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Corporate Social

Responsibility Report

May 31, 2017

2016 Corporate Social Responsibility Report

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TXC Corporate Social Responsibility Report Introduction

TXC started to issue the CSR report dated back in 2009. To ensure our CSR report covered

corporate social welfare, business governance, and environment health & safety issues, the report

was written based upon GRI and AA1000 guidelines. Moreover, in 2016, to better present our

willingness, eagerness, and aggressiveness, TXC adapted comprehensive options of GRI G4 to

issue our CSR report.

■ Scope

The Corporate Social Responsibility Report information disclosure is based on the period from

January 1, 2016 to December 31, 2016. Because of the business area is Ping Cheng Factory in

Taiwan. Therefore, the scope of certification this time also includes social welfare, corporate

governance and environment safety health.

■ Principles of writing contents of reports

The structure of contents and the aspect boundaries of the Corporate Social Responsibility Report

is on the basis of the Global reporting initiative (GRI) G4.0 Sustainability Guidelines and

AA1000 Assurance Standard. The report was prepared based on the principles of materiality,

stakeholder inclusiveness, sustainable development fields and comprehensiveness. No significant

difference regarding the scope, limitations and measuring method between this report and the

2014 report. Relevant financial figures of the report are calculated in New Taiwan dollars and

have been certified by the accountant. Aside from regular internal audit of the environmental,

safety and sanitary management system, every year we also accept external audit of ISO14001

and OHSAS18001. Greenhouse gas emission data was used the coefficient of the “greenhouse

gas emission coefficient control chart (version 6.0.3) provided by the Environmental Protection

Agency and has been reported after certified by BSI. Moreover, the carbon dioxide emission data

of product carbon footprint has been calculated from the coefficient provided by ITRI DoITPro:

Y2013 databank.

■ Report Verification

In order to upgrade information transparency and credibility, the report has been commissioned

to the third party, British Standards Institution (BSI), for verification. It is reviewed for


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inclusivity, materiality and responsiveness according to the assurance standard of AA1000 and

GRI G4.0 guideline. This report conforms to the Comprehensive option of GRI G4.0 index and is

verified by BSI with the assurance statement attached to the appendix.

■ Issue time

The Corporate Social Responsibility Report is continuously issued to public on the TXC’s

website: http://www.txccorp.com/index_en.php?action=f_social_1&cid=6 annually.

Last issue version: May 2016 (in Chinese and English)

This issue version: May 2017 (in Chinese and English)

Next issue version: May 2018 (in Chinese and English)

■ Contact Us

You are welcome to contact us if you have any question or suggestion on the report by the way as

follows:

TXC Corporation

Address: No.4, 6 Kung Yeh 6th

road, Ping Cheng District 324, Tao Yuan City, Taiwan

Tel: +886-3-469-8121

Fax: +886-3-469-6954

Contact window: Supervisor of administration center

E-mail: [email protected]

Website: http://www.txccorp.com

http://www.txccorp.com/index_en.php?action=f_social_1&cid=6

mailto:[email protected]

http://www.txccorp.com/


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Contents

Contents ............................................................................................................................................ 3

1. Strategy and Vision .................................................................................................................. 6

1.1. Statement from Executive ................................................................................................ 6

1.2. The commitment of TXC Corporation ..................................................................... 9

1.2.1 Corporate social Welfare ................................................................................ 10

1.2.2 Corporate operation governance .................................................................... 10

1.2.3 Environment safety and health ....................................................................... 11

1.2.4 Relevant definitions of Conflict Minerals ...................................................... 11

1.3. Organization structure of Corporate Social Responsibility of TXC ...................... 13

2. Company Overview ................................................................................................................ 14

2.1. Company Profile .................................................................................................... 14

2.1.1. Business Logic ............................................................................................... 14

2.1.2. Market overview ............................................................................................ 15

2.1.3. Operation performance ................................................................................... 18

2.1.4. Public association ........................................................................................... 19

2.2. Awards in 2016 ....................................................................................................... 19

3. Corporate Operation Governance ........................................................................................... 20

3.1. Corporate operation governance structure ............................................................. 20

3.2. Board of directors ................................................................................................... 25

3.2.1. Responsibilities of board of directors ............................................................. 27

3.2.2. Company law and regulations compliance ..................................................... 28

3.2.3. Duties of the Remuneration and Compensation Committee .......................... 30

3.2.4. Obligations of the Auditing Committee ......................................................... 31

3.2.5. Internal auditing Introduction ......................................................................... 32

3.3. Code of conduct ..................................................................................................... 33

3.3.1. Anti-corruption ............................................................................................... 34

3.3.2. Political donation ............................................................................................ 35

3.3.3. Competition in the industry ............................................................................ 36

3.4. Risk management ................................................................................................... 36

3.4.1. Risk management policy ................................................................................ 36

3.4.2. Organization structure of risk management ................................................... 37

3.4.3. Contingency plan ............................................................................................ 38

4. TXC Corporation and Related Interest Parties ....................................................................... 39

4.1. Identification of related interest parties and communication ................................. 39


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4.2. Employees .............................................................................................................. 51

4.2.1. Recruiting ....................................................................................................... 51

4.2.2. Appointment ................................................................................................... 53

4.2.3. Training and development .............................................................................. 54

4.2.4. Salaries and benefits ....................................................................................... 55

4.2.5. Lohas TXC ..................................................................................................... 58

4.3. Customers ............................................................................................................... 63

4.3.1. Customer relationship management ............................................................... 63

4.3.2. Customer privacy ........................................................................................... 65

4.4. Supplier .................................................................................................................. 66

4.4.1. Selection of suppliers ..................................................................................... 66

4.4.2. Negotiation on content of contract ................................................................. 69

4.4.3. Supplier information ...................................................................................... 69

4.4.4. The supplier communication channel ............................................................ 69

4.4.5. Order continuity ............................................................................................. 69

4.5. Government and regulatory agencies ..................................................................... 70

4.5.1. Degree of regulatory compliance ................................................................... 70

4.5.2. Environment protection .................................................................................. 70

4.5.3. Fulfillment of tax obligation .......................................................................... 70

4.5.4. Degree of policy co-ordination ...................................................................... 70

4.6. Competition in the industry .................................................................................... 70

4.6.1. Strategy plan ................................................................................................... 70

4.6.2. New Product and technology/royalty ............................................................. 71

5. Environment Safety and Health ............................................................................................. 72

5.1. Environment protection plan and management ...................................................... 73

5.1.1. Environment protection plan .......................................................................... 73

5.1.2. Environmental Management Practices ........................................................... 77

5.1.3. Environmental Information Disclosure Status ............................................... 78

5.1.4. Resource-Saving and Reducing Carbon Measure .......................................... 81

5.2. Environmental protection implementation ............................................................. 82

5.2.1. Specific measures and efficacy in waste reduction and resource recycling and reuse ......... 82

5.2.2. Specific Measures and Efficacy of Green Products and Services .................. 86

5.2.3. Specific Measures and Efficacy in Pollution Control .................................... 87

5.3. Implementation of Environmental Protection Concepts ........................................ 89

5.3.1. Internal Implementation of Environmental Protection and Specific Measures ........ 89

5.3.2. Green Purchase ............................................................................................... 91


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5.4. Safety and Health Planning and Management ....................................................... 92

5.4.1. Establishment of our Safety and Health Management System ...................... 92

5.4.2. Workforce Participation Empowerment in Safety and Health ....................... 92

5.4.3. Specific Measures in health and safety management ..................................... 93

5.4.4. Risk Management Planning ........................................................................... 95

5.4.5. Accident Investigation Management .............................................................. 95

5.4.6. Business disaster recovery plan ...................................................................... 96

5.5. Supply Chain Security Planning and Management ................................................ 97

5.5.1. Construction of the Supply Chain Security Management System ................. 97

6. Social Welfare ........................................................................................................................ 98

6.1. Public welfare and charity ...................................................................................... 99

6.2. Environment and protection ................................................................................. 101

6.3. Arts and culture .................................................................................................... 103

6.4. Education and research ......................................................................................... 103

7. Plans and Prospects .............................................................................................................. 106

7.1. Green operation aspect ......................................................................................... 106

7.2. Occupational safety and health aspect ................................................................. 106

7.3. Public welfare activity aspect ............................................................................... 106

7.4. Environment protection aspect ............................................................................. 107

7.5. Employee participation aspect ............................................................................. 107

GRI G4.0 indicator index 108


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1. Strategy and Vision

1.1. Statement from Executive

Enterprises should be centered on man, and talents are the cornerstones to sustainable

enterprise management. Enterprises, minus the talents, are not capable of producing sufficient

niche differences, consequently they are incapable of long-term management. Therefore, how to

nurture talents, how to keep colleagues motivated and remain as zealous and upbeat as during the

inception of the enterprise has been a primary concern for our company management. Further, for

an enterprise to operate efficiently relies on systems of all levels. The inter-connection and

inter-operation between all units within the company, vertical or horizontal, also hinges on the

efficient governance right from the board of directors down to all departments. Hence, how to

link the system with the organization and for the organization to drive operation has been on our

company's priority agenda, and much more so for a company that possesses a millennium vision

and intends to stand rooted every step of the way.

The term, Corporate Management, has been well documented in Europe and the US for

many years. Included in Taiwan’s corporate evaluation is Corporate Social Responsibility.

Whether it be the former GRI 4.0 edition or the Year 2016 edition of the new GRI102 (Global

Reporting Initiative), the Board of Directors is covered as part of the corporate management. This

goes to show the intertwining and inseparable relationship between corporate social

responsibilities and corporate management. In the past few years, TXC Corporation has been

strictly self-demanding and self-examining through various evaluation systems. Without blowing

our own trumpet, we are pleased to say that we have achieved considerable results in that respect.

With regard to issues on Climate Change, we put carbon reduction into practical action and

actively publicize carbon footprints as inter-connected as between IoT devices. The act of

fanning in one corner, through the butterfly effect, may cause a fire in another place. Our world

does not work as independent units in their singular operation, but we rely on each other for

survival and further still, for mutual creation and counteraction. Several days ago, the Global

Seed Vault inside glaciers on Norway’s Svalbard archipelago was flooded due to thawing

permafrost. This is a huge warning to humans’ future survival. By contrast, what we could do

may be essentially limited, yet regardless, our company - as a global citizen - will spare no efforts

in the direction of mitigating climate change, for the sake of our future generations.

Not long ago, scholars proposed amending Taiwan’s Company Act, the first in the

amendment draft of the 130 Articles included Corporate Social Responsibilities and states as


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below: “A company should operate by abiding by all laws and ethical confinements, conduct

action beneficial to the public interests and fulfill its social responsibilities.” The objective is to

switch from the former focus on shareholder-centered interests to incorporating public interests.

Indeed, for a corporation to exist, it requires conscience, and only those conscientious

corporations will obtain long-standing support from employees, shareholders and customers alike.

It will thus undoubtedly be a foreseeable daily active focus for all corporation management teams

to conduct research on how to achieve enduring development amidst global competition, to

obtain excess returns from customers and to further implement their due social responsibilities so

as to fulfill the obligation as a global citizen.

TXC Corporation has always been devoted to “Cultivating Young Talents Rooted in

Education” as its axis of corporate social responsibilities. Over the past 10-plus years, we have

been persistent in our mission and practice by contributing to the elementary schools in Pingzhen

and Beitou’s Zuojin. With many years of deliberation, this year saw the establishment of the

Education Foundation, with hopes to converge collective efforts so as to complete more

educational missions. This expectation may begin with a humble intention but will galvanize

efforts from all directions and ultimately result in great achievements through ripple effects. Let

us make further concerted contribution towards social harmony and intellectual & psychological

developments in children’s education, all in the spirit of planting seeds for future growth of

forestry, in expectation that efforts made today will amount to results of wider impact tomorrow.

As such, starting next year, I will assign the general manager to act as the Commissioner for “the

Environmental and Social Commission” and “the Economic Commission”, while striving for

more support from the Board of Directors to work collectively with colleagues in fulfilling

corporate social responsibilities.

I remember five whole years ago that CommonWealth Magazine stated in an article titled,

“Corporate Ambitions and Conscience” an open evocation for corporations to “create a healthy

climate in which to nurture talents in the industry/commerce sectors that possess both corporate

ambitions and corporate conscience.” The evocation/incitation from five years ago has been

translated into the Article 1 amendment under the Company Act which can be seen as a

reasonable result from compulsive reinforcement. However, the law and regulation is the

minimum reinforcement that companies can impose upon themselves. As far as TXC Corporation

is concerned, to maintain a corporate conscience is our eternally unfaltering determination. How

such fruits born out of corporate ambitions can enable corporate conscience to exercise and

impart more impact will hinge on how much weight our colleagues can shoulder, what valor we

can summon, and what courage we can galvanize as a team.


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On the occasion of publishing TXC Corporation’s CSR Report, I am hereby happy to impart

a few words of encouragement as above.

Chairman:

TXC Corporation


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1.2. The commitment of TXC Corporation

Since the founding of TXC, we have long expected to feedback to society as a good

corporate citizen while in pursuit of corporate growth and sustainable development. On honoring

commitment, we have consistently adhered to our operation principle toward upstream and

downstream companies, support social benefit and environmental preservation. In recent years,

following attention to topics of environmental protection and based on our conviction and

mission for the society and environmental protection, internally the company has actively

promoted green product design and publicity work of various environmental protection events so

as to serve our corporate responsibility for protection of the environment.

Based on the guideline of “what is taken from society is used in the interests of society,”

within the scope our capability, TXC will continue to serve society and the public and feedback

results to employees, customers and the disadvantaged social groups, particularly giving priority

to basic education, and make contributions to society in fulfilling our corporate social

responsibility. Based on the above description, the Company's commitment to corporate social

responsibility from the “Corporate Social Responsibility”, “Company operations management”

and “Environmental Safety and Health” to proceed with three dimensions, it is summarized as

follows:

Corporate Social Responsibility

Connunity charity work

Environment safety and health

Arts and culture

Education and research

Corporate Governance

Protect stockholder's rights and interests and to function

Treated fairly to stockholder

Implement the duty of the board of directors

Information Disclosure and transparency

Implement Corporate Social Responsibility

Environmental Safety and Health

Policy

Environme proteection plan and management

Implamentation of environment protection The concept of environmental protection and its education and promotion Safety and health plan and management

The environment safe hygiene check table


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1.2.1 Corporate social Welfare

The “promoting education for the young” is the most important CSR activity of this

Company, given that education is a long-term goal and people the foundation for future

development, and no one will become a talent and no progress will be made in the absence of

sound and well-planned education. According to Guanzi, it takes ten years to grow a tree but a

hundred years to education people. While primary education and teachers giving primary

education concern us most, we have been sponsoring art, culture, physical education, and music

activities relating to the morality, intelligence, physical, socialization, and aesthetics education of

elementary schools ever since started promoting CSR in 2004. Despite of limited resources and

capacity, we have spared no effort to focus on education for the young over the past 13 years or

so based on the belief in “devoting faith to what should be done and devoting energy to what can

be done,” in order to benefit schools near our locations in Beitou, Taipei, and Pingzhen, Taoyuan.

Although the results are not outstanding but have contented our humble wish. Please refer to the

website for the social welfare as

http://www.txccorp.com/index_en.php?action=f_social_1&cid=4&sid=11&id=2

1.2.2 Corporate operation governance

The company has made a strong commitment to corporate governance for a number of years

and received an A+ and A++ Information Disclosure and Transparency Ranking grade from 2007

to 2014. We paid much attention to the information transparency which is highly positive

recognition. To ensure all employees who have keep a sense of integrity, inclusion, so as to

maintain the corporate image. We have printed the second version of code of conduct in Chinese

and English, which will be also released on the company’s website. In addition to this, the second

version of CIS specification in Chinese and English issued to unify the use of external corporate

logo. We expect that all employees keep in mind of the company’s request after careful review

and signing back the “responsibility declaration” on the issue of code of conduct so as to take

responsibilities to colleagues, shareholders and related interest parties.

To adequately present the company’s results of the corporate operation governance to

increase confidence of investors, the company will continue to participate in the evaluation of the

corporate operation governance by Taiwan Corporate Governance Association (TCGA). ·In 2015,

TXC Corporation was ranked among the top 20% by the Taiwan Stock Exchange Corporation in

Corporate Governance Evaluation. In 2016 and 2017, we rose among the top 5% in the corporate

management evaluation, which demonstrated the effort of the company for this cause.

http://www.txccorp.com/index_en.php?action=f_social_1&cid=4&sid=11&id=2


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1.2.3 Environment safety and health

In order to maintain labor safety, besides continuing to introduce OHSAS 18001

occupational safety and health management system and passing CNS 15506 Taiwan occupational

safety and health management system certification under the guidance of Labor Safety and

Health Committee and Labor-Management Meeting. We held many sessions of health-promoting

events, such as metabolic syndrome health seminars, cervical smear tests, HPV virus seminars,

CPR & Heimlich maneuver advocacy, voluntary-quit-smoking-at-workplace events, oral cancer

screening events, voluntary weight-loss events, emotion and stress-relief events, blood pressure

monitoring events, flu vaccination and so on, to assist our colleagues with improving their health

and to further obtain the “Health Promotion Emblem” certified by the Healthy Workplace Unit of

the Health Promotion Administration, Ministry of Health and Welfare. With a view to building a

friendly communication environment, reducing misunderstandings and conflicts, we additionally

invited Lifeline lecturers to conduct “Soft Communication Classes” to improve awareness and

caring skills. Regarding off-factory transport accidents, we give timely assistance and concern.

We continue to create a safe working environment to provide our colleagues with maximum

security.

In 2016, the company has been accredited with the ISO 9001 in quality management system,

ISO/TS16949 in quality management system for the automobile industry, ISO 14001 in

environmental management system, CNS15506 occupational safety and health management at

workplace in Taiwan, ISO/IEC27001 information security management system, ISO28000 supply

chain security management system, IECQ QC080000:2012 hazardous substances process

management system, OHASAS 18001:2007 occupational safety and health management system,

and recognition of occupational safety and health performance. With the inclusion of the

accreditation of ISO 14064-1:2006 greenhouse gas inspection, PAS 2050:2011 carbon footprint

verification, and ISO 14051:2011 material flow cost accounting (MFCA). In the future, the

company will ensure the effective functioning of all these systems to satisfy and even surpass the

demand of the customers. For the company’s environmental safety and health, please refer to

http://www.txccorp.com/index_en.php?action=g_ESH_1&cid=1

1.2.4 Relevant definitions of Conflict Minerals

TXC Policy and Commitment

As a member of the electronic industry supply chain, TXC will perform its

corporate social responsibility. Aside from abiding by the code of conduct as set forth

by Electronic Industry Citizenship Coalition (EICC) and GeSI and related requirements,



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TXC has carried out supply chain survey and formulated its policy and commitment for

not using any conflict minerals from the Republic of Congo and its neighboring nations.

Our No Conflict Minerals Policy is as follows:

Conflict minerals refer to gold, tantalite, wolframite and cassiterite mined and sold

by the armed groups in the mining areas of the Republic of Congo and its neighboring

nations. Since mining or control of aforementioned minerals involved serious issues of

human rights, races and illegal benefits, TXC thereby makes the following commitment

as a member of the global village:

Not to purchase conflict minerals produced in the conflicts areas.

Strive to require the upstream and various raw materials suppliers to refuse to use

conflict minerals from the conflict areas and require to produce a letter of

commitment.

To ensure the supply chain manufacturers also comply with this policy, TXC has

required all material suppliers to fill out the Commitment on Prohibiting Use of

Conflict Minerals for products containing any of the following items of conflict

minerals, and concomitantly provide a namelist of the minerals processing

manufacturers as approved by EICC and GeSI to ensure that their products do not use

any conflict minerals from aforementioned areas.


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1.3. Organization structure of Corporate Social Responsibility of TXC

The corporate social responsibility administration committee is totally in charge of by the

chief administration center. Under the committee, they are eight units as corporate governance

group conducted by finance unit, green product design group conducted by research and

development, supplier management group by purchasing and supply chain management center,

the labor-employer committee conducted by the human resources unit, the risk management

group conducted by the finance and QA units, the energy saving group by manufacturing unit,

labor safety and wealth committee conducted by election of employees, and social welfare

promotion group formed by supervisors of the various centers. In accordance with the annual

plan and budget, the issues of related stakeholders will be incorporated into routine jobs and

annual plan to promote furthermore corporate responsibility related activities and certificate.

Economic management representative and environmental and social management

representative, risk assessments of the economic, environmental and social operating

performance and significant economic, environmental and social issues are reported to the board

of directors during the last board meeting of the year. Approval of the handling measures for

related issues is sought from the board of directors to effectively address the demands of

stakeholders on the Company and also ensure that the business direction and countermeasures

effectively conform to market and industry trends and induce the management team to make the

necessary adjustment.


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2. Company Overview

TXC Corporation was founded in 1983 (hereinafter referred to as TXC). With a history over

30 years, TXC has upheld the self-expectation of “good and even better” and requirement of

“excellence.” Thanks to hardworking and endeavors of employees, currently TXC now ranks

No.1 in Taiwan and No. 3 in the world by scales of the professional frequency control component

manufacturing services. We also provided customers with abundant manufacturing capacity,

complete diversity of process technologies and modular design on the professional frequency

control component manufacturing services.

2.1. Company Profile

Founded: December, 1983

Amount of Capital: NT$ 3,097 million

Numbers of employees: 1,043 persons (December 31, 2016,)

Main business: Professional frequency control component manufacturing services

Major products: Major in six series of products of high precision and high quality Crystals,

Oscillators, Real time clock modules, Automotive, Light Sensor and Sapphire Wafer.

Headquarter: 4F, No.2, Chung Yang S. Rd., Peitou, Taipei, Taiwan

Ping Cheng Factory: No 4,6, Kung Yeh 6th

road, Ping Cheng District, Tao Yuan City

Ningbo Factory: No.189 Huangshan West Rd. Beilun District, Ningbo, Zhejiang, China

Chungking Factory: No.22 Fung Sheng Rd., Jiulongpo District, Chungking, China

2.1.1. Business Logic

The core value of an enterprise lies with its publicized business logic and its attendant vision

and mission and the continuous development of an enterprise is often built on a long-term


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architecture, as well as its core value. In view of the imperativeness and importance of the

enterprise’s core value for long-term development following gradual development of the

company, TXC Corporation hereby declare the company’s vision statement, mission statement

and corporate culture as follows:

2.1.2. Market overview

Sales area of major products

Products will become smaller and lighter and the proportion of product shipment using

SMD quartz crystal will become ever higher. Looking to the future, Asia will continue to

be OEM pivot of the global electronics industry with more shipments coming from Asia.

TXC will continue to strive to develop the American and European design-in market.

Sales distribution of major products in recent two years:

Unit: Thousand New Taiwan dollars

Year 2015 (consolidated) 2016 (consolidated)

Amount % Amount %

America 239,122 2.58 267,915 2.78

Europe 35,478 0.38 39,638 0.41

Asia 7,603,437 82.06 7,527,750 78.11

Domestic 1,387,619 14.98 1,801,799 18.70

Total 9,265,656 100.00 9,637,102 100.00

Area


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Market share

The crystal quartz components made of crystal using its natural characteristic are

essential basic components of electronic products. In the current quartz crystal component

market supplied by Japan, TXC Corporation, departure from Taiwan, is one key component

manufacturer. We provide qualified and reliable products with strong ambition. We combine

production service of flexible reaction as a result of continuously growing fast and

expanding market share. Global market share increased to 9.8% in 2016. (according to an

information by external market analyst). Currently we have become now No. 1 in Taiwan

and No. 4 in the world by scales of the professional frequency control component

manufacturing services.

Total Xtal & Oscillator Market Shares (Millions of Dollars)

2016 Rank Company Name 2016

Revenue (M) Percent of Total

1 Seiko Epson $409 12.9%

2 NDK $357 11.3%

3 TXC $310 9.8%

4 KCD $287 9.1%

5 KDS $212 6.7%

6 Vectron $160 5.1%

7 SiWard $103 3.3%

8 Hosonic $94 3.0%

9 MegaChips $73 2.3%

10 Murata $72 2.3%

Other Companies $1,088 34.2%

Total Revenue $3,165 100.00%

Data Courtesy of CS & A 2017


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Product application

Quantity and value of output of last two years

Unit: K units, K dollars

Year 2015 (consolidated) 2016 (consolidated)

Domestic Sales Exports Sales Domestic Sales Exports Sales

Main Product Quantity Value Quantity Value Quantity Value Quantity Value

Dip Quartz 250,000 209,031 298,476 210,000 188,862 258,802 250,000 209,031

SMD Quartz 2,800,000 2,517,292 5,939,631 2,900,000 2,578,069 5,292,220 2,800,000 2,517,292

Others 0 1,564,456 1,917,631 0 2,402,077 2,380,855 0 1,564,456

Total 3,050,000 4,290,779 8,155,738 3,110,000 5,169,008 7,931,877 3,050,000 4,290,779

Worldwide locations:

TXC has three manufacturing bases: Ping Cheng Factory in Taiwan, Ningbo Factory in

China “TXC (Ningbo) Corp.” and Chongqing Factory in China “TXC (Chongqing) Corp.”

We also have two overseas subsidiaries in the U.S. and in Japan, as well as business supports

from other invested affiliated companies. We have branches and offices in Los Angeles,

China, Japan and Europe. Application engineers have been built to quickly meet needs of


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client design and engineering section. We also feedback to customers or compile message

quickly when customer complaints; In addition, we have creased distribution channels to

extend marketing to all over the world. Refer to following website for various subsidiaries

and offices of TXC http://www.txccorp.com/index_en.php?action=a_about_1-1&cid=2.

2.1.3. Operation performance

To meet market demand, we have continually upgraded and increased high-end market

applications for our wireless communications and personal digital products. Furthermore,

we’ve focused on low power, small size and precision niche markets. Thanks to expansion of

production capacity on both shores of the Taiwan Straits, consolidated sales revenues ran to NT$

9,637,101,000 in 2016, net profit after tax was NT$1,013,692,000 earning per share after tax was

NT$3.28. The entities included in the preparation of the Company’s 2016 Consolidated Financial

Statements are TXC Corporation, Taiwan Crystal Technology International Limited, TXC

(Ningbo) Corporation and Taiwan Crystal Technology (HK) Limited, Growing Profits Trading

Ltd, TXC Technology Inc, TXC Japan Corporation, TXC（Chongqing）Corporation, TXCO

Corporation. See the company website for the 2016 financial statements.

(http://www.txccorp.com/index_en.php?action=e_company_1-1&cid=2)

Unit: NT$ Thousand

Item 2016 2015

Increases(Decrease)

Amount changes ratio

Net operating income 9,637,101 9,265,656 371,445 4.01

Gross profit 2,554,069 2,235,175 318,894 14.27

Net income (loss) 1,013,692 938,203 75,489 8.05

Consolidated Financial Status and Profitability：

Year 2016 2015

Financial structure

(%)

Debt Ratio 32.83% 31.07%

Long-term fund to fixed assets ratio 273.17% 265.53%

Solvency (%) Current Ratio 279.40% 248.91%

Quick Ratio 227.49% 201.84%

Profitability (%)

Return on assets 6.82% 6.67%

Return on Equity 9.79% 9.56%

Basic earnings per share（NT dollar） 3.28 3.03

Year

http://www.txccorp.com/index_en.php?action=a_about_1-1&cid=2

http://www.txccorp.com/index_en.php?action=e_company_1-1&cid=2


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2.1.4. Public association

TXC actively involved in the industry association activities and became a member of them,

such as Quartz crystal industry association, Electric parts association, Taiwan electrical and

electronic manufacturers association, Taipei Enterprise manager association, Taiwan quality

association, Supply management institute, Taiwan and Taiwan corporate governance association.

The company’s chairman acted as directors of Quartz crystal industry association and Electric

parts association.

2.2. Awards in 2016

Corporate Governance Award EPA Carbon Footprint Emission Coefficient

Datebase Establishment Award Ministry of Finance Safety Certification

Quality Enterprise(AEO) contribution Award


20

3. Corporate Operation Governance

Having considered investors’ dependence on the company’s various information disclosures

and on the strength of our continuing practice of transparent access to various information to

safeguard the shareholders’ rights, we have been assessed as excellent and won much recognition

in the Information Disclosure Evaluation in many previous & present years. On the various

requirements listed in the newly established “Corporate Management Evaluation” newly

established in 2015, we place great emphasis, which has driven the company continuously

stronger and relentlessly forward, while contributing management results back to stakeholders

concerned, as well as the society and the country. The results of Corporate Management

Evaluation from present and previous years are listed as below. Results of the appraisal are as

follows:

Year Corporations Evaluated Ranking

2017(Third) 1,496 Top 5%

2016(Second) 1,447 Top 5%

2015(First) 1,393 Top 6%~20%

3.1. Corporate operation governance structure

There is no major change in the organization’s size, structure, ownership, share capital

structure, the location of suppliers, the structure of the supply chain and in relationships with

suppliers in 2016. There is no major change to shareholding by directors and supervisors while

ownership by institutions followed self-adjustment along with the ups and downs of the market.

The Company established an Economic and Environmental & Social Committee in 2013 to

effectively make decisions and determine responsibility for the above issues.


21

Corporate operation governance structure


22

Various departments’ content of work as follows:

Department Contents of work

Office of the

chairman

Setting up major strategic planning for the company

Help solve major problems concerning quality and engineering

Technical ability is enhanced and to promote the supervision of product development

Risks and opportunities assessment for the feasibility of new technology and investment

Overall financial planning and Investment Management Development

Managing

Director’s Office

In charge of the company's overall business policies, objectives, budget planning and setting, as well

as the implementation of overall business of supervision, coordination and management

Decision, revision and implementation into major business proposal

Supervision of the operations of overseas subsidiaries

Audit Office

Audit plan developed to track the results all the way to the final project, in order to use it for the

overall management of the internal control audit

The production of annual and monthly audit plan

production of audit summary report, report to the general manager, chairman, supervisors, board of

directors

Internal control and audit services supervision

The implementation of performance evaluation and guidance for improvement for each management

unit

Amendments to the internal control system and the implementation details

Corporate Key Operating Risk Management System (KBR) and KPI management for various units.

Marketing Center

Product sales, order processing and customer development and service

Competitors, sales analysis, product marketing strategy and industry market analysis

Management of cost and sample development

Emerging market development, new product development and marketing services

Customer service and problem solving for product applications

Drafted product marketing strategy

Established business (sales, cost and quality) targets, strategy and planning for automotive products.

RD Center

R & D of new products and mass production

New products / transfer of material technology and mass production

R & D plan of the project, implementation and import

New product evaluation and development of marketing

Miniaturization, high precision, high reliability, new product development, planning, promotion and

production of technology transfer

Development and improvement of new equipment, modules, instruments and tools

Planning, promotion, technology transfer and production of new process technology development

project

Research and implementation of the R & D plan

New product samples for testing and evaluation to assist the product engineering units

Quality

Assurance Center

Review and setting of company-wide annual quality / environmental safety and health goals

Establish, audit and coordinate company-wide quality, environment and green products system to

ensure its effective operation

Work plans and implementation of various annual quality-related activities

Promote quality improvement work

Annual work planning and implementation of DCC center

Planning and importing materials, control and inspection of the quality when undertaking

manufacturing, product assembling and shipment of home-made chip

Quality management of products and materials

Inspection and control of materials importing, processing and quality of finished product

Improvement of IQC testing method, the increase of test performance to reach testing optimization

Customer complaint management process


23


Manufacturing

Center

Co-ordinate and apply the resources (manpower, equipment, production capacity, investment

budget, etc.)of the entire manufacturing center (PCF & NGB & CKG)

Managing the KPI (key performance indicators) of each factory under the manufacturing center

Implementing and achieving the manufacturing capacity expansion plan as required by the company

goal

To understand the manufacturing strategy and trends of the whole quartz crystal industry

Production and manufacture of products

Improvement, planning and implementation of the production process

Process Improvement and Process Development

Management and maintenance of production equipment

Calibration of instruments and management

Production capacity, material requirements planning, production and marketing controls and

arrangements, inventory and warehouse management delivery

Supervision and implementation of industrial safety and health as well as the environmental

management system

Inspection and maintenance of public system equipment

Administration

Center

Planning and setting of the company organization systems and departmental duties

The establishment and implementation of the company management system

To promote the effectiveness of the review of the annual budget

Production and analysis of the accounting process of the company as well as cost and financial

accounting information

Financial management, capital allocation and handling services of the underlying shares of listed

companies

Personnel compensation and benefits, recruitment, selection, promotion, appraisal, training and

development and other human resources management jobs

Staff Relations and to conduct various conference activities

General Services Administration and General Services jobs

Delivery and management of the company business information, the establishment of operating

systems, and its development and maintenance

Network communications planning, implementation, and maintenance

e-form operational planning and implementation of electronic forms

Security and management of information and network communication

Supply chain

management

Center

Purchase and management of equipment, raw materials, semi-finished & finished products and

general goods

Quotation, price negotiation, purchasing, transaction term negotiation, payment requisition, tracking

etc.

Promotion of supplier management system and development of supplier management.

Formulating the production-marketing balance plan, production schedule, execution and

management.

Carry out tasks such as import, export, transport, customs declaration, customs clearance and

insurance as well as the review and payment requisition of relevant expenses.

Management and analysis of the cost of imported materials.

Statistics, review and improvement of On Time Delivery

Purchasing work system review and improvement and work procedures streamlining to raise

efficiency

New materials, substitute materials, common materials for different plants, development of new

manufacturers or equipment.

Supply market information (supply/demand, price, technology, policy etc.) compilation and trend

analysis.


24


Labor safety and

health

management

office

Oversee safety and health review / risk assessment and other environmental safety management.

Responsible for safety and health management system planning and establishment of related

procedures.

Oversee safety and health management items.

Draft, plan and introduction of safety and health management items. Supervise organization and

identification of safety and health related laws by related departments.

Handle internal / external inquiries and communication regarding safety and health issues

Remuneration

committee

Regularly review the organization rules and submit recommendations for revision. Regularly review

director, supervisor and executive officer performance evaluations and remuneration policy, system,

standards and structure following establishment. Regularly evaluate company director, supervisor

and executive officer remuneration.

Obligation of the

Auditing

Committee

Set up and revise internal control system and internal control system effectiveness evaluation

Set up and revise guidelines for significant financial and business conduct including acquisition or

disposal of assets, derivative product transactions, lending of capital, endorsement and guarantees to

others

Evaluate the conflicts of interests involving directors

Evaluate significant assets, derivative product translations, lending of capital and endorsements and

guarantees.

Evaluate fund raising, issuance or private placement of equity securities.

Evaluation CPA appointment, dismissal and compensation and appointment and dismissal of

financial, accounting and internal audit supervisors.

Review annual financial reports and semi-annual financial reports.

Economic

Committee

Convene scheduled and unscheduled committee meetings to discuss economic topics to be

submitted for review and serve as a basis for continuous improvement.

Report to stakeholders and highest governing body the negotiation procedure for economic issues.

When negotiation is authorized, the management representative will report to the board of directors.

Encourage full understanding of relevant laws and responsibilities that need to be borne by the

company.

Oversee establishment, implementation and maintenance of management systems by each unit

supervisor to achieve individual objectives.

Environmental &

Social

Committee

Convene scheduled and unscheduled committee meetings to discuss environmental and social issues

to be submitted for review and serve as a basis for continual improvement.

Report to stakeholders and highest governing body to negotiation procedure for environmental and

social issues. When negotiation is authorized, the management representative will report to the

board of directors.

Encourage full understanding of relevant laws and responsibilities that need to be borne by the

company.

Oversee establishment, implementation and maintenance of management systems by each unit

supervisor to achieve individual objectives.


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3.2. Board of directors

The highest governing body of the company is Board of directors. For this reason, the

nomination, selection, dismissal of directors and supervisors has a clear article to follow, and it is

in accordance with professional requirements. Furthermore, the seats of the directors, supervisors

and independent directors are also in line with the conventional industry. The company also

provides independent directors and supervisors to fully exercise the powers of the related

resources.

The directors of TXC are elected by shareholders’ votes. There are a total of eleven

members on the board of directors with four independent directors. In line with the diversity

policy for members of Board of Directors, we have two female independent directors. The

chairman, who is voted by the members of the directors, has a term of three years. At the present,

the director of the company is Mr. Lin Jinbao, who also works as the chief executive; whereas,

the deputy chairman of the company acts as the deputy executive. As for the managing director,

he must be a qualified manager as appointed by the board of directors. Managing director is

directly responsible to the board of directors (at the present the position of managing director is

held by Mr. Lin Wanxing), all the rights and interests of relevant people inside and outside the

company can communicate with the company spokesman or the acting spokesman through the

mail and telephone contact as shown in the company website, in order to fully reflect the

company's operational needs which might need to be adjusted or amended. Furthermore, external

customers can also communicate with the “customer representative” which is set up by the

company’s business and marketing unit. As for corporate bodies, the company also carries out

explanations through the relationship of investors, and uploaded the latest information onto the

company website, for the purpose of free viewing. As for our internal staffs, they can express

their views or offer suggestions through emails or through employee satisfaction surveys, to

achieve full communication purposes. As of December 2016 the company has not received any

complaint calls. As for internal colleagues, the proposed requirements were met in their routine

operations, and there is no risk of breaking any law, for this reason, these incidents were not

recorded.

Regarding the election and appointment of company directors, unless stipulated otherwise in

laws, regulations or articles, the provisions of the Director Election Procedure, which outlines the

operational judgment, accounting and financial analysis ability, business management ability,

crisis handling ability, industry knowledge, international market views, leadership ability and

decision-making ability required by directors, shall be followed. Wherein, Chairman Mr. Lin


26

Jinbao has nearly three decades of experience in the quartz industry, and leads the technology

officer Dr. W.T. Hsu to jointly responsible for the task of product planning and R&D. As for

marketing and sales, plant operations and related logistics support, these are the job of the

managing director, who has more than twenty years of experience in the quartz industry. These

two men worked together to achieve the aim of professional complementation. In addition, the

independent director of the company, Professor Yu Shangwu, held a Ph.D. in financial studies

from the University of Birmingham, U.K. Furthermore, he currently holds the position of

Professor at Ming Chi University of Technology. For this reason, he is an expert in both the field

of finance and information management. One of our female independent directors, a former chief

investment officer for Pegatron Corporation, ASUSTeK Computer Inc., former managing director

for UBS Group AG, current director for Kinsus Interconnect Technology Corp., DaShenSi

Venture Capital Corporation, eslite Foundation for Culture and Arts, Spotfilms Co., Ltd. (legal

representative), Ms. Sharon Su is a specialist in corporate finance & investment and industry

research & analysis. Our other female independent director, previously working in Simpson

Thacher & Bartlett LLP and Yongyun Attorneys-at-Law, Ms. Jennifer Wang is currently a partner

in Chen & Lin Attorneys-at-Law in charge of capital and merging projects, specializing in

securities trading act, company act, corporate merging act, fair trade act, e-commerce and

cross-strait investment & technological collaboration regulations, covering cross-nation or

domestic corporate merging, corporate re-shuffling, domestic & overseas initial public offering &

financing, foreign nationals investing in Taiwan and setting up R&D and straining centers,

application for governmental subsidies, setting up joint ventures, fair trade act compliance and

relevant applications, as well as assisting customers conducting various business trading and

contract design, drafting and negotiation and general company legality consultancy, her work

experience covering professional legal services for domestic and cross-country corporations of

various sectors. As for the remaining directors of Mr. Ge Tianzong, Mr. Chen Que Shangxing,

and Mr. Guo Xiuxum, each has the expertise in the field of consumer electronics marketing and

business development, respectively. As for the legal director Hong Ding Venture, it is the capital

reinvestment company of UMC Group. For this reason, it has the practice experience in the field

of market dynamism as well as professional industry investment. In any case, by appointing

people with practical experience in the industry or people with scholarly background into the

board of directors, the company is able to sufficiently identify the changes in the politics,

economy, society, science and technology, in order to adjust the company's internal rules, such as

employee manuals, codes of conduct, emergency response plans, in addition to fully grasp the

future through the possession of the international standard certification requirements, and acting

in advance. The directors and supervisors of the company would also continually participate in

the professional training courses in the area of finance and business practice. In 2016, the


27

company set the topics of “An Analysis of the Results of Corporate Governance Evaluation in

2015 and the Countermeasures in 2016” and “Analysis and Influence of Taiwan Anti - Avoidance

Act?” as the gravity of training. You may inquire at the open information observation station

(http://mops.twse.com.tw/mops/web/t93sc03_1) regarding studies by directors and supervisors.

As for the rest of senior managers, each has their own duties and qualifications as required to suit

his post. Furthermore, their ability will also be assessed each year through key performance

indicators, which is the standard unit for assessing their performance. The board members and

managers of TXC strictly follow the code of conduct. There is no complaint for sexual

discrimination and no report from employees about sexual harassment or inequality from sex

gender.

3.2.1. Responsibilities of board of directors

The continued and sustainable management of a company mainly comes from a steady

managing direction as well as the implementation of system and control. As for the direction of

development of prospective business, it depends on the understanding towards the market by the

Board of Directors and the Management sector. Board responsibilities include supervision,

determining management direction and work in accordance with the market demand.

Furthermore, it is also necessary to appoint capable and competent managing level executive to

carry out the management strategies of the board of directors, to ensure good business results.

To ensure good management results, the Company established an Economic and Environmental

& Social Committee in 2013 to effectively make decisions and determine responsibility for the

above issues. After the Management Representative appointment is passed by the board of

directors and authorized by the President Representative, the board appoints the Chief Financial

Officer to serve as the Economic Management Representative and currently serving

Environmental Safety and Health System Manager to fill the position of Environmental and

Social Management Representative. In addition, risk assessments of the economic, environmental

and social operating performance and significant economic, environmental and social issues are

reported to the board of directors during the last board meeting of the year. Approval of the

handling measures for related issues is sought from the board of directors to effectively address

the demands of stakeholders on the Company and also ensure that the business direction and

countermeasures effectively conform to market and industry trends and induce the management

team to make the necessary adjustment.

In 2016, company operations were normal, performance conformed to the board’s

expectations and no significant disputes occurred. In the event of a significant dispute or major


28

event, the announcement method for significant news is posting on the Market Observation Post

System and the company website and notification of each board member by e-mail as soon as

possible. The company posted a total of 34 items of significant news and promptly notified each

board member by e-mail in 2016.

In addition, the 2016 Sustainability Report, written based on the comprehensive option in the

Global Reporting Initiative (GRI) G4.0 Guidelines, was approved at the December 19, 2016

board meeting.

3.2.2. Company law and regulations compliance

The mode of operation of the Board of Directors of the company is in compliance with local

laws and regulations, in order to maintain the proper and normal operation. The management

result will be fully disclosed on the company’s website as well as on annual reports. As for

suggestions and recommendations by the parties of interest, the company also has a designated

spokesman to respond to these queries. This can effectively avoid damage to the company by

unidentified risks. Furthermore, the company website has set up hassle-free email communication

channels (http://www.txccorp.com/index_en.php?action=e_company_1-1&cid=6) so that all

stakeholders can communicate and complain to company supervisors, independent directors,

chairman and general manager, and ensure the communication and complaint channels with

stakeholders are open.

As for rules of procedure for the board of directors, the Company shall convene a meeting in

accordance with law, at least once quarterly to review business performance and discuss

important strategic issues, the meeting issues include the economy ("International Financial

Reporting Standards" (IFRS), expansion in investment), environmental (RoHS, GP) and

corporate social responsibility. As for matters brought up in the executive board meeting, it is

http://www.txccorp.com/index_en.php?action=e_company_1-1&cid=6


29

important that it has to be specific. In case of conflicting interests where avoidance to the issues

is needed, we will attempt to adopt self-censorship to the issue. There are clear specifications

regarding article 28 of corporate governance practical principles, the principle of integrity in

operation, the code of conduct, article 15 of the rule of procedure of the board of directors and the

code of conduct for employees. If the director, supervisor or manager violates ethical conduct, the

company will issue disciplinary measures in accordance with the standards of ethical conduct of

the company, and will also disclose the name, job title, and time of violation, reason for violation,

story of violation, rules for violation and procedures for violation to the MOPS. TXC has always

upheld the highest principles of relevant laws and regulations. There were no fines in 2016 for

corruption related offenses.

A list of directors and supervisors attendance to meetings of board of directors

Title Name (or

Representative) Gender

Attendance

times(B)

Times of

attendance

by proxy

Actual

attendance

%(B/A)

Remark

Chairman Lin Jinbao Male 8 0 100

Vice

chairman Xu Derun Male 8 0 100

Director Lin Wanxing Male 8 0 100

Director Zhou Mingzhi Male 4 0 80 New

Director Hong Ding venture

capital co., ltd Male 8 0 100

Director Chen Que

Shangxing Male 8 0 100

Director Ge Tianzong Male 8 0 100

Independent

director Yu Shang Wu Male 8 0 100

Independent

director Edward Tsai Male 8 0 100

Independent

director Su Yan Syue Female 5 0 100 New

Independent

director Wang Chuan-Fen Female 5 0 100 New

Note: The background information, educational background, concurrent jobs at other companies and attendance rate

by members of the TXC board of directors have already been published in the company annual report. You

may also inquire at the open information observation station (http://mops.twse.com.tw/mops/web/index)

Board of directors

Age Female Male

40-50 2 0

50-60 0 3

60-70 0 6

http://mops.twse.com.tw/mops/web/index)


30

3.2.3. Duties of the Remuneration and Compensation Committee

To continue to improve corporate governance and narrow the gap with international

standards, the Company Board of Directors adopted a resolution on December 28, 2011 on

setting up the Remuneration and Compensation Committee. The Committee operates

independently and submits its recommendations to the board for reference. The third

Remuneration Committee passed the Board of Directors Meeting on July 18, 2016. Yu Shangwu

was recruited as independent director, Cai Songqi, Su Yansyue and Wang Chuanfen, as members

of the Remuneration Committee. Relevant details have been examined to ensure the remuneration

of managers meet expectations of the stakeholders.

In accordance with the Organizational Regulations of the Remuneration and Compensation

Committee formulated by the company, the committee shall convene meetings twice a year with

following obligations:

Regularly review the organizational regulations and propose commendations for

revision.

Formulate and regularly review the policy, system, standard and structure of the

performance evaluation and remuneration and compensation for company directors,

supervisors and managers.

Regularly evaluate the remuneration and compensation for company directors,

supervisors and managers.

The performance evaluation and remuneration of our company directors and managers are

processed in line with the Remuneration Committee Charter and will undergo periodic evaluation

by the Remuneration Committee, so as to keep a check on whether the company’s overall

remuneration policies, systems, standards and structure are consistent with market

competitiveness. Key factors included in the performance evaluation of our company directors

and managers are overall company operation performance, management risks that the company is

exposed to in terms of economic, environment and social dimensions and action in response to

developmental trends, as well as scopes of contribution to the company performance. In addition,

the salary payment of managers is in step with the following factors: salary standards of the same

position in the industry, the position holder’s responsibilities and management scope within the

company, and the overall contribution to the company’s operational objectives. Should a manager

be assessed as irrevocably unfit for the position, he/she can be lawfully discharged from the

position based on the resolution of Board of Directors.


31

Decisions about short-term performance bonus percentages and variable-pay remuneration

payment times are made in consideration to industry characteristics and company business

attributes. The above remuneration includes cash remuneration, stock options, profit-sharing

plans, retirement benefits and severance payments, allowances and other incentive measures.

After following the earnings distribution principle set down in the Company’s Articles of

Incorporation and allocation or reversal of special reserve in accordance with relevant laws and

regulations, no more than 2% of the remaining earnings shall be allocated for remuneration to

directors and supervisors and no less than 3% shall be allocated for employee bonuses. The

remainder are combined with accumulated undistributed earnings from previous years and

distributed as shareholder dividends as resolved by the shareholders’ meeting after an appropriate

amount is reserved based on operating conditions. By taking consideration to the above, a

reasonable salary will be given. The overall condition of the company should be taken into

account when deciding the salary of the director and managers. In order to strike a balance in

sustainable operation and risk control, the amount of their remuneration is dependent on future

operating performances and risks. Furthermore, their remuneration will be subjected to review

depending on the actual management condition as well as relevant laws of the local government.

An obstruction-free communication channel has been established inside the company

website. Regarding remuneration policy and recommendation vote results, stakeholders may

contact the Company’s Remuneration Committee and submit complaints. For further details,

refer to the company website

http://www.txccorp.com/index_en.php?action=e_company_1-1&cid=3&sid=8&id=10 .

With regard to pension benefits, the Company has established employee retirement plan in

accordance with the Labor Standards Act and retirement reserve funds are regularly deposited

into the Bank of Taiwan in accordance with the law. The Labor Retirement Reserve Fund

Supervisory Committee is responsible for the management and utilization of the retirement

reserve fund. The Legislative Yuan passed the Labor Pension Act on June 11, 2004. Starting from

July 1, 2005, the Company has been depositing pension funds each month into individual labor

pension account set up by the Council on Labor Affairs in compliance with the new system. In

January 2007, a manager of the employee pension fund was appointed to guarantee that the

pension plan is professionally managed.

3.2.4. Obligations of the Auditing Committee

On June 19, 2013, a resolution was passed by the Shareholders’ Meeting to voluntarily

http://www.txccorp.com/index_en.php?action=e_company_1-1&cid=3&sid=8&id=10%20


32

establish the first annual Review Committee and appoint the independent directors Yu Shang-wu,

Peng Yun-hong, Edward Tsai as the members of the first Review Committee with a term from

June 19, 2013 to June 18, 2016. Commissioners for the 2nd Audit Committee were

commissioned in the shareholders meeting on June 7, 2016 and consist of the entire members of

independent board directors, Mr. Yu ShangWu, Mr. Cai Songqi, Ms. Sharon Su and Ms. Jennifer

Wang. Their term of office begins on June 7, 2016 and terminates on June 6 2019. The four

independent directors perform effective oversight over each aspect of company operations and

governance and enterprise operation development in order to practice corporate governance,

strengthen supervision function and enhance the management system.

3.2.5. Internal auditing Introduction

The Internal Control System of Publicly-listed Companies” promulgated by the Securities

and Futures Bureau of Financial Supervisory Commission of the Executive Yuan, the auditing

room has been set up under the board of directors.

The auditing room formulates its annual auditing plan in accordance with foregoing

handling guidelines and carries out following auditing operations in a cyclical manner

for the year to ensure that the company internal control system is proper, reasonable

and effective in implementation by various departments:

· Sales and receipts cycle

· Procurement and payment cycle

· Production cycle

· Wage and work cycle

· Financial cycle

· Fixed assets cycle

· R&D cycle

· Computer cycle

In accordance with regulations of the Securities and Futures Bureau, the auditing room

would audit on a monthly basis the stock affairs operation and the derivative financial

products trading operation, and on a quarterly basis audit endorsement and

guaranty/liability commitment and contingent items/capital loan to third party

operation; and present report on tracking of improvement on shortcomings found by

previous auditing every 3 months; and carry out self-inspection operation for the


33

internal control system every year in order to improve operation performance. And in

accordance with provisions of “The Implementation Guidelines for Building Up the

Internal Control System of Publicly-listed Companies” report to the board of directors

the auditing report and the auditing tracking report by the end of the following month

upon completion of the auditing report.

The auditing room shall complete following required online reportage operation

within the deadline of the Securities and Futures Bureau of the Financial Supervisory

Commission of the Executive Yuan.

· Submit report on the Annual Auditing Plan for the following year before end

December.

· Submit report on information on auditing supervisor and auditor for the current

year before end January.

· Submit report on Implementation of the Annual Auditing Plan for the previous

year before end February.

· Submit report on Internal Control System Statement of the previous year before

end April.

· Submit report on Shortcomings of the Internal Control System and Improvement

of Abnormalities of the previous year before end May.

3.3. Code of conduct

For a long time TXC had strived to create a working environment which abide cooperate

code of ethics as well as respecting diversity and talent. Based on the above concept, the

company drafted the “code of conduct” which is subjected to alteration through environmental

and legal changes. In recent years, more and more attention had been paid to “corporate social

responsibility” by upstream and downstream partners. An equal emphasis will be placed on

"environmental, safety, health" as much as "Corporate Social Responsibility" and "company

operations management". In 2010 the second edition of "Code of Conduct" was published, with

its content including eight dimensions such as company operations management, employees,

customers, community groups, suppliers, government and regulatory agencies, shareholders,

competitors. Both the TXC colleagues and directors possess this code of ethics manual, and this

manual is to be used as the principle for everyone in the TXC to follow. Every time when a new

staff enters the company, they will be given this training in order to remind them that these

guidelines are to be enforced. Furthermore, the risk of corruption will be told over and over again.


34

All the colleagues should also sign and return a comprehensive peer "Responsibility

Declaration," to demonstrate that they have received, read, understand and would implement the

relevant requirements of the Code of Conduct. All colleagues shall adhere to this principle while

in execution of business. In the event of corruption and embezzlement by employee, latter will be

punished in accordance with the employee punishment and award regulations and meted out

penalties according to the seriousness of the circumstances.

Employees would be required to read and click to confirm the Code of Conduct been truly

implemented. Thanks to proper publicity on the Code of Conduct, no single case of corruption or

embezzlement happened in 2016.

I hereby make the company "Code of Conduct" concerning anti-corruption, political

contributions and business activities of competitors in the industry's as follows.

3.3.1. Anti-corruption

Acceptance of gifts

The employees of this company shall absolutely not accept any gifts that could possibly

impair or influence your fair decision making judgment. We also must not request gifts or

special treatment with people we do business with. Can accept new small and inexpensive

items, promotional items costing very little or gift as a sign of hospitality when:

○ The gift is in accordance with the requirement of the giver and receiver’s company

○ This situation occurs only occasionally.

○ The Gift of the bequest should be made at the request of the other party.

○ The fact that the public disclosure of the gift would not make our company or the

individuals feel uncomfortable.

○ The real value of the gift is less than US $ 100.

Acceptance of reception

Acceptable fortuitous sports events, recreational activities or dining invitations are as

follows:

○ Such reception conforms to the company regulations of the person who extends the

invitation.

○ Such reception is not in response to request of the opposite party

○ Such recreational activities are fortuitous occurrences, appropriate and not costly

expense.


35

○ Open disclosure of the reception will not cause any discomfort for the company or

relevant individuals.

○ Acceptance of the reception has obtained permission of your senior supervisor.

Note: the $ 100 rule shall not apply to entertainment activities. Self-awareness and a

restrained mannerism should be the key in deciding whether to accept the hospitality.

3.3.2. Political donation

Political donation should only be endorsed when it is in compliance to the law of the country

in which this donation takes place as well as the regulations of the company. So-called "political

donation" means to hand out any direct or indirect payments, rationing, donations, loans,

advances, deposits, gifts, services or anything of value to government officials, civil servants,

political candidate in campaigning, or election-related candidate, or groups either endorse or

oppose a referendum or other election-related issues. Note the following important issues and

limitations:

○ In some countries, companies are forbidden to engage in political donations.

○ All the political donations to the company must go through the approval of

○ Generally, political donations to TXC are handled by the company's political action

committee (to be established).

○ TXC will not directly or indirectly subsidize any political donations made by

colleagues.

○ Company strictly prohibits cash donations.

Therefore, the TXC has always been politically neutral, but still encourages employees to

fulfill their due responsibilities of citizens. Our staff should be actively involved in politics, and

cast their votes to elect the wise and the able, to support the most ideal candidates for public

office. Meanwhile, the top executives of TXC also offer suggestions as well as concerns towards

the economy, public affairs as well as issues affecting the industry, via visiting to various industry

associations and government officials. Due to our support for democratic development in the

Republic of China, the expresses interest in politics, but we do not favor any political parties, and

had not carry out any political donations, and would continue to remain politically neutral, and

would follow the requirements of the Code of Conduct in participating in relevant political

activities.


36

3.3.3. Competition in the industry

TXC strives to compete in a fair, open and just manner. We strongly forbid carry out the

following with our competitors in the industry, such as joint price fixing, market segmentation,

customer arrangement, bidding, agreement content, monopoly and perform boycott to the

supplier or customer. Colleagues attending business association meetings or trade association

meetings must also avoid inappropriate conversation related to our competitors. Thanks to the

company’s strict adherence to relevant laws and regulations, competition in the industry had been

carried out in a fair and open environment, and no incidence happened in 2016 which was related

to violation of anti-trust regulations.

3.4. Risk management

For each identified risk, the company would set risk management method and will be

delivered to the board for approval. Furthermore, regular drills will take place to ensure relevance

and effectiveness of the management approach.

In terms of risk management of the company, in addition to financial performance, the

company also takes consideration of the effect of production on the climate. For this reason, the

company is the first quartz industry in Taiwan is to carry out greenhouse gases and carbon

footprint inventories. In addition, carrying out carbon reduction in order to reach the goal of

energy conservation, and the impact of climate change on the industry, is also a regular topic in

the environmental safety and health meetings which take place every quarterly. In addition, we

also promoted and built the "energy management system" in 2011 in a bid to effectively reduce

the volume of carbon dioxide. At the same time, we also have continually carried out checking of

greenhouse gas emission, product carbon footprint and PAS 2060 to meet customer requirements

and make preparations for laws and regulations in the future. Relevant details and results will be

disclosed in the company’s annual reports and on the company web pages, and are also included

reports of the Board of Directors from time to time. As for consideration in regarding to human

rights and labor conditions, the company also carries out quarterly risk assessments, since the

fourth quarter of 2010. Social aspect of risk analysis assessment will also be carried out on

anything related to the EICC and Social Accountability 8000 International standard (SA8000),

such as working overtime, using child labor, poor working conditions, etc.

3.4.1. Risk management policy

The risk management policy of the company is to establish risk management mechanism

that can identify; measure; monitor and control the risk. The overall structure of the risk

management system is to promote appropriate risk management-oriented business model to


37

achieve operational goals, and to enhance shareholder value.

Major risk issues that the Company faced such as business marketing, production operations,

human resources planning, new product development, and financial accounting controls, can be

solved using the original specifications of the system, as well as using a more advanced and more

sensitive monitoring, evaluation, risk control procedures and criteria in order to balance safety

and efficiency, and to create a more cost-effective mode of operation of the business, such as the

establishment of enhanced information systems, and strengthen early warning surveillance

capabilities.

Moreover, to ensure internal information security, avoid improper disclosure of information

and allow uninterrupted operation of informatization of various businesses, maintain the

effectiveness of the internal management system and enhance the confidence and satisfaction of

customers, manufacturers and interested parties, TXC built the Information Security Management

System in January 2011 in accordance with the standard regulations of ISO 27001. In October

2011, we passed certification of the Information Security Management System (ISO 27001).

Aside from further enhancing effective protection of our internal IPR, we also enhanced customer

trust for transaction with our company. The company passed ISO 27001 audit with an outstanding

record of no deficiencies in 2012 and plans to follow up with the updated ISO 27001:2013

version to ensure the company's information safety and control measures are able to maintain

rights of stakeholders.

TXC started to build the Corporate Operation Risk Management System (ISO 31000) and

Business continuity management systems (ISO 22301) in 2012. Through a complete risk control

mechanism, the prevention notion has deeply planted in our corporate culture to help identify and

reduce risk. Use insurance system for the transfer of unbearable risks.

3.4.2. Organization structure of risk management

The Company has a risk response unit, which is operated and promoted by the co-ordination

of the management plan of the convener, who happens to be the general manager. Underneath

this unit, there are smaller centralized responsibility units, responsible for promoting the business

risk management.

Administration Center: Human resource allocation and response, financial risk

assessment, the implementation of various insurance operations, to maintain the

operation of the system, establishment and maintenance of environmental safety and

health, the audit and establishment of laws and regulations, as well as public relations


38

and media outreach matters.

R & D center: Contingency measures of R & D work environment, risk assessment of

new product development, control of research and development progress.

Marketing Center: Collection and the establishment of market information,

co-ordination of emergency matters for production and marketing, customer

relationship building and processing, as well as tracking and collection of receivables.

Manufacturing center: contingency operations of production, plans and specifications

for production contingency, human resources support configuration program, and

on-site environmental security contingency plans.

Procurement Center: the establishment of contingency plans for suppliers, raw material

procurement contingency matters, water supply schemes, as well as replacement plan

for the purchase of equipment.

Supply Chain management Center: Set-up and substitute plans of a supplier response

plan, response for procurement of outsourced products, import/export transportation,

custom clearance, and insurance and other operations.

Quality Assurance Center: file data storage plan, damage to the product due to natural

disasters and quality control, as well as the contingency measures of product testing

operations.

LED business unit: Safety maintenance measures for long crystal equipment, crystal

production response plan regulations, manpower support arrangement plan, and

environmental safety response plan for crystal growth.

Audit Office: Regular checks on whether risk control by the various central units had

been conducted or not, basing on company internal control and audit plan, and produce

audit reports according to the actual audit results.

3.4.3. Contingency plan

Due to changes in the industry environment and customer requirements, in 2009 we

re-examined the existing "emergency plan" which we seen as inadequate. For this reason we did

some re-editing and published the third edition of "emergency response plan", which includes

sections on the scope of contingency plans, organization responsibilities and structure, flowchart

for inception, hazard identification and risk assessment, medical emergency program, escape

plans, safety data sheets (SDS), audit approach on emergency response, etc. Through the above

processes and related approaches for the units to follow, the damage will be immediately reduced,

whether it is man-made, natural disasters and other major contingencies, and the company would

quickly returned to normal operation.


39

4. TXC Corporation and Related Interest Parties

4.1. Identification of related interest parties and communication

In recent years, under demand of the international society, enterprises shall no longer aim

solely for maximum profits for the company. As a responsible enterprise, the company shall take

care of its social responsibility in business operation as well as to consider the welfare of the

related interest parties. TXC identifies related interest parties according to correlation on jobs of

various departments, and then the company includes the issues concerned into the work in charge

and annual plan.

TXC set up a dedicated unit for corporate social responsibility in charge of promoting

relevant activities of corporate responsibilities and certification. The dedicated unit cooperates

with members of other departments at the same time, including investor relations, department of

Human Resources, department of finance, Quality Assurance center and the Environmental and

Healthy Safety team and other units. The interested parties shall be evaluated respectively by

these departments according to the correlation of works, and the topics and issues concerned by

them shall be listed into their routine works and annual plans. If there is any issue to be

considered by a special unit and team members, it shall be handled by the preceding units and to

be completed in cooperation with other units.

TXC’s related interest parties includes employees, customers, community parties, suppliers,

institutions, shareholders, competitive industry parties, they are identified according to the

definitions of code of conduct with a total of seven items. To keep well interaction with every

related interest parties, TXC fully understood requirements of related interest parties through

various communication channels furthermore to revise the company’s operation directions,

through the two major communication courses of the year end review meeting and executive

meeting, and after getting various issues in daily lives with senior managers, and then to ascertain

priority setting on the issues concerns of related interest parties. After 22 issues were jointly

identified through meetings of corporate governance team, green product design team and supply

management team, labor-management meeting, risk management team, energy team, labor safety

and health committee and corporate social welfare promotion team under the corporate social

responsibility management committee, the issues were submitted to the corporate social

responsibility management committee to identify new products and technologies, legal

compliance, corporate governance and product quality. Hereby, we list the important issues

defined by the company and communication ways and channels of every related interest party as

follows:


40

Issues concerned by interested stakeholders:

Item Issues

Stakeholders

Staff Customer Community

group Suppliers

Government and

regulatory

bodies

Shareholders Competition

in the industry

1 New products

and technologies ◎ ◎

◎

◎ ◎

2 Degrees of

regulation

consistency

◎ ◎ ◎

◎ ◎

3 Corporate

operation

governance

◎ ◎

◎ ◎ ◎ ◎

4 Product quality ◎ ◎

◎

◎ ◎

5 Continuous order ◎ ◎

◎

◎ ◎

6 Occupational

Safety, hygiene

and Health

◎ ◎ ◎ ◎ ◎ ◎

7 Risk

Management ◎ ◎ ◎ ◎ ◎ ◎

8 Implementation

of environmental

safety

◎ ◎ ◎ ◎ ◎ ◎

9 and health

management ◎

◎ ◎

10 Staff

development ◎

◎

◎ ◎

11 Product

characteristics ◎ ◎

◎

◎ ◎

12 Product prices ◎ ◎ ◎ ◎ ◎ ◎

13 Environment

Protection ◎

◎

◎ ◎

14 Supplier

Assessment ◎ ◎ ◎ ◎

◎ ◎

15 Company’s

financial

performance

◎

◎ ◎ ◎ ◎

16 Patent ◎ ◎ ◎ ◎ ◎ ◎

17 Fulfill social

responsibility ◎

◎ ◎ ◎

18 Salaries and

benefits ◎

◎

◎

19 Community care ◎ ◎

◎ ◎ ◎

20 Customer

Relationship

Management

◎

◎ ◎ ◎

21 Perform tax duty ◎

◎ ◎ ◎ ◎

22 Policy

collaborations ◎ ◎ ◎ ◎ ◎ ◎ ◎


41

The concerned level by the interested parties & the impact level to company:

Item Issues

The concerned level by the

interested parties The impact level to company

Total

1 2 3 4 5 Subtotal 1 2 3 4 5 Subtotal

1 New products

and

technologies

◎

4

◎ 5 20

2 Degrees of

regulation

consistency

◎ 5

◎ 5 25

3 Corporate

operation

governance

◎

4

◎

4 16

4 Product quality

◎ 5

◎

4 20

5 Continuous

order ◎

1

◎ 5 5

6 Occupational

Safety, hygiene

and Health

◎

3

◎

4 12

7 Risk

Management

◎

2

◎

4 8

8

Implementation

of

environmental

safety

and health

management

◎

3

◎

4 12

9 Staff

development

◎

4

◎

3 12

10 Product

characteristics

◎

3

◎

3 9

11 Product prices

◎

3

◎

3 9

12 Environment

Protection

◎

4

◎

2 8

13 Supplier

Assessment

◎

4

◎

2 8

14 Company’s

financial

performance

◎

4

◎

2 8

15 Patent

◎

2

◎

3 6

16 Fulfill social

responsibility

◎

3

◎

2 6

17 Salaries and

benefits

◎ 5

◎

2 10

18 Community

care

◎ 5 ◎

1 5


42

Item Issues

The concerned level by the

interested parties The impact level to company Total

1 2 3 4 5 Subtotal 1 2 3 4 5 Subtotal

19 Customer

Relationship

Management

◎

1

◎

2 2

20 Perform tax

duty

◎

2 ◎

1 2

21 Policy

collaborations ◎

1 ◎

1 1

22 Scale of

operation ◎

1 ◎

1 1


43

Figure I: The matrix of issues concerned by stakeholders

Medium

Th

e imp

act lev

el to co

mp

an

y

The concerned level by the interested parties

High

LowHigh

5

6

7 8

9

10

11

12

1314

15

1617

18

19

2021

22

Medium


44

Significant Issues, Aspect Boundaries Inside and Outside the Organization, Management

Practices and Corresponding Indexes:

Significant

Issues Aspect Boundary Management Practices

Corresponding

Index

New product

technology

Inside

organization V

Inside the organization, boost

the Company’s internal

cohesiveness and effectively draw

together internal capabilities to

clarify R&D direction, improve

knowledge of competitors in order

to effectively provide market

competitive products. The

Company conducts an annual

review of its R&D roadmap and

product planning & direction and

establishes indexes to quickly

introduce products which meet

market requirements.

· Economic

Performance

G4-EC1~

G4-EC4

Outside

organization V

Outside the organization, next

generation product development

is undertaken in order to build

confidence toward company

future development from

stakeholders, maintain ability to

attract talent and acquire new

capital investment through

outstanding business performance.

Therefore, the Company fully

discloses the results of its new

product R&D in their website and

annual report so that stakeholders

can fully and quickly understand

these developments.


45

Significant


Corresponding

Index

Legal

compliance

Inside

organization V

When there is a change in

government or international laws,

the laws are then examined. The

examination results are then used

to revise the employee manual,

related operating procedures,

management procedures and

training material to ensure full

compliance with the law and

provide a safe and comfortable

work environment and workplace.

• Law and

regulations

compliance

G4-EN29,

G4-SO8,

G4-PR9

•The grievance

mechanisms

about

environmental

impacts

G4-EN34

•The grievance

mechanisms

about labor

G4-LA16

•The grievance

mechanisms

about human

rights

G4-HR12

•The grievance

mechanisms

about society

G4-SO11

Outside

organization V

Fully disclose the Company’s

compliance with domestic and

international laws and disclose the

status in the Company website,

social responsibility reports and

annual reports (for example:

conflict metals) and announce

good governance and best practice

principles, take into account

corporate social responsibility

requirements to maintain

stakeholders confidence in the

sustainable operation of the

Company.


46

Significant


Corresponding

Index

Company

operation

governance

Inside

organization V

Inside the organization, board of

directors operations considers the

voices of various stakeholders,

ensures greater fulfillment of

corporate social responsibility and

takes into account the welfare of

all stakeholders. The Company has

established a remuneration and

review committee and ensures

clean and fair transactions and the

reasonableness and legality of

internal operations through the

function of the independent

directors. In addition, the Taiwan


Association’s CG6008 Advanced

Corporate Governance System

Assessment certification to ensure

that company operation details all

conform government and

stakeholder expectations. The

above results are fully disclosed

on the company website, market

observation post system and the

annual report.

•Economic

Performance

G4-EC1~

G4-EC4

•Market Share

G4-EC5~

G4-EC6

•Water

G4-EN8~

G4-EN10

•Emissions

G4-EN15~

G4-EN21

•Anti-corruption

G4-SO3~

G4-SO35

·Anti-competitive

behavior

G4-SO7

•Law and

regulations

compliance

G4-EN29,

G4-SO8,

G4-PR9

Outside

organization V

Complete disclosure of

information outside the

organization allows stakeholders

to fully understand the Company’s

intentions and operating results

and make suitable investment

decisions. The results of the above

operation governance is disclosed

through annual reports, webpages,

corporate social responsibility

reports and the market observation

post systems. Continue

self-examination and improve

steadily through AA1000, GRI4.0

international standards and Taiwan


Association ratings.


47

Significant


Corresponding

Index

Product

quality

Inside

organization V

Continuous improvement,

continual strengthening to reach

world-class quality. Comply

with various audit system

requirements such as TS16949,

VDA 6.3 and customer rigorous

specifications to raise quality. In

addition, the Company holds

Design for Six Sigma (DFSS)

training and project promotion to

strength product quality. In order

to ensure the quality of the

above product, employee

confidence in the company

inside the organization can be

concentrated together to

effectively reduce the prevention

cost and appraisal cost in the

defect quality cost which can

raise overall company

profitability.

•Customer and

health

G4-PR1,

G4-PR2

•Product and

service

information

and labeling

G4-PR3~

G4-PR5

Outside

organization V

Outside the organization, trust in

the company for stakeholders

and customer assurance is

increased which can increase the

frequency and number of

transactions between both

parties, expand the Company’s

overall global market share and

also thereby reduce the internal

and external failure cost in the

defective product cost.

Note: Inside organization refers to the Pingzhen Plant in Taiwan but does not include Ningbo and

Chongqing 2 Plants.


48

Table II: ways and channels of communication for all stakeholders

Interested

stakeholders

Issues concerned by

interested stakeholders

Communication method and

channel Frequency

Staff

Remuneration and benefits

Staff Development

Occupational Safety,

hygiene and Health

company sustainability

The annual employee

satisfaction survey

Annual

Salary survey Irregular

Executives’ mailbox and

telephone line

Irregular

Seminar for employees Irregular

Employee suggestion box Irregular

Sexual harassment complaint

box Irregular

Improvement suggestion box Irregular

Employee benefits meeting Irregular

Mid-year review Half year

Year-end review Half year

Departmental meetings Irregular

Labor Conference Quarterly

E.S.H committee meeting Quarterly

Customer

Product Quality

Product Price

Social responsibility

Customer Relationship

Management

Customer Satisfaction Survey Annual

Various types of customer-based

questionnaires

Irregular

Supplier Self-Assessment

Questionnaire

Irregular

Customer and 3rd

party audit Irregular

Customer Representative

(Project Manager)

Irregular

Phone communication Irregular

Meetings with Customers Irregular

Community

groups

Community care

Implementation of

Environmental safety and

Health management

Social responsibility

New Year visit the neighborhood

representative near the company

Annual

Visit the Park Management

Committee

Irregular

Participate in various activities at Irregular


49

Interested

stakeholders

Issues concerned by



channel Frequency

corporate sustainability industrial areas

Sponsor disadvantaged groups in

the community

Irregular

Sponsor environmental

protection at community primary

school and supply various types

of equipment

Irregular

Company website provides

detailed information on

greenhouse gases as well as

environmental safety and health

policy to be used as a reference

for interested parties

Irregular

Supplier

Supplier Assessment

Features

Continuous Order

Financial performance

Regular training, survey and

website promotion will be

provided for suppliers for topics

such as "greenhouse gas

inventory," “product carbon

footprint inventory","corporate

social responsibility", "Industrial

Bank Regulation undertaking",

"procurement and contractors

health and safety norms," and

"environmental, occupational,

safety, health survey"

Irregular

Government

and regulatory

bodies

Regulations conformity

Environmental Protection

Performing tax duty

Degree of policy

co-ordination

Maintain good interaction with

authorities at various department

Irregular

Formal documents from/to

government

Irregular

Business activities and

management practices to fully

expose the website and annual

reports

Irregular


50

Interested

stakeholders

Issues concerned by



channel Frequency

Attend training and conduct

searching for rules and

regulations

Irregular

Search for rules and regulations

in order to maintain the

compliance

Quarterly

Shareholders

Financial performance

Operating governance of

the company

Risk Management

corporate sustainability

Shareholders Annual

Investor Irregular

Website Irregular

Quarterly Bulletin Quarterly

Annual Report Annual

Spokesman mechanism Irregular

Independent directors mailbox Irregular

Attend the evaluation of

corporate operation governance

Irregular

Attend the evaluation of

information disclosure

Annual

Competition

in the industry

Strategic planning

New Products / New

Technology

Patent

Scale of operation

Participate in the relevant

Association

Irregular

In accordance with the

provisions of the Code of

Conduct to undertake interaction

Irregular

Patent database Irregular

Market research Irregular

Phone communication Irregular


51

4.2. Employees

The key of TXC success is from mutual trust and mutual respect among employees. We

fully respect the dignity of every colleague. We listen to concerns and recommendations and

accept difference with an open mind. Employee care and employee welfare are two principles for

welfare system to provide employees with better qualified welfare.

A Worker Rights and Ethics Policy has been drafted by the company to uphold worker rights.

The established policies are reviewed each quarter by the Labor / Management Committee to

determine if any revisions or adjustments are needed in order to uphold corporate ethics and

fulfill corporate social responsibility. The policies are posted to inform all.

4.2.1. Recruiting

We fully understand the physical and psychological effects of child labor, which would

cause in negative corporate social image as well. Therefore, the company expresses policy of not

employing child labor in code of conduct and in employee handbook. It is fully implemented in

the course of interview.

Consistent with TXC Corporation’s philosophy in equal rights for everyone, during the

process of recruitment, hiring, remuneration, benefits, disciplinary actions, work allocation,

training opportunity, promotion, demotion, dismissal or retirement we never engage in or support

discrimination based on race, ethnicity, skin color, height, weight, eyesight, place of birth,

military status, nationality, social background, social hierarchy, pedigree, religion, gender, sexual

orientation, family responsibility, marital status, union membership, any identity protected by the

national law, political preference, age, pregnancy (childbirth), disability, medical condition,

health examination outcome, illness or other forms of discriminations deemed inappropriate by


52

public order and moral. To protect the rights and benefits of all employees the Company has

signed a standard format employment contract with employees.

A total of 317 new employees were recruited in Taiwan in 2016 of which one was senior

supervisor.

Proportion of gender , age and region of new employees in 2016

Categories Groups Male Proportion (%) Female Proportion (%)

Age

< 30 50 16 119 38

30~40 44 14 93 29

41~50 4 1 4 1

Over 51 2 1 1 0

Total 100 32 217 68

Total employees are 1,043 persons as of the end of 2016. (relevant information as following

list) The aforementioned staff are all full-time employees, of which 9 are physically challenged, 2

are male and 7 are female. Of all 131 supervisors, 16% are female and the ratio of employing

local senior supervisors is 97.71%, accounting for 34 people.

2016 Employee headcounts

Gender Age Taiwan China Japan America Europe Thailand Total

Female

<30 196 0 0 2 0 0 198

30-40 287 0 1 4 0 0 292

41-50 95 1 1 0 0 0 97

>51 40 0 0 0 0 0 40

Male

<30 80 0 0 1 0 0 81

30-40 186 4 0 8 2 0 200

41-50 83 9 6 3 0 0 101

>51 27 5 2 0 0 0 34

Total 994 19 10 18 2 0 1,043


53

2016 Employee headcounts

Categories Group Male Female Total

Contract Fixed-term Contract 4 189 193

Not Fixed-term Contract 412 438 850

Subtotal 416 627 1,043

Location

Direct employee 76 432 508

Indirect employee 230 174 404

Basic supervisor 27 10 37

Intermediate supervisor 54 6 60

Senior supervisor 29 5 34

Subtotal 416 627 1,043

4.2.2. Appointment

In order to effective recruiting, retention and training, TXC continues to strengthen

following retention measures, from related aspects of management system, new staff interview, a

complete system of multiple training and development, salary and reward management system,

good working environment to improve the retention effects and furthermore to increase

employees’ knowledge in breadth and depth. The median employee departure rate in 2016 was

19.9%. Relevant information on departure rates are disclosed as follows:

The headcounts of resignation in 2016

Categories Groups Headcounts Monthly turnover

rate

Male

<30 29 2.8%

30~40 31 2.9%

41~50 4 0.4%

>50 3 0.3%

Female

<30 50 4.8%

30~40 69 6.6%

41~50 17 1.6%

>50 5 0.5%

Total 208 19.9%

Note: the company monthly turnover rate is calculated as follows: Monthly numbers of leaving / yearly ending

headcounts of employees)


54

4.2.3. Training and development

TXC plan to prepare training courses by job grade / job level system and the practical needs

to strengthen employees’ professional knowledge, skill and expertise to enhance working

efficiency of employees and career planning. Training courses includes training for new

employees, professional training, executive skill training, general training, self-inspired growth,

project training and on line learning platform. As long as employees are willing to do, harvest and

growth would be expected. There is a diverse array of courses available; in addition to course

lectures, events are also designed based on the attributes of the course, and case studies and team

discussions are conducted to make learning more fun, interesting and effective. TXC provides

employees with an open and diverse learning environment, education and training details are

described as below:

Categories Description

Training for

new employees

· Through the new staff workshop courses and internal professional guide training, they

could understand the company quickly and join into the organization culture. At the

same time they could shorten their adaptation period to allow them to contribute to the

company from learning.

· To let employees understand their own interests are treated fairly and respectfully, the

Company also provided training of Code of Conduct and International Standard Social

Responsibility (SA8000), Regulations of Prevention, Correction, Complaint and

Punishment of Sexual Harassment, Association for Enterprise Opportunity (AEO), Supply

Chain Security Management System (ISO 28000), Information Security Management

System (ISO 27001) and the Personal Information Protection Act to simultaneously

provide relevant training courses on human rights, environmental safety, information

security and supply chain security.

Professional

Training

· Professional trainings are provided according to necessary expertise of different units and

customer requirement such as research and development, manufacturing, marketing,

quality assurance, finance, human resources, purchasing and general affairs to meet

professional needs.

Executive skill

Training

· To provide operation executive and administration executive with diversified theory and

practice courses to strengthen their capacity of operation and administration for future

development.

General

Training

· To provide employees with laws and regulations, company-wide or general common

courses, for example: such as quality awareness, occupational safety and welfare,

hazardous substances / green product management system (HSPM/GPMS), etc.

Self- inspired

growth

· From time to time to organize health, spiritual lectures so that colleagues have a full range

of satisfaction and growth.

Project training · Training employees in special skills, such as green belt and black belt six sigma training,

project management courses.


55

In order to provide the above tangible courses, TXC built up eHRD training platform to

provide colleagues with learning resources without limitation on time and place.

In 2016, we organized up to 193 sessions of training courses, totaling 858 hours, covering

29.07 hours of human rights policies, with a total participation of 5,916 people. The total hours in

training is 18,138 people/hours with a total training expenditure of NT$324,278.

Average training hours by functions (including people who have left) for 2016

Item Supervisor Direct employee Indirect employee Total

Gender Female Male Female Male Female Male

Headcounts (A) 22 94 234 128 177 251 906

Participant people times 204 1,145 735 299 1,343 2,190 5,916

Total training hours (B) 326 2,440 4,069 1,396 2,513 7,394 18,138

The average training hours per

employee (C=B/A) 15 26 17 11 14 29 112

4.2.4. Salaries and benefits

TXC Corporation offers a diverse and competitive remuneration system that is not affected

by age, gender, marital status, political preference or ethnicity. Our average salary is above that of

our competitors, because we uphold the philosophy of sharing profit with our employees to

attract outstanding talents as well as to inspire and retain our current employees.


56

Refer to ratio of employee compensations as below. The highest individual annual earnings

is 584% of the annual median earnings of all employees at the Company. The highest individual

annual percentage increase in compensation was 189.47% compared to the annual percentage

median increase in compensation for all employees.

Employee category Proportion of average salary

Female Male

Senior supervisor 1.00 1.56

Intermediate supervisor 1.00 1.16

Basic supervisor 1.00 1.08

Indirect employee 1.00 1.22

Direct employee 1.00 1.11

In order to ease work of employees, besides insurance benefits and pension provision

required by law, also provide group insurance, travel safe insurance, health check, and various

According to the overall business operation of the company and individual performance for the

bases of the salary adjustment.

Assist staff in long-term investments of financial and retirement planning, to set aside a fixed incentive to encourage employees to long-term holders of company stock.

To set aside a certain percentage of profit earnings as the basis of employee bonus share earnings results with colleagues.

A total of two times of annual performance evaluation was made and to affirm, reward, and motivate their outstanding performance of male and female employees with multiple incentive programs. Festival bonuses, production performance bonus, patent bonus, project bonus, sponsored bonus, outstanding contribution prize, team collaboration bonus, outstanding staff bonus and senior staff bonus.

Salary

Bonus

Profit Sharing

Treasury stock

system


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health promotion activities to ensure that employees’ safety for work and life. See below sheet for

relevant welfare measures.

In addition, the company provides various work leave in accordance with the Labor

Standards Act. If a long period of leave is needed due to childbirth, military service or serious

illness, employees may apply for unpaid leave and then apply to be reinstated after leave is

completed. As decreed by the Act of Gender Equality in Employment, a total of 105 employees in

2016 (52 males; 53 females) were entitled to unpaid parental leave, for which 10 females applied.

The repatriation rate (i.e., returning to post upon termination of unpaid parental leave) is 75% and

the retention rate is 80%.

Female Male Total

Number of employees that took parental leaves in 2016 10 0 10

Number of employees that should return to work in 2016 (A) 7 1 8

Number of employees that returned to work in 2016 (B) 5 1 6

Return to Work Rate (B/A) 71.43% 100.00% 75%

Number of employees that returned to work in 2015 (C) 4 1 5

Number of employees that returned to work in 2015 and still

employed at least 12 months (D) 3 1 4

Retention Rate (D/C) 75.00% 100.00% 80.00%

Activities

•Domestic and foreign travel

•Ball contests

•Specific discount shop

•Year-end raffle

Facilities

• Employee cafeterias/dormitories

• Convenience store

• Nursing room and medical service room

•Basketball/badminton/table tennis court

• Fitness room

• Free car and motorcycle parking lots

Insurance and pensions

• Labor, health, group insurance

• Regular health examination

• Labor Pension reserve

• Labor Pension

Profit sharing

• Profit sharing

• Stock options

• Convertible corporate bonds

• Treasury stock systems

• Shareholding Trust

Cash gifts

• Cash gifts for three major holidays

• Birthday

• Weddings/Births

• Hospitalization and white card consolation gifts


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4.2.5. Lohas TXC

The talent of employees is always the most important key to enterprise success and

sustainable development. The company always provides colleagues with good work conditions

and work environment, as a target, to expect employees to do their best to develop themselves

under the balance of work and life quality, and to become important partners in long-term

development of the company.

Open communication / complaint channel

TXC Corporation respect employees the freedom and rights of assembly and

association, and is committed to provide smooth channels of communications to expect

to integrate all resources. The direction of the company and views of employees can be

fully exchanged, which will be a basis of improving and providing better working

environment and conditions.

In the preparation of “Employee Manual”, “Code of Conduct”, “Labor Rights and

Ethical Policy” and in creating diverse communication channels, we abide by the

articles and spirit of EICC and SA8000 in a reciprocal manner in order to protect our

employees’ rights. Therefore, all our colleagues receive complete human rights audits;

as of 2016, no incident of hiring child labor, gender discrimination, forced labor,

prevention or impediment of the employees’ freedom of association, and no human

rights complaints were received during the same year.

To ensure the legal rights of the employees, in the event of specific incidents

which require change of current employee relation such as adjustment of basic wages,

change of work time, change of payroll structure, access control measures, adjustment

of parking space legal procedures at home and abroad shall be adhered to (domestically

follow the Basic Labor Law and its implementation details). Coordination and handling

will be conducted through the Welfare Committee. We will take initiative to brief and

report to relevant employees and notify in advance employees at a certain period so as

to achieve the purpose of full and seamless communication.


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Welfare Committee Activities

TXC Corporation has established the Employees' Welfare Committee to plan and

promote various employee benefits and activities. In order to create a sound workplace

environment, Employees' Welfare Committee has launched the “Corporate Culture

Acknowledgement Card” points-collection event to encourage our colleagues and their

families to partake in a variety of activities such as family day, sports meets, social

clubs, traveling, art and culture, so that they may relieve stress and enhance work

efficiency.

Family Day


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＊ Community activities

The company also supports various recreational clubs formed independently by

the employees, and we provide them with subsidies and resources. At present the

establishments of associations as table tennis club, badminton club, bicycle club,

basketball club, photo club, softball club, walking and volunteer club.

＊ Leisure and convenience facilities

The company provides colleagues with diversified leisure facilities and services,

we set up a gym, a library letting system, audio- visual classrooms, basketball court,

table tennis / pool facilities, so that the employees could exercise after work for fitness

and relaxation, and other proving a medical room, comfortable cafeteria, dormitories


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and various convenient services such as convenience store and medical room.

＊ Healthy living and management

We apply the philosophy of “We are family” to create a sound workplace

environment, where resident doctors and professional nurses in the infirmary provide

professional health management services for our employees. Besides regularly

organizing health inspections, we also hold various health promotion events from time

to time in order to materialize a healthy new lifestyle for our colleagues via the

all-encompassing health concept, thereby creating a healthy and happy workplace.

Nursing room Observation room Residing doctor Employee medical

Convenient store Gym Visually impaired massage activity

Basketball machine


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•We held many sessions of health-promoting events, such as metabolic syndrome

health seminars, cervical smear tests, HPV virus seminars, CPR & Heimlich

maneuver advocacy, voluntary-quit-smoking-at-workplace events, oral cancer

screening events, voluntary weight-loss events, emotion and stress-relief events, blood

pressure monitoring events, flu vaccination and so on, to assist our colleagues with

improving their health and to further obtain the “Health Promotion Emblem” certified

by the Healthy Workplace Unit of the Health Promotion Administration, Ministry of

Health and Welfare. With a view to building a friendly communication environment,

reducing misunderstandings and conflicts, we additionally invited Lifeline lecturers to

conduct “Soft Communication Classes” to improve awareness and caring skills.

Regarding off-factory transport accidents, we give timely assistance and concern. We

continue to create a safe working environment to provide our colleagues with

maximum security.For other events, please refer to the company

website(http://www.txccorp.com/index_en.php?action=g_ESH_1&cid=5&sid=12)

Health Promotion Events

•Eliciting resources from the Taoyuan City Government, we invited Mr. Tsai Guo-

chiang, professional counselor from the Teacher Chang Foundation to lecture on the

health course of “Workplace Stress in Its Coping Strategies”. Mr. Tsai gave an in-

depth analysis on the impact of stress on human bodies, illustrated with humorous

video clips to encourage audience participation and discussion. He also advised to our

colleague with precious tips on how to relieve stress. In addition, we also encourage

colleagues and their family members to attend the Teacher Chang Foundation event,

“Live with love, Advance with gratitude”, hoping for a heart-soothing evening for all

attendees through such a beautiful melodic Spiritual Feast Concert.

Psychological Counseling Service

•The company has collaborated with three visually impaired masseuses to establish the

“Visually Impaired Massage Station”, providing regular massage service every month

in order to relieve the physical and mental pressure of our employees. At the same

time, we strive to promote employment opportunities for the disabled community to

fulfill our CSR.

Visually Impaired Massage Station

•By way of organizing voluntary fitness regimes, we encourage colleagues to acquire

adequate habits of exercise training, so as to promote a healthy exercise climate in the

workplace and enable colleagues to improve personal health.

Healthy Diet Ambassador

• In order to effectively help successful smoking quitters stay away from tobacco

hazards, the effort to create a healthy, smoke-free workplace for our colleagues was

led by Chairman Paul Lin and President Peter Lin. The no-smoking policy at all

Company facilities has come into effect in March 2015 to provide a smoke-free

healthy environment for the employees at workplace. We continuously provide

smoking colleagues relevant information on cigarette abstinence and free CO

screening and set up monitor posts to effectively help colleagues quit smoking.

Stop Smoking Support Class

http://www.txccorp.com/index_en.php?action=g_ESH_1&cid=5&sid=12


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4.3. Customers

We always aim to enhance customer value, providing our customers with a variety of

frequency control components and modular design in, in order to meet the comprehensive

demand of our customers. The common goal of all the colleagues has always been to exceed

customer expectations. TXC continues to win recognition from domestic and international

corporations. In 2016, TXC received the following awards: Core Partner of Huawei and

Outstanding Supplier from Inventec. In recent years, we have been cultivating deep in the

Chinese market and have achieved the recognition of our Tier-1 clients in China such as Huaqin,

Ningbo Bird Company, RGK Group and the like. In recognition of the outstanding achievement

as well as competitiveness of the company in its price offered; its quality, delivery, service, the

company received the honor of the highest quality by our world-class customer. TXC customer

relationship management features are as follows:

4.3.1. Customer relationship management

In order to meet customer value and needs, enhance customer satisfaction with the company

as a whole and to strengthen customer loyalty to the company, TXC has conducted the “customer

satisfaction survey” at the end of each year. Its content includes 5 items which are, “product

supply and delivery (delivery period) ”, “product quality ”, “products and customer service ”,

“technical support and “(no harmful substances / green products) HSF / GP”. The overall mark

for customer satisfaction in 2016 is 86.99 points. The result exceeded expectations, compared

with 2015 sliding of 2.2%. Based on the trend of satisfaction survey and customer

recommendations on a yearly basis, the company would instruct relevant units to make

improvement plans and adjustments in order to meet customer expectation, and continue to

cultivate deeply for long-term relation with customers and achieve the win-win goal.


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Complete supply of product line:

From low-end products to high-end products, TXC is committed to provide the

most competitive products via our large and standardized operation, in order to meet

customer demand for comprehensive products. Quality certifications are

simultaneously carried out in Taipei, Ningbo and in Chungking three factories, enabling

customers to buy peace of mind, with satisfaction.

Product Quality services

All branches and offices of TXC are equipped with product application

engineering manpower, which work along with local business to quickly meet

customer needs, as well as providing professional technical support and related

training courses. At the same time establish an effective and fast market feedback

mechanism in order to improve product quality and to provide important information

on continuous improvement and innovation, in order to achieve the goal of customer

satisfaction.

To ensure product quality meets customer requirements, TXC has started

promoting the 6-sigma activities in 2005 and has executed a total of 81 programs as of

now. For each program the black belt and green belt employees would lead the

program employees to carry out product and flow improvement with the purpose of

cost conservation, yield improvement and flow reengineering. The past executed

programs are listed below:

Year Item Project Name

2016

1 4BF machine high frequency (48m ~ 54m) grinding broadband improvement

2 8Q24 temperature test TC-RR improved

3 9Q374 standard line frequency stability improved

4 8Q electrode surface bubble abnormal reduction

5 AV624 series of non-performing rate improved

6 SMT-2538L10.4AA (102-25B0101) NG Rate improvement & cost reduction

7 7M & 7V26MHz series of material round edge stand-alone output efficiency

increased by 50%

8 7M & 7V low-frequency overall non-performing rate reduction

9 7V25MHz FQC retreat rate is reduced

10 7M product total inspection NF bad reduction

2015 1 4 inch PSS A Yield Improvement

2 5032 S-3 TCXO Crystal 4526001001 RTY Improvement


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3 8W Yield Improvement

4 Proximity Sensor (PA22401001) Yield Improvement

5 1612 Series Cost Down Project

2014

1 6Y 192 Yield Improvement

2 8H 16 rounded edges efficiency increase of 100%

3 BR 61400002 Yield Improvement

4 Inverted MESA 5MA2200009 Yield Improvement

5 L8C2004001 Yield Improvement

6 A flat piece of regulation Yield Improvement

In addition to continuing work on Improvement for Six Sigma project, Design for

Six Sigma (DFSS) course and project planning were also initiated. A total of six

major projects were completed for DFSS including TSX, proximity sensor, inverted

MESA, 1612XO/TCXO and 1210 Crystal development projects. The Company will

continue to introduce Six Sigma Green Belt & Black Belt and DFSS to further

strengthen and raise the Company’s R&D standards.

TXC product quality meets stringent requirements of international customers. We

have close relationship with major international players and can meet their demands

at any time and make adjustment to product specifications.

Price

Customer is the cornerstone of sustainable survival and development, the

company has always been to respond to market price fluctuation with caution. TXC

Corporation will continue to work in conjunction with major and strategic customers in

the exploration of new markets, the application of new specification application.

Through the innovation of new products and technologies, the company will make

innovation in line with the technological development of the customers. Further to

keeping abreast with the customers in development for their recognition, the company

also seeks to maintain shareholders’ equity to the desired level.

4.3.2. Customer privacy

As for customer information, it is considered to be confidential information by TXC and this

confidential information must not be granted use for non-TXC staff, with the exception that the

person has a legitimate and lawful business relationship with our business and there is a demand

for the information. All staffs must abide by the Code of Conduct. As of 2016 there is no instance


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in which customer privacy is violated nor is there any case of customer’s data being lost and

damaged. Appropriate guidance was given to all employees and supervisors on the provisions of

the Personal Information Protection Act so the Act can be enforced correctly.

4.4. Supplier

TXC supply and management philosophy is to achieve close cooperation with suppliers in

order to reach the ultimate goal of customer satisfaction.

To fulfill of corporate social responsibility commitment as a member of the global supply

chain, the Company has worked to spread corporate social responsibility concepts to our supplier

community. The key aspects are as follows:

1. Approval of clean procurement

2. Quality and product safety assurance

3. Environmental considerations (green purchasing)

4. Follow laws and social norms

5. Information security assurance

6. Human right and labor safety & health considerations

7. Corporate social responsibility fulfillment status

4.4.1. Selection of suppliers

To ensure upstream and downstream manufacturers capable of performing corporate social

accountability, TXC has based on following principles in selecting suppliers and auditing of four

major categories: quality, delivery, price and service quarterly. In addition, newly introduced

suppliers must submit a signed Supplier Company Basic Information Survey, Quality and

Environmental System Self-Evaluation Sheet, Industry Code of Conduct Commitment, SA8000

Commitment, Environmental and Occupational Safety & Health Status Survey Sheet and

Conflict Minerals Declaration for use during evaluation and review.

* Leadership in product technology

* Excellence in service and support

* Quality.

* Performance in delivery and lead time.

* Performance in overall cost control.


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Manufacturers with comparatively better evaluation are given priority for cooperation with

TXC. If the evaluation results do not completely conform to the system requirements of the

Company or the supplier previously had a bad record, a more careful evaluation is conducted to

determine if the supplier should remain on certified supplier list.

Moreover, in view of rising importance for various issues related to employee rights and

benefits related to human right, environmental, safety and sanitation, TXC will give priority to

suppliers with following systems. The chart below shows the percentile of various certification

systems of our most important suppliers:

Certification systems No. of suppliers in

conformance

Conforming

suppliers

Conforming

proportion (%)

*Electronic Industry Citizenship Coalition 105 105 100%

ISO 9001 Quality management system 105 75 71%

ISO 14001 Environmental management

system 105 50 48%

SA8000 Social Accountability

Management System 105 30 29%

ISO28000 Safety Supply Chain

Management System 105 7 7%

OHSAS 18001 Management System 105 11 10%

IECQ/QC080000 Hazardous material

flow management system 105 3 3%

Certification systems 105 2 2%

ISO14064 Greenhouse gas inventory 105 0 0%

PAS2050 Product carbon footprint

inventory 105 105 100%

* comply with the system

When the company responded to the downstream suppliers or contractors, the Code of

Conduct is used as the basis for cooperation. Both companies also need to sign and return the

agreement document of EICC. Once this is done, they shall become official partners of the

company. If for some reason if the aforementioned vendors cannot or refuse to sign and return the

documents, necessary buffer time will be given. If they still failed to sign, the cooperation will be

ended and we will try to find other partners. Supplier qualification is immediately revoked in the

event of any violations to respect freedom of assembly, collective bargaining, forced labor and no

use of child labor. In 2016 a total of 105 were sent, with 105 of them completed and signed, a

response rate of 100%.

To ensure meeting requirements and guidelines of corporate social responsibility being


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implemented to our suppliers. The suppliers need to sign back “Promise to follow the standards

of SA8000” , “Green Products & Environmental Statement”, “Electronic Industry Code of

Conduct”, “Integrity Commitment”, “Environment, Health and Safety survey form” and

“Promise not to use conflict minerals” every year for compliance by suppliers. At the annual

suppliers meeting, the company would brief on the relevant actions and requirements on

corporate social responsibility and appeal to suppliers for compliance. The 2016 supplier survey

results were verified to conform to the system requirements of the Company. There were no

significant or potential negative impacts on the environment, labor conditions, human rights or

social aspects. If there are any actual or predictable significant negative impacts on the

environment, labor conditions, human rights or social aspects that occur with current company

suppliers, the company shall immediately downgrade or remove the supplier from the supplier

list in accordance with supplier management guidelines. If there is no equivalent substitute for the

supplied material, the Company shall provide assistance and guidance to eliminate the above

significant negative impact that has occurred and is predicted to occur to keep the supply chain

operating efficiently. During the guidance period, the number and frequency of audits is

increased and strengthened.

The company supplier chain:


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4.4.2. Negotiation on content of contract

Throughout the process of negotiation with supplier or potential supplier on content of

contract, our attitude should be fair and just. We shall abide by relevant laws and regulations and

support conventions of a fair enterprise.

4.4.3. Supplier information

We shall never reveal confidential information of our suppliers for joint use by non-TXC

external persons, unless said supplier has written permission for consent.

4.4.4. The supplier communication channel

When dealing with suppliers for our company, in addition to the communication routine, the

company also obtains a view on the common market through the annual Supplier Events, and in

the same time review on the product features, specifications, and degrees of stability in the past,

as well as using the Six Sigma model to solve problems, to help to looking for any opportunity

for improvement. For this reason, it greatly enhances the supplier product quality, as well as

efficiency and speed.

4.4.5. Order continuity

According to the direction of the company, some of the earlier models will be produced by

the downstream supplier, while the company would maintain the production of high-precision,

high value-added products. In view of market fluctuation, in order to maintain normal production

for the suppliers, the company also maintains a certain ratio of production by an external supplier,

through negotiations, in order to achieve the purpose of coexistence and common prosperity. In

order to achieve the continuity of orders, the company will simultaneously consider the

production cost and the number of suppliers in the factory, to maintain profit margins, and to

create long term willingness for cooperation. In 2016, the company carried out a survey for five

items including the quality system, the next tier supplier management, process control, social

responsibility, environmental management and auditing for a total of 73 raw materials suppliers.

The value of the total procurement is 10% of the company’s value of a year. Currently, the major

world-class quartz suppliers are from Japan, as the country has the technical threshold of more

than several decades. For this reason about 33.4% of the industry comes from Japanese suppliers,

62.7% from Taiwan suppliers and 3.9% from other countries. Short-term development of local

suppliers does have its difficulty; however, the localization of the procurement of goods is a

thorough procurement policy of TXC. If Taiwanese suppliers intend to invest in the upstream

development of quartz industry in the future, TXC is optimistic about this and will take the


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initiative to provide opportunities for cooperation and assistance.

4.5. Government and regulatory agencies

4.5.1. Degree of regulatory compliance

The company complies with the laws of both domestic and foreign countries at overseas

location. This obligation is written in the company’s code of conduct, as well as in the

employee’s handbook. Meanwhile, the corresponding regulations are check on the quarterly basis

to ensure that the company complies with the latest laws and regulations. This inspection includes

laws and regulations regarding personnel, environmental, safety and health matters, supply chain

security as well as the special needs of customers. Regarding general laws and regulations, the

company has provided linking to relevant laws and regulations in the company website as

reference for employees. Please go to:

http://www.txccorp.com/index_en.php?action=h_human_1&cid=5

4.5.2. Environment protection

As regarding to environmental protection as specified in law, the company also complied

with the relevant requirements for companies. This environmental protection regulation is

vigorously enforced in our company, through self-management. We aim to do our best efforts in

protecting the environment and ecology.

4.5.3. Fulfillment of tax obligation

The company pays taxes honestly in order to promote the development of national economy.

4.5.4. Degree of policy co-ordination

The company cooperates fully with the policies promoted by our government, regardless

whether they are financial disclosure, environmental regulations or foreign labor policies.

4.6. Competition in the industry

4.6.1. Strategy plan

The strategic planning of our company and other leading companies in the industry can have

major impact on each other. For this reason, we maintain a high degree of concern for the

strategic intention of others in the industry. We therefore draft our strategic planning based on

market interviews and analysis on openly disclosed information of other companies. Due to this

fact, we know very well on the topics of product miniaturization, frequency changes, as well as

on the selection of markets, in order to be as close to the market demand as possible and to seize

the initiative.

http://www.txccorp.com/index_en.php?action=h_human_1&cid=5


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Thanks to foregoing planning, TXC has a 3-year product roadmap for necessary adjustment

according to market changes, actions of competitors and internal resources. For details please

refer to the chart below. According to report of industry analysts, TXC currently ranks third in

the quartz industry. For detail information, refer to chapters and sections on market share.

4.6.2. New Product and technology/royalty

We have also carried out analysis on new products of our competitors, their technologies and

patents, in order to understand the progress of the industry, as well as our status in the industry.

We are cautious about the patent map of the industry. Therefore, we gradually deploy our patents

to avoid unnecessary disputes.

2013 - 2016 Patent Applications and Licenses

Type No. of Patent Applications No. of Patent Applications

2013 2014 2015 2016 2013 2014 2015 2016

Invention 3 0 4 4 6 4 1 0

Utility Model 0 0 0 1 3 0 0 1


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5. Environment Safety and Health

The environmental issue has changed its original feature and grown into a global destruction

problem from a regional one. Global warming, attack by heat waves, exhaustion of the ozone

layer and acid rain and so on. Any problem of the environmental issue could have extensive

implications on the natural and ecological environment.

We have only one earth is not a slogan but a call for actual action for cherishing our living

space. We also are accountable for protection of the environment, resolving environmental issues,

caring for nature and cherishing nature. Our most pressing job is protection of the earth

environment in the future.

Under important topics such as climate change and health and safety issues, TXC had

actively committed to the promotion of related activities, in 2012, and had passes the

“greenhouse gas verification” (ISO14064-1), “product carbon footprint verification” (PAS2050),

PAS2060, “material flow cost accounting” (ISO 14051) and “Occupational safety and health

management System”(OHSAS 18001) and CNS 15506) certification, respectively. Through these

efforts, it has proven that our company had reached a certain standard in the area of

environmental safety and health. We promoted “Energy management system” (ISO50001) and

“Supply chain security management system” (ISO28000) in 2012, in order to show better

operating results, and making a contribution to the Earth's environment.

Policies of the company are approved and announced by the General Manager; in order to

strengthen the promotion of environmental safety and health policy, these announcements are

posted and published in various conference rooms and on the company website, along with the

company vision statement, mission statement and quality policy, hazardous substances free policy,

labor rights and ethical policy, environment, health & safety policy, greenhouse gas policy,

energy management policy, information security policy and supply chain security policy. The

latest version of policy was signed by President on February 27, 2013. The content of the above

policy items is described below:


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5.1. Environment protection plan and management

5.1.1. Environment protection plan

The company established our ISO14001 system in 2002, and through the system standards,

we strengthen our management capacities for continuous improvement of environmental

performance, effectiveness, and properly maintaining overall operations. All corporate activities

comply with governmental regulations and other applicable international requirements for

pollution prevention control, while we have obtained the legally required "stationary pollution

source operating permits," "water pollution control permit," "industrial waste disposal plan"

approval and "toxic chemical substances operational permit," etc., ensuring implementation of

permit provisions through periodic point inspection, maintenance, reporting and testing. The total

amounts of various fixed pollutants discharge of the company are lower than the control standard.

(Total ammonia emission quantity 0.057 tonne/year; total nitric acid emission quantity 0.001004

tonne/year; total phosphoric acid emission quantity 0.0963 tonne/year; total sulphuric acid

emission quantity 0.096 tonne/year; total hydrofluoric acid emission quantity 0.222 tonne/year;

total cyanide emission quantity 0.0004 tonne/year; total volatile organic compounds emission


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quantity standard 2.812 tonne/year.) The testing results are posted on the company website:


In 2016, the volatile organic compound (VOC) emission amounts reported air pollution are

shown in the Table below

(unit: metric ton)

2016 Pingzhen

Q1 2.32048

Q2 3.92991

Q3 12.50593

Q4 4.55545

Total 23.31177

Source: Air pollution prevention fee system

5.1.1.1. Establishment of Environmental Management System

Our Pingchen plant began implementing the ISO 14001 management system since 2002,

deploying planning / implementation / audit / review (PDCA planning doing compliance

assessment) management system principles, regularly reviewing and systematically assessing the

organization's activities / products / services processes, ensuring effective management of raw

materials, processes , energy resources, waste, resource recycling and other activities, to identify

their derivative environmental impacts, and elucidate opportunities for improvements thereby

fulfilling our stewardship duties for social responsibility and achieving our goals for sustainable

development.

5.1.1.2. Energy Management System

In 2011, ISO 50001 energy management system was established by TXC based on

plan-do-check-act (PDCA) management system principles in a bid to search for an effective

program for reducing energy use and subsequently achieve the purpose of energy conservation

and carbon reduction. At the same time, for synchronous cooperation between the upstream and

downstream industry chain, TXC also gradually required affiliated suppliers to comply with

EICC standard and conform to relevant regulations. For green supplier system introduction, TXC

also has committed to require all suppliers to carry out inventory of product carbon footprint and

greenhouse gas emission. This is aimed to first understand the situation and then seeking to

reduce generation of carbon dioxide in the operation process.

◎ Energy Management Policy

To fulfill our global citizenship & social responsibility, TXC commits to abide by the

laws to minimize the emission of carbon dioxide, develop green products, and to increase

the performance level of energy saving. We hope that TXC can achieve the energy

consumption target goal, and our solid actions are:



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Review our energy saving target constantly.

Reduce energy consumption by 1.6% every year using 2011 as the baseline (a power

consumption of 0.1034 degree per unit of SMD product.)

Increase the efficiency of our facilities.

Regular maintenance to find out improvement measures and opportunities for energy

conservation.

Purchase energy saving products.

According to energy procurement regulations, priority will be given to products with

energy conservation marking, water conservation marking, energy star and energy

conservation facilities.

Promote the awareness and sense of energy saving of our employees.

Every year regularly communicate with all employees on consciousness for energy

conservation, and personnel using major energy use equipment should receive major

energy conservation training every 3 years in accordance with the educational

training method.

◎ Greenhouse gas emissions intensity in 2016 is 0.035 Ton CO2e / 1,000 pcs

◎ Completed energy consumption in 2016：

NO. Name of management

plan Goal/Objective

Saving degree

Per year

Greenhouse

gases Emissions

EHS-15-05

The air-conditioning

system in Building D

has switched to

high-efficiency

chillers

Reduce power

consumption for chiller

operation to

808181KWH/year

609,380.64 321.76 Ton CO2e

◎ Inventory Results：

An energy use comparison was done for four years with 2013 designated as the base

year. Energy conservation rate was 6.74% compared to the 2011 base year.

Item/Year 2013 2014 2015 2016

Electricity (MWh) 33,443 34,227 32,282 34,147

Production (thousand) 309,204 525,871 400,817 520,265

Product energy

consumption 0.1082 0.0651 0.0805 0.0656

Energy consumption rate -4.60% 24.64% 6.74% 24.00%


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5.1.1.3. Pollution Prevention Planning

◎ Pollution prevention measures Management

All plant pollution prevention and treatment equipment have dedicated teams

responsible for maintenance and operations, with a complete written set of management,

operational and maintenance procedures to guide implementation ensuring the pollution

control equipment can achieve optimal effectiveness. Among the various control measures

deployed are included:

Air pollution control measures:

Currently there are three sets of factory Venturi scrubber, five activated carbon

adsorption systems, as shown in the flowchart, and for our air pollution testing standards and

results, please refer to our website's


Water pollution control measures:

After pre-treatment process, wastewater generated by the procedure is then discharged

via sewer to the wastewater treatment station in Ping Cheng to undergo unified treatment.

After processing, then relesing to the Tai Hang lack Creek of Taoyuan County. Sludge are

removed, transported and processed by qualified business owners.Quarterly water quality

testing for wastewater discharge, ensuring test results meet applicable regulatory agency

emission standards, with testing standards and results posted on our website





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◎ Solid Waste Management

All factory waste control operations are conducted in accordance with our "TXC Solid

Waste Management Guidelines" , with all waste sites complying with the appropriate

regulations for segregated collection and storage, with accredited contractors providing

regulatory agency authorized cleaning or re-utilization.

5.1.2. Environmental Management Practices

5.1.2.1. Management plan and objectives

Our environmental safety and health management system relies on a pre-review approach to

management:

Consideration of environmental aspects:

Identification of environmental aspects is undertaken on a regular basis every three

years, and whenever there is any development or introduction of new processes, such as the

introduction of new chemicals, machinery and equipment, then periodic considerations are

applied, to assess and take appropriate precautionary measures or ensure execution of

necessary controls.

Regulatory Compliance:

Quarterly initiatives are undertaken to collect applicable environmental laws and

regulations, with compliance assessment audits every six months, deploying

recommendations for affects or areas needing improvement, expanded assessments of


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environmental impacts, seeking to minimize impacts while ensuring the company complies

with all legal and regulatory requirements, and providing transparency through

simultaneously posting assessment results on the company website.

Establishing goals, targets and management programs:

To implement the corporate Environmental, health and safety policies, we rely on

determinations consonant with environmental concerns and regulatory processes, to elicit

the major concerns or regulatory areas which do not conform with our stakeholders

expectations, thereby setting environmental objectives for continuous improvement and

enhancement across our corporate environmental performance.

5.1.2.2. International Environmental Norms and Operational Management System

TXC engages in monthly tracking of international environmental law and regulatory

changes (such as WEEE, RoHS, REACH, etc.) to ensure that the materials, processes and

products TXC uses provide full compliance with international environmental requirements.

Whenever new environmental requirements arise, TXC teams immediately work with the

necessary inventory action plans, ensuring the latest requirements are included in the company's "

HSM011 (EMS011)_ environmental and material management guidelines", requiring compliance

from all our plant personnel and other collaborating partners.

5.1.2.3. Industrial Environmental Accounting System

In light of the growing international emphasis on environmental protection issues, since

March 31, 2010 we have endeavored forward on comprehensive ESH environmental health,

energy-saving, carbon reduction, and green activities expense accounting with the Project Code:

PE151, yielding objective data of the company's extensive efforts at environmental protection,

with expenditures in 2016 amounting to 12,600,208 (NT$)dollars, primarily reflecting

environmental clean-up, operational environmental testing, pollution control equipment

operations and maintenance costs.

5.1.3. Environmental Information Disclosure Status

5.1.3.1. Greenhouse Gas Inventory (ISO14064-1)

Given the global trends for carbon emissions reduction, March 4, 2010 Taiwan EPA

proposed additional targets for reducing CO2 emissions by 210 million tons within a decade. In

response to these global environmental trends and to aid in meeting our domestic greenhouse gas

reduction strategy requirements, to achieve sustainable development of energy and carbon

reduction goals, since 2010 we are cooperating with public policies to deploy comprehensive


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corporate greenhouse gas inventories every year, to better understand our emissions status, and

deploy appropriate measures to help reach CO2 emission reduction targets.

In 2017 TXC adopted standard ISO14064-1 procedures to conduct an inventory of our 2016

Taoyuan County facility, Beitou head office and Farglory free trade zone operations-generated

greenhouse gas emissions, completing BSI Greenhouse Gas Inventory verification procedures,

achieving ISO14064-1 certification, and establishing annual routine inventories hereafter, with

biannual recertification efforts. These inventorying efforts were aimed at determining a

comprehensive scope of corporate greenhouse gas emissions, and estimating overall emission, to

provide a basis for reduction improvements. So we will continue our best efforts at inculcating

the highest standard environmental protection systems, with widespread promotion throughout

our upstream and downstream supply chains, in the hope of allowing all phases of our operations

to provide for carbon reducing efforts, contributing to broad environmental stewardship and

compliance with international environmental regulations.

◎ Emissions boundaries

We have consulted the ISO 14064-1 standards and the World Council for Sustainable

Development / World Resources Institute (WBCSD/WRI) Greenhouse Gas Protocol in

establishing our geographic boundary limits, employing operational control to assign

responsibilities within our organizational emission boundaries, providing direct and energy

indirect emission assessments for the Pingchen facility(#4, Sixth Industrial Street, Pingchen

Industrial District, Taoyuan County ), Beitou headquarters(4th Fl.,#16, Section 2, Central Rd.

S., Beitou District, Taipei City) and Farglory free trade zone ( 7th

Floor, No.7, Hangsiang

Road Dayuan Taoyuan, Taiwan)

◎ Inventory Results

TXC’s total greenhouse gas emission in 2016 were an equivalent of 18,313.362 metric

tons of carbon dioxide. Inventory covers Pingzhen plant, Beitou plant and Yuanxiong

warehouse. Source of discharge is primarily outsourced power (scope 2). This effort

heralded completion of TXC's premier implementation of an integrated organizational

greenhouse has inventory, with "good" accuracy ratings for all our obtained data in 2013.

For the future, we will not only continue to promote greenhouse gas emission control to

reduce costs, but also look forward to reaching a balance between resource efficiency,

energy conservation, and environmental protection, for sustainable energy development,

working together with the industry to advance an economy and society-wide low carbon

presence, while also striving to adhere to the following two focal points:

Promoting energy conservation and reducing electricity consumption

Improving equipment efficiency, ensuring good equipment maintenance, and reducing


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freon and refrigerant escape.

For greenhouse gas inventory report in previous years, see company webpage at

http://www.txccorp.com/index_en.php?action=g_ESH_1&cid=2&sid=4. The gradually

rising trend in greenhouse gas emissions was the result of production capacity expansion, an

increase in equipment used and a larger amount of building floor space. In spite of this, TXC

is still committed to improving production efficiency and using energy saving facilities to

continue to conserve energy, reduce carbon and fulfill our responsibility as a global citizen.

2016 (IPCC 1995) – Power factor (2015)

Total Scope 1 Scope 2 Scope 3 CO2 CH4 N2O HFCs PFCs SF6

Greenhouse gas emissions

(ton CO2e/per year) 18,313.362 208.050 18,105.312 18,126.453 97.376 0.271 89.262 0.000 0.000 0.000

The percentage of total emissions (%) 100.00% 1.14% 98.86% 98.98% 0.53% 0.00% 0.49% 0.00% 0.00% 0.00%

Note：

1. Scope1: Direct Greenhouse gas emissions, Scope2: Energy indirect Greenhouse gas emissions

Scope3:Other indirect emissions including contracted waste and wastewater treatment, contracted

product component transportation, employee arrival and departure and business travel, cafeteria LPG,

OK convenience store refrigerator and vending machines. Since the source of these emissions is held or

controlled by other companies, TXC is unable to control these activities and greenhouse gas emissions.

The only work that can be done is to identify these emission sources. Quantification may not be done.

2. The fuel costs of domestic business travel by business units in 2016 converted into gasoline amount was

84,606.22 liters or 2,831.4GJ.

◎ 2016 direct and indirect energy use are as follows：

◎ An ozone-depleting substance emissions for 2016 are as follows：

ozone-depleting

substance

Emission

volume(Kg) GWP KgCO2e

R12 0.01933 10200 197.166

R21 0.03 148 4.44

R22 26.279284 1760 46251.53984

R502 0.03 4786 143.5776

R503 0.012 13299 159.582

Total 46756.30544

The type of

energy Source of emission

Amount per

year

Amount per

year (GJ)

Direct Diesel 0.046 Kiloliter 1.640

Direct Oil 3.341 Kiloliter 111.820

Indirect Externally-purchased

electricity

34,246,416

kkwh 123.287



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5.1.3.2. Product Carbon Footprint Inventory

TXC started to engage in product carbon footprint inventory in 2010. In 2017 TXC

conducted 7Z series Automotive Electronics carbon footprint inventory based on the PAS2050

standards, which involve product life cycle emission inventorying across the scope of raw

material extraction activities, manufacturing, quartz crystal production, packaging and customer

delivery phases. Inventory items include direct (category 1), indirect (category 2) and other

greenhouse gas emissions (category 3).

TXC regularly carries out “product carbon footprint investigation” (PAS2050) every year.

Aside from understanding discharge of CO2 generated in the product life cycle, we also carry out

the policy for CO2 reduction. We also decided to carry out “product carbon neutralization

investigation” (PAS2060) in 2012 so that we can buy back from industry for the equivalent of

carbon dioxide that failed reduction. All previous year in product carbon footprint inventory

report please refer website:


5.1.4. Resource-Saving and Reducing Carbon Measure

In recent years, we have continued to undertake carbon reduction programs, resource

recovery and pollution control efforts.

5.1.4.1. Electricity-saving programs and benefits

In line with government policy for encouraging recycled energy in 2011, application for

building power generation equipment using recycled energy was filed with the Ministry of

Economic Affairs. The Energy Bureau of the Ministry of Economic Affairs endorsed the rooftop

solar energy generation system for installing 230 single tiles to a total of 264 tiles with a total

installation capacity of 60.72kw and an estimated annual power generation of 63,164 degrees.

Taiwan Power Corporation signed a resale contract for the building project and the project

completed construction and joint power generation by 2011/12/26. Total power generation was

340,356 kilowatt–hours from 2012 to 2016. The facilities continue to be in effective operation.

Year 2012 2013 2014 2015 2016

kilowatt–hours 66,056 67,592 70,828 71,168 64,712



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5.1.4.2. Water-Saving Programs and Benefits

TXC's facilities water supplied are all sourced from the Taiwan Water Corp., and given the

limited water resources in the Taiwan region, our water use statistics are provided below, so we

have invested in water recapture and reutilization systems since 2008, and since November 2008

nearly 35% of our production process water supplies have undergone RO wastewater treatment

for reuse in toilet flushing and airconditioning replenishment. A total of 40,541M3

RO wastewater

was recycled in 2016 representing recycling rate of 23.2%. The trend over the latest eight years is

shown in the following graph.

5.2. Environmental protection implementation

5.2.1. Specific measures and efficacy in waste reduction and resource recycling and reuse

5.2.1.1. Waste classification and reduction programs and efficacy

◎ Waste treatment amounts have increased steadily along with increased production.

Classification and weighing was done for resource recycling starting from June 2011. The

statistics for the six categories of resource recycling (scrap iron, paper, glass, aluminum,

PET bottles and plastics) from 2013 to 2016 are provided below:

Unit: Kg

The categories of resource recycling 2013 2014 2015 2016

Paper 11,514 7,648 11,648 9,582

Plastics 2,064 2,782 8,780 11,390

Glass 0 0 0 1,645

Scrap iron 576 646 183 250

PET bottles 236 281 476 821

Aluminum 143 121 848 1,006


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◎ Since December 2008, the employee cafeteria has been using stainless steel tableware

reducing the need for wasteful disposable bowls and chopsticks, while promoting employees

to responsibly use napkins, to ensure practical environmental protection efforts, while also

reminding all to take only what they can actually eat to reduce food waste.

◎ From May 2008 our vending machines discontinued provision of plastic bottles

(beverages).

◎ Since May 2008 to reduce restroom waste, we have switched to fully soluble toilet paper,


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which proceeds directly to septic tanks, where duly authorized contractors periodically

undertake final processing.

◎ As of May 2008, we have deployed paper recycling and reuse programs, encouraging

dual sided printing, with promotional notices located adjacent to all copiers and printers,

while imposing controls all copier paper supplies, using only lighter bond weight papers, to

reduce unnecessary deforestation.

◎ Since April 2008, our conference rooms have discontinued use of paper cups.

◎ Beginning from July 2007, we have promoted waste classification (four categories),

helping to implement recycling concepts, with recycling bins throughout our facilities,

allowing for recapturing and recycling all manner of daily use items, recyclables, and

food waste capture.


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◎ Kitchen waste recycling

In 2010 we began collecting data for organic and food waste recovery, as the table below

indicates in 2012, about 27% of our common waste is recoverable for recycling and

reutilization, ensuring longer life for landfills, and also enhancing our incinerator

efficiency, while we have posted notices in our cafeterias to "treasure resources, reduce

food waste, please limit servings to only what you can consume", as a friendly reminders

for our colleagues not to waste food.

5.2.1.2. Waste recycling, reutilization, and waste exchange operations

◎ Waste solvent reuse

Since 2007 solvents used throughout our manufacturing processes (methanol and

isopropanol), which used to be treated by incineration are now returned to the chemical

suppliers, who use redistillation and purification processes, allowing recapture and reuse of

the methanol and isopropanol.


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◎ Resource Recovery, Recycling and Reutilization

Since 2006 Environmental safety and health management system is managed through a

pre-review approach.

5.2.2. Specific Measures and Efficacy of Green Products and Services

5.2.2.1. Green Products

TXC complies with RoHS (Restriction of Hazardous Substances in Electrical and

Electronic Equipment) 2011/65/EU, WEEE (Waste Electrical and Electronic Equipment)

2012/19/EU, (EU) 2015/863, PFOS 2006/122/EC, REACH (Registration, Evaluation,

Authorization and Restriction of Chemicals) (EC) No 1907/2006 requirements. Starting from

July 1, 2006, TXC has been in compliance with international standards banning the use of

substances containing Pb, Cd, Hg, Cr6+

, PBB, PBDE and PFOS. In addition to receiving ISO


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14001: 2004 environmental management system and IECQ/QC 080000: 2005 hazardous material

management system certifications, the company through the efforts of our employees passed

Sony Green Partner, Samsung ECO-Partner and Huawei Green Partner certification. Voluntary

Certification on the Pollution Control of Electronic Information Products was obtained from

China RoHS in accordance with electronic and information product pollution control

management regulations. Building upon the foundation of mutual understanding and joint

introduction of environment improvements, green purchasing activities serve as a basis for the

continuous provision of green products. In order to ensure that product quality conforms to the

related green and environmental protection regulations, the company strictly prohibits the use of

banned substances in its production processes and instructs our suppliers not to use banned

substances in either products or production so that the requirements of non-use, non-containment

and non-contamination are complied with at each stage from product design and manufacturing

to delivery and also to reduce the environmental impact of our products and services. The ICP

test data for various company products are posted on the company's Green Product Process

webpage. (http://www.txccorp.com/index_en.php?action=d_quality_1&cid=3) Company product

information and labelling are listed in the product specification sheets or related labelling is done

according to customer shipping requirements to ensure 100% compliance with customer

requirements.

5.2.2.2. Goal of using no hazardous materials

By hazardous substances we refer to materials banned under RoHS, WEEE, REACH other

regulations or pursuant to client guidelines, all of which are compiled in our corporate

"Environmental Management Materials Management Guidelines", undertaking all required

administrative measures, to ensure full threshold compliance with international standards,

allowing optimal accession to accredited provider lists.

TXC is continuing to maintain an accident-free record in regard to any hazardous

substances.

1. Sales return due to nonconforming GP is 0.

2. Nonconformity due to hazardous materials in plant is 0.

3. Nonconforming finished products detected from hazardous substances test in

nonconforming GP is 0.

5.2.3. Specific Measures and Efficacy in Pollution Control

5.2.3.1. Investment in pollution control facilities and operational and maintenance conditions

Among our pollution conrol measures, we have currently deployed three sets of Venturi

scrubbers, four sets of activated carbon adsorption equipment, and two sets of waste water

http://www.txccorp.com/index_en.php?action=d_quality_1&cid=3


88

treatment facilities and other pollution control facilities. These operations conform to our

"stationary pollution source operating permit "," Water Pollution Control Permits "and ISO14001

system requirements, with period inspections and maintenance, to ensure high in-service rates,

allowing the firm to stay below the applicable overall pollution emission control standards.

Periodic testing results for "Stationary sources" and "effluents" are posted on our website.

◎ Waste Disposal

2016 Material used by weight

Type Weight (kg)

Crystal Bar 2,037

Methyl alcohol & Isopropyl alcohol 66,471.5

◎ 2016 the main product materials packaging materials

Types Weight (kg)

Plastic reel 0.025

Embossed carrier tape 0.04

Heat activated ahesive cover tape 0.01

Bubble anti-static bag 0.05

Carton 0.35

Label

Coated paper 0.006

Scotch 0.0067

Shielding Bag 0.012

Drier 0.0035

◎ 2016 the category, weight and final disposal of waste described in the following

table:

Waste Code Waste Description Weight

(Tons)

Final

Disposal

D-1801 Garbage 21.74 Incineration

C-0301

Waste liquids with flash point lower than 60℃

(not including waste alcohol with ethanol

volume concentrations lower than 24%)

61.082 Physical

treatment

C-0301

Waste liquids with flash point lower than 60℃

(not including waste alcohol with ethanol

volume concentrations lower than 24%)

15.08 Incineration


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D-0902 Inorganic sludge 39.62 Physical

treatment

D-0903 Inorganic sludge 26.98 Physical

treatment

D-1503 Non-hazardous waste acids 1.0975 Chemical

treatment

A-9001 Electroplating waste cyanide plating solution 1.5551 Chemical

treatment

E-0217 Waste cyanide electroplating solution 0.781418 Physical

treatment

B-0214 Potassium cyanide 0.6295 Physical

treatment

B-0399 Other chemical mixtures or waste containers 1.71 Incineration

Source: Environment Protection Administration Exective Yuan, ROC( http://prtr.epa.gov.tw/)

For the actual reported quantity, please refer to the Industrial Waste Report and Management System

(IWR&MS) of the Environmental Protection Administration, Executive Yuan.

5.3. Implementation of Environmental Protection Concepts

5.3.1. Internal Implementation of Environmental Protection and Specific Measures

◎ As part of our global corporate citizenship, besides our responsiveness to public

policy demands requiring energy-saving carbon-reduction efforts, we also encourage

our staff at work and in their homes to promote everny-saving and carbon-reduction

through the following twelve measures:

No Content

1

No outside leakage of air conditioning: Reduce use of air conditioning,

open windows more, do not wear suit and ties in non-designated area, set

air conditioning at 25-26°C and prevent outside leakage.

2

Always turn off lights and unplug when not in use: Turn off lights and

unplug when not in use. Review lighting requirements. Improve lighting

effectiveness. Reduce number of superfluous bulbs.

3

Energy saving lamps save money: Replace the conventional tungsten

filament bulbs with energy saving bulbs. Provides same amount of

lighting at a lower cost. Long lifespan also saves money.

4

Energy saving, water saving logos: Purchase products that have

environmental protection, water saving and energy saving logo and high

EER ratings to save energy, reduce carbon and protect the environment.

5

Cycling and walking for health: Take stairs more and take elevator less.

Ride frequently to work and exercise, walk more, spend more time for

exercise and fitness.

6 Don’t drive once a week: Take public transportation, reduce the number

of times you drive and ride alone, don’t drive at least once per week.

7 Select carbon reduction vehicles: Use gas/LPG, hybrid or electric cars or

http://prtr.epa.gov.tw/


90

motorized transportation, get in the habit of turning off engine when

parked.

9

Bring your own cups, chopsticks, handkerchiefs and bags: Prepare your

own cups, environmentally friendly chopsticks, handkerchiefs and

shopping bags; drink less bottled water, use less disposable products.

10

Value resources, care for the Earth: Use both sides of paper, use recycled

paper, water saving faucets and toilets, don’t use overly packaged

products, recycle resources.

11

Choose low-emission: Purchase low emission / low fuel consumption

vehicle models for personal transportation to reduce energy consumption.

It is even better to join carpools.

12

Do not use stand-by mode on appliances: Turn off the power of

appliances that are not in use to save electricity and do you part to protect

the environment.

◎ From January 2010 our employee cafeterias have deployed a once weekly Eat

Vegan to Save the Planet campaign, dedicating every Wednesday to a meatless

menu, helping on the small scale to limit one's materialistic desires and appetite

urges, while changing dietary habits, improving health with antioxidants, and on the

larger scale ensuring a contribution to preventing deforestation impacts, greenhouse

gases, other macroenvironmental improvements, for ourselves and our posterity to

enjoy a clean and sustainable planet.

◎ We continue to expand our e-ification efforts, establishing e-operating systems,

such as: e-forms workflow systems, e-payroll, e-bulletin boards, online learning

platforms and email to reduce paper waste.


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◎ Publicize PC energy conservation setting and unplug the computers before leaving

the office in order to comply with the energy conservation policy and implement

energy conservation and carbon reduction.

5.3.2. Green Purchase

5.3.2.1.

In order to fulfill our responsibility as a global citizen, TXC has actively cooperated in green

purchasing practices. Besides directing purchasing at products that have received government

environmental protection symbol certification, the company has also purchases equipment and

launched related improvement projects to include power savings, operation efficiency, water

conservation and service life factors into purchasing considerations. Therefore, TXC defines

green purchasing as the purchase of products, technology, services to conserve energy, reduce

carbon, reduce waste and reduce environmental impact. The green purchasing principles

recognized by TXC are:

(1) Government certified green products such as products with either environmental protection

symbol or energy conservation or water saving attributes.

(2) Products that conform to the relevant laws of other counties (such as EU RoHS, WEEE laws)

or products that have been approved to use environment protection symbols.

(3) Suppliers are asked to consider power, water and material conservation when designing

production equipment. After completing installation, equipment contractors are instructed to

check whether the energy performance of related equipment conforms or exceeds the

specifications in the purchase contract.

5.3.2.2.

In compliance with company environmental protection policy and simultaneously carrying

out supply chain green procurement publicity and integrating green supply chain service


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customers.

Ways to implement green procurement

5.4. Safety and Health Planning and Management

5.4.1. Establishment of our Safety and Health Management System

Our occupational Safety and Health Management systems conforms to the spirit of

OHSAS18001 and PDCA structures, including risk assessment, operating environment controls,

hazardous materials and waste management, subcontractor management, training, safety

investigations, emergency response and audits. We applied second time occupational Safety and

Health Management systems efficacy in 2013.

5.4.2. Workforce Participation Empowerment in Safety and Health

We have established an Environmental and Occupational Safety and Health Committee,

which meets quarterly to review our work progress, and study environmental protection, safety

and health issues. A total of 14 persons regularly participate in the Labor Safety and Health

Committee. Of these, 6 are labor representatives making up 43% of the committee members. A

senior executive is assigned to represent management, and ensure appropriate implementation

and management directives for the firm's environmental and safety and health related issues. The

committee exercises jurisdiction over matters including: industrial safety, industrial hygiene,

environmental protection, training, promotion and related activities. All of our corporate

employees responsible for occupational safety and health related efforts have obtained their

required licensures, and attend agency sponsored seminars or academic conferences and events.

Green Mark inquiries through the Internet and understand green products information.

In compliance with company environmental protection policy and simultaneously carrying out supply chain green procurement publicity and integrating green supply chain service customers.

Purchasing at products that have received

government environmental peotection symbol

certificate.

Information

Collection

Advocacy

to promote

Purchase

Products


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5.4.2.1. Occupational Safety

TXC maintains a labor safety and hygiene management committee to make sure the

company meets required labor safety and hygiene standards. This measure also assures that all

operational flows are safe and are designed to prevent industrial hazards.

To ensure employee occupational safety protection and safe operations of machinery and

equipment, each employee is required to observe all pertinent occupational safety regulations and

guidelines, adhering to safety requirements and work efficiency, as abiding core objectives in all

our activities.

5.4.3. Specific Measures in health and safety management

Our Safety and health management system applies a pre-review approach:

(1) Risk assessment: safety and health risk assessments are conducted on a periodic triennial

basis, and whenever any new processes are in development or introduced, such as with the

introduction of new chemicals, machinery and equipment, with deployment of all

appropriate precautionary measures or other necessary controls to reduce risks to within an

acceptable range.

(2)Regulatory compliance: all updated safety and health regulations are reviewed quarterly,

with compliance audits every six months, to ascertain impacts or areas in need of

improvement, and undertake health and safety risk assessment, to minimize possible impacts,

ensuring corporate compliance with all laws and regulatory requirement, with all such


94

periodic assessments published on our corporate portal website.

(3)Establishing objectives, target areas and management plans: to ensure implementation of

our environmental and safety and health policies, we rely on risk assessment and regulatory

compliance audits, to establish priority areas for risk improvement efforts, and where the

regulatory environment does not conform to stakeholder expectations, we establish

additional safety and health guidelines to continually improve our workplace environmental

safety and health risks, while enhancing our corporate safety and health performance.

5.4.3.1. Product liability insurance

We endeavor to ensure all our products comply with international guidelines, and

concomitantly provide adequate protection for our consumer's rights. So since 2005, we have

sought reputable international insurance firms to provide us with full comprehensive product

liability insurance coverage. Since most of our production involve active and passive frequency

components, product or functional losses (poor frequency vibrations or in capacitance), are

unlikely to mean for our distribution channels and ultimate consumers any physical injuries. Thus,

we have obtained product liability insurance, to meet the highest ethical requirements, thereby

rightly improving our corporate image in line with our international competitors, while sharing

any risks and responsibilities from our distribution channels. No violation of relevant laws and

regulations pertinent to product in 2016.

5.4.3.2. Contractors Safety and health management

To ensure the safety of factory workers on the construction and to maintain the surrounding

environment, the Company has established relevant management system and E- management

system for contractors. Prior to the co-operation, the contractors would sign the “contractors’

safety, health and hygiene agreement” and complete the safety and health training to ensure that

prior, during, and after the operations are in accordance to the regulations. We also require that,

before the construction, the applicant is required to fill the “Contractor work permit and

construction environment risk form”, and asking the safety and health unit to provide us with a

security guard office to be used as a basis for inspection. Construction personnel entering the

plant must swipe card and have ID checked before being accompanied into the plant by the

applying section supervisor. Those persons who have not undergone or passed safety and health

education and training must complete the related education and training and receive certification

before applying for a temporary construction pass and entry together into the plant area with the

applying section supervisor.


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5.4.4. Risk Management Planning

All of our corporate risk management adheres to OHSAS18001 standards, with provision of

a complete set of workplace hazard identification and risk assessment criteria, allowing us to

comprehensively appreciate all our site risks, and provide adequate controls at high risk facilities,

reducing risks to pre-empt operations related safety incidents, and provide all our employees with

a safe workplace.

5.4.5. Accident Investigation Management

We have set up a complete system of workplace accident investigation for studying the

direct reasons, indirect reasons and basic reasons for the occurrence of accidents and carried out

further improvement so as to avoid recurrence of similar accidents.

To exhibit our resolve in maintaining zero workplace accident, the company has registered

relevant hours and continued tracking at the website specified by the Labor Committee on a

monthly basis.

5.4.5.1. Occupational accident statistics

Key statistics is according to the statistics indicators of important occupational accidence

announced by the council of labor affairs in selections of disable injury frequency rate (average

disable injury cases per million work hours at workplace) and of disable injury severe rate

(average lost work days per million work hours at work place). TXC has all along adhered to the

goal of zero accident and implemented notification and completed survey and improvement

mechanism for handling accidents and traffic accidents so as to prevent recurrence of similar

hazards. Irregularly we would produce publicity information on safety and hygiene to be

disseminated via the internal website, emails and bulletin board among all employees so as to

enhance their consciousness for safety and hygiene.

There were six occupation injury incidents during work at Plant 1. The others were all traffic

accidents.


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FR and SR in 2016 are provided below:

FR SR No. of Accidents by

Gender Days Lost by Gender

Disabling

Injury

Frequency Rate

Disabling Injury

Severity Rate Male Female Male Female

6.25 41.87 3 10 3 84

There were thirteen occupation injury incidents, 9 traffic accidents and four accidents, was

wrapped, stampede, cut, the object flying down.

No mortality related to work in 2016. The work injury rate, proportion of loss of work days

and attendance rate are described below:

The work injury rate, proportion of loss of work days and attendance rate

Gender Number

Total working hours Work injury rate Handling accident Traffic accident

Male 2 1 2,077,836 0.29

Female 2 8 2,077,836 0.96

Note：Work injury rate = Work injury number/ Total working hours * 200,000

Gender

Workday loss

Total working hours Proportion of loss

of work days Handling

accidents Traffic accidents

Male 2 1 2,077,836 0.29

Female 46 38 2,077,836 8.09

Note：Proportion of loss of work days = Workday loss / Total working hours * 200,000

Gender Total Absence days Total working days Absence rate

Male 575.828 231,707 500

Female 2,158.171 231,707 1,860

Note：Absence rate = Total Absence days/Total working days * 200,000

5.4.6. Business disaster recovery plan

We build up emergency prevention classification of emergent handling, emergent handling

level classification and emergent care reaction plan for emergent cases caused by natural disaster

or accident injury, such as fire, explosion, power shut down, flood, typhoon, toxic chemical

substances, we also hold file drills and emergent response drills at least twice a year from every

unit representatives. Professional instructors from the fire from time to time conduct courses

including firefighters, ambulance personnel training, communication liaison training, security

personnel training and evacuation guide personnel training, they carry on exercise with local fire


97

authorities to maintain the company’s overall security to stop and prevent risk or accidence

occurrence. In 2016, we held emergency response/contingency plan and fire service exercises,

such as “Factory Exit & Evacuation Drill”, “Fire-Extinguishing Training”, “Suspicious

Mail (Explosives) Packages Handling Procedure Training”, “Self-defense Fire Service Group

Exercise” and so on. To minimize the impact on employee health and safety and company

property. So that employees’ health and safety and company’s property could be down to

minimum impact. The company’s emergency reaction plan please refers to the part of the

company’s website. (http://www.txccorp.com/index_en.php?action=g_ESH_1&cid=5&sid=14)

5.5. Supply Chain Security Planning and Management

5.5.1. Construction of the Supply Chain Security Management System

Through government integrated system counseling in 2011, we commenced construction of

the Authorized Economic Operator (AEO) and the Supply Chain Security Management System

(ISO28000) in a bid to build a supply chain security system for favorable customs clearance and

for improving service quality and effectiveness so as to satisfy customers for the industrial value

chain security requirements. Operation of this system mainly comprises of educational training,

and formulation of risk appraisal, goal, objectives and programs, quality enterprise certification

self-evaluation chart, business partner auditing, internal auditing and management review, etc.

Thanks to third party auditing by SGS in October 2011, TXC was successfully certified for ISO

28000 and obtained excellent enterprise security certificate presented by the General Taxation

Administration of the Ministry of Finance in March 2012.

Ever since the accreditation as an Authorized Economic Operator (AEO) in 2012, the

company never cease to conduct self-inspection for the safety requirements of the supply chain,

and referred the supporting materials on security control, business partner evaluation, and internal

audit findings for verification every year. The Company will apply for a new round of

accreditation this year with the customs inspectors conducting an on-site inspection on January

30. After an internal evaluation, the company has been accredited the AEO once again. On March

19, Mr. Liao Chao-yang, the Director-General of Customs Affairs at Keelung Port, presented the

AEO certificate at the company in person.



98

6. Social Welfare

Since its inception, TXC has all along feedback to society to meet the expectation of a fair

corporate citizen. Feedback is responsibility and good deed is conscience, it is so for the

individual and should there be exception for the enterprise? The Gospel of Matthew says:

“Therefore when you five alms, do not sound a trumpet before you as the hypocrites do in the

synagogues and in the streets, so that they may be glorified by men.” Over the years, TXC has

silently engaged in charitable deeds with the intention of feedback to society without any

intention of disclosure and be known by other people. Hence, it is a matter “do not let your left

hand know what your right hand is doing.” Recently, thanks to vigorous promotion by Professor

Gao Xijun, founder of Farsight magazine, the concept of Corporate Social Responsibility has

been widely known among the public. With respect to the rating of our corporate social

responsibility system by Commonwealth Magazine, employees suggested that the company do

more to contribute back to society and also disclose the various social activities in which the

company is involved to encourage employees and others in our industry to join hands to make a

contribution to society.

In consideration of employee, investing public and other stakeholders as well as corporate

social responsibility aspects, the Company has always made education, a multi-generational

endeavor of the nation, a core mission of setting down roots of education, fostering the shoots of

learning and directed our resources towards elementary schools nearby company plant locations

in Pingzhen and Beitou such as Longde and Datun Elementary Schools. As for schools, social

welfare groups and disadvantaged families nearby the company such as the Taipei City TFCF, the

Longtan Home for the Disabled and Fangzhou Home for the Disabled, resources may be limited

but love and sincerity is limitless. This following report of how the Company has fulfilled its

corporate social responsibility over the years is intended to state the current status of this work to

outline company past efforts and advocate and fulfill our commitment to social responsibility in

the future. Looking towards the future, TXC will continue to actively engage into social welfare

activities in consideration to stakeholders within the range of our abilities and do our part to

fulfill our social responsibilities as a corporate citizen and also use the recognition shown through

the Top Corporate Citizen awarded by Commonwealth Magazine Taiwan and the Corporate

Social Responsibility Award from Global Views Monthly Magazine as a mirror for

self-examination. The Company Volunteers Group was set up in 2015 and was issued a

Certificate of Appreciation from the Social Welfare Department of Taoyuan City Government on

October 28, 2016.


99

6.1. Public welfare and charity

Neighborhood Care

The company has long been engaged in building a good relationship with the local

community. Through heads of Yongguang and Yongan Village in Pingjhen Industrial Park, we

have supplied underprivileged communities with commodities during Chungyuan Festival and

winter months every year. At the same time, we also provided nearby nursing homes with

commodities and financial support, because we wish to introduce well-being, happiness and

compassion to the society through the act of benevolence.

Birthday Celebration

In order to fulfill the philosophy of our corporate volunteer club in putting touching

sentiment into action, colleagues from the company’s volunteer club and our subcontractor Nice

Style traveled to Taoyuan Shengai Education and Nursing Institute in the after noon of November

20 to play games with the children and celebrate their birthdays. The concept of “love is to never


100

let go, hold on to your happiness” was promoted in a playful manner inspired by the image of

“round”, so that our volunteers can appreciate the happiness of caring about children. Moreover,

hairstylists from Nice Style and our corporate volunteer club. The event drew to a successful

conclusion amid a cordial, warm atmosphere.

Blood Donation

Starting from 2007, TXC sponsors two blood donation drives each year as a way to make its

feedback to the society. The colleagues have generously responded to these public welfare

activities. A total of 186 bags (250C.C) blood donations in 2016.


101

Step 30 Charity Campaign

The respond to the “Step30 Plan” initiated by “Step30 International Ministries”, a one-week

shoes donation campaign was held on August 1st, 2016. With the assistance of many colleagues,

a total of 293 pairs of 293 pairs of shoes and a partial of the donations were transferred to Step30

International Ministries on August 15th. We expect that under the mutual support of many

corporations, the poor children of Africa can stay away from the infection of chigoe fleas and do

our share of corporate social responsibility.

6.2. Environment and protection

Cleaning Zhuwei Fishing Port

About 80 personnel members of our company, led by the company president, with the

enthusiastic participation of the Volunteer Society, participated in the Zhuwei Fishing Port

Cleaning Campaign in Dayuan today(30th). It was estimated that about one thousand passionate

environmental protectionists from enterprises and students that had participated in this campaign.

After taking a group photo, the campaign came to an end perfectly. Moreover, to thank the

co-workers’ enthusiastic, the company president presented each of them a large pack and a small

pack of nice to encourage them participate in more charity services in the future.


102

Campaign to minimize the use of plastic bags

In order to decrease the amount of plastic bags used achieve sustainability on Earth,

Chairman Paul Lin personally led and promoted the “Less plastic Campaign” on December 22.

The event was conducted by the campaign ambassador at noon, where our colleagues were

invited to sign the manifesto of using less plastic bags. At the same time, portable reusable bags

were given to our colleagues for daily use. In total, approximately 500 colleagues attended the

event, which was conducted amid a jovial ambiance, significantly reinforcing awareness of using

less plastic products. It is hoped that our colleagues will be able to appreciate the long-term

damage of plastic bags on the environment through this event, because the sustainability of Earth

relies on everyone’s efforts. Let us start by decreasing the use of plastic bags until it is completely

eradicated from our environment.

Environmental Cleaning Activity

The Company rallied the support from its employees to engage in the cleaning of Industrial

Park in joint effort with Ping Cheng Industrial Park Service Center. Under the efforts of all the

local dwellers and participants from the enterprises in the industrial zone, the surrounding of the

zone turns more appealing. This is also the manifestation of corporate social responsibility of the

enterprises in the zone.


103

6.3. Arts and culture

Teacher Chang Thanksgiving Musical Concert

To continuously support various events held by public welfare groups and provide

colleagues with versatile stress soothing channels, our corporation especially encourages our

colleagues and their family members to participate in the “With Love at Heart, Proceed with Ease

Thanksgiving Musical Concert” held by the Teacher Chang Foundation. Through this concert of

beautiful melodies, we expect our colleagues and their family members to be cultivated

physically and mentally, feel the power of “loving and helping people”, and fulfill our share in

corporate social responsibility.

6.4. Education and research

Environment goods donations

TXC performs its corporate social responsibility by focusing on education. For effective use

of limited resources and optimal benefit, TXC has paid attention to helping the elementary

schools in the surrounding of Beitou and Pingzhen. In order to foster environmental awareness

and consciousness in the younger generation, the company made environmentally friendly cups


104

made of environmentally safe materials and distributed them to school children. The messages

“protect environment, love Earth, reduce carbon, protect ecology” and “value resources, think

about where each grain of rice comes from, value materials, remember what it takes to make

every single thing” was printed on the cups so this concept will gradually be incorporated into

their daily lives and these children will naturally become advocates of environmental protection.

Exchange Visit

In order to enhance the experience of students towards Taiwan's industry and to understand

Taiwan’s enterprise management methods, the company had invited students and Professors from

National Central University and National Chengchi University to hear the company's operating

philosophy, its state of competition and its production processes for the quartz industry and other

related issues.

TXC Scholarship for Children of staffs

Since 2008, the company has provided scholarships for the children of our staffs, with the

aim of inspiring these children to study hard and to appreciate the hard-earned revenue of their

parents, so that these daughters and sons of our colleagues can cherish and be grateful to their

parents, thus continue their hard work, and become a useful person for the country in the future as

National Chengchi University IBM National Central University


105

a country. In addition, the various center supervisors also provide additional scholarships to

encourage students with excellent scholastic achievements.


106

7. Plans and Prospects

In 2017, TXC will continue to make progress towards the three avenues of corporate social

responsibility: public welfare, corporate governance and environment / safety / health. By

working to achieve the objectives of awakening, fostering, educating, we believe that putting our

hearts and efforts towards a common purpose will focus our strength so that we can accomplish

our desired objectives. As for the future, we will make progress even though we may not know

for sure what changes will come as long as we continue to work towards a certain direction.

7.1. Green operation aspect

Our company has issued a green product guidebook and environmental safety and health

guidebook in response to green product requirements. We had planned to release a new version of

the environment safety and health guidebook which includes the latest requirements and

corresponding company practices. This new version was created to address internal training

requirements and serve as guidelines for our suppliers so downstream and upstream can work in

tandem to conform to the latest domestic and international standard requirements

7.2. Occupational safety and health aspect

In the future, TXC will strive to achieve plant safety knowledge, education & training and

zero accident targets. Statistics will be collected for all regular accidents that occur at the plant

which will then be used as a basis for internal tracking and improvement. In addition to reducing

potential work accidents, employees will have a greater sense of safety and security when

performing their jobs.

7.3. Public welfare activity aspect

Volunteer leave, an item included in the revised 2013 employee manual, is meant to

encourage employees to participate in public service together with the company provided it does

not affect one's personal routine and job duties. Family members are also welcome to join in

activities such as beach cleaning, no smoking hike to spread the influence of these activities to

family and friends and make them even more effective. To show concern for disadvantaged

groups, assistance is provided through borough chiefs for low-income residents in neighborhoods

nearby the Pingzhen Plant. Basic necessities bringing warmth and comfort were provided to show

our care and concern as a company.


107

7.4. Environment protection aspect

A variety of activities have been jointly planned with the Environmental Quality Protection

Foundation for 2013. Employees enthusiastically participated in the Taiwan green belt and Kenya

tree planting activity by opening up their wallets to ensure that the activity was a success. TXC

will continue to hold weekly meat-free day activity at the company. Quarterly targets will be set

for various plant activities. The company has also applied an EPA certification badge for low

carbon activities that promote energy conservation and carbon reduction.

7.5. Employee participation aspect

TXC also will continue to encourage employees to join various clubs and activities such as

basketball club, cycling club, yoga club, badminton club, photography club, golf club, table

tennis club, walking club and provide financial support to foster a sense of belonging among

employees. For the members at each department responsible for promoting the various projects,

instant rewards and commendations are provided at the department level to encourage employees

to challenge themselves and increase added value to achieve overall benefit and raise company

competitiveness.

108

G4 Content Index

STANDARD DISCLOSURES PART I:

Profile Disclosures Section Page(s) Remark

Strategy and Analysis

G4-1

Provide a statement from

the most senior

decision-maker of the

organization (such as CEO,

chair, or equivalent senior

position) about the

relevance of sustainability

to the organization and the

organization's strategy for

addressing sustainability.

Statement from

executive 6

G4-2

Provide a description of

key impacts, risks, and

opportunities.

Statement from

executive

Risk management

6

36

Organizational Profile

G4-3 Report the name of the

organization. Company Overview 14

G4-4 Report the primary brands,

products, and services. Company Profile 14

G4-5 Report the location of the

organization's headquarters. Company Profile 14

G4-6

Report the number of

countries where the

organization operates, and

names of countries where

either the organization has

significant operations or

that are specifically

relevant to the

sustainability topics

covered in the report.

Worldwide locations 17

G4-7 Report the nature of

ownership and legal form. Company Overview 14

G4-8

Report the markets served

(including geographic

breakdown, sectors served,

and types of customers and

beneficiaries).

Market overview

Worldwide locations

15

17

G4-9 Scale of the reporting

organization.

Company Profile

Market overview

Operation

performance

14

15

18

109



G4-10

a. Report the total number

of employees by

employment contract and

gender.

b. Report the total number

of permanent employees by

employment type and

gender.

c. Report the total

workforce by employees

and supervised workers and

by gender.

d. Report the total

workforce by region and

gender.

e. Report whether a

substantial portion of the

organization's work is

performed by workers who

are legally recognized as

self-employed, or by

individuals other than

employees or supervised

workers, including

employees and supervised

employees of contractors.

f. Report any significant

variations in employment

numbers (such as seasonal

variations in employment

in the tourism or

agricultural industries).

Recruiting 51-53

G4-11

Report the percentage of

total employees covered by

collective bargaining

agreements.

No related

agreement.

G4-12 Describe the organization's

supply chain.

Selection of

suppliers-

Supplier chain

68

110



G4-13

Report any significant

changes during the

reporting period regarding

the organization’s size,

structure, ownership, or its

supply chain, including:

．Changes in the location

of, or changes in,

operations, including

facility openings, closings,

and expansions

．Changes in the share

capital structure and other

capital formation,

maintenance, and alteration

operations (for private

sector organizations)

．Changes in the location of

suppliers, the structure of

the supply chain, or in

relationships with

suppliers, including

selection and termination

Corporate operation

governance structure 20.21

G4-14

Report whether and how

the precautionary approach

or principle is addressed by

the organization.

Risk management 36-38

G4-15

List externally developed

economic, environmental

and social charters,

principles, or other

initiatives to which the

organization subscribes or

which it endorses.

No Conflict

Minerals Policy

Labor Rights and

Ethics Policy

11.12

51

G4-16

List memberships of

associations (such as

industry associations) and

national or international

advocacy organizations in

which the organization:

．Holds a position on the

governance body

．Participates in projects or

committees

Public association 19

TXC doesn't

Provides

substantive funding

beyond routine

membership dues

111



G4-16

．Provides substantive

funding beyond routine

membership dues

．Views membership as

strategic

IDENTIFIED MATERIAL ASPECTS AND BOUNDARIES

G4-17

a. List all entities included

in the organization's

consolidated financial

statements or equivalent

documents.

b. Report whether any

entity included in the

organization's consolidated

financial statements or

equivalent documents is not

covered by the report.

Operation

performance 18

G4-18

a. Explain the process for

defining the report content

and the Aspect Boundaries.

b. Explain how the

organization has

implemented the Reporting

Principles for Defining

Report Content.

TXC Corporate

Social

Responsibility

Report Introduction

Responsibilities of

board of directors

1

27

G4-19

List all the material Aspects

identified in the process for

defining report content.

Identification of

related interest

parties and

communication

39-42

G4-20

For each material Aspect,

report the Aspect Boundary

within the organization, as

follows:

．Report whether the Aspect

is material within the

organization

．If the Aspect is not

material for all entities

within the organization (as

described in G4-17), select

one of the following two

approaches and report

Significant Issues,

Aspect Boundaries

Inside and Outside

the Organization

44-50

112



G4-20

either:

The list of entities or

groups of entities included

in G4-17 for which the

Aspect is not material or

The list of entities or

groups of entities included

in G4-17 for which the

Aspects is material

．Report any specific

limitation regarding the

Aspect Boundary within

the organization

Significant Issues,

Aspect Boundaries

Inside and Outside

the Organization

44-50

G4-21

For each material Aspect,

report the Aspect Boundary

outside the organization, as

follows:．Report whether

the Aspect is material

outside of the

organization．If the Aspect

is material outside of the

organization, identify the

entities, groups of entities

or elements for which the

Aspect is material. In

addition, describe the

geographical location

where the Aspect is

material for the entities

identified．Report any

specific limitation

regarding the Aspect

Boundary outside the

organization

Significant Issues,

Aspect Boundaries

Inside and Outside

the Organization

44-50

G4-22

Report the effect of any

restatements of information

provided in previous

reports, and the reasons for

such restatements.

TXC has no case

for restatement.

G4-23

Report significant changes

from previous reporting

periods in the Scope and

Aspect Boundaries.

TXC Corporate

Social

Responsibility

Report Introduction

1

113

STAKEHOLDER ENGAGEMENT


Profile Disclosure Section Page(s) Remark

G4-24

Provide a list of stakeholder

groups engaged by the

organization.

Ways and channels

of communication

for all stakeholders

48~50

G4-25

Report the basis for

identification and selection

of stakeholders with whom

to engage.

Identification of

related interest

parties and

communication

39

G4-26

Report the organization's

approach to stakeholder

engagement, including

frequency of engagement

by type and by stakeholder

group, and an indication of

whether any of the

engagement was undertaken

specifically as part of the

report preparation process.

Ways and channels

of communication


48~50

G4-27

Report key topics and

concerns that have been

raised through stakeholder

engagement, and how the

organization has responded

to those key topics and

concerns, including through

its reporting. Report the

stakeholder groups that

raised each of the key

topics and concerns.

Ways and channels

of communication


48~50

REPORT PROFILE

G4-28

Reporting period (such as

fiscal or calendar year) for

information provided.

TXC Corporate

Social

Responsibility

Report Introduction

1

G4-29 Date of most recent

previous report (if any).

TXC Corporate

Social

Responsibility

Report Introduction

1

G4-30 Reporting cycle (such as

annual, biennial).

TXC Corporate

Social

Responsibility

1

114

Report Introduction

G4-31

Provide the contact point

for questions regarding the

report or its contents.

TXC Corporate

Social

Responsibility

Report Introduction

1

G4-32

a. Report the ‘in

accordance’ option the

organization has chosen. b.

Report the GRI Content

Index for the chosen option

(see tables below). c.

Report the reference to the

External Assurance Report,

if the report has been

externally assured. GRI

recommends the use of

external assurance but it is

not a requirement to be ‘in

accordance’ with the

Guidelines.

TXC Corporate

Social

Responsibility

Report Introduction

1

G4-33

a. Report the organization's

policy and current practice

with regard to seeking

external assurance for the

report.

b. If not included in the

assurance report

accompanying the

sustainability report, report

the scope and basis of any

external assurance

provided.

c. Report the relationship

between the organization

and the assurance providers.

d. Report whether the

highest governance body or

senior executives are

involved in seeking

assurance for the

organization's sustainability

report.

TXC Corporate

Social

Responsibility

Report Introduction

1

Governance

G4-34

Report the governance

structure of the

organization, including

committees of the highest

Corporate operation

governance structure

Responsibilities of

20.21

27

115

governance body. Identify

any committees responsible

for decision-making on


and social impacts.

board of directors

G4-35

Report the process for

delegating authority for


and social topics from the

highest governance body to

senior executives and other

employees.

Responsibilities of

board of directors 27

G4-36

Report whether the

organization has appointed

an executive-level position

or positions with

responsibility for economic,

environmental and social

topics, and whether post

holders report directly to

the highest governance

body.

Responsibilities of


G4-37

Report processes for

consultation between

stakeholders and the highest

governance body on


and social topics. If

consultation is delegated,

describe to whom and any

feedback processes to the

highest governance body.

Responsibilities of


G4-38

Report the composition of


body and its committees by:

．Executive or

non-executive

．Independence

．Tenure on the governance

body

．Number of each

individual's other

significant positions and

commitments, and the

nature of the commitments

Board of directors

A list of directors

and supervisors

attendance to

meetings of board of

directors

29

The directors of the

Company only

signed the

"Directors

(Supervisors) is

willing to either

consent" agreement

and "NDA

document."

116

G4-38

．Gender

．Membership of

under-represented social

groups

．Competences relating to


and social impacts

．Stakeholder representation

G4-39

Report whether the Chair of


body is also an executive

officer (and, if so, his or her

function within the

organization’s management

and the reasons for this

arrangement).

Board of directors 25

G4-40

Report the nomination and

selection processes for the

highest governance body

and its committees, and the

criteria used for nominating

and selecting highest

governance body members,

including:

．Whether and how

diversity is considered

．Whether and how

independence is considered

．Whether and how

expertise and experience

relating to economic,


topics are considered

．Whether and how

stakeholders (including

shareholders) are involved

Board of directors

Company law and

regulations

compliance

25

28

G4-41

Report processes for the

highest governance body to

ensure conflicts of interest

are avoided and managed.

Report whether conflicts of

interest are disclosed to

stakeholders, including, as

Company law and

regulations

compliance

28

117

G4-41

a minimum:

Cross-boardmembership ．

Cross-shareholding with

suppliers and other

stakeholders ．Existence of

controlling shareholder ．

Related party disclosures

G4-42

Report the highest

governance body's and

senior executives’ roles in

the development, approval,

and updating of the

organization's purpose,

value or mission statements,

strategies, policies, and

goals related to economic,


impacts.

Statement from

executive

Business logic

Code of conduct

6

15

33

G4-43

Report the measures taken

to develop and enhance the

highest governance body's

collective knowledge of


and social topics.

Board of directors

Responsibilities of

board of directors

25

27

G4-44

a. Report the processes for

evaluation of the highest

governance body's

performance with respect to

governance of economic,


topics. Report whether such

evaluation is independent or

not, and its frequency.

Report whether such

evaluation is a

self-assessment.

b. Report actions taken in

response to evaluation of


body's performance with

respect to governance of


and social topics, including,

as a minimum, changes in

membership and

organizational practice.

Responsibilities of


118

G4-45

a. Report the highest

governance body's role in

the identification and

management of economic,


impacts, risks, and

opportunities. Include the


role in the implementation

of due diligence processes.

b. Report whether

stakeholder consultation is

used to support the highest

governance body's

identification and

management of economic,


impacts, risks, and

opportunities.

Responsibilities of


G4-46

Report the highest

governance body's role in

reviewing the effectiveness

of the organization's risk

management processes for


and social topics.

Responsibilities of

board of directors

Risk management

27

36

G4-47

Report the frequency of the


review of economic,


impacts, risks, and

opportunities.

Responsibilities of


G4-48

Report the highest

committee or position that

formally reviews and

approves the organization's

sustainability report and

ensures that all material

Aspects are covered.

TXC Corporate

Social

Responsibility

Report Introduction

1

G4-49


communicating critical

concerns to the highest

governance body.

Responsibilities of


G4-50

Report the nature and total

number of critical concerns

that were communicated to


body and the mechanism(s)

used to address and resolve

them.

Responsibilities of


119

G4-51

a. Report the remuneration

policies for the highest

governance body and senior

executives for the below

types of remuneration:

．Fixed pay and variable

pay:

––Performance-based pay

––Equity-based pay

––Bonuses

––Deferred or vested shares

．Sign-on bonuses or

recruitment incentive

payments

．Termination payments

．Clawbacks

．Retirement benefits,

including the difference

between benefit schemes

and contribution rates for


body, senior executives,

and all other employees

b. Report how performance

criteria in the remuneration

policy relate to the highest

governance body’s and

senior executives’


and social objectives

Duties of the

Remuneration and

Compensation

Committee

30

G4-52


determining remuneration.

Report whether

remuneration consultants

are involved in determining

remuneration and whether

they are independent of

management. Report any

other relationships which

the remuneration

consultants have with the

organization.

Duties of the

Remuneration and

Compensation

Committee

30

G4-53

Report how stakeholders’

views are sought and taken

into account regarding

remuneration, including the

Duties of the

Remuneration and

Compensation

30

120

results of votes on

remuneration policies and

proposals, if applicable.

Committee

G4-54

Report the ratio of the

annual total compensation

for the organization's

highest-paid individual in

each country of significant

operations to the median


for all employees

(excluding the highest-paid

individual) in the same

country.

Salaries and benefits 55-57

G4-55

Report the ratio of

percentage increase in


for the organization's

highest-paid individual in

each country of significant

operations to the median

percentage increase in


for all employees

(excluding the highest-paid

individual) in the same

country.


ETHICS AND INTEGRITY

G4-56

Describe the organization's

values, principles, standards

and norms of behavior such

as codes of conduct and

codes of ethics.

Code of conduct 33

G4-57

Report the internal and

external mechanisms for

seeking advice on ethical

and lawful behavior, and

matters related to

organizational integrity,

such as helplines or advice

lines.

Company law and

regulations

compliance

Open

communication /

complaint channel

28

58.59

G4-58

Report the internal and

external mechanisms for

reporting concerns about

unethical or unlawful

behavior, and matters

related to organizational

integrity, such as escalation

through line management,

whistleblowing

Company law and

regulations

compliance

28

121

mechanisms or hotlines.

Economic

G4-EC1 Direct economic value

generated and distributed.

Market overview

Operation

performance

Salaries and benefits

15

18

55-57

G4-EC2

Financial implications and

other risks and

opportunities for the

organization's activities due

to climate change.

Statement from

executive

Risk management

Greenhouse Gases

Emissions

6

36

79

G4-EC3

Coverage of the

organization's defined

benefit plan obligations. Salaries and benefits 55-57

G4-EC4 Financial assistance

received from government.

There was no

financial assistance

received from

government in

2016.

G4-EC5

Ratios of standard entry

level wage by gender

compared to local minimum

wage at significant

locations of operation.

Salaries and benefits 55

Ratio of standard

entry level wage

compared to local

minimum wage is

1:1.

G4-EC6

Proportion of senior

management hired from the

local community at

significant locations of

operation.

Recruiting 52

G4-EC7

Development and impact of

infrastructure investments

and services provided.

TXC did not have

any infrastructure

investments and

services related to

public benefit in

2016.

G4-EC8

Significant indirect

economic impacts,

including the extent of

impacts.

Recruiting

Order continuity

Public welfare and

charity

52

69

98

G4-EC9

Proportion of spending on

local suppliers at significant

locations of operation. Suppliers 69

Environmental

122

G4-EN1 Materials used by weight or

volume. Waste Disposal 88

G4-EN2

Percentage of materials

used that are recycled input

materials.

Our products do

not use any

recycling raw

materials.

G4-EN3 Energy consumption within

the organization.

Greenhouse Gases

Emissions-

2016 Direct and

indirect energy use

80

G4-EN4 Energy consumption

outside of the organization.

Greenhouse Gases

Emissions-

Inventory Results

79

The Company has

not conducted

energy information

provider survey so

can’t expose this

indicator

G4-EN5 Energy intensity Energy Management

Policy 74

G4-EN6 Reduction of energy

consumption

Energy Management

Policy 75

G4-EN7

Reductions in energy

requirements of products

and services

There was no

reduction in energy

requirements of

products and

services.

G4-EN8 Total water withdrawal by

source.

Water-Saving

Programs and

Benefits

82

G4-EN9

Water sources significantly

affected by withdrawal of

water.

Water-Saving

Programs and

Benefits

82

G4-EN10

Percentage and total

volume of water recycled

and reused.

Water-Saving

Programs and

Benefits

82

G4-EN11

Operation sites owned,

leased, managed in, or

adjacent to, protected areas

and areas of high

biodiversity value outside

protected areas.

TXC’s business

location is not

adjacent to the

protected areas or

areas of high

biodiversity value

outside protected

areas. G4-EN12

Description of significant

impacts of activities,

products, and services on

biodiversity in protected

123

areas and areas of high

biodiversity value outside

protected areas.

G4-EN13 Habitats protected or

restored.

TXC’s business

location is not

adjacent to the

protected areas or

areas of high

biodiversity value

outside protected

areas.

G4-EN14

Number of IUCN Red List

species and national

conservation list species

with habitats in areas

affected by operations, by

level of extinction risk.

G4-EN15 Direct greenhouse gas

(GHG) emission (Scope 1)

Greenhouse Gases

Emissions-

Inventory Results

80

G4-EN16

Energy indirect greenhouse

gas (GHG) emission (Scope

2)

Greenhouse Gases

Emissions-

Inventory Results

80

G4-EN17 Other indirect greenhouse

gas emissions (Scope 3)

Greenhouse Gases

Emissions-

Inventory Results

80

G4-EN18 Greenhouse gas emissions

intensity

Energy Management

Policy 74

G4-EN19 Reduction of greenhouse

gas (GHG) emissions

Completed energy

consumption in

2016

75

G4-EN20

Emissions of

ozone-depleting substances

(ODS).

An ozone-depleting

substance emissions 80

G4-EN21 NOx, SOx, and other

significant air emissions.

Environment

protection plan 73

G4-EN22 Total water discharge by

quality and destination.

Water pollution

control measures 76

G4-EN23 Total weight of waste by

type and disposal method. Waste Disposal 88

G4-EN24 Total number and volume

of significant spills.

No significant spill

in 2016.

G4-EN25

Weight of transported,

imported, exported, or

treated waste deemed

hazardous under the terms

of the Basel Convention

TXC does not have

any hazardous

waste material

specified under the

terms of the Basel

124

Annex I, II, III, and VIII,

and percentage of

transported waste shipped

internationally.

Convention Annex

I, II, III, and VIII.

G4-EN26

Identity, size, protected

status, and biodiversity

value of water bodies and

related habitats significantly

affected by the

organization's discharges of

water and runoff.

Water pollution

control measures

Waste recycling,

reutilization, and

waste exchange

operations

76.77

86

The wastewater

after treatment is

discharged to the

Pingzhen

Industrial. Park

sewage station, and

sludges are

removed and

disposed by a

qualified company,

thus no significant

impact on the

ecological

environment.

G4-EN27

Extent of impact mitigation

of environmental impacts of

products and services.

Specific Measures

and Efficacy of

Green Products and

Services

87

G4-EN28

Percentage of products sold

and their packaging

materials that are reclaimed

by category.

The package

materials used for

our products could

not be reclaimed.

G4-EN29

Monetary value of

significant fines and total

number of non-monetary

sanctions for

non-compliance with

environmental laws and

regulations.

No significant fine

for non-compliance

with environmental

laws and

regulations in 2016.

G4-EN30

Significant environmental

impacts of transporting

products and other goods

and materials for the

organization's operations,

and transporting members

of the workforce.

Our

product/material or

transporting

members have no

significant

environmental

impacts.

G4-EN31

Total environmental

protection expenditures and

investments by type.

Industrial

Environmental

Accounting System

78

G4-EN32

Percentage of new suppliers

that were screened using

environmental criteria.

There is no new

supplier in 2016.

125

G4-EN33

Significant actual and

potential negative

environmental impacts in

the supply chain and actions

taken.

Selection of

suppliers 68

G4-EN34

Number of grievances

about environmental

impacts filed, addressed,

and resolved through

formal grievance

mechanisms.

There is no

grievance about

environmental

impacts in 2016.

Social: Labor Practices and Decent Work

G4-LA1

Total number and rates of

new employee hires and

employee turnover by age

group, gender, and region.

Recruiting

Appointment

52

53

G4-LA2

Benefits provided to

full-time employees that are

not provided to temporary

or part-time employees, by

significant locations of

operation.


G4-LA3

Return to work and

retention rates after parental

leave, by gender. Salaries and benefits 57

G4-LA4

Minimum notice periods

regarding operational

changes, including whether

there are specified in

collective agreements.

Open

communication /

complaint channel

58

G4-LA5

Percentage of total

workforce represented in

formal joint

management-worker health

and safety committees that

help monitor and advise on

occupational health and

safety programs.

Workforce

Participation

Empowerment in

Safety and Health

92

G4-LA6

Type of injury and rates of

injury, occupational

diseases, lost days, and

absenteeism, and total

number of work-related

fatalities by region and by

gender.

Healthy living and

management

Occupational

accident statistics

61.62

96

G4-LA7

Workers with high

incidence or high risk of

diseases related to their

occupation.

Healthy living and

management 61.62

126

Social: Human Rights

G4-LA8

Health and safety topics

covered in formal

agreements with trade

unions.

TXC does not have

trade union and

EHS issues are

fully covered in

EHS committee on

quarterly basis.

G4-LA9

Average hours of training

per year per employee by

gender and by employee

category.

Training and

development 54.55

G4-LA10

Programs for skills

management and lifelong

learning that support the

continued employability of

employees and assist them

in managing career endings.

Training and

development 54.55

G4-LA11

Percentage of employees

receiving regular

performance and career

development reviews by

gender and by employee

category.


G4-LA12

Composition of governance

bodies and breakdown of

employees per employee

category according to

gender, age group, minority

group membership, and

other indicators of diversity.

Board of directors

Recruiting

25

52.53

G4-LA13

Ratio of basic salary and

remuneration of women to

men by employee category,

by significant locations of

operation.


G4-LA14

Percentage of new suppliers

that were screened using

labor practices criteria.

There is no new

supplier in 2016.

G4-LA15


potential negative impacts

for labor practices in the

supply chain and actions

taken.

Selection of

suppliers 67

G4-LA16


about labor practices filed,

addressed, and resolved

through formal grievance

mechanisms.

Open

communication /

complaint channel

58

127

G4-HR1

Total number and

percentage of significant

investment agreements and

contracts that include

human rights clauses or that

underwent human rights

screening.

Most of the

contracts in TXC

are sales and

purchasing related;

therefore, human

right issues are not

include articles in

those contracts.

G4-HR2

Total hours of employee

training on human rights

policies or procedures

concerning aspects of

human rights that are

relevant to operations,

including the percentage of

employees trained.

Code of conduct

Training and

development

33

55

G4-HR3

Total number of incidents

of discrimination and

corrective actions taken.

Open

communication /

complaint channel

58

G4-HR4

Operations and suppliers

identified in which the right

to exercise freedom of

association and collective

bargaining may be violated

or at significant risk, and

measures taken to support

these rights.

Open

communication /

complaint channel

Selection of

suppliers

58

67

G4-HR5


identified as having

significant risk for

incidents of child labor, and

measures taken to

contribute to the effective

abolition of child labor.

Recruiting

Selection of

suppliers

51

67

128

G4-HR6


identified as having

significant risk for

incidents of forced or

compulsory labor, and

measures to contribute to

the elimination of all forms

of forced or compulsory

labor.

Open

communication /

complaint channel

Selection of

suppliers

58

67

G4-HR7

Percentage of security

personnel trained in the

organization's human rights

policies or procedures that

are relevant to operations.

All security

personnel were

trained in advance

before standing on

job post and have

full understanding

of TXC's policies

or procedures

concerning aspects

of human rights.

G4-HR8


of violations involving

rights of indigenous

peoples and actions taken.

There was no

incident of

violations

involving rights of

indigenous peoples

and actions taken.

G4-HR9

Total number and

percentage of operations

that have been subject to

human rights reviews or

impact assessments.

Open

communication /

complaint channel

58

G4-HR10

Percentage of new

suppliers that were

screened using human

rights criteria.

There is no new

supplier in 2016.

G4-HR11


potential negative human

rights impacts in the supply

chain and actions taken.

Selection of

suppliers 67

G4-HR12


about human rights filed,

addressed, and resolved

through formal grievance

mechanisms.

Open

communication /

complaint channel

58

Social: Society

G4-SO1

Percentage of operations

with implemented local

community engagement,

impact

assessments, and

Social Welfare 98

129

development programs.

G4-SO2

Operations with significant

actual and potential

negative impacts on local

communities.

TXC has no

significant potential

or actual negative

impacts on local

communities

G4-SO3

Total number and

percentage of operations

assessed for risks related to

corruption and the

significant risks identified.

Code of conduct 34

G4-SO4

Communication and

training on anti-corruption

policies and procedures

Code of conduct

Training and

development

34

54

G4-SO5

Confirmed incidents of

corruption and actions

taken Code of conduct 34

G4-SO6

Total value of political

contributions by country

and recipient/beneficiary. Political donation 35

G4-SO7

Total number of legal

actions for anti-competitive

behavior, anti-trust, and

monopoly practices and

their outcomes.

Competition in the

industry 36

G4-SO8

Monetary value of

significant fines and total

number of non-monetary

sanctions for

non-compliance with laws

and regulations.

There is no

significant fines for

non-compliance

with laws and

regulations in 2016.

G4-SO9

Percentage of new

suppliers that were

screened using criteria for

impacts on society.

There is no new

supplier in 2016.

G4-SO10


potential negative impacts

on society in the supply

chain and actions taken.

Selection of

suppliers 67

G4-SO11


about impacts on society

filed, addressed, and

resolved through formal

grievance mechanisms.

There is no

grievance about

impacts on society

in 2016.

130

Social: Product Responsibility

G4-PR1

Percentage of significant

product and service

categories for which health

and safety impacts are

assessed for improvement.

Green products

No hazardous

substances goal

86.87

G4-PR2


of non-compliance with

regulations and voluntary

codes concerning the health

and safety impacts of

products and services

during their life cycle, by

type of outcomes.

Product liability

insurance 94

G4-PR3

Type of product and service

information required by the

organization's procedures

for product and service

information and labeling,

and percentage of

significant product and

service categories subject

to such information

requirements.

Green products 87

G4-PR4




codes concerning product

and service information and

labeling, by type of

outcomes.

Product liability

insurance 94

G4-PR5

Results of surveys

measuring customer

satisfaction.

Customer

satisfaction 63

G4-PR6 Sale of banned or disputed

products.

TXC never sale of

banned or disputed

products.

G4-PR7




codes concerning

marketing communications,

including advertising,

promotion, and sponsorship

by type of outcomes.

Because our

commercial mode

is classified under

B2B category,

therefore, we never

engage in any

promotional

activities.

G4-PR8

Total number of

substantiated complaints

regarding breaches of

customer privacy and

Customer privacy 65

131

losses of customer data.

G4-PR9

Monetary value of

significant fines for

non-compliance with laws

and regulations concerning

the provision and use of

products and services.

Product liability

insurance 94

4F, No. 16, Sec. 2, Chung Yang S. Rd., Peitou 112, Taipei, Taiwan, R.O.C.

Tel : +886 2 2894 1202 Fax : +886 2 2894 1206

http://www.txccorp.com/

Ver. 2012Adam Lee

Rita HsuSwallow Lin

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