographic, location, products, news, etc.)
In 2017, an addition was made in the manufacturing process. According
to the RoHS and REACH directives, hazardous substances subject tocontrol are required to be audited.
On-site audit for 20 suppliers had been completed in 2018, and 15
suppliers were scheduled for on-site audit at the end of the year, which
will begin in 2019.

Management
Mechanism

On-site Audit Results(Total of 401
Noncompliance
Items)

Labor Rights

119 cases, mainly about overtime, wage and benefit related issues.

Health and
Safety183 cases, mainly on insufficient occupational safety measures in theoperating environment, and inadequate emergency response measures.

Environment

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

Ethics16 cases, mainly about the failure to establish the management proceduresfor employees accepting inappropriate payments and gifts.

Treatment andResponses

049

Responsibility Management

In response to the above findings, besides requesting the suppliers to
respond with improvement measures, HTC also provided management
system and implementation experience to suppliers for reference and put
them in the priority list for on-site audit in 2019 in order to prevent similar
incidents from happening.

HTC 2018 CSR Report 050

Audit Result of 2018

Freedom of Association
Non-discrimination

5%

Humane Treatment

8%
Working Hours

Freely chosen Employment

13%

2%

Product Content Restrictions

5%

Wastewater adn Solid Waste

6%

Air Emissions

7%

34%
Storm Water Management

Labor Rights

Environmental permits and Reporting

7%

Environment

Hazardous

EthicsNo Improper

Substances

1%

47%

Energy Consumption andGreenhouse Gas Emission
Child Labor Avoidance

10%

15%

Wages and Benefits

2%
Occupational Injury and Illness 2%
Physically Demanding Work

Machine Safeguarding

Industrial Hygiene

23%

2%

9%

Pollution Prevention
and Resource

17%

Responsible Sourcing of Minerals

6%

Protection of Identity

6%

Fair Business,
Advertising and Competition

Food, Sanitationand Housing

14%

Emergency Preparedness051

Occupational Safety

Responsibility Management

Health and Safety

22%

49%

6%

Disclosure of Information

6%

Business Integrity

6%

Advantage

56%

Protectionof Intellectual Property

13%

HTC 2018 CSR Report 052

No conflictminerals productused at HTC in

2018

Result as follows:

Responsible Procurement of Minerals
HTC has responded to the global boycott of conflict minerals, supports the Conflict-Free Smelter Program ,has promised not to use conflict minerals, and refuses to accept primary ore material from the Congo and theneighboring Central African countries in conflict.
In addition, through a responsible procurement practice, our suppliers and we shall comply with the “HTC
Conflict Minerals Procurement Policy” and reply the “CMRT” and “Conflict Free Minerals Statement” in aconcerted effort to avoid all use of conflict minerals. HTC has not only monitored and managed its supply
chain and prohibited the use of electronic parts produced with the minerals but also supports the audit andcertification process of the minerals to ensure all the minerals HTC uses are conflict-free.
Based on Conflict Minerals Reporting Template, HTC set up KPI, tracking the progress of sign-back, in order
to effectively manage the supply chain and reduce the risk of breaching the contract. We have completed thedevelopment of products using conflict-free minerals in 2016. All minerals used in HTC products from the endof 2017 are CFSI qualified smelters. At the end of 2018, all suppliers also signed an agreement to ban the use of
conflict minerals, which will be updated annually.

1.3%
1.3%
TURKEY 1.7%
SOUTH AFRICA 1.7%
AUSTRALIA 1.7%
BRAZIL 2.1%
TAIWAN 2.1%

UNITED ARAB EMIRATESSINGAPORE

3.0%
CANADA 3.0%
ITALY

RUSSIAN FEDERATION

The intended use of conflict minerals

KOREA, REPUBLIC OF

Summary

Au

Sn

W

Ta

Point of Use

Contact in thecircuit boards

Soldering in thecircuit boards

Tungsten Alloy
used in Vibrator

TantalumCapacitor

Intended Use

As circuit board
contacts to ensure
proper connection.

Solder to mountcircuit board
electronic
components.

Tungsten alloy
used in the phone
vibration motor.

An element
used in tantalum
capacitors.

OTHERS

11.9%

JAPAN

Gold
CHINA

5.1%

12.7%

5.7%

UNITED STATESOF AMERICA

6.4%
GERMANY 7%

SWITZERLAND

7.5%

1.1%
OTHERS 1.4%

1.5%
1.5%
2.3%
PERU 2.5%
UNITED STATES OF AMERICA 2.6%
JAPAN 3.2%

PHILIPPINESPOLAND
TAIWANBELGIUM

3.3%
THAILAND 3.7%
BOLIVIA 3.7%

25.9%

MALAYSIABRAZILCHINA

INDONESIA

49.2%

Tin

7.8%

16.2%

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

053

Responsibility Management

HTC 2018 CSR Report 054

Customer Relations
1.5%
AUSTRIA 2.4%
BRAZILRUSSIAN FEDERATION

4.0%

GERMANY

5.8%

JAPAN

5.9%

8.6%

VIETNAMPHILIPPINES

1.2%

KOREA, REPUBLIC OF

1.0%

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

Protection of Customer Confidentiality

CHINA

Tungsten

59.1%

HTC makes a promise of “Strict observation of contractual obligations and confidentiality commitment” toall customers. All information we provide to our customers is subject to clear policies and a system of strict
internal control. In addition to technical data and hardware and software, information related to patents andother intellectual property rights of customers may be incorporated into our controlling system. We complete
confidentiality agreements with all customers and suppliers in advance to maintain the absolute security of all
the confidential information belonging to our corporate customers.
The HTC privacy policy is also incorporated in the orientation training of new employees. Every employee istrained in all aspects of maintaining confidentiality when working with customers. Under our solid control
mechanism, there was no damage to the rights or interests of any customer caused by a breach of privacy orfrom lost data in 2018.

UNITED STATESOF AMERICA

In response to the EU General Data Protection Regulations (GDPR) requirements that came into effect in May
2018, HTC promoted the Personal Information Management System within the organization to achieve goal ofprotecting personal information set for products and internal management processes.

10.5%

Corporate Customer Satisfaction Management

2.0%
ESTONIA 2.2%
RUSSIAN FEDERATION 2.4%
THAILAND 3.5%
KAZAKHSTAN 3.5%
MEXICOBRAZILGERMANY

JAPAN

INDIA

1.9%

MACEDONIA,THE FORMER YUGOSLAVREPUBLIC OF

1.1%

13.1%

Tantalum

CHINA

35.4%

UNITED STATESOF AMERICA

18.7%

055

Responsibility Management

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

Participation in CSR Program Offered by the Client

5.6%

10.6%

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

In 2015 to 2018, we took part in the CSR program that Deutschen Telekom AG provided to suppliers. The
program, aimed at enhancing supplier social responsibility, includes 10 principles: corporate governance, anticorruption, supply chain management, environmental protection, production operation, safety and sanitation,
salary and benefits, employee satisfaction and turnover rate, improvement of the working environment,
and employee relations. After persistent effort over the past year, HTC won the Gold Award of the Deutsche
Telekom Supplier Development Program for two consecutive years in 2016-2017.
In September 2018, HTC participated in the Joint Audit Cooperation (JAC) Supplier CSR Best Practices
Award, which identifies best practices and leadership in the health, safety and welfare of the supply chain. The
actions we have taken and the results we have achieved are highly recognized by the reviewers.

HTC 2018 CSR Report 056

Sustainable
Agenda ___HTC
Sustainable
AgendaSustainable
Environment

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

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

Eco-design
Eliminating the use ofhazardous substances

Sustainable
Processes

Sustainable
Packaging

Sustainable
Product

Environment safety and healthManagement of hazardous
substances
Management of waste andchemicals

Green packaging material

Product Carbon
Footprint

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

HTC ESH Policy

HTC smart mobile devices help reduce the transportation and travel previously needed forcommunication, and consequently the carbon footprint of the user as well. New combinations and new
patterns of operation, livelihood, work, study, and travel involving smart mobile devices help users saveenergy and reduce carbon emission.
To this end, we have devised a dual-aspect strategy composed of “adopting an energy management system” and“performing energy-saving practice.” On one hand, we strive for optimizing our management system to reduceenergy consumption, and on the other, we use energy-saving technology to improve the energy efficiency ofour products.

A quick look at HTC management of energy and climate change

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 toachieve sustainable development and to ensure a better quality working environment for our employees,
customers, suppliers, and contractors.

As a response to the issue of greenhouse gases and global warming, HTC implemented the ISO
14064-1 Greenhouse Gases Emissions Inventory Program and has an ISO 14064-1 Greenhouse Gases
Emissions Verification Opinion Statement for the planning of energy strategy and action.

1. We regard environment, safety, health, productivity, quality, and effective energy management withequal importance.

All the HTC plants have been included in the Taiwan organizational boundary area and have been
subject to inspection since 2009.

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.
4. We are committed to preventing foreseeable dangers and loss control.
5. We follow required laws and regulations.
6. We are committed to give priority to the purchase of green products.
7. We will continue to practice and improve on our environment, safety, health and energy management
systems.

059

Sustainable Agenda

Between 2010 and 2015, the HTC plants in China were also included in the scope of inspection anddisclosure and external verification was launched. Electric power was found to be the main sourceof emission.
The ISO 50001 Energy Management System, based on ISO 14064-1 standards, is used to check thegreenhouse gas emissions and emissions source of a company. With the help of energy management
systems, the ISO 50001 can achieve energy management according to plan. HTC has implemented
the system since 2011 in an effort to reach the goal of sustainable management.
After joining the Carbon Disclosure Project (CDP), HTC is obliged to regularly report its plans,
systems, and achievements regarding carbon risk and carbon management. Participate in CDP
Supply Chain program members and invite suppliers to participate in the carbon disclosure.

HTC 2018 CSR Report 060

Sustainability Management Vision

GHG Emission and Reduction

HTC will reach their short-, medium-, and long-term goals of sustainable development by the performance,
management mechanism promotion and system establishment, as well as by cooperation with society andother enterprises in environmental protection.
Green Management Vision and Mid-term and Long-term Planning2012-20152016-20202014 Taoyuan TY5 LEEDAwards—Gold Award
2014 Enterprise
Environmental Protection
Awards—Silver Award
2014 Taoyuan Energy
Conservation and Carbon
Reduction Action Label2015 Taiwan Corporate
Sustainability Awards
2015 UL Environment
Certificate—Platinum Award
2015 Helped safety andhealth program members
pass ISO 14001-related
verification

2016 Applied for clean production2021-2025

2016 Cooperated withgovernment agencies or schools
to promote environmental
protection

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

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

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

Total greenhouse gas emission by HTC was 24,438.5009 t-CO2e in 2018. 2013 continues to be the base year,
and the greenhouse gases inventory in 2018 didn’t exceed over 3% of significance threshold. The majorityof emitted gas was CO2. It is notable that HTC’s GHG emissions contained little percentage of CH4, N2O and
HFCs. 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 the overall 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 cooling and air-conditioning systems in HTC’s buildings all use environmentfriendly coolant R-134a to further preserve the ozonosphere.

HTC GHG Emissions
Total Emission

Unit

2016

2017

2018

Total Emission Scope 1

t-CO2e2,140.0604

3,409.3880

2,711.7527

Total Emission Scope 2

t-CO2e33,298.3098

29,972.2841

21,027.7191

Eco-Efficiency Value

NT$

2.21

1.78

1.00

Total Emission Scope 3

t-CO2e297.1666

1,425.3491

699.0291

2017 To apply for Energy
Conservation and Carbon
Reduction Action Label

Emission:CO2

t-CO2e33,995.2462

30,636.6878

21,421.7374

Emission:CH4

t-CO2e1,012.3600

882.4375

494.82502018 To receive Water Footprint
Third-Party Verification

Emission:N20

t-CO2e1.19201.25160.6854Emission:HFCs

t-CO2e429.5720

1,861.2952

1,822.2240

2021
l
2025

Reduce power consumption (carbon emissions) by 1%.

Emission coefficients

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

Global Warming
Potential (GWP value)

2016-2018 based on IPCC 2007 4th Assessment Report.

Water recycling rate reaches 75%.
Waste recycling rate reaches 80%.

2016
l
2020
2012
l
2015

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

Note : 1. Eco-efficiency value (revenue generated from each unit of greenhouse gas emission) = Operating revenue (in millions) / greenhouse gas emission (Scope 1+Scope 2).
2. Scope 3 includes transportation vehicles, global business travel and waste disposal. In 2018, due to the reduction in company’s global business travel, emissions were reduced.

Waste recycling rate reaches 72%.

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

061

Sustainable Agenda

HTC 2018 CSR Report 062

TargetEnergy-Saving
reducedcarbon emissions

Energy Saving and Carbon Reduction Results in 2018
TaoyuanProgram

Energy Consumption Analysis
The power used by HTC is mainly electricity. To decrease the use of electricity, we persistently promotevarious kinds of energy efficiency management. We achieve energy savings through the improvement of thelighting and air conditioning systems, and the installation of renewable energy equipment.
The design on energy efficiency contributed to 680,929.64 kWh (2,451.35 GJ) of reduction, and the total
amount of reduction in carbon emission was 360,737.36 kg of CO2e which translates into a saving of
NT$2,001,531.92. The electric power factor of the HTC buildings was 98.03% on average. Taipei headquarters
outperformed the others by means of power factor adjustment, refrigeration and air-conditioning cost saving,
and reached a final electric power factor of 100%.
Energy Saving and Carbon Reduction Results of Office buildings and Factories

Projected
EnergySavings
in kWhProjected
Actual Carbon
Actual Amount
CarbonEmission
Energy of Money
Emission
Reduction
Savings
Saved
Reduction inin CO2e/kwh
in kWhin NT$
CO2e/kwh

SavingRate

The C/T motor fan energy saving solution
in TY3 building

25,18026,85580,565

13,32014,201106.65

Exhaust System update in H building

7,362

10,02130,063

3,895

5,301

136.12Entering water temperature control incondenser

18,234

34,633103,899

9,646

18,321

189.94The exterior wall mercury street lamps
replaced by LED lights in TY3 building

11,664

11,66434,992

6,170

6,170

100

Ladder A top floor mercury lamps
replaced by LED lights in H Building

11,016

11,01633,048

5,827

5,827

100

The exterior wall lamps replaced by LED
lights in H Building

7,500

7,500

22,500

3,968

3,968

100

Lighting change from T8 to LED in H- 5F
Building

84,74484,744

254,232

44,83044,830100

Lighting change from T8 to LED in H- 4F& 5F CDIT Building and other warehouses

26,92826,92880,784

14,245

14,245100

Total Use of Electricity(GJ)

Total Amount of Electricity Bill(NT$)

Average Electric Power Factor(%)

TY3 Building

25,106.40

20,342,955

98.92

The conveyor lighting change from T8 to
LED in H- 2F Building (Stocked LED lights)

10,36810,36831,104

5,485

5,485

100

H+P Building

62,456.18

43,678,231

99.00

Xinghua 18

8,410.68

6,373,034

94.42

Lighting change from T8 to LED in
H- 2F&7F Building(increasing budget
quarterly for implementation)

72,706

72,706

218,117

38,461

38,461100

DaZhi Plant

10,264.32

8,103,111

96.83

TPE1

23,975.80

15,115,565

100.00Lighting change from T8 to LED in H2F&4F&5F Building (increasing budget
quarterly for implementation)

126,403

126,403379,210

66,867

66,867100

TPE25,747.39

4,527,037

100.0077,45877,458232,373

40,97540,975100

Others

681.45

776,700

93.05

Lighting change from T8 to LED in H- 2F
Building (increasing budget quarterly for
implementation)

136,642.22

98,916.633

98.03

Setting the inverter in the air handing unit
on TY3- 2F building

40,69437,303111,910

21,527

19,73091.67

Lighting change from T8 to LED in TY32F & 3F & 4F Back Building

57,02457,024

171,072

30,16630,166100

IT computer facility air conditioning
energy saving in H- 6F Building

12,888

8,592

25,776

6,818

4,545

66.67

Exhaust System update of toilet in H- B2F
Building

1,584

1,056

3,168

838

559

66.67

Exhaust System update of male toilet in
TY3- 1F Building

129

129

386

68

68

100

Exhaust System update of female toilet in
TY3- 1F Building

129

129

386

68

68

100

40,951

100

2018

Total

The Eco-efficiency Value of HTC
Environmental Indicator

Unit

2016

2017

2018

Electricity

1,000 kWh/Year

62,48256,65837,956

Operating revenue

Million(NT$)

78,161

62,12023,741

Eco-efficiency value

NT$

1.25

1.11

0.63

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

Taipei
CO2 concentration setting increased from800ppm to 1,000 ppm in TPE1

76,402

76,402

187,949

40,951

Total

668,413680,931 2,001,533

354,124

360,738 101.87%

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 2018: NT$3/kWh.
2. The CO2 carbon emission coefficient is calculated on a basis of the 0.529 kg/kWh standard announced by the Bureau of Energy.
3. The effects achieved through the replacement or removal of lamps are figured out through power conversion.
4. The effects achieved by switching off lights at night and in the holidays is calculated through power conversion.
5. The effects achieved by reducing power consumed by water fountains are calculated through time control and power conversion.
6. The effects achieved through controlling air conditioning system temperature is calculated on the basis of saving ration and power conversion standard announced by the
Bureau of Energy.
7. The effects achieved through process optimization and two plants merged is calculated on a base of the actual used amount in the same period of 2013.

063

Sustainable Agenda

HTC 2018 CSR Report 064

The Use of Green Energy

Since large manufacturing centers are where the employees and the equipment consume energy most, we focus
our energy-saving efforts on the energy management of the large manufacturing centers, and carry out different
energy-saving strategies and measures according to the individual states of our respective facilities.
Targeting the Taoyuan plant area, HTC plans to build a new energy management system. Through the additional
monitoring system, the energy-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 theequipment deployment and operation time during factory working hours and off-work hours, the equipment isturned on and off according to the automatic scheduling. This project is expected to be completed in the third
quarter of 2019.

Real-time information
monitoring system

ACsystemAir supply
andexhaustSingle line
diagramPower
resources
Ice water
systemMeter
overview

Cooling
water system

Details

Small fans

UPS

Air conditioning
boxes

Electricity
reportLighting
systemTwo-wire
control

Water
resources

Sustainable Agenda

1. Taipei headquarters has solar panels that generate electricity used for lighting thestaircases and basement in 2012. The cumulative total number of solar panels since
it was built has reached 90,896 kWh.

Solar panels

2. HTC has installed solar panels on the rooftop of Hsinhua Dormitory for the water
heating system. Heat generated in this way can be stored in tanks to provide
hot water for washing facilities, which reduces the use of natural gas and carbon
emission. The solar-powered equipment that HTC uses saved 96,271.4 cubic metersof natural gas in 2018, this translates into an equivalent of NT$1,252,828.21 costsaving and a reduction of 182 metric tons of CO2e.
Note: 1. One cubic meter of natural gas costs NT$13.
2. The carbon emission coefficients of natural gas is calculated in accordance with Version 6.0.3 of the Greenhouse Gases Emissions
Management Chart (1.888 kgCO2e/m3).

Heat pumps
for air conditioning

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

Electric vehicles
and bicycles

Taipei headquarters has installed an ample number of power-charging sockets forelectric vehicles and bicycles to encourage employees to use low pollution and highenergy efficient means of transport. In 2018, additional four parking spaces withpower charging stations for electric vehicles have been installed.

Air pressure
systemNetworksystemGenerator
Parameter
setting

SewageHot spot
analysis

AlarmsystemReal-time
alert
Alarm record

Boiling watercollecting

065

Descriptions

Energyanalysis

Tap water

Building
H

Energy-Saving Program

Exhaust gas

Gas system

PublicsystemTo 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.

Power charging sockets for electric vehicles

Building
P

Solar panels at Taipei headquarters

Free bicycles for rides

Building
TY3

HTC 2018 CSR Report 066

Setup of Renewable Energy Devices
Targeting the construction of a new parking shed in the Taoyuan plant area, HTC planned to use its roof
to build a solar power generation system, replacing the metal roof of the parking shed with solar panels, a
total generating capacity of 180KW. By means of internal line parallel series, the power was sold in bulk andincluded in Taiwan Power Company’s power supply system, thereby relieving Taiwan’s power load and supply
constraints and reducing carbon dioxide emissions. The devices was completed in September 2018 and put
into trial operation. The application for administration process and the selling of electricity was sent to Taiwan
Power Company. It is expected that the application will be approved by Taiwan Power Company in 2019. The
total power generated during the trial operation has reached 46,840 kWh.
180kW Solar Power Generation System

Parking
shed 130kW

solar power
array

Inverter1

Sunlight / thermometer

R5485

Parking
shed 230kW

solar power
array

Inverter2

Resource Consumption Statistics in 2018

R5485

Parking
shed 330kW

solar power
array

Inverter3
R5485

Parking
shed 430kW

solar power
array

30kW

solar power
array

30kW

solar power
array

R5485

PM5350multimeter

Inverter5
R5485

Parking
shed 6

AC boxInverter4
R5485

Parking
shed 5

Taipower system

R5485

Inverter6

R5485
Real-time solar information
monitoring system

Wholesale
electric
meter

2018

Green Plant

Unit

City water consumption

degree/year

WastewaterRiver

Total city water discharge

Metric Tons

The amount of rainwater recycled

Metric Tons/year

1,501

Total amount of water recycled/reused

1,000 liter /year

55,094

The ratio of water recycled/reused tototal amount of water consumed%/year

16.32

Total amount of waste recycled

Kg/year1,771,480.5

Total amount of waste reused

Kg/year0

Total amount of waste incinerated

Kg/year415,510

Waste disposal expense

NT$ thousand /year

2,353,257

Environmental management and recycling amount

NT$ thousand /year

3,891,147

345,188
Dongmen Creek +New Taipei City dedicated sewer
153,729

Note : 1. Because Hsinchu and Tainan Software R&D Centers are offices, the consumption of those two is not significant. In this regard, the consumption of those isn’t included in theabove.
2. In 2018, since the P Building in Taoyuan was rented, the amount of rainwater recovered was zero. Therefore, the overall amount of rainwater recovery was reduced.
3. Domestic garbage at Taipei’s headquarters building consists partly of recycled cartons that are unquantifiable. A recycling company has been commissioned for handling.
4. Waste materials, as put into statistical data, are divided into categories ranging from plastic, paper, scrap iron, scrap aluminum, scrap galvanized iron, waste edge board, scrap
computer products, waste wood (pallets), miscellaneous types of plastic, scrap parts, kitchen refuse, recycled domestic material and general rubbish.

067

Sustainable Agenda

HTC 2018 CSR Report 068

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

An Office Environment with Plants and Green Landscaping
We uphold the concept of environmental sustainability and we regularly increase our green space in Taipei
headquarters and Taoyuan. The HTC outdoors green area now totals 30,700 m2 and the TPE1 building
horticulture planning adhered to the concept of environmental protection and open parks. The planting areaon 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 Taoyuan area, there are around 113 tree species native to Taiwan on the grounds, such as Camphor andthe Taiwan Golden-rain Tree. Our employees can enjoy the lush green surroundings of their work environment.
Taipei’s headquarters building planning covers B1 to 17F. In every floor, the indoor foliage was widely planted,
totaling 450 pots. Different plants 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-tailorchid, the lime pothos, the philodendron, etc., in the lobby of H Building and TY3 Building in Taoyuan.
In the office areas, we set the potted plants every 20 to 50 meters and replace them regularly. The annual
management fees for our green environment maintenance amounts to NT$ 1.461 million which is used toprovide a fresh and green office environment for HTC employees.

HTC’s Taipei Headquarters, The Golden LEED Certified Green Building
In 2013, HTC’s Taipei headquarters office received the green building markfrom Ministry of the Interior and the golden LEED (Leadership in Energy& Environmental Design) certification from the U.S. Green Building
Council (USGBC), offering its employees an excellent and comfortablelow-carbon and take the responsibility of environmental sustainability.
The fully-integrated energy management system was utilized to attain afull real-time management and enhance the efficiency of energy use. The
total amount cumulated for the reduction in carbon emission since theinauguration of the building has reached 12,660 metric tons of CO2e.
The fully-integrated energy management system is constructed in the
Taipei headquarter, which covers over 7,000 spots of on-site monitoring,
total monitored spots amounted to 20,000. Under the effective control
and analysis, the EUI (Energy Usage Intensity) of Taipei headquarters
amounted to only 102.91 kWh/m2 annually in 2018, which was quite amarvelous result.

LEED gold certification

Unit: EUI (per year)

Building

2016

2017

2018

TPE1

92.88

93.98

102.91TPE2

263.56223.14170

Taoyuan(P, H, TY3, DaZhi)

302.13262.53187.06

Green Building Label

Green Procurement
Our strategy is to buy environmentally friendly products to substantiate our environmental protection concept of“recyclable, low pollution, and resource-saving”. We express the purchase of environmentally friendly products
as a priority in our procurement specifications to firmly integrate the concept into our daily operations.
In 2018, the amount of green procurement reached NT$ 376,900. From 2012 to 2018, the accumulated
expenditure for products with green-product stamp was about NT$27.09 million.

069

Sustainable Agenda

HTC 2018 CSR Report 070

Water Resource Management

Sewage Treatment

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

Usage in 2018(Metric Tons)

TaoyuanTaipei
Headquarters

280,409

64,779The wastewater generated by our facilities is mainly domestic sewage from the washroom and for other cleaninguses and restaurant wastewater that contains no process wastewater. We invested NT$ 27,760,000 in building
sewage treatment equipment in 2010 and spent NT$ 1,586,226 on operation and maintenance in 2018.
Description of Sewage Treatment Unit Facilities
Domestic
SewageFine sieve pumpUnit: ton

Water Saving Measures

Fine sievemachineSaved 1% on tap water usage
The Taipei headquarters building selected water-saving waterequipment, using air conditioning condensate and recovered
rainwater. The overall daily water-saving rate was 66% (including
toilets, urinals, faucets and showerheads).

Sewageadjustment tank

Fine sieve after
degreasing

Upper liquid
refluxOil slicktreatment slot

Surfacedegreaser

Aeration tank
Scum
Greaseintercepting tank

Quick mixing
tank
Slow mixing
tank
Sedimentation
tank
Recyclestorage slot

Activatedcarbon filter

SludgePump

Sludgestorage tank

EntrustedcleanupMid slot

Discharge slot

Watering
Discharge

SludgeSludge belt
filterSludgeEntrustedcleanup071

Sustainable Agenda

HTC 2018 CSR Report 072

To substantiate sewage control, we have implemented daily maintenance and inspection in accordancewith the “Procedures for Sewage System Operation, Repair, and Maintenance.” We abide by all the laws andregulations and the sewage is tested every six months by an institution authorized by the Environmental
Protection Administration. The final test results are published on the Internet and show that the effluent andrecycled water are in full compliance with all the standards.

Sewage Recycling
The domestic wastewater is discharged into the sewer system and delivered to the wastewater treatment plant.
The treated wastewater is discharged into the Dongmen River, which eventually flows into the Nankan River.
In 2018, the total domestic wastewater treatment volume was 162,052 metric tons, and the recovered volume
from the treatment of domestic wastewater was 53,593 metric tons.

Domestic sewage is discharged into the sewage sewer. Based on the average concentration of effluent BOD and
COD from 2016 to 2018, there will be no adverse effects on the nearby water bodies. Since 2017, a self-initiatedtest of effluent heavy metals has shown ND or lower than the test value. Starting January 2013, the average
daily treatment capacity of the sewage treatment plant reached 600 metric tons, sufficient to replace the use of
tap water for park landscape irrigation and for toilet water use.
The Amount of Water Discharge and Recycled Water, and the Average Concentration of BOD
Amount of
Water Discharge(Metric Tons)

Amount of
Recycled Water(Metric Tons)

Average
Concentrationof BOD(mg/l)

Average
Concentrationof COD(mg/l)

The
Suspended
Solids(mg/l)

Test ofEffluent
Heavy Metals

2016

73,750

194,868

14.95

42.95

10.05

-

2017

63,988

182,002

16.6

50.85

22.35

-

2018

108,459

53,593

7.15

32.2

12.7

None

The green fields and planted areas inside
the factories are irrigated with recycled
sewage water without increasing the total
amount of water consumed. Starting from2012, HTC drafted and implemented
water conservation plans. We examine
results each year to examine whether or
not to adjust the goals. From 2014 to 2018,the amount of recycled water used for
irrigation was 911,976 metric tons.

Sewage Recycling Strategy and Effectiveness in 2018
Strategy and EffectivenessSewage Recycling

Recycled water for irrigation (Metric Tons)

162,052

Sewage water output (Metric Tons)

53,953

Amount saved (NT$)

696,709

Actual wastewater recycling rate

33.07%

Rainwater Storage and Recycling System
HTC has established a rainwater storage and recycling system to collect rainwater for flushing toilets andwatering plants. A total of 1,389 metric tons of rainwater was recycled from the Taipei Headquarter Building,effectively saving water resources.

Note : 1. Tested items of heavy metals: Cd. Cr. Cr+6. Cu. Zn. Ni.
2. In 2018, due to the large reduction in the area of vegetation that needs to be watered, the amount of recovered water decreased and the amount of discharged water increased.

Rainwater monitoring system

073

Sustainable Agenda

HTC 2018 CSR Report 074

Environmental Protection Education and Promotion

Water-saving Sanitation Equipment
HTC gives top priority to the use of sanitary equipment with a water-saving label.
The faucet device installed with water-saving spiral allows the faucet to reduce theamount of water outflow and each faucet can save 77 liters of water a day. More than
8,625,500 liters of water have been saved since installation in October 2012. All the
toilets and urinals in the bathrooms should be energy efficient and have the Water
Sense Label of the United States Environmental Protection Agency and Water Labelof water resource agency, MOEA.

HTC continues to promote and enhance environmental protection
consciousness and awareness in employees using a diversified interface.
Through the new employee educational training and the provided training
materials, the idea of environmental 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 inenvironmental protection and give their full support through actions aswell as everyday life habits.

Note: For a total of 500 faucets have been installed and each faucet can save 231 liters of water per month. Since the installation, it has been
75 months up to the end of 2018. Therefore, it is calculated as: 75 months * 231 liters * 500 = 8,625,500 liters.

Garbage classification promotion

Photocopying Paper Management
HTC aims to reduce photocopying paper consumption by 1% per year and bring theuse of paper down to an absolute minimum.
By the end of 2018, the total number of paper saved was 3,017,500 sheets, achieving the best paper saving
management. Compared with 2017, NT$ 340,460 was saved, which is equivalent to a saving rate of 60%.

Print

Use photocopying papers with carbon footprint labels to support green, low-carbon products
Link the computer with the employee number, the employee card must be sensed in front of thebusiness machine before printing, effectively reduces the unclaimed printed documents

Fax

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

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

HTC Paper-Saving Performance
Year

2016

2017

2018

Paper Use (Piece)

5,102,500

5,027,500

2,010,000

Paper saving (Piece)

4,010,000

75,0003,017,500

Paper saving target

1%

1%

1%

Achievement rate

44%

1%

60%

533,435

12,125

340,460

Amount saved (NT$)

Note: In response to the company's boundary merging and department downsizing, the paper-saving rate in 2018 has increased significantly.

075

Sustainable Agenda

Environmental Policy Poster

HTC 2018 CSR Report 076

Environmental Protection and Safety and Health Education
New employees and contractor education trainees in 2018
Training Hour(hr)

CourseTraining Time/Frequency

Responsible Unit

Environmental protection and safety andhealth education training

3

New employees whenreporting to work

OSH Dept.

Hazardous substance use

3

New employees whenreporting to work

OSH Dept.

Operational equipment hazard notifications

3

After arriving at the
department of work

Equipment Dept.

General labor safety and health in-service
education training

1

Every year/ On-job employees

On-SiteHazardous chemical use notice1

Every year/ On-job employees

On-Site

2017

2018

Shuttle bus total
driving distance

332,002 km

308,525 km

Shuttle bus
total gas
consumption

55,338 liters

51,421 liters

Total carbon
emissionvolume190,916.1 KgCO2e

177,402.45 KgCO2e

Encourage Employees to Carpool
HTC runs a shuttle bus service on many commuting
routes with a daily capacity of 325 passengers. Thistransportation arrangement together with carpooling makes it easy for employees to move toand from work. By cutting down on the number ofvehicles travelling to and from the plant the amountof greenhouse gas emitted, in the form of vehicle
exhaust, can be significantly reduced.

In 2018, the overall carbon emission was reduced by approximately 13,513.65 KgCO2e (7.08%) comparedwith 2017.
Annual gasoline consumption and carbon emissions of shuttle buses in 2018
Bus
Wenn-chin
Miles (km)Taoyuan Bus
total

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

28,105 14,788 28,10522,400 28,105 25,480 28,435 29,570 22,790 26,510 26,510 22,848
440

260

440

360

440

400

440

460

380

440

440

380

28,545 15,048 28,545 22,760 28,545 25,880 28,875 30,030 23,170 26,950 26,950 23,228

Wenn-chin 4,684 2,465 4,684 3,733 4,684 4,247 4,739 4,928 3,798 4,418 4,418 3,808
Oilconsumption Taoyuan Bus
73
43
73
60
73
67
73
77
63
73
73
63
(liters)
total
4,758 2,508 4,758 3,793 4,758 4,313 4,813 5,005 3,862 4,492 4,492 3,871
Carbonemissions(KgCO2e)Wenn-chin
Taoyuan Bus
total

16,160 8,503 16,160 12,880 16,160 14,651 16,350 17,003 13,104 15,243 15,243 13,137
253

150

253

207

253

230

253

265

219

253

253

219

16,413 8,652 16,413 13,087 16,413 14,881 16,603 17,267 13,323 15,496 15,496 13,356

Note : 1. Kilometers per month=kilometers per ride* total rides per month.
2. Fuel consumption calculated as 6km per liter (km per month/6km).
3. Carbon emissions per km calculated using the coefficient of diesel fuel of 3.45 L/Kg CO2e (mobile source) according to “information disclosure on the carbon footprint
calculation service platform”.
4. Round-trip distance from Xindian to Taoyuan is 35km/trip and the round-trip distance from Taoyuan to Taoyuan Train Station is 2.5km/trip.

077

Sustainable Agenda

Sustainable Design
Enhancement of Energy Efficiency
An analysis of energy efficiency starts with the raw material used to produce the electronic telecommunications
product, its manufacture, life cycle and disposal. The mobile phones raw material carbon footprint is low, as isthat of the manufacturing process as well as usage, when most of the greenhouse gas is emitted. We concentrateon energy saving from the early design and research and development phase. All power supply devices used for
HTC products must comply with the relevant international energy consumption specifications: US Energy Star,
California Energy Commission, the EU Code of Conduct, the EuP, and Energy Efficiency Certification (EEC)
with third-party verification. The power supply devices used for all specific models meet the 0.03W standby
power minimum energy consumption standard. Taking HTC U12+ as an example, according to the simulation
calculation, the annual power consumption is about 7.84 kWh. The improvement includes using charger
with standby power of less than 0.03 W, which reduces the energy consumption by about 4.1% compared tocharger with standby power of 0.15 W. As for the energy consumption during battery charging process, we took
the regulations of the US Department of Energy (DOE) and the California Energy Commission (CEC) as thestandards to improve the efficiency of charging and reduce the loss of energy after the battery is fully charged asmuch as possible, allowing the overall energy consumption to reach minimum.

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

Description

Applicable Area

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

Power supply units

Verified by a third-party verification company(UL/TUV/ITS) as complying with California
appliance efficiency regulation.
Working with Call2Recyle(RBRC) to properly
recycle used batteries in North America.

Mobile phones, virtual reality(VR)device, including Accessories withrechargeable batteries, etc.

Batteries

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

079

Sustainable Agenda

The HTC R&D team has developed excellent power management modes that allow the phone (depending onuser habit) to automatically enter Standby mode to extend battery life. Some of our phones have an ambient
light sensing function that controls the LCD backlight according to the ambient light level in order to provide a
comfortable reading environment and also to save power.
For issues related to charging the cell phone, we have launched HTC Rapid Charger 3.0, a rapid-charging
device with high energy-efficiency. Its energy-efficiency has also reached the highest standard currently set
internationally, including Energy Efficiency Level VI and EU CoC Tier 2, whose energy consumption during
no-load standby is lower than 0.03W and has reached the highest 5-star level. In terms of design, its volume has
also seen 25% of reduction compared to its predecessors. In addition to reducing the use of resources, built-in
over current, overheating and short circuit protection, so that the use of security is guaranteed.

Energy Efficiency Regulations of the US Department of Energy and theCalifornia Energy Commission for Battery Charging Products
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 mustcomply with the DOE regulations and be registered. Prior to this, the California Energy Commission (CEC)
began implementing energy efficiency regulations for battery charging systems in February 2013. These
requirements cover almost all electronic products that use rechargeable batteries, including mobile phones
and notebook computers.
These two regulations have different criteria for the test results. Nevertheless, they use the same test
method and the same test data. The DOE regulation focuses on the unit energy consumption (UEC), thatis, the amount of electricity consumed during the charging process must not exceed the limit. On the other
hand, the CEC regulation directly regulates the total power consumption within a certain period of time
during the charging process which cannot exceed the limit. The limits in both regulations are related tothe battery capacity; therefore must be calculated after testing the battery capacity. For products that havebeen certified in 2018, their energy consumptions are at least 10% below the regulatory limits.

HTC 2018 CSR Report 080

Recyclability
We start a full evaluation of a product for recyclability at an early stage of the R&D process. To dothis we conduct a simulation of disassembly and analyze the material composition of the productand relative recycling rate. In addition, we carry out a series of strategies such as material marking(as per the standards of ISO 11469 and ISO 1043) and component simplification and degree of easeof disassembly. Then feedback is given to the R&D team about any useful and valuable strategies.
Currently, HTC product could meet the present and future requirements for recycling.
We consider material recyclability in the selection of all materials and product disassembly andanalysis is carried out by an impartial third-party. All current products such as the HTC U12+and VIVE Pro. This significantly exceeds the EU WEEE Directive on the mobile phone material
recovery standard which is 55%.

Phone and Battery Recycling>ABS+PC<To properly fulfill their responsibilities as a manufacturer, HTC, which is 100% in line with EU WEEE
requirements, has also promoted the US and Canadian mobile phone recycling program. Old mobile
phones, up to a value of US$499.99, can be traded in to reduce the undue disposal or handling of old mobile
phones and the impact of this upon the environment.
1. HTC promotes cell phone trade-in program (http://www.htctradeup.com/), through online platform toallow the customer to receive the old cell phone recycling offer without limitations in cell phone brand,
and acceptable as long as the old cell phone is still operable. The check will be mailed to the customer
after the new cell phone is purchased and the old cell phone is mailed back. In 2018, the total cumulative
units of devices were 1,689 units with the value of US$25,335.

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 lithium-ion batteries, as well as the recycling of cell phones in Canada. We pay
a fee to Call2Recycle for every mobile sold in the United States and Canada. In 2018, the project
recycled 3.27 million kilograms of batteries and mobile phones in the United States and Canada,
among which more than 42,638 kilograms of disposable batteries were recycled in Vermont in
2018, an increase of 16% compared to 2017. Due to the gradual increase in customer awareness andrecyclability, more than 52.16 million batteries have been collected and recycled in the United Statessince the project was launched in 1994.

081

HTC U 12+VIVE Pro

Material recovery rate:

Material recovery rate:

80.5%

75.2%

Sustainable Agenda

3. HTC takes part in the state-owned e-waste programs of more than 20 states in the US, responsible forrecycling Nexus-9 Tablet PC. Due to different recycle mechanism of life cycle termination determinedby each state, many states establish the weight of the Company’s annual recyclable electronic products
by market share, some states charge the cost to the manufacturer based on the price of unit weightof the recycled products, while the remaining states allow the mail recycle plan, and pay the annual
registration fee, without having to set the recycling target. For example, in Washington State, we pay acertain percentage of expenses according to the market share of the tablet PCs, the local governmentis responsible for the recycling collection operations across the entire state, and the recycle firms
legally registered with the state ecological department recycle the electronic products to ensure thatthe recycling operation is held responsibly and appropriately. From 2009 to 2018, there was a total of
16,737,558 kg of electronic waste recycled in the Washington state area.

HTC 2018 CSR Report 082

Positively Cutting Hazardous Substance
All parts, components, modules, materials, and so on delivered to HTC meet a set of requirements,
which are even stricter. The HTC Substance Control List not only restricts the ten substances controlled
by RoHS(Restriction of Hazardous Substances Directive), but also others restrained by international
environmental regulations and customer requirements, such as polyvinylchloride (PVC), Brominated Flame
Retardant, and Phthalates listed by RoHS 2.0 are prohibited. Moreover, the chemical analysis of new products
carried out by third-party verification institutions began since 2017. Four new Phthalates in RoHS 2.0 were
included for the analysis.
To further extend the control of hazardous substances into the supply chain. We established a platform forunified management of our entire green supply chain to help our R&D engineers select green materials thatmeet international environmental regulations and customer requirements from the HTC product databasein 2006. From September 2018, suppliers are also required to provide the RoHS reports containing the abovementioned test items for the materials supplied. In addition, the Material Inspection Department also begun
to evaluate the purchase of related testing equipment to ensure that all HTC products do not contain any
hazardous substances.
In response to the international greening trend, HTC introduced halogen-free materials in 2009. Afterrequesting suppliers to provide halogen-free reports simultaneously, setting up halogen machines (i.e.,
halogen-free process auxiliary equipment/supplies inventory), and other stages, the “HTC’s new models are all
halogen-free” quality claim was proposed in 2012, with 100% qualified HSF sampling.
In order to continue to work on the non- hazardous substances. Of products, during the selection of materials
in 2015, we replaced the beryllium copper alloy used for contact points in a mobile phone with other safer
materials. Although beryllium copper alloy is safe in itself, it can produce beryllium oxide during the recycling
process that is harmful to human health. We have thus decided not to use the material in any of our products
since 2016.

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

083

Sustainable Agenda

Sustainable Manufacturing Process
Management of Waste and Hazardous Substances

In 2018, HTC’s waste disposal methods consisted of four types:

The major manufacturing operation at HTC is the assembly of Smartphone, so the only waste is gas produced
by welding, without NOx or SOx emission. We handle and dispose of waste according to our self-regulated“Process for Removal and Handling Business Waste” and practice good resources recycling to ensurecleanliness of the working environment and reduce environmental impact.

HTC Waste Statistics

Regarding management measures, besides entrusting legal disposal authorities to properly dispose of the waste
in accordance with the government policy, we also follow disposal trucks to check and confirm their cleaning
status on site from time to time. Regarding plants, we inspect waste storage and temporary storage zones
through inspection checklist regularly, and request corrections for non-compliance within a limited time. We
also establish environmental safety and health self-assessment form and perform audits, to accomplish effective
management and evaluation mechanism. In the event of environmental concerns, HTC can be reached via theinformation on the company’s website to ensure that we respond and handle it promptly.
Measures

Methods

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

Set up recycling bins and encourage and propagandize
staff to sort domestic waste. The employees recycled
1,771,480.5 kg of domestic waste in 2018.

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

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

In the process of mobile phone assembly and manufacturing, HTC inevitably generates general businesswaste and small amounts of harmful business waste. HTC upholds and implements proper disposal of waste,
commissioning legal waste removal and processing companies and choosing the best handling approach based on
the nature of waste.
2016

2017

2018

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

0.07210.07850.7

Weights of each mobile phone recycled (kg/unit)

0.36280.4037

2.81

NOTE: In 2018, large amount of assets were scrapped due to internal organization change or merging. As a result, the average weight of recycled materials for each mobile phone in 2018
has increased significantly compared with that in 2017.

Treatment

Unit: kg

Treatment Capacity
2016

2017

2018

Descriptions
Including Tray plate, foam, miscellaneous
plastic, waste wood pallets

Recovery (General)

3,450,697 2,434,060 1,771,480.5

Incineration (General)

1,143,555

660,540

415,510

Domestic garbage

Burial: Waste bakelite

069,96023,560Waste bakelite had been produced in 2017,none of which was produced from 2016.

Chemical treatment: Harmfulwaste liquid containing
copper

2,860

0

0

Other (Such as livestock
husbandry): kitchen leftover

400,489.1

324,077.5

179,997

The chemical treatment shall be conducted
once every two years for the treatment of thecopper-containing waste liquid according to"Criteria Governing Methods of and Facilities
for Storage, Clearance and Disposal ofIndustrial Wastes". No relevant output in 2018
The amount of leftover is calculated on abarrel of 189 kilograms.

Waste Reduction, Recycling and Reuse
HTC waste reduction strategy involves the reduction of the generation of waste from the source by meansof sorting and advocacy. The reuse of waste is also a priority and is essential for an increase in resource
recycling efficiency.
We have been taking steps to handle the treatment of waste materials according to type. As an example,
we commission contractors to collect and recycle waste trays. In addition, a number of other licensed
contractors are employed to recycle other material and much of the waste is purified and turned into
industrial raw material. Other waste goes through physical classification which increases reusability. For
example, the source control strategy is adopted when the recyclable plates and sponges can be recycled
to the production line for reuse. The material that is not recyclable goes to a final destination. We also
publish the condition of temporarily stored waste material on the Internet. Our recycled resources reached1,771,480.5 kg in 2018.
Between 2011 and 2018, the money earned or saved by recycling waste rose year by year to reach
NT$3,891,147 by 2018. The waste recycling rate increased from 56.89% in 2011 to 81.02% by 2018 to pass
our long-term goal of 80%. By 2018 the accumulated savings and earnings from the recycling of waste hadreached NT$85,791,178.

085

Sustainable Agenda

HTC 2018 CSR Report 086

Waste Recycling Effect and Rate

Hazardous Substances and Chemical Control
100.00%80,000,000
70,000,000

80.00%

60,000,000

70.00%

50,000,000

60.00%
50.00%

40,000,000

40.00%

30,000,000

30.00%

20,000,000

20.00%

10,000,000

10.00%

0

2011

2012

2013

2014

2015

2016

2017

00.00%

2018

Recycling Rate

56.89%

62.94%

65.82%

65.19%

70.72%

74.43%

78.09%

81.02%

Kg

Kg

4,000,000

20,000,000

3,500,000

18,000,000
16,000,000

3,000,000

14,000,000

2,500,000

12,000,000

2,000,000

10,000,000

1,500,000

8,000,000
6,000,000

1,000,000

4,000,000

500,000

2,000,000

0Total Weight ofWaste Recycling
Cumulative Weightof Waste Recycling

2012

2013

2014

2015

2016

2017

2018

2,605,450

2,785,082

2,723,339

3,037,885

3,450,697

2,434,060

1,771,481

2,605,450

5,390,532

8,113,871

11,151,756

14,602,453

17,036,513 18,807,993.5

Sustainable Agenda

HTC analyzes the international environmental protection regulations and complying with theenvironmental protection requirements of international customers, with reference to the relevantinternational technical standards, and then establishing the IP-00000106-01 Toxic Substance Control
List, and holding suppliers meeting regularly to work with parts suppliers together seeking for the useof 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 the international
environmental protection specifications.
In the aspect of production management, the manufacturing department has also set up the hazardous
substances testing standards to ensure that all products of mass production are non-toxic nonhazardous green products.

Cumulative
Amount of
6,466,984 18,403,308 31,109,190 41,863,673 54,950,036 61,788,676 66,983,184 70,874,331
Recycling in NT$

087

HTC Hazardous Substance Management Policy

90.00%0

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

HTC 2018 CSR Report 088

Sustainable Packaging
HTC mobile phone products are packed using materials that make transportation safe and add aesthetics tothe products upon delivery. We also consider the impact the packaging materials will have on the environment
when they are discarded. The materials we use must be compliable with the regulation, environmentallyfriendly, and sustainable. In packaging design, consideration is given to the following:
1. Reduction of the amount of material used;
2. The use of biodegradable raw material;
3. Printing with environmentally friendly ink (soy ink);
4. The facilitation of shipment;
5. Mark following recycling symbols on the box to show the consumers recycling packaging material.

History of HTC “Sustainable Packaging”

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

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

ResultOne pallet can carry
more packs
and help reduce freight

WeightHas been reduced, helps toreduce CO2 emission resulting
from transportation

Material

Fast growing materials(sugar cane, bamboo)

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

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

Packaging Material
Through continuous efforts, in 2018, HTC’s generation of the carbon footprint from the mobile phone package
during transport decreased by 13.94% compared to 2009.

2009

2013/2014

2015

2016

2017/2018

Hero box

M7 BOX/M8 BOX

M9 BOX

M10 BOX

U11/ U12+ Box

Dimensions

183x89x60mm

160x160x28mm

160x160x28mm

180.5x150.5x33.5mm

202x165.5x34.5mm

Total Weight

170g

95g

95g

111g

149.2gTransportation Carbon
Footprint (kg CO2eq)

1.59

0.89

0.89

1.04

1.4

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

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

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

Packing materials are completelychanged to fast-growing materials to
reduce the use of paper packaging.
Direct stamping on the box top reduces
the printing area and printing color andink use.
Glazedplastic
not used.090
HTC 2018
CSRis Report

ECO Features

089

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

Sustainable Agenda

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

The Material of VR Packaging
Utilize recyclable packaging materials and lightweight design.

Dimensions
Weight

2015

2016

2017

2018

Rigid BOX

Rigid BOX

Pizza Box

Pizza Box

574x420x212mm

415x295x181mm

532x344x185mm

418x338x188mm

3,000g1,800g2,250g1,200g

6pcs

24pcs

20pcs

30pcs

28.14

16.88

21.11

11.26

Printed with twocolors and reducethe ink use.

Volume reduced by
55%.

Reduce printing
with ink.

Reduce printing
with ink.

Weight loss by 40%.

Share packaging
to reduce thegeneration of new
packaging materials.

Extremely simplified
packaging design.

The Number
of Pallets

Transportation
CarbonFootprint(kg CO2eq)

ECO Features

Printed with twocolors and reducethe ink use.

091

Sustainable Agenda

Sustainable Products
In response to the global warming crisis, HTC constantly looks for ways to reduce the impact and influence of
manufacture, production, and consumption by users, on the environment. The concept of life-cycle time (LCT)
is our way of thinking about this and we start with R&D. The R&D engineers are provided with quantified andfully comprehensive green information for the initiation of life-cycle- investigation (LCI) on the supply chain
to establish a database of the key parts and components and their environmental impact.
The HTC product carbon footprint is measured in accordance with ISO 14040 and ISO 14044 standards. It
involves direct data provided by the HTC plants and upstream suppliers. The data are put into internationallyaccepted life cycle assessment software and databases like SimaPro and Ecoinvent, which are also fed withindirect data. The data, after passing third-party verification, is made public as a carbon footprint report or
Eco Declaration that gives transparent environmentally related product information to the relevant clients.
The carbon footprint analysis measures the impact of a product on the global climate from the aspect of its
total life cycle starting from the production of raw material, manufacture of the product, its distribution,delivery to the customer, to its end-of-life disposal. Such analysis finds that the carbon footprint of asmartphone is most obvious during the mining of the raw materials and the consumer use phases. HTC will
spend more effort on reducing carbon emission during these two phases.

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

Carbon Footprint and Lifecycle Assessment Related Planningand Reporting Memorabilia
HTC has been conducting product environmental impact investigation and analysis in accordance withlife 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 theIndustrial Development Bureau MOEA and completed the Environmental Protection Declaration(EPD) with 19 suppliers.
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.
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.
5. In 2015, cooperated with 8 suppliers, fulfilled two products carbon footprint inspection.
6. In 2016, water footprint inspection and third-party verification have been accomplished.
7. Starting from 2016, the supplier GHG autonomous inventory was initiated. Suppliers are required tosubmit GHG inventory data in the first half of each year. The response rate in 2018 reached 100%.
8. In 2018, HTC officially became a CDP supply chain project member. In the first year, major suppliers
were invited to participate in the CDP Carbon Disclosure Questionnaire and the annual response rate
reached 48%.

The ratio of HTC U11 Carbon footprint

67.1%
8.7%

Resource
extraction

093

Sustainable Agenda

Production

Transport

24.1%
0.1%

Usage

End of LifeHTC 2018 CSR Report 094

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

Overview of Human Resource Structure

HTC is an international corporation, and a member of Responsible Business Alliance (to view the RBA’smembership list please visit http://www.responsiblebusiness.org/about/members/), 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 or ethnicity. Or any other form of
discrimination protected by relevant laws.

HTC recruits promising talent from all around the world. At the end of 2018, HTC global employee workforce
totaled 4,810. Of these, 34.02% were foreign supervisors, accounting for the total number of executives
worldwide; foreign supervisors and professionals together accounted for 23.89% of the total number of
executives and professionals worldwide and 24.37% of the supervisors were women.

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

HTC Code of Conduct
We place great importance on employee integrity
and uphold high ethical standards. The company
has established the “HTC Code of Conduct” as theprime 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 Codeis higher than any local regulations unless a provision
is inconsistent with a legal order issued by the local
government.
New employees undergo an orientation training
session on the same day they report for duty. They
learn about the HTC corporate policy, the Code of Conduct for employees, ESH policy and corporate social
responsibility. An e-learning program for new employees is also provided that explains the HTC corporate
principles using exemplary cases. There are physical and online courses for retraining for all employees every
year. In any case of conflict with the laws in force in places where HTC operates, the local HTC HR teamshall 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 to serious disciplinary action, including the termination of
employment.
To ensure that the “HTC Code of Conduct” is fully implemented, we conducted the external third-party
compliance verification 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.

097

Friendly Workplace

HTC’s turnover rate of direct workers in 2018 was 10.23%*, 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 16.55%, with the statistical frontier covering the world.
*Note: To calculate the turnover rate, divide the number of employees leaving the company by the total average number of employees per year. The figure does not include employees
who were involuntary resigned employee

HTC HR Structure Overview
Unit

2016

2017

2018

Global Employee (Male)

Person

5,531

5,151

2,679

Global Employee (Female)

Person

5,398

5,240

2,131

Employees under indefinite contract (Male)

Person

5,509

5,113

2,641

Employees under indefinite contract (Female)

Person

5,369

5,204

2,105

Employees under fixed-term contracts (Male)

Person22

38

38

Employees under fixed-term contracts (Female)

Person29

36

26

Part-time personnel (Male)

Person26

28

35

Part-time personnel (Female)

Person38

36

32

Manufacturing employees (Male)

Person

1,659

1,279

629

Manufacturing employees (Female)

Person

3,841

3,697

1,212

General employees (Male)

Person

3,872

3,872

2,050

General employees (Female)

Person

1,557

1,543

919

Taiwan dispatch personnel (Male)

Person79

82

Taiwan dispatch personnel (Female)

Person49

30Percentage of employees younger than 29 years old

%

39.69

38.76

27.90

Percentage of employees aged 30 to 50 years old

%

56.27

56.63

66.82

Percentage of employees older than 51 years old

%

4.04

4.61

5.28

Note: 1. The Employees under indefinite contract includes general employees, foreign employees, R&D substitute service, interns, student workers and consultants.
2. The dispatch personnel worked as supportive assistants.

HTC 2018 CSR Report 098

Europe,
Middle East & Africa

Americas245Europe,Middle East
& Africa

Americas

210

169

Male

The Global
Distributionof HTC Personnel

107

By Agein 2017
Total

10,391

Age

Manufacturing
Employee%

General
Employee%

Middle Supervisor%

Senior Supervisor

%

≤29

228

4.74

461

9.58

33

0.69

0

0

30~50

377

7.84

294

6.11

1,148

23.87

39

0.81

≥51

24

0.50

4

0.08

58

1.21

13

0.27

Total

629

13.08

759

15.78

1,239

25.76

52

1.08

FemaleAsia-Pacific

The Global
Distributionof HTC Personnel

9,977

in 2018
Total

Europe,Middle East & Africa

Americas

4,810

243

192

Asia-Pacific

4,493

Age

Manufacturing
Employee%

General
Employee%

Middle Supervisor%

Senior Supervisor

%

≤29

388

8.07

214

4.45

18

0.37

0

0

30~50

699

14.53

231

4.80

418

8.69

8

0.17

≥51

125

2.60

9

0.19

17

0.35

4

0.08

Total

1,212

25.2

454

9.44

453

9.42

12

0.25

SeniorMiddleGeneral

Total

85

2,330

3,116

5,531

0.78

31.32

28.51

48.78

By Position

The Global
Distributionof HTC PersonnelYear

in 2016

Level
Male

Total

10,929%Asia-Pacific2016

10,494

Female

14

654

4,730

5,918

%

0.13

5.98

43.28

54.15

Total

99

2,984

7,846

10,929

Male

75

2,343

2,733

5,151

0.72

22.55

26.30

49.57

13

674

4,553

5,240

%

0.13

6.49

43.82

50.43

Total

88

3,017

7,286

10,391

Male

52

1,239

1,388

2,679

1.08

25.76

28.86

55.7

12

453

1,666

2,131

0.25

9.42

34.64

44.3

64

1,692

3,054

4,810

%

By Country
Domestic personnel(male)

Domestic personnel(female)Foreign employees(male)

Foreign employees(female)

2017

4,416

2,899

735

2,341

2018

2,198

1,603

481

528

2017

Female%2018

Female%Total

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

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HTC 2018 CSR Report100Care for Foreign Employees

HTC New Recruits of Employees Worldwide Statistics in 2018
Unit

≤29

30~50

≥51

Asia

America

Europe, Middle East, Africa

MaleFemaleMale

FemaleMale

FemalePerson

203

84

14

13

0

1

%

35.12

14.53

2.42

2.25

0

0.17

145

62

31

16

4

1

25.09

10.73

5.36

2.77

0.69

0.17

Person

0

2

1

0

1

0

%

0

0.35

0.17

0

0.17

0

348

148

46

29

5

2

Person%Sum

PersonTotal

Person496

75

7

HTC Turnover of Employees Worldwide Statistics in 2018
Unit

≤29

30~50

≥51

Asia

America

Europe, Middle East, Africa

MaleFemaleMale

FemaleMale

FemalePerson

702

1,858

11

12

4

3

%

11.39

30.15

0.18

0.19

0.06

0.05

Person

1,984

1,211

57

27

36

27

%

32.20

19.65

0.93

0.44

0.58

0.44

Person

78

139

4

4

5

0

%

1.27

2.26

0.06

0.06

0.08

0

2,764

3,208

72

43

45

30

Sum

PersonTotal

Person

5,972

115

75

The top priority for HTC when dealing with foreign employees is to raise the awareness of anti-discrimination
regulations, to eliminate repulsion harassment and the lack of proper discipline in the workplace. The
provision of an open communications channel and an appeals system is also necessary to ease the disquiet
many foreign employees feel when working and living abroad in Taiwan and to allow them to concentrate on
their work. In addition, the health check of foreign employees is included in the system management, and thedata tracking management after the health check is carried out to ensure good health.
HTC’s dormitory area offers air-conditioning, library, and prayer room. The dormitory area in Xinghua Road
was renovated to provide Chinese classrooms, employee lounge and other facilities. The public space in thedormitory area is managed by the cleaning unit to carry out regular environment sanitation. We regard foreign
employees as regular employees without any discrimination. In January 2019, based on the decision of foreign
employees, we decided to change employees traveling subsidy into PX Mark gift certificate, appreciating
foreign employees hard work throughout the year.
In addition to providing comprehensive orientation, we also emphasize life care for foreign employees. Apartfrom hiring translators, administrators and counselors who are skilled in native languages, providing life,
language, culture and mental health assistance. In 2018, a total of 899 foreign employees were counseled. Most
issues were related to living regulations, such as accommodation, transportation, etc.

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HTC 2018 CSR Report102Talent Attraction & Retention
Value and Listen
to The Voice of
Our Employees

Making detailed records of their feedback
Express ideas and thoughts of workers
Keep track of follow-up effects
Respect workers’ decisions

Life & Leisure

A cleaning unit that cleans the dorm around the clock.
24-hour hot water supply
Free Lesson of learning Chinese

Proper Health
Examination Program

Adjust the welfare and foreign laborers' health inspection frequency regulated byrelated laws and regulations
Biennial Health Examination Once
Health Examination Follow Up
Entry health check (General physical examination, general items designated by theCouncil of Labor, intestinal parasites, chest X-ray examination, dengue fever, Handisease check)

Tax Refund Check

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

Enhancing Physical and
Mental Health Activities

HTC long-term cares for the well-being of its employees, and adheres to the business philosophy ofintegrity. The management of employees is conducted in accordance with relevant laws and there isno discrimination for foreign employees. In response to the foreign employee protest incident in 2018,
besides carrying out appropriate communications with relevant parties in a timely manner, HTC also
continued to listen to the voice of the employees. After the investigation through legal procedures, it has
been confirmed that the alleged accusations were inconsistent with the facts.
To prevent similar incidents from happening again, we strengthened the two-way communication
mechanism with foreign employees. In July and August of the same year, a formal meeting in threedifferent time-frames was held to explain the severance package in detail. The foreign employees canchoose to accept the package and depart after signing the relevant documents, or choose to wait fortransfer. For foreign employees who chose to wait for transfer, HTC not only tried to assist them in finding
new jobs, but also provided at least 60 days of accommodation in accordance with the laws. In addition, we
also negotiated with the Taoyuan Municipal Government Labor Bureau and arranged special personnel totake foreign employees to the municipal government for job match every week. If foreign employees finda new job, we will help them to check the employment documents for any violation of laws before carryingout the transfer. For those who have not found a new job, we will offer assistance for their departure. All
the cases were closed in December 2018. To demonstrate our commitment to employee care, HTC willcontinue to implement corporate social responsibility through practical actions.

Friendly Workplace

HTC is globally based, and adheres to the business philosophy of “Choose People with Talents” by actively
recruiting outstanding R&D talents at the location of its operation bases. To ensure that the knowledge
and skills of the talents are in compliance with the needs of the company, HTC regularly participates in the
recruitment activities and symposiums held by universities, offering opportunity for students to interact
and exchange information with the company. Each year, internship program is offered to undergraduate
students, allowing them to get the first taste and adapt to corporate culture, which will help them to develop
the workplace skills that are required. After the internship is completed, potential talents will be selected to
become the full-time employees of HTC when they graduated from university.

University Talent Recruitment Activities
to Welcome New Graduating Students from Various Fields

Irregular opening of the "Counseling station"

Response to the Foreign Employee Protest Incident in 2018103

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

In the 2018 Campus Job Fair, HTC planned to recruit 250 outstanding talentsfrom home and abroad, including talents from product design, art design,technology R&D, engineering, business management, international marketingand business, e-commerce, digital marketing, etc., to join HTC’s big family.
HTC offers rich learning resources and great working conditions, providing
diverse work projects and international exchange opportunities. We hope tostrengthen our foundation in Taiwan while reaching out to the world and focus on cultivating all kinds oftalents, providing opportunities to connect to the world and facing international challenges.
In 2018, we participated in the Campus Job Fairs held at National Taiwan University, National Chiao Tung
University, and National Tsing Hua University. We offered job opportunities for internship and Researchand Development Substitute Services, a total of 754 resumes were collected in these three Job Fairs.

Engaging Diversified Talent
2016 2017 2018
HTC offer job opportunities for diversified talents. At theend of 2018, 69 disabled people (weighted) were employed,
Disabled employees (male)64
54
31
which is 28 more than the required number (the required
number is 41). In addition to relying on talent-job matching
Disabled employees (female)43
42
20
conducted by the supportive or sheltering bodies, we also
allocate jobs in consideration of the characteristics ofindividual handicapped workers. We can also tailor job descriptions and the working environment, to allow thehandicapped to have the opportunity to prove their abilities. Through education and training is also provided
to allow the handicapped to make a contribution to society and enhance their own quality of life.

HTC 2018 CSR Report104Complete Education and Training Plan
The cultivation of talent is the foundation of a going business concern. HTC, while engaged in the pursuitof growth and profit, is also committed to helping employees grow with the company. The creation of anenvironment that will help them continue to do this is very important. HTC is guided by business needs aswell as personal career development. The company strives to provide employees with enhanced professional
skills, in addition to assisting them to seek a good career development direction; HTC has classified talentmanagement and development as an important management indicator. Employees should improve and growwith the company.

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

Diversified Learning Channel, Providing a Comprehensive Learning Environment

The design of the internal training courses is centered on the five core occupational
functions and the learning effect is substantiated through a series of diversified channels.

Planning &Organizing

There are physical and online courses for learning skills and drills.
Experts in various fields are invited from around the world to share industry trends andfuture technology blueprints in creative thinking forums.

Communication& Influencing

Core

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

Competency
Driving For
Results

After reporting to work,
Comprehensive training courses
will be provided in the following
week. “Newsletter” will be sent
to colleagues every week within
the month after reporting towork to blend into HTC culture
and develop all the necessary
knowledge and skills as soon as
possible. This training also helps
them appreciate the corporate
environment and recognize the“Quietly Brilliant” culture of thecompany.

General
Employees

New
Employees

Manufacturing
Employees

We e n s u r e m a n u f a c t u r i n gemployees gets all the
professional knowledge andtechnical skills training needed
for their occupation categories
and specialization (basic,
professional, advanced).

The
Management

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

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Customer
Focus

Teamwork

Newcomer Training Courses
HTC provides a complete training system for new
recruits. Starting from their reporting, we assist
newcomers in quickly integrating into HTC’s culture
and develop a full range of knowledge and skills
through a variety of physical and online courses.
Newcomers are encouraged to share all kinds ofmatters taking place at HTC with a senior employee,
Newsletter will be sent to colleagues every week
within the month after reporting to work to help
newcomers getting familiar with HTC culture
quickly, and blending into HTC’s big family.

HTC 2018 CSR Report

106Cultivating Key Leaders
HTC actively promotes company culture in the face of rapid changes in the global industry and new patternsof global enterprise competition and cooperation. HTC quickly adapts to a constantly changing environmentand cultivates management talent with an international vision, expecting their excellent managers to becomepresent and future drivers who will continuously lead HTC towards steady growth and development in timesof hardship and challenge. In 2018, leadership-training courses were given to 206 person-time.
In order to enable executives to learn new viewpoints, new ideas, and change their inherent thinking patterns
from the best practices of the industry, to have new behaviors or practices in their work or management, we
also promote Manager Week activities, and share the management articles with all executives regularly each
Friday with more than 50 articles shared in 2018.

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

Special Training Courses and Resources
Legal Training
HTC stipulated special regulations in its Code of Conduct to regulate confidentiality provisions, company
assets, information and personal information protection, employees and their immediate family members
and customers, standards of social and business etiquette for suppliers, travel, conflicts of interest, external
part-time job, internal trading, etc., to guard against dishonesty, as well as penalties for violations. Employee
Reporting Mailbox is also provided as the complaint channel for employees. HTC puts emphasis on legal
education, and add legal training as a compulsory course for new employees. Examples were included in thee-Course for promotion.
Anti-corruption training rates for Board of Directors
and all levels of the New Employees in 2018

Number of training recipient
Recipient rate

GeneralWorkforce

MiddleSupervisors

SeniorSupervisor

HighestGoverning Institution

269

96

3

12

8.81%

11.35%

4.69%

92%

Note: The calculation for the training recipient rate at each level is based on the number of person completing the training/the number of employees at the specific level. 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 employee.

HTC New Employees Legal Training in 2018
Course Content

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

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Number ofparticipants

Course Hours

2017

2018

2017

2018

General new employees legal training - confidentiality and anti-insider trading

819

368

36

36

General new employees legal training – intellectual property rights

819

368

38

38

General new employees legal training – patent litigation

819

368

38

38

HTC 2018 CSR Report108Thinker Forum

Personal Development Seminar

To allow employees to keep updated on the newest
trend and expand their vision in product application,
we continued to promote the “Thinker Forum” in 2018,
and invited pioneering experts from around the world togive 6 lectures. The themes of the lectures were in line
HTC’s R&D emphasis. Speakers from various fields wereinvited to share their knowledge of industrial trends, novel
technologies and future technology blueprints with our
employees, allowing our employees to share the industrial
trends, novel technologies and future scientific knowledge
as well from their practical experiences and case studies,
expanding their horizons in product application.

HTC has organized personal development learningseminars based on the five core competencies of thecompany. Each seminar was opened for two hours
and speakers who are experts from various fields wereinvited. From the sharing of practical experience and casestudies, employees can learn ways to make their work
more smooth and effective. In 2018, we held two personal
development learning seminars. Communication expert
Shenglong Li and professional counseling psychologist
Cuifen Lin were invited to share some communication
skills and workplace pressure relief methods with ourstaffs, allowing employees to enrich their “soft power”.

Future of Work by Jamie Lin
In March 2018, Mr. Jamie Lin, the co-founder of AppWorks, was invited to share his observations andinsights of innovation with HTC employees on the topic of “Future of Work”.
Mr. Jamie Lin is the co-founder of AppWorks, helping the early team to start a business and promote
Taiwan to become a world-class internet industry cluster. He began by talking about the rise of artificial
intelligence, robotics, AR/VR, and blockchains, and explained about how these new technologies will
dramatically change our daily life, altering the existing industrial structures and business models. ThroughQ&A session, he discussed with HTC staffs on how to focus on future industry changes and join hands increating a better future!
On that day, our staffs showed great enthusiasm for the activity. A total of 201 people attended the seminar.
After the seminar, the wonderful talk given by Mr. Lin was uploaded to the Learning Management System(LMS) platform, and through the monthly learning newsletter, employees who are unable to attend theevent due to business reasons were encouraged to watch the talk through online courses.

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HTC 2018 CSR Report110Information Security Enhancement and Re-engineering Courses
Since HTC is the leader in technologies and products, such as VR+AR, Smart phone, AI, Blockchain and 5G,
protecting company’s research and development assets and customer information, is the responsibility of all
employees in HTC. To ensure that information security is fully integrated into the organizational culture andthe company’s core values, HTC actively establishes and promotes information security policies to protect
company information and comply with international information protection regulations. In this regard, we
continue to enhance and strengthen our employees’ awareness on information security through on-goingeducational and cognitive programs.
In October 2018, HTC held the “Security in Full Operation!” large event, enabling HTC employees to fully
understand the company’s information security policies and various security related solutions, especiallyin mobile application management, account multi-factor authentication, endpoints network security
management, business collaboration, cloud services, etc. More than 900 employees participated in the event.

English Leadership Resourceand External Training Subsidy
As an international brand, HTC provided “Online
English Learning” to encourage staff to learn
continuously and spontaneously. In 2017, a weekly
English-language business English course is set up toprovide themes needed for work so that employees
can improve their English proficiency. A total of
58 courses were held and a total of 793 people
participated in the learning course in 2018.
In addition, HTC encourages employees to continue
to absorb professional knowledge and to match theirstudy program to their work to ensure growth. HTC
encourages employees to improve their professional
knowledge via schools or other academic institutions,and apply the acquired knowledge to their work. The
cost of the external training can be reimbursed at theend of the training upon application (reimbursement
is based on the actual expenses). The subsidy provided
for external training in 2018 was about 3.91 million.

e-Library
HTC relocated its library to the Taipei Headquarter
Building in 2018. HTC helps staff develop goodreading habits mainly by the provision of a wide
range of reading activities and a rich collectionof library resources; employees can enjoy a richliterary atmosphere and reading environment.
Electronic magazine services are also madeavailable for employees so they can view and readthe current editions on their computers or mobile
phones anytime anywhere. The number of people
subscribing to our electronic magazine reached 33,763 in 2018.
Through organizing “Enjoy the Reading,” providing employees with a platform for discussion and enhancing
knowledge in various fields. Sharing books with the “HTC Library Book Release Activity”, giving new life to oldbooks, enhancing the HTC workplace and promoting a good reading culture, so that learning will never stop.
Each season’s “Featured Books Digest” allows employees to quickly absorb the essence of the book in addition
to their work. We organized a library action book fair with irregular lectures to enable employees to join theranks of reading and learning. Starting monthly in 2016, the e-newsletter “HTC Learning Charging Station”
will be launched, integrating all training resources and information so that employees can grasp all kinds oflearning information at the first time, explore learning horizons, and plan for self-learning.

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HTC 2018 CSR Report112

A Sound Wage and Welfare System
Training Results
In order to cultivate HTC employees to quickly respond to fierce challenges from global technology andgrasp the industrial pulse, in addition to upgrading the professional technical annual training courses anddepartment professional courses, in conjunction with HTC’s policy, organizational learning planning was
conducted, coupled with external training subsidies and other measures. Between 2016 and 2018, HTC
invested nearly NT$ 18.6467 million in employee training-related programs. Training hours totaled 456,900
and there were nearly 208,700 attendees, each person receiving 52.39 training hours.
In 2018, HTC male employees received 55,673 hours of training and female employees received 52,686 hoursof training. General staff received 77,480 hours of training, supervisors received 30,342 hours and management
537 hours. The table below lists staff training over the years:

Year

Item

Course (Hours)

Number of Participants

Average Training Hours

2016

193,31378,627

17.69

2017

155,188

74,425

14.93

2018

108,359

55,63322.39

Note: 1. Total number of training hours of the year/total number of employees of the year = average number of training hours per person of the year.
2. The average number of training hours per person in 2016-2018 = total training hours in 3 years / average number of employees in 3 years. (8,720 person)

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

General Staff
Salary Ratio(Manufacturing
Employees)

Mid-Level
Management
Salary Ratio

High- Level
Management
Salary Ratio

Male

FemaleMale

FemaleMale

FemaleMale

Female

107

100

101

100

109

100

114

100

New Recruits Basic Pay and Taiwan
Minimum Wage RateType

Basic Pay
(Manufacturing
Employees)

Minimum
Wage

1

100

100

114

100

Employees Training Hours and Sex Ratios at All Levels in 2018
Sex

Total Training (Hour)

Average Training (Hour)

Male

FemaleMale

FemaleGeneral workforce

30,73046,750

17.10

25.27

Supervisor

24,447

5,895

28.93

20.54

Manager

496

41

9.92

3.73

Level

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

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

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General Staff Average
Compensation Ratio(Manufacturing Employees)

Mid- Level
Management Average
Compensation Ratio

High- Level
Management Average
Compensation Ratio

Male

FemaleMale

FemaleMale

FemaleMale

Female

108

100

101

100

115

100

130

100

HTC 2018 CSR Report114Employee Salary and Benefit Increase Ratio
Item Description
Total employee salary andbenefits expenses (NT$)

2018 End-of-the-Year Appreciation Banquet

2015

2016

2017

2018

10,133,909,000

8,704,953,000

8,703,019,000

5,705,420,000

Note: 1. Total employee salary and benefits (proprietary financial statements).
2. The decrease in cost in 2018 is due to the decline in the total number of employees.

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

The HTC 2018 End-of-the-Year Appreciation Banquet was held at the Nangang Exhibition Hall in
January 2019. The Chairman of the Board, Cher Wang, and the Director, C. T. Cho, together with the senior
management of HTC attended the Banquet to thank the employees of HTC for their persistence and hard
work over the year, continuing to bring innovations and breakthroughs for the HTC brand, and providing
consumers with the best products.
In the 2018 End-of-the-Year Appreciation Banquet, 226 tables were prepared for participants, and nearly
3,000 prizes were drawn, with a total value of more than NT$13 million, of which the biggest prize was
NT$200,000 in cash. Compared with last year’s total prize value of nearly NT$9 million, this year’s prize value
was increased by more than 40%. Moreover, several famous celebrities and artists were invited to host the
Banquet and perform on the stage, adding lots of excitement and fun to the Banquet.

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

Encouragement for Senior Employees
In addition, trophies are presented in recognition of service to employees who been with the company for five,ten, fifteen and twenty years. HTC also has an internal replacement system to provide the necessary assistance tostaff needing to be transferred, or to those making application for transfer, or who are seeking job enrichment ora change of career.

Group Insurance
HTC and the Welfare Committee buy group insurance for employees, so that an employee who is hospitalized
for sickness, injury, or who dies, can still provide some security and protection for their families.

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HTC 2018 CSR Report

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

The Meal Subsidy Program
Meal subsidies of NT$130 for during regular office hours and NT$100 during holidays are offered to generalemployees. Meal subsidies of NT$35 to 50 for working hours to manufacturing employees. HTC also offers
afternoon tea every day.

Education Scholarships for Children
The HTC Employee Welfare Committee provides scholarships for the children of employees from elementary
school to college: NT$800 for elementary school students, NT$1,600 for junior high school students, NT$2,000
for high school and vocational education students, including first, second and third year college students; andNT$3,000 for college students in their fourth and fifth year. A total of 533 person applied for child education
scholarship for the first semester of 2018, while 400 person applied for the second semester.

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

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

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

Transportation Vehicles
HTC offers employees many different means of transportation on several different routes for commuting toand from work. The vehicles provided ensure safety and peace of mind as well as being very convenient.
In 2018, TVs were installed in the waiting area for the shuttle buses. With the help of the shuttle-bus GPS, users cankeep track of the position of the shuttle bus at any time. Furthermore, shuttle bus questionnaires were sent out tocollect the opinions of users, providing better shuttle bus services with more comfort, convenience and safety

Flexible Employee Leave
For compassionate employees, employees can enjoy one day of paid leave (birthday) in the month of theirbirthday, and they can get off work at 3:00 pm the day before the three important Chinese holidays. Until 2018,
these small benefits continue to bring happiness and joy to employees either physically or mentally.

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Travel Subsidy
Travel subsidies are provided based on seniority, details are shown below:
Unit:NT$2018
The HTC Employee
Welfare Committee

2018
HTC

2018
Total

Over 5-year tenure (Before 2012/12/31)

2,000

4,100

6,100

Over 3-year tenure but less than 5-year tenure (2013/1/1~2014/12/31)

2,000

1,800

3,800

More than 1- year tenure but less than 3-year tenure (2015/1/1~2016/12/31)

2,000

900

2,900

Less than 1-year tenure (later than 2017/1/1)

2,000

0

2,000

Employee tenure
Base date:2017/12/31

A Five Star Gym
In order to encourage and promote the sports
atmosphere and allow employees to develop good
exercise habits, HTC has set up a fully equipped
professional fitness space in office buildings. Various
modern fitness equipment and coaches are available onschedule to provide guidance and advice.

Use of the Gym
Number of Users in
2018

Category
Use of the Gym (person time)

37,186

Participation in aerobic classes(users)

1,050

HTC has commissioned professional fitness management
consulting firms and professional suppliers to manage
the gym and to provide full-time services. These include onsite fitness instruction, fitness curriculum planning,
and advice about the prevention of sports injuries. Six coaches with an emergency card or sports injury
protection license were on shifts at the site. This provides employees with the best health consulting services
and the environment. Employees get help for the establishment of positive sports safety and healthcare.
Courses are planned and arranged on various health topics and activities and employees can participate
according to their preferences. In addition, the employee service Application system is intimately developed
for the employees to click on the phone to register, save the time of waiting in line.
In addition, HTC plans two-month aerobic courses throughout the year to provide a diverse curriculum for
employees. There are yoga, boxing, cardio and other stress relief courses available. Another spectacular sports
facility is to be found on the 17th floor. It is a large hall, practically a stadium, with a 10-meter-high ceiling thatcan be used for basketball, tennis or badminton. The gym also commenced additional sports massage classes
sold at NT$600-$800/30 minutes were available to employees at NT$400. Through professional sarcolemma
stretch, the employees enjoyed a more comfortable exercise experience.

HTC 2018 CSR Report118Creating a Happy Workplace
A Working Environment Incorporating Brand Spirit
HTC regards the creativity that stems from brainstorming as one of our most valuable assets. To promoteinterpersonal communication, the R&D headquarters in Taipei is configured with many staff areas thatallow our people to interact and talk, this includes interlacing sky bridges between the buildings that link
departments together and interaction rooms that project from the floors like transparent boxes. We hope thatthese interaction-oriented spaces will encourage and promote cross-department synergism and cooperation,
supporting the free extension of creativity. HTC believes sharing is the best kind of interaction. To this end
we will share the lobby on the first floor of the R&D Building with the community, This HTC Gallery will help
young local artists show their creativity and work, promoting social and community interaction. In addition,
the HTC Gallery will cooperate with different institutions and artists to regularly showcase new cultural andartistic works. It will be open to the community schools, groups, and the public. Let us all get closer to the arts.
All the people who work in this building can also appreciate being in an “art gallery” that will inspire creativity
and help HTC launch better and more amazing products.

Valuing Female Employees
HTC regards the female workforce as very important. In view of the increasingly large number and influence ofworking women, we have continued to improve our software and hardware, in the hope that a diverse culture
based on gender equity will help HTC become more competitive. The physical and mental caring mechanisms
we provide for our female employees include:
A female cancer-screening program is part of the annual health check. This includes the choice of a Pap
smear, a breast ultrasound exam, or a mammogram.
Consideration for the physiological needs of female workers, providing a comfortable environment for
rest, the loan of free hot pads, menstrual pain assessment, health knowledge and education, physician
consultation or referrals and so on.
A friendly environment for breastfeeding. We provide a warm and comfortable nursing environment,ultraviolet milk bottle disinfection devices, microcomputer thermos, comfortable sofa, refrigerator
for breast milk storage, and infant breast-feeding-related publications and light music. HTC has 17
Breastfeeding room in Taiwan that was visited 25,273 times in 2018.

Work-life Balance Support

HTC Gallery & Sense Arena
To enrich and diversify the exhibitionsof the HTC Gallery, we collaborated with
Taiwan's professional art gallery in 2018.
Besides exhibiting the works of Taiwan
artists, we also exhibited works of Spanish
and French artists. The exhibiting artworks
have ranged from one-dimensional
paintings to the sculptures and glass arts,
making the Gallery lively and rich. This
enables HTC staffs and visitors to watch
not only the one-dimensional paintings,
but also observe the three-dimensional
artworks in detail. Visitors can walk freely
around the artworks, making the process more exciting and fun.
In August 2018, a very special art miscellany was held in the TPE1 hall. Under the majestic music, the45-minute Live Painting Show was launched. The artist who performed this marvelous painting is theJapanese new artist Miwa Komatsu. Miwa Komatsu appeared in a signature white dress and prepared
to complete in person the two artworks in the "Pray" series. After a moment of meditation, she swayed
the paints in the TPE1 hall while the music was playing to draw the guardian beast which is her favorite.
The unique style of heroic painting also made the audience stunned. In just 45 minutes, Miwa Komatsu
combined Japanese traditions and philosophical elements with a unique style of painting to present thenatural world she senses.

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In addition, in order to encourage and support
employees to raise the next generation withconfidence, HTC has a perfect application system forparental leave to protect employees' work rights sothat parents can take care of their newborns with ease.

Employees applying for Family care leave
Year

2015

2016

2017

2018

Male

91

56

66

51

Female

151

144

143

136

Total

242

200

209

187

Employees Applying for Unpaid Parental Leave and Resuming Duty after Leave in 2018
Male

% Female%

Total

The Number of Qualified for UPL for Raising Children in 2018

518

58

376

42

894

The Number of Person Actual Applied UPL in 2018

12

15

69

85

81

The Number of Reinstatement-to-be in 2018

21

17

105

83

126

The Number of Application for Reinstatement in 2018

18

23

62

78

80

Reinstatement Rate in 201885.71%

59.05% 63.49%

The number of application for reinstatement in 2017

20

17

98

83

118

The Number of Retention Over 1 Year After Reinstatement in 2017

14

18

62

82

76

Retention Rate in 201870%

63.27% 64.41%

Note: 1. The “number of qualified for UPL for raising children in 2018” was based on the number of employees who had taken maternity or paternity leave within 3 years (2016-2018).
2. The “number of reinstatement-to-be in 2018” includes applied in 2016 and should reinstate in 2018, applied in 2017 and should reinstate in 2018, applied in 2018 and should
reinstate in 2018.
3. The “number of application for reinstatement in 2018” includes applied in 2016 and reinstated in 2018, applied in 2017 and reinstated in 2018 and applied in 2018 andreinstated in 2018.
4. The “Reinstatement Rate in 2018” = Number of employees reinstated in 2018 / Number of employees that should have been reinstated in 2018
5. The “Retention Rate in 2018” = Number of employees who had worked one year consecutively after being reinstated in 2017 / Number of employees reinstated in 2017.
6. The “number of application for reinstatement in 2017” includes applied in 2015 and should reinstate in 2017, applied in 2016 and should reinstate in 2017 and applied in 2017
and should reinstate in 2017.

HTC 2018 CSR Report120

Listening to the Voice of the Employee
HTC employs nearly 5,000 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.
All responses to proposals and the follow-up progress of these meetings are published on the HTC Intranet
website for review by all the employees. According to internal HTC statistics, the issues most frequently
discussed in the labor-management meetings are “the working environment”, “parking and transportation”
and “catering management”. In 2018, HTC also discussed with the Union on the major changes in humanresource allocation. In addition to regular labor-management communication meetings, we also set up
diversified feedback channels, including setting up grievance lines, appeal boxes, e-mail address for complaints,
and sexual harassment complaint mailboxes. Labor-management meetings and employee opinion surveys areheld regularly as a reference for supervisors, internal operations, improvement of employee satisfaction levels
and improvement of work commitments. A good communications mechanism results in harmonious labor
relations. Labor disputes, bad feelings and losses can all be avoided.
Note: HTC’s labor union was established in 2015, but until the end of 2018, no collective agreement has so far been made.

Employee Satisfaction Survey
Out of consideration for employees ‘ feelings about working in the company, which can in turn improve work
efficiency and effectiveness, and reduce the turnover rate, HTC conducts employee satisfaction survey throughquestionnaires. The manufacturing employees questionnaire survey conducted in 2018 consists of 6 categories
including job content, work environment, salary & benefits, internal communication, gender equality, andorganizational commitment. The targeted score for 2018 was 3.50 points (out of 5) and the average score fromthe actual survey was 3.60 points, reaching the annual target. In summary, the employees concerned more
about organizational commitment and work environment. For this reason, relevant activities and plans will
be implemented to enhance employees’ recognition of the company. The questionnaire survey results werealso reported to the senior management team for review, and used as the reference for preparing the annual
operational targets and plans. In 2018, employees were highly affirmed by HTC’s performance in issues suchas the “Implementation of the gender equality law”, “No gender-discriminated salary” and “Being confident indoing your current job”.
Basic Data Analysis of Survey

Major changes in human resource allocation in 2018
To effectively utilize resources and professional manpower, HTC launched the organizational
optimization plan in the beginning of 2018, and announced a strategic human resource allocation
adjustment for Taiwan, planning to reduce 1,500 employees in the manufacturing department.

Male
45%

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

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10-15
11%

>15
3%
<5

28%

Owing to the changes in market and production demand, HTC must ensure that operational efficiency
and competitive advantage are maintained while providing quality products. After careful evaluation,
we believe that this action is a necessary step to achieve HTC's long-term corporate goals. It is hopedthat through the implementation of the Lean Management Program, the competitiveness of thecompany can be further strengthened.
In this regard, we have provided full assist to the affected employees and handled the procedures inaccordance with the labor-related laws and regulations. Besides submitting a proposal to the Labor
Bureau of Taoyuan City Government, since major changes in human resource allocation is the focusof the Union, we also made agreement with the employee representatives of the Union and actively
provided assistance to employees in their job transfer, including organizing more than 10 job-transfer
related sessions, offering hundreds of job opportunities, and requesting Taoyuan City Government
to assist in organizing job fairs as well as consulting services. HTC strives to protect the rights andinterests of the employees, hoping to reduce the impact to the minimum.

Female55%

GenderSeniority

5-10

58%
Foreman,Leader9%

Technician

91%

University

Master,Doctor1%

22%

Education
Level

Title

JuniorCollege

20%

Senior/VocationalHigh
School57%

HTC 2018 CSR Report122Occupational Health and Safety
Effective Advisory and Assistance Channel
To protect the working rights of our employees, we have set up a diversified and smooth communication
channel that an employee can use to pass on information about problems and to receive a response
without delay. In addition to the employee care office in the major units that provide a relaxing space forcommunication, timely help with workplace problems can also be sought using the following channels. In
2018, employee consultation was focused on largely on the issues of manpower optimization. The company
established a dedicated line to provide employees with comprehensive consulting services. There was no
gender discrimination cases reported in 2018.

Potential
Work
Problems

Advisory
andAssistance
ChannelsWork problems.

Consultation and Referral to the Employee Assistance
Program(EAP).

Leadership style andcommunication.
Compensation, benefits, andworking hours.
Workplace sexual
harassment, sexual abuse, or
sexual discrimination.

Production line manufacturing employees should dial
extension 38585.

All our facility management systems comply with the OHSAS18001 standard for Occupational Health and
Safety Management. Every new employee is given complete safety and health education training upon entry.
We have also published the “ESH Management Manual” and “Safety and Health Rules” which have also beenposted on our Intranet website for employees to consult at any time.

Occupational Safety and Health Committee
The Occupational Safety and Health Committee has 20 members. Among them, there are 7 labor
representatives, which accounted for 1/3 of the total number, 1 healthcare professional, 1 labor safety related
engineer technician and 8 department managers, supervisors and directors.
We work out an occupational safety and health plan each year according to the relevant problems that need
to be addressed. The focus is on asking all the people involved to follow occupational safety and healthrules; to identify hazards to lower risks; to set up rules for the labeling of dangerous chemicals and a general
understanding of them; the promotion of occupational safety and health information; and the establishmentof a system to manage contractors. All these measures are aimed at reducing risks.
We have emergency response plans that will be implemented in the event of an emergency caused by humanerror or natural disasters, such as fire, explosion, typhoon, an accidental leak, mechanical injury, infectious
disease, or an earthquake. As identification of the nature of the emergency, taking the necessary measures andexamination of standard operating procedures. We hold fire all measures impact on the health and safety of theworkers and also try to least damage or company property.

General employees should dial extension 28585.
Employee Help hotline E-mail: HelpMe_8585@htc.com
Open and registration-exempt staff cares office.

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

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HTC 2018 CSR Report124

Food Safety - Hearty and Healthy Meals at HTC

Drinking Water Quality Control

To ensure our employees have “healthy and satisfying food, ”HTC cooperates with professional catering
service providers and dieticians to design and produce healthy, nutritional, and delicious meals using local
ingredients from reputable and certified local food suppliers. The meals are nutritionally balanced and thenumber of calories is controlled, giving HTC employees the opportunity to enjoy high quality and healthy
food. We avoid all questionable ingredients and insist that all purchases have CAS, TQF, ISO and HACCP foodcertification. Branded food commodities are given top priority and we always support the local agricultural
producers. The pantry room also provides freshly made tea and lemonade, allowing employees to drink healthy
tea with no food additives. HTC cafeterias are operated by the company and the ingredients and cooking oil
used are purchased by the company and not outsourced. To safeguard the food safety and health of employees.

The drinking water quality directly affects the health of employees and drinking water management is closely
related to water quality. Therefore, it is an indispensable part of daily life. HTC has set up a comprehensive
water fountain inspection plan to ensure the standard of purity of drinking water. Regular maintenance,water sample testing, and records disclosure are done according to the Drinking Water Management Act. The
maintenance and care of the drinking fountains are carried out by a professional company and testing of water
purity is carried out by an environmental testing agency that is authorized by the EPA to take regular samples
and perform the tests every 3 months. The results of the water quality tests are published and the records arealso posted in a prominent position close to the drinking fountains. The total bacteria count of drinking waterand E. coli colonies have passed the test in 2018.

Besides adhering to the quality of the purchased ingredients, we also take the initiative to arrange on-site
audits for the second-tier suppliers, and require suppliers to propose deficiency improvement plans. The
supplier on-site audit items are based on the Food Good Hygienic Practice (GHP), and are divided into eleven
categories: factory environment and food operation site construction and facilities, product acceptancecheck and inspection, raw material storage management, food pre-treatment process management, logistics
and distribution control operations, inspection sites / toilets / hand washing facilities / changing rooms, andothers. A total of 27 suppliers were audited in 2018, and deficiency items have all been corrected and improved.

Food Safeguards

Healthand Safety
Management

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

Meals are cooked upon ordering. When the meal is ready, SMS text message will be used for notification. The
dining environment is designed with floor-to-ceiling windows, designing furniture, green plants and artistic
installations to create a variety of styles for employees to enjoy and relax. On the first floor of the Taipei
Headquarter Building, there is a tea booth selling selected good tea from Lalashan. With the idea of healthy
and nutritious ingredients, carefully selected raw materials are used to provide employees with products thatare healthy and delicious. Furthermore, in response to environmental protection, the provided utensils arerecycled and cleaned for reuse. To promote waste reduction, customers bringing their own cups will receive
discount for their beverages.
In order to enrich the choice of food, the employee cafeteria in Taipei Headquarters Building and the B1of H-Building in Taoyuan will organize food tasting event every month. After food tasting, questionnaire
survey will be conducted to collect feedback from employees. Based on the survey results, adjustment will
be made for improvement. The employee cafeteria also collaborates with professional catering service
providers to deliver fun activities and interesting dishes during certain festivals, allowing the employees toenjoy the festive atmosphere.

125

Friendly Workplace

HTC 2018 CSR Report126Smoke-Free Workplace

Valuing Employee Health

HTC positively advocates the government policy of a smoke-free workplace. In compliance with the Tobacco
Control Act, smoking inside company premises is prohibited. There are outdoor smoking areas. Quit Smoking
Clinic has been started at the Employee’s Clinic since May 2016 to conduct quit smoking treatment throughprofessional physicians, pharmacists, quit smoking health teachers, allow the participating employees to quit
smoking successfully. In 2018, the number of employees participated in the event reached 17 employees.

We regard the health of our employees as a key element of our success and sustainable development. In thisregard, 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 work and life. Maintaining physical and mental health and ensuring the health of
every employee.

Environmental Sanitation Agents

Health Enhancement Scheme for HTC Employees

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

Category

Environmental Expenditures

HealthManagement

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

HealthPromotion

Comfortable breastfeeding rooms, Smoking cessation promotion, Weight-loss Classes,
Topic seminars, Blood donation activity.
Influenza vaccination, Cancer screening, Infectious disease control and treatment.
Health ladder (picture/music), aerobics.
Family Day.
CPR & AED course design.

Occupational
HealthEstablishment and maintenance of HE Database for Special-Operation Staff.
First-aid training, Prevention and treatment of occupational injuries and illness, Workers
return to work management.

Employee
Assistance
Program

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

Unit: NT$ ThousandYear
Environmental expenses

2016

2017

2018

68,737

83,74542,804

Environmental Maintenance Expenditure in 2018
Unit: NT$

Category

Taipei Headquarters

Taoyuan Plant

Total

Plant cleaning

12,940,714

19,479,690

32,420,404

Restaurant cleaning

3,005,484

5,250,989

8,256,473

Pest disinfection

72,613

234,738

307,351

Rodent control

103,890

282,599

386,489

Carpet cleaning

9,400

--

9,400

Sofa cleaning

19,425--

19,425

Elevator ladder cleaning

243,800--

243,800

Water tower cleaning

44,100203,563247,663

Gardening

876,165

585,000

1,461,165

Cleaning supplies

1,985,319

3,609,172

5,594,491

Total Expenditure

19,300,910

29,645,751

48,946,661

Actions

Note: For the expenditure of Taoyuan Plant, the “Plant Cleaning” item includes the rented P Building, but the rest of the items do not.

127

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HTC 2018 CSR Report

128

The Number of People Serviced in Taoyuan Health Center in 2018
900
800
700
600

Health Management

500
300
300
200
100
0

Outpatient Service
person-time
Physiotherapy
person-time
General Consulting

HTC has established an “Employee Clinics.” Professional medical
Employee Clinics Service
counseling is available for staff and there are resident doctors in the
Result in 2018
clinic. There is also excellent physical therapy and health management(Taoyuan and Xindian)service. Health check services for employees cover the divisions
Category
Person-timeof general medicine, family medicine, rehabilitation medicine,
physiotherapy, and radiographic screening. HTC employees are not
Outpatient Service
2,049
required to pay a registration fee at the employee clinic. The dependents
Health Center356
of employees and suppliers (stationed at HTC to provide service) can be
GeneralConsulting
5,656
treated at the employee clinic and enjoy the same benefits and services
Trauma Treatment866
as HTC employees. Offering lower registration fee comparing to othermedical institutions. At the end of 2015, the Taoyuan plant’s full-time
Occupational
87
medical specialist reported to work. Through his long stay in the Taoyuan Hazards and Job
Placement
plant area, he fully understood the operating conditions of the plant area
Physiotherapy
2,033
and became familiar with the employees’ issues, which provided extra
Health management690
protection of the plant staff’s occupational safety and health. The healthcenter at Taipei headquarters building provides doctor health services
Total
11,737every Thursday and every other Friday, including occupational medicine
and family medicine divisions. There are also physicians specialized inbaby-friendliness, health policy and management, labor health service and health checkup and promotion.
HTC Taoyuan Employee Clinics provides approximately 5,576 person-times of service and 6,214 people
attended Xindian Health Center in 2018. With a one-time entry fee of NT$50, the total amount of deducted
registration fees for the year 2018 was NT$94,700, which was equivalent to 1,894 persons, and the total
deducted copayment was NT$175,550, which is equivalent to 3,511 persons.

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Friendly Workplace

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

284

161

197

216

224

175

136

101

156

139

138

122

244

68

174

206

230

170

198

144

134

181

166

118

272

136

83

139

114

102

33

33

52

75

86

84

17

5

13

35

17

14

19

9

15

22

28

17

12

9

8

7

10

4

3

5

-

5

8

3

Trauma Treatment
Occupational Hazards
and Job Placemen
Health Center

43

29

36

22

44

14

31

35

20

38

28

16

Total

872

408

511

625

639

479

420

327

377

460

454

360

Sep

Oct

Nov

Dec

The Number of People Serviced in Xindian Health Center in 2018

1,200
1,000
800
600
400
200
0

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Health Management

62

37

27

45

62

45

48

85

71

91

53

64

General Consulting

354

109

227

238

248

284

279

251

325

638

659

835

Trauma Treatment
Occupational Hazards
and Job Placemen
Health Center

37

11

47

50

74

62

86

65

57

62

46

58

-

1

1

2

2

2

-

-

2

-

-

3

42

25

8

16

22

18

33

41

40

56

52

56

Total

495

183

310

351

408

411

446

442

495

847

810

1,016

HTC 2018 CSR Report130

6,214The Accumulated Health check completion rate of general employees in 2018

The Number of People Serviced in Xindian Health Center in 2018 by Category

100%
90%

3,083

80%
70%

The Accumulated
Health check completion rateof general employees in 2018

60%
50%

690

680

40%

674

85.36%

30%

23

20%
Total

Motherhood
Protection

44
Bed Rest

2

Public injury
tracking

Otolarynagology

87

Emergency care

Dermatology

409

153

Mental HealthCounseling

138

HealthCounseling44

Muscle sorenessand Ache

10
Dentistry

Obstetrics &Gynecology

General Surgery

General
Medicine

HealthManagement

26
Ophthalmology

151

10%
0%

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Uncompleted Annual Health Check Tracking Mechanism

Annual Health Check Subsidies
HTC provides health check subsidies to its employees in Taiwan according to job title and grade. The dependentsof the employees also have access to health checks at any of the HTC contracted medical institutions.
In 2018, HTC spent NT$ 5,017,000 on subsidized health checks for general employees in Taiwan. There were
1,097 benefited employees. Among them, the health check completion rate for general employees in 2018 was
85.36%, while that for manufacturing employees was 100%, 1,296 people completed the health check in 2018.
According to the results of the health check, health management and a health education and counseling service
were arranged and employees needing further attention met with a physician so that more comprehensive
health care and treatment could be arranged. We track the health of these employees on a regular basis
according to the severity of their condition, and provide them to receive more comprehensive health care. As aresult, no harm caused by overwork occurred in 2018.

On the 11th of every month, employees are notified via email regarding
the time of health inspection. Supervisors of the first order will be
added to the copy of the letter in 3 months, and the supervisors arerequested to assist in supervision. According to the results of thehealth checkup, management at different levels will be carried out.
Employees reaching a certain degree of severity are given healthadvice and health education.

Sep

Oct

Nov

Dec

Health check follow-up
and statistics in 2018
The number of new recruits
with physical abnormalities
follow-up

401

The number of employeeswith physical abnormalities
follow-up

406

Physical Examination Abnormal Education Rate in 2018
100%
90%

HTC Health Check Regulations
Frequency
Regulations
Way
Last check date

Manufacturing employees: Once every two years after arrival
General employees: With one-year seniority and once every two years

80%
70%
60%
50%
40%

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

30%

Manufacturing employees: Implemented by employee clinic

10%

General employees: Staff can have a health check in numerous hospitals cooperated with HTC

0%

Manufacturing employees: Arranged by departments since July 2015

20%

0

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

General employees: In progress
Note: In Jul 2018, there was no case to be tracked, thus the unavailability of completion rate data.

131

Friendly Workplace

HTC 2018 CSR Report132

Health Promotion Programs

2018 Annual Health Check Abnormal Items and Number of Person

1. Manufacturing Employees
491 persons had abnormal health examination results. The top five abnormal items were white blood cells 172
persons, hemoglobin 105 persons, total cholesterol 57 persons, low-density cholesterol 46 persons, and liverfunctions 26 persons.
2018 Abnormal Items and Number of Persons for Manufacturing Employees
Liver Functions 26 persons
Low-density Cholesterol 46 persons

Total Cholesterol 57 persons

Others 85 persons

It is a well-known fact that the pressure of a technology industry tends to cause employees to neglect theimportance of their health. HTC Employee Clinic will organize seminars and health promotion activities
from time to time every month. The annual health promotion courses will be organized based on the previous
year’s health check abnormal items as well as the topics interested by the employees from the questionnaire
survey results. In 2018, 367 people participated in the infectious disease and cancer prevention activities,
and 8 people required further health consultations, all of which have completed the follow-up check. For the
Health Promotion Courses, a total of 73 classes were held in 2018, with a total of 2,595 participants, and an
average satisfaction rate of 94.07%. For the employees with abnormal items during health check, doctors will
be arranged for follow-up check and health education will be provided by nurses.
2018 Health Promotion Course Content and Number of Participants
Classes

Person

Total

80

491

70

■ Number of Attendees

60

Number of Classes

persons
Blood Cells 172 persons

40

40

947

20
10

Triglycerides 60 persons

133

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Low-Density Cholesterol

0

1,249 persons

TaoyuanTainanTotal Cholesterol 67 persons

Total

454

500

Number of participants in health promotion courses in various regions in 2018

Xindianpersons

Health Enhancing
Promotion

Total

765

367
Exercise and Diet
Weight Loss Courses

Others 148 persons

140

1,000

14

4

Infectious Diseases
and Cancer
Prevention

High Blood Pressure 58 persons

312

Vision Care

Urine Occult Blood 52 persons

57First Aid Courses

2018 Abnormal Items and Number of Persons for General Employees

1 7
Human Factors
Engineering02 57
EAP promotion

454 persons had abnormal health examination results. The top five abnormal items were low-density
cholesterol 69 persons, total cholesterol 67 persons, triglycerides 60 persons, high blood pressure 52 persons,and occult blood 58 persons.

2,500

1,500

30

2. General Employees

2,595

2000

50

Hemoglobin 105 persons

3,000

73

Total

1,332 persons
14 persons

2,595 persons

69 persons

HTC 2018 CSR Report134(1) Preventive measures against health-endangering heavy workloads

HTC Employee Clinic Facebook Page

https: //www.facebook.com/HTC.EmployeeClinic
HTC has created a Facebook Fan Page for the employee clinic. Besides promoting health promotion
activities, information on the correct health management is provided to employees, cultivating employees’autonomous health management capabilities. As of the end of 2018, the number of fans in FB Fan Page
reached 1,009 persons.

According to related regulations, employers have the obligation to plan and take the necessary safety andhealth measures for employees taking rotational shifts, night shifts or who work for long hours, in case
medical conditions might occur which are related to an unusually heavy workload. Appointments are madewith medical doctors, or health consultants for employees should a medical check find them to have a healthproblem. A change of work or the adjustment of working hours is usually recommended. In 2018 screening
and notification, 40 risky employees were interviewed by doctors. Work adjustment was applied to 3
employees. There was no incident of injury caused by overload in 2018.

Occupational HealthPreventive Measures Against Health-endangering Heavy Workloads

1. Specific Health Check

In 2018, the work environment at the HTC Taoyuan Plant is carefully tested and monitored. The special healthhazardous operations such as those involving ionizing radiation, dust, MDI and noise must receive a thoroughhealth checkup. The total number of employees required for special health examination was 108 people, andthe examination completion rate was 100%.
The number of workers put under Grade 1 Control was 74; Grade 2 Control was 34. In compliance with “TheLabor Health Protection Regulations”, all 34 workers subject to Grade 2 Control were sent individually to thecompany infirmary for health consultation with a doctor, who gave instructions on personal health and how toprevent further problems.

Identify
and Assess

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

Taoyuan health center counselingservice
Xindian plant on-site health service

HealthManagement

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

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

Set UpPreventive Plan

Make preventive measures against
health-endangering heavy workloads

Effectiveness
Assessment

Assess the effectiveness of plan andmake improvement plan

2. Emerging Health Issues

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

Topic

Organizer

Overload and Health Hazard Operation Prevention

Employee Clinic

Maternal Health Protection Plan

Employee Clinic

Ergonomics Hazard Prevention

ESH Department

Execution Infringement Prevention

HR Department
Number of injuries due to fatigue

2018 Employees with Overload Risk Management in 201828

■ Number of risky employees■ Number of notification
14

12 12

00
Jan

135

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Feb

4

33
Mar

Apr

00

00

May

Jun

2

Jul

33
Aug

00
Sep

22
Oct

44
00
Nov

Dec

HTC 2018 CSR Report136

(2) Maternal Health Protection Plan

Employee Assistance Program (EAP)

When safety and health hazard factors exist in the workplace, there may be adverse effects on pregnancy
and breastfeeding. When female employees’ presence in the workplace is indispensable, the importance ofthe protection of maternal health is highlighted. HTC has since June 2016 launched the Motherhood HealthProtection Program, which includes all female employees one year after childbirth or breastfeeding womenas 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 endof 2018, 92 employees completed the risk classification and protective measures, indicating the considerably
safe work enjoyment and contents.

2018 Maternal Health Protection Plan Risk Level and Numbers of Employee

73

70

77

70

Risk Level 2

Employee Assistance Program (EAP) Results

71

70

68

63

59

63

62

3
2

2

2

1
0
Jan

Feb

Mar

Apr

May

0

0

0

0

0

0

Jun

Jul

Aug

Sep

Oct

Nov

Note: Risk level 1: Evaluated by the doctor as harmless to the mother, fetus, or infant.
Risk level 2: Evaluated by the doctor as possibly harmful to the mother, fetus, or infant.
Risk level 3: Evaluated by the doctor as harmful the mother, fetus, or infant.

137

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HTC has been working with the Hsinchu Lifeline Association since February 2009 to provide employeeswith psychological counseling and guidance with respect to working career, relationships, family andparenting, gender sentiments, mental illness, and physical and mental stress. Each year, employees canenjoy unlimited telephone consultations and 6 free face-to-face consultation services, which are paid in fullby the company. In 2018, a total of 442 employees used the telephone consultation services. The analysis
and recommendation on employee consultation topics are reported regularly to the Occupational Safety
and Health Committee.
Appointment Hours: Monday ~ Friday 9 am ~ 7 pm
Reservation Tel: Mobile: 035-260415

Risk Level 1
82

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

Dec

2016

2017

2018

Number of Telephone Counseling (Free)

111

141

351

Number of Interviews

79

130

91

Hours of Interviews

106

140

100

Number of Interviews (Male)

46

44

38

Number of Interviews (Female)

33

86

53

Number of Interviews (manufacturing employees)

3

6

2

Number of Interviews (general employees)

76

125

89

443,000

566,400

460,000

Invested expense (NT$)

HTC 2018 CSR Report138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 self-inspection 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 thecomprehensive prevention of occupational accidents.

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

Education and Training
for Safety and Health

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

Standard Operating
Procedures and Job
Safety Analysis

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

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

Emergency Response

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

Health Managementand Enhancing

Purchase medical consumables and provide health checks or checks for special
health problems specific to both new employees and those already on the job.
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 andcommunicate with employees over workplace safety. All these efforts are aimed at
improving work efficiency.

139

Friendly Workplace2018 Full-time Environmental Safety and Health Personnel Training
2018 (Re) training for Certificate Training Completion Rate

Q1

1. Head of high pressure gas supply and consumption operations initialtraining x1 trainee
2. Fire protection personnel retraining x1 trainee

100%

Q2

1. Organic solvent operation manager x3 trainees
2. Stacker operator (>1 ton) training x1 trainee
3. Stacker operator (>1 ton) initial training x1 trainee

100%

Q3

1. Stacker operator (>1 ton) training x1 trainee

Q4

1. Specific chemical operation manager (MDI) x2 trainees
2. Roof work operation manager x2 trainees

Completed

Completed

100%
Completed

100%
Completed

HTC 2018 CSR Report140Comprehensive Emergency Rescue Measures

Injury Frequency Rate (FR)Injury Severity Rate (SR)A 24-hour emergency rescue Hot Line has been set up as part of a fullycomprehensive emergency notification system.
Sufficient rescue personnel have been lawfully designated and emergency rescue
personnel training courses are held annually.
Twelve Automated External Defibrillators (AED) are available at specific places
within the company.
Emergency evacuation drills are carried out periodically.
Since 2010, CPR seminars are held regularly each year

Injury Frequency Rate per Million Hours Worked

Lost Day Injury Frequency Rate per Million Hours Worked

These related measures have been effectively carried out at HTC. In 2018, mostoccupational injuries were the result of traffic accidents (24 cases) that happened
during commutes. There were 11 other injury cases that occurred within the facility.
Falls are the most frequently reported incident (3 cases), with 12.5 days of labor lost.
The average employee injury frequency rate (FR) was 0.83 person-time/per million
hours worked, average injury severity rate (SR) was 7.53 days/per million hours
worked in 2018. Our annual target will have been missed.
We will promote safety education for employees who commute to and from workin the future and will also provide them with work safety concepts and necessary
training. Warning signs are to be placed in conspicuous places to reduce theincidence of accidents.
Average FR in Taiwan Plant in 2018
TargetResultAverage Injury Frequency Rate (FR)

0.3

0.83

Average Injury Severity Rate (SR)

1.8

7.53

Note: 1. Average Injury Frequency Rate, FR=person/total time of work*million hours worked

Year

2016

2017

2018

Year

2016

2017

2018

Taiwan

0.61

0.61

0.83

Taiwan

13.00

10.89

7.53

Taoyuan plant (male)

0.98

1.82

2.08

Taoyuan plant (male)

24.87

17.37

27.33

Taoyuan plant (female)

0.58

0.39

0.64

Taoyuan plant (female)

12.59

16.00

1.29

Taipei HQ (male)

0.21

0.21

0

Taipei HQ (male)

0.42

1.25

0

Taipei HQ (female)

0

0

0

Taipei HQ (female)

0

0

0

Management Target

0.30

0.30

0.3

Management Target

1.80

1.80

1.8

Note: Injury Frequency Rate = Incidence of Lost-Time Injury×1,000,000/total hours
worked.

Note: Injury Severity Rate=Days Lost for Lost-Time Injury×1,000,000/Total Hours
Worked.

GRI Injury Indicators
Incidence Rate (IR)Occupational Disease Rate (ODR)= Total Incidences / Total Hours Worked × 200,000*= Occupational Disease Cases / Total Hours Worked × 200,000*

Year

2016

2017

2018

Year

Taiwan

0.12

0.12

0.17

Taoyuan plant (male)

0.2

0.36

Taoyuan plant (female)

0.12

Taipei HQ (male)Taipei HQ (female)

2016

2017

2018

Taiwan

0

0

0

0.42

Taoyuan plant (male)

0

0

0

0.08

0.13

Taoyuan plant (female)

0

0

0

0.04

0.04

0

Taipei HQ (male)

0

0

0

0

0

0

Taipei HQ (female)

0

0

0

2. Average Injury Severity Rate, SR=days/ total time of work *million hours worked

Day Lost Rate (LDR)

Absence rate (AR)3. Occupational injuries statistics does not include light damages of less than one day of loss, excluding traffic accidents.

= Total Days Lost/ Total Hours Worked × 200,000*= (Total Days Lost/Total Days Worked) ×100%

Year

2016

2017

2018

Year

2016

2017

2018

Taiwan

2.6

2.18

1.51

Taiwan

0.01

0

0.01

Taoyuan plant (male)

4.97

3.47

5.47

Taoyuan plant (male)

0.03

0.02

0.03

Taoyuan plant (female)

2.52

3.2

0.26

Taoyuan plant (female)

0.01

0.02

0

Taipei HQ (male)

0.08

0.25

0

Taipei HQ (male)

0

0

0

0

0

0

Taipei HQ (female)

0

0

0

Taipei HQ (female)Note: 1. *: 200,000 means for 50 weeks a year, 40 working hours per week, and per 100 employees
2. In 2018, there was no case of temporary worker injury; therefore, the injury rate (IR), occupational disease rate (ODR), loss day ratio (LDR), and absenteeism rate (AR) were all zero
3. If employees were injured due to work, it is regarded as occupational sickness leave. Therefore, the days of personal leave and sick leave were zero

141

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HTC 2018 CSR Report142

Contractor Management
HTC attaches great importance to the safety of contractors. Each year, according to the status of contractor
safety and health management, a complete occupational safety and health management plan is drawn up
to prevent and prevent occupational disasters. In addition, HTC has passed the OHSAS18001: 2007 versionof the Occupational Health and Safety Management System. Newly recruited construction workers receive
safety and health education before they start on their jobs. They are given all necessary information about theworking environment and the relevant safety regulations. They all know the location of fire-fighting facilities
and how to use it.
The Second Item of the HTC Environmental, Safety and Health Policy states that “We regard the safety andhealth of employees, customers, suppliers and contractors as equally important”. During the operation of thecontractor, 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 fortreatment. As long as the injury is due to work, whether it is small or severe, the notification must 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.
The HTC Family was created in cooperation with the Taoyuan City Government in 2014. The City organized
the safety and health seminars and field trips and also shared actual case studies with the contractors every
year. This caused small and medium-sized enterprises to work for occupational safety just like a mother hen
leads her children. From 2016 to 2018, the contractor’s injury rate (IR) was 0*.

Measureof Contractor
Construction
Management

Contractors
Healthand
Safety Audit

The provision of site safety induction
sessions at construction sites.

Incorporating requirements for safety & healthmanagement in the written agreements with allcontractors according to the applicable regulations toclearly define contractor obligation and responsibility,and evaluate all the risks in the working environment
including that from dangerous machines, so as to haveproactive control and eliminate potential hazards.

Verifying the information about
construction workers and vendors.
Monitoring high-risk operations.
Personnel access control.
Ensuring construction site safety.
Conducting safety and healthmanagement for new facility
construction.
Obtaining the required insurance forcontractor employees.

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 thesafety & health education of the workers, and all safety
requirements to be met before, during and after the useof machines, tools and equipment.

* Note: 1. The total number of working days for men is 666,244.72 days, and the total working hours is 6,089,188.47 hours in 2018.
2. The total number of working days for women is 750,380.28 days and the total working hours is 7,196,702.79 hours in 2018.
3. IR rate = total number of work injuries / total work hours × 200,000* (*: 50 weeks in a year, 40 working hours per week, the ratio for every 100 employees.)
4. 	The statistics of occupational injuries for contractors are based on the same criteria as the regular employees, excluding minor injuries with day of loss less than one day andtraffic accidents.

143

Friendly Workplace

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

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 character and culture for communities and towns in cooperation with local government, care fordisadvantaged families, providing their children with opportunities to receive education, and raising funds forenvironmental and ecological preservation.
We engage in public interest activities to espouse humanitarianism and contribute to a peaceful andharmonious society. The Foundation plays an important part in community engagement and social services
to instill the core values of integrity, honesty, care, love, positive thinking, and respect for natural resources.
The HTC Foundation invested NT$ 9.4 million on education in 2018, while HTC Social Welfare and Charity
Foundation spent NT$ 61.42 million on charity business.

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

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

Objectives
1. To encourage the development of good campus culture by influential education projects andthe continuous and systematic encouragement of teachers, parents, and students.
2. To encourage the development of good urban character culture by influential education
projects and urging local communities to work towards this end.
3. Care for disadvantaged families and the provision of educational opportunities for young
people to give them the knowledge and character that allow them to become contributive
members of the society.

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

147

Social Investment and Contribution

HTC 2018 CSR Report148Many Blessings Courses
The HTC Education Foundation is committed to the development of character education for young
people. It hopes to shape character through joint efforts by schools, parents, and society. Following theprinciple of “lighting a candle rather than cursing the darkness,” the foundation has established the“Many Blessings Course” for junior and senior high school students. These free courses each last for five
weeks. They include three hours of training and activity per week. The students get the energy to move
forward and make changes inspired by their instructors and volunteers, They are encouraged to become
leaders who can actively serve the public and use their own power to change the world.

Summer Institute for Character Education

Other Social Engagement Activities
In addition to sponsoring the social work upheld by the HTC Foundation, HTC also positively engages inpublic interest activities through other channels. In 2018, our accomplishments in social works included:

Blood Donations
HTC Foundation has been dedicated to the implementation of character education. For many years, it
has been providing high-quality, systematic, and diverse resources for education and training throughthe “rock education implementation program” to help schools across Taiwan to implement character
education more effectively. To help schools cultivate a character-based campus culture, nurture thoseschool practicing character education, promote academic and practical dialogue for the character
education to strengthen the ability of the schools’ leadership teams in implementation, the foundation
has been inviting Dr. Marvin Berkowitz, lecturing professor on character education from Collegeof Education, the University of Missouri at St. Louis, to give a lecture in the “Summer Institute for
Character Education” in Taiwan since 2012. As of 2018, there have been 256 people in total from theleadership teams made up of school principals and administration members from 40 schools who haveparticipated in the five-day intensive immersion training. There are five different campus schools in
2017-2018 from Bina Bangsa School in Indonesia.
This course has been taught in Missouri and other areas for 20 years. According to feedback from the
27 schools that participated in the last 5 years after the course, the course has been beneficial to boththe participating teams and their members in core topics of the character education and nature of
education or buildup of consensus for the leadership team. HTC Foundation will continue to hold thistraining course through its summer institute. It hopes that this course would help schools build up theirown leadership teams for the character education on their campuses. Through collective efforts by theteam members, the campus-based culture of character would be shaped to cultivate students’ growthand development in characters.

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

149

Social Investment and Contribution

Eight times every year HTC cooperates with the
Taipei Blood Center and Hsinchu Blood Center tohold blood donation drives. Many of 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 allline up to make donations to give back to society.
HTC is recognized by Hsinchu Blood Center as astanding Honorable Blood Donor Group. In 2018,
employees responded enthusiastically to blood
donation activities, and the participation rate wasnearly doubled. The total blood donated in Taoyuan
Plant was 144,000 ml, while the total blood donated in
Taipei Headquarter Building was 121,250 ml.

Year

2016

2017

2018

Number of incumbents

9,688

9,239

4,096

Blood Donation

857

748

695

Donation Rate (%)

8.85

8.10

16.97

Total blood donation (ml)311,500 288,500 265,250

The HTC Child Support ClubThe HTC Child Support Club was founded in 2006 as a spontaneous association formed by HTC employees. The
members raise money that is donated to the China Children’s Fund (CCF) to support the sponsorship of children
in need. In 2018, a total of 66 children were adopted, including 58 in China and 8 in foreign countries (including
Guatemala, Indonesia, the Philippines, Senegal, Sri Lanka, Kyrgyzstan, Paraguay, etc.).

2018 Christmas Charity Sale
“Light up the dream and grow together” – In 2018
Christmas Concert, we offered love and donations toprotect the minority children!
Many children lost their parents when they wereyoung because of family problems, illnesses or
accidents. There are also many children who
become highly concerned minority children
because of their parents’ deviated behavior. Whenthese children are helpless in facing their future andthinking to give up on themselves, there are manygroups to offer them love and to help them to face
the difficult challenges, allowing them to get rid of
the pain and seeing the precious value within them.
In the Christmas concert of 2018, HTC employees
supported the children and families of the “Taipei
Orphan Welfare Foundation” and “Taitung Senior
Caring Club” through practical actions.

HTC 2018 CSR Report150

GRI 103:
The Management Approach and Its Components
Standard
Material Topics

Summary of the Communities and Associations ParticipatedEconomic
Economic Performance

How HTC manages the topic

The purpose of the
management approach

Pay attention to corporate governanceand operational transparency, andformulate and implement a corporate
governance structure in accordancewith relevant laws such as the “Company
Law” and “Securities Exchange Act”,
and continuously improve management
performance.

Properly and effectively
assign the powers andresponsibilities of the boardof directors, managers, andshareholders to establish
and maintain an operatingteam that is accountable toshareholders“Corporate Governance PracticePrinciples”

Establish a Salary & Compensation
Committee to evaluate professionallyand objectively the salary &compensation policy and system, andassess progress in achieving the goals.

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

“Salary & Compensation Committee
Organizational Procedures”

Organization Name

Member qualification

SDA (Secure Digital Card Association)

General member

Wi-Fi ( WECA Wireless Ethernet Compatibility Alliance)

General member

TCA (Taipei Computer Association)

General member

RBA (Responsible Business Alliance)

General member

GSM Association

MemberTAICS (Taiwan Association of Information and Communication Standards)

General member

AirFuel Alliance

General member

VESA ( Video Electronics Standards Association)

General member

Khronos Group-OpenGL(Open Standards for media Authoring and Acceleration)(The Industry's Foundation for High Performance Graphics)

MemberIndustry-Academy Alliance 3D & AR/VR image display Industry-Academy Alliance

General member

Standard

NMEA (New Media Entertainment Association)

General member

Material topics

JBRC (Japan Battery Recycling Collection)

General member

How HTC manages the topic

Taoyuan importers & exporters chamber of commerce

General member

Import ISO 14001 environmental
management system and verify it withexternal third parties.

CCSA (China Communications Standards Association)

General member

OPEN Alliance (One-Pair-Ether-Net Alliance)

General member

GTI (Global TD-LTE Initiative)

General member

3GPP (3rd Generation Partnership Project )General member

MIPI (Mobile Industry Processor Interface Alliance )General member

Bluetooth SIG (Bluetooth Special Interest Group)

General member

Provide attractive and stimulating salary& benefit plans, establish relevant rules
to return operational performance to theemployees; and develop various welfare
measures and training mechanisms.
Conduct performance evaluation for all
employees every year, and offer salaryadjustments and incentive bonuses
based on the performance evaluation
results to ensure the compensationand growth of employees. This canlink together company’s finance andperformance.

“HTC Code of Conduct”“Rules for Derivatives Transaction”“Regulations for the Appointment
of Directors/Supervisors in Reinvestment”“Board of Directors Rules ofProcedure”

Grievancemechanisms
Investor Liaison :Telephone: +8862-8912-4138
E-mail: ir@htc.
com
Company
spokesperson andinvestor relations
Shen Daobang
spokesman@htc.
com

Ensure that the company’ssalary & compensation are
in compliance with relevantlaws and regulations andare sufficient to attract
talents.
Enable employees to dotheir best to maximize theirstrengths, and encourage
employees to continue towork hard and innovate intheir positions.

Effluents and Waste

Set up sewage treatment equipment in
the plant area, and regularly test andreport online.
Entrust lawful disposal agencies toproperly dispose of wastes, and carryout irregular inspections.
Periodic inspections of waste storage
and temporary storage areas will
be conducted through inspection
schedules.

Refer to the “Code of Conduct for
Responsible Business Alliances”
to develop relevant environmental
specifications in the “HTC Supplier
Code of Conduct” to periodicallyassess suppliers’ compliance with andimplementation of the Code.

Social Investment and Contribution

Related policies

Environmental

Establish supplier evaluation andmanagement system.

151

Marketing Presence

Supplier Environmental Assessment

The purpose of the
management approach
Reducing waste throughclassification andadvocacy, and increasing
the efficiency of recycling.
Reduce the impact ofoperations on the naturalenvironment.
Extend the concept andrequirements of social
responsibility management
to the supply chain andimplement supply chain
responsibility.

Related policies“ESH Management Manual”“HTC Corporate Social Responsibility
Policy”“Process for Removal and HandlingBusiness Waste Manual”“Procedures for Sewage System
Operation, Repair, and Maintenance”“HTC Supplier Code of Conduct”“Vendor Management Procedure”“Vendor Survey Procedure”“Supply Chain CSR and QMS Audit
Procedure”“Contractor Environmental,
Safety and Health Management
Procedures”“Environmental, Safety and
Health, and Energy Regulations
Requirements Management
Procedures”“Supplier Environmental, Safety and
Health, and Energy Management
Procedures”

Grievancemechanisms
Internal: e-mails,
announcement
methods, proposal
improvement bills,
or discussions
with the Healthand Safety
Committee
External
stakeholders
can file anappeal throughCorporate Social
Responsibility
Corporate_
responsibility@
htc.com. The casewill be transferredinternally to the
EA. According
to the “EP00000010
Procedures for
the Control ofEnvironmental
documents”

HTC 2018 CSR Report152

GRI 103: 2018 Management Approach

Standard

SocialMaterial Topics

Standard

Labor/Management Relations
Employment
Occupational health and safety
Training and education

How HTC manages the topic
HTC has a well-established parental
leave application mechanism to protect
the rights of employees.
Provide diverse and fair employment
opportunities for employees.
The board of directors set up a salarycompensation committee to assess
the salary and remuneration policy andsystem of the directors, supervisors,and managers and achievement of
performance goals.
Provide attractive, motivating salary andbenefits programs.
The company convenes a labormanagement conference every quarterand records and tracks problems andimproves results.
The Ministry of Environmental
Protection and the Department of Laborand Social Security are responsible forthe implementation of the occupationalsafety and health and energy
management system and draw up theannual plan.
Refer to the “Code of Conduct for
Responsible Business Alliances” toformulate relevant labor regulations in
the HTC Supplier Code of Conduct
Build inspection standards for hazardous
substances.
Mark product information, and add
environmental protection material
certification on the packaging.
Set up internal control mechanisms tocontrol technical data, software andhardware, and customer patents or
intellectual property rights.
Reference Responsibility Business
Alliance Code of Conduct Developing
Corporate Social Responsibility Policy
and Set up a supplier assessment andmanagement mechanism.
Reference Responsibility Business
Alliance Code of Conduct Developing“HTC Supplier Code of Conduct”, andperiodically assess whether suppliers
meet and implement the guidelines.

Customer health and safety
Customer Privacy
Supplier social evaluation
Socioeconomic Compliance

The purpose of the
management approach
Ensure the rights andinterests of all employees.

“HTC Code of Conduct”

Promote good labor
relations.

“Customer Satisfaction
Management Program
Specification”

Protect the labor rights ofmultiple employees.

“HTC Corporate Social
Responsibility Policy”

Reduce the turnover rateof employees.

“HTC ESH Policy”

Reduce the risk ofworkplace hazards toemployees and reduce
occupational hazards.
Attract and retain
outstanding talents.

“ESH Management Manual”“Safety and Health Rules”“HTC hazardous substancemanagement policy”“HTC Supplier Code of Conduct”“HTC Information Security Policy”

Grievance mechanisms
The grievancemechanism includes
employee complaint
hotline, complaintsuggestion box,
grievance e-mail, andsexual harassment
grievance mail box

Employee Services APP
notification system“HTC Supplier Code of Conduct”

Customer service
hotline: 0809-090-166,
please call: 02-21626788

Protect customer privacy.
Reduce product harmful
substances and packages.
The use of wood.
Extend the concept
and requirements ofsocial responsibility
management to the
supply chain andimplement supply chain
responsibility.
Conformity to relevantsocioeconomic
regulations.

GRI 103: The Management Approach and Its Components

Environmental
Supplier
Environmental
Assessment

16, 38-40, 114“HTC Conflict Mineral
Procurement Policy”

Set up local customer
service hotlines in 70
countries around theworld“Supplier Environmental,
Safety and Health, and Energy
Management Procedures”

Build more than 20
websites in different
countries
Provide PR, Service,
Copyright, Security andother different types of
e-mail38, 114HTC CSR Committee
Responsible Business Alliance (RBA)
ISO 14001 Environmental Management
Domestic related environmental regulations
Supplier assessment and management mechanism.
ISO 14064-1 Greenhouse Gases

19-22, 48-55, 59,
71, 73, 85-88

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

21-22, 37-38, 47, 48,
97, 102-103, 113, 117,
121-124, 129-138, 143

Customerhealth and safety

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

56, 79-83

Customer Privacy

Information security /privacy management
Corporate customer satisfaction management
General Data Protection Regulation(GDPR)
Domestic and foreign related capital regulations

suppliersocial assessment

Supplier assessment and management mechanism.
Responsible Business Alliance(RBA)(OHSAS 18001/ISO 45001) Occupational Health and Safety
Management System
IECQ QC080000 Hazardous Substance Process Management System
UL Certificate

21-22, 48-55, 59, 143

Socioeconomic
Compliance

Other social and economic related regulations(domestic and foreign)39-40, 47, 56, 79-83,
88, 97, 123

Employment

Training andeducation“Customer Service Privacy
Protection Declaration”

Protect customer healthand safety.

Compensation Committee

Occupational
health and safety“Privacy Policy”“Supply Chain CSR and QMS
Audit Procedure”

Market Presence

Labor/Management
Relations

Reduce the potential
risk of excessive use ofviolence or other humanrights violations bysecurity personnel on
duty.
Ensure that the products
are non-toxic andharmless green products
and comply with nationallaws and customer
specifications.

Independent director, supervisor system, the internal audit system
Corporate Governance Evaluation of TWSE

General employees
company extension
28585
Employee helpline
e-mail HelpMe_8585@
htc.com“Vendor Survey Procedure”

Economic
performance

Effluents and waste

manufacturing
employees of the
production line
company extension
38585“Personal Information Protection
Management Policy”“Vendor Management Procedure”

The result of Evaluation(referring page)Mechanism of Evaluation

Economic

Reduce the negative
impacts of end career
employees.

HTC adopts the Conflict Minerals Survey
Template to conduct annual assessment
on suppliers’ mineral sources.
Establish KPIs, and progress feedback
mechanisms to effectively manage thesupply chain.

153

Related policies

Material Topic

Social56, 111

HTC 2018 CSR Report154

GRI Standards Content Index

GRI Standard

GRI 102:
GeneralDisclosures
2016

Disclosed Topic

Referring Page

Remark

102-43

Approach to stakeholder engagement

25-26

102-44

Key topics and concerns raised

25-26

102-45

Entities included in the consolidated financial statements

102-46

Defining report content and topic Boundaries

1, 21-24

102-47

List of material topics

23-24

102-48

Restatements of informationNone

102-49Changes in reportingNone

102-50

Reporting period

102-51

Date of most recent report102-52

Reporting cycle

41-42

102-53

Contact point for questions regarding the report227-34, 48, 97

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

2102-55

GRI content index

155-158

102-56External assurance

159-160

103-01

Explanation of the material topic and its Boundary

103-02The management approach and its components

103-03

Evaluation of the management approach

102-02

Activities, brands, products, and services

7102-03

Location of headquarters

10

102-04

Location of operations

7

102-05

Ownership and legal form

7102-06

Markets served

10102-07

Scale of the organization

102-08

Information on employees and other workers

102-09Supply chain

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

11-12, 16, 98
98-100Please refer to Market
Observatory Post System
https://mops.twse.com.
tw/mops/web/t146sb05

Precautionary Principle or approach102-12External initiatives

102-13

Membership of associations

151

102-14

Statement from senior decision-maker

5-6

102-15Key impacts, risks, and opportunities

41-42

102-16

Values, principles, standards, and norms of behavior

17-18

21-22, 25-26

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

102-23Chair of the highest governance body

Please refer to HTC 2018
Annual Report P.28

102-25

Conflicts of interest

Please refer to HTC 2018
Annual Report P.110

102-36

Process for determining remuneration
List of stakeholder groups

102-41

Collective bargaining agreements

GRI 103:
Management
Approach
2016

37

Please refer to HTC 2018
Annual Report P.28-30,
82-87, 105

102-40

GRI 102:
GeneralDisclosures
2016

11-16

102-11

Consulting stakeholders on economic, environmental, and social
topicsRemark25-26

7102-21

Referring Page

Identifying and selecting stakeholders

Name of the organization

Mechanisms for advice and concerns about ethics

Disclosed Topic
102-42102-01

102-17GRI Standard

No agreement2
2018/6
Once a year24
152-153
154

Topic-Specific Disclosures: GRI 200 (Economic topics)
GRI 201:
Economic
Performance2016

201-01

Direct economic value generated and distributed

16

201-03

Defined benefit plan obligations and other retirement plans

114

GRI 202:
Market Presence 202-01
2016

Ratios of standard entry level wage by gender compared to114

205-01

local minimum wage

40

205-02

Operations assessed for risks related to corruption

205-03

Communication and training about anti-corruption policies andprocedures

38
25-26

Please refer to HTC 2018
Annual Report P.288-291

GRI 205:
Anti-corruption
2016

40, 108
None

Note:* represents the topic disclosed voluntarily by HTC, not a major topic identified in 2018.

155

GRI Standards Content Index

HTC 2018 CSR Report156

GRI Standard

Disclosed Topic

Referring Page

RemarkTopic-Specific Disclosures: GRI 300 (Environmental topics)

GRI 302:
Energy2016

GRI 305:
Emissions
2016

GRI 306:
Effluents and
Waste
2016
GRI 308:
supplier
environmental
assessment
2016

302-01

Energy consumption within the organization

302-04

Reduction of energy consumption

302-05

Reductions in energy requirements of products and services

305-01

Direct (Scope 1) GHG emissions

305-02

Energy indirect (Scope 2) GHG emissions

305-03

Other indirect (Scope 3) GHG emissions

305-05

Reduction of GHG emissions

305-06

Emissions of ozone-depleting substances (ODS)

305-07

Nitrogen oxides (NOx), sulfur oxides (SOx), and other significant
air emissions

306-01

Water discharge by quality and destination

306-02

Waste by type and disposal method308-01

New suppliers that were screened using environmental criteria

308-02

Negative environmental impacts in the supply chain and actions
taken

63
63-67
80

62

GRI 401:
Employment
2016

GRI 402:
Labor/
Management
Relations
2016
GRI 403:
Occupational
Health and
Safety2016

GRI 404:
Training and
Education
2016

157

New employee hires and employee turnover

401-02

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

405-02

Ratio of basic salary and remuneration of women to men

114

GRI 406:
Nondiscrimination
2016406-01

Incidents of discrimination and corrective actions taken

None

GRI 410:
Security
Practices2016

410-01

Security personnel trained in human rights policies or procedures

414-01

New suppliers that were screened using social criteria

414-02

Negative social impacts in the supply chain and actions taken

50, 53

Assessment of the health and safety impacts of product andservice categories

83

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

None417-01Requirements for product and service information and labeling89417-02

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

Incidents of non-compliance concerning marketing communications

None

GRI 418:
CustomerPrivacy
2016

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

None

GRI 419:
Socioeconomic
Compliance2016419-01

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

None

73
85-88

50

101
115-118

Parental leave

120

402-01Minimum notice periods regarding operational changes

121403-01

Workers representation in formal joint management-worker healthand safety committees

124403-02

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

141-143404-01

Average hours of training per year per employee

404-02

Programs for upgrading employee skills and transition assistanceprograms

105-113, 121

404-03

Percentage of employees receiving regular performance and careerdevelopment reviews

107, 114

RemarkDiversity of governance bodies and employees

GRI 416:416-01
Customer Healthand Safety
416-02
2016

48, 50

Referring Page

405-0162

401-03

GRI Standards Content Index

GRI 405:
Diversityand Equal
Opportunity
2016

Disclosed TopicGRI 414:supplier social
assessment
2016

Topic-Specific Disclosures: GRI 400 (Social topics)
401-01GRI Standard

GRI 417:
Marketing andLabeling
2016

38, 98-100, 104

124

48, 50, 53-55

113

HTC 2018 CSR Report158

Assurance Statement

159

Assurance Statement

HTC 2018 CSR Report160

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

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

http://www.htc.com+886-2-89124138+886-2-89124138