CORPORATE SOCIAL RESPONSIBILITY REPORT

To Create Wonderful World

2014Tianma Microelectronics Co., Ltd.

Tianma Microelectronics Co., Ltd.

February 2015

Corporate Social Responsibility Report 2014

2

Brief introductionEvery year since 2012, Tianma has issued the corporate social responsibility (CSR) report to the

public, for the purpose of disclosing its ideas and activities regarding social responsibility. This

report is the third annual Corporate Social Responsibility (CSR) report of Tianma Microelectronics

Co., Ltd., which is aimed to provide stakeholders information regarding corporate actions and

performance in terms of economic, social and environmental affairs. In the meanwhile, we want to

take this chance to say thanks to all who have made suggestions to the completion of the report. We

will continue the follow-up efforts to improve the quality of corporate social responsibility report.

Content definition This report is based on the principles of the substantiality, stakeholder participation as well as

sustainable development under Global Reporting Initiative (Global Reporting Initiative, referred

GRI) guideline. We have identified the key stakeholders following a comprehensive analysis and

evaluation of the business operating environment. We have communicated and conducted dialogues

with stakeholders through a questionnaire to collect their concerns and needs, and prioritize

the list as well. After evaluation, the disclosing items, content and indicators of the report have

been finally confirmed. The disclosed Tianma 2013 CSR indicators have never been revised.

Data collectionTo effectively show the content and performance of 2014 company's GRI indicators in terms of economic,

environmental and society Etc., According to the state quo of the company. We selected 34 general

standard disclosures and 31 specific standard disclosures under G4 standard. According to the selected

indicators, the company has conducted an on-site investigate and survey, for example on-site surveys,

employee interviews, information consulting, and on-site observations etc., to determine the scope of

the report and extent of data collection, and find ways to improve the collection and calculation methods.

ScopeUnless otherwise stated, the organizational scope of this report covers all entities which

the company has control of or significant impact upon, such as financial and operation

policies and measures, and are consistent with the scope of the company's annual report.

(The boundaries of part of the indicators may be different. See the remarks for details.)

Compiling basisThis report made reference to Global Reporting Initiative, GRI "sustainability reporting

guidelines version 4.0"(G4), and prepared according to the core option.

Expressions statementFor convenient expression and reading," Tianma Microelectronics Co., Ltd." Will be referred

to as "the company", "Tianma", "Shenzhen industrial base" or "we" in the report.

This report has both online version and the print version, online version can be read at

Tianma Microelectronics co., Ltd. Website www.tianma.cn

Tel: (86)755-8622 5773 / 8622 5777 Fax: (86) 755 - 8622 5772 E-mail: csr_office@tianma.cn

Reporting Period

Jan. 1st - December

31st, 2014

Reporting Cycle

Once a year

ABouT ThiS REPoRT

3

ConTEnTS

P04/ Message from the Chairman and General Manager

·Company overview

·Chronicle of TIANMA events

·Corporate governance and decision-making systems

·CSR management system

·Stakeholder communication and response

P06/ About the company

P85/ Appendix

·Human rights and fair treatment

·Employee care

·Training and career development

·Remuneration and welfare

P56/ For the Employees·Environmental protection

·Eco-friendly operation

·Hazardous substance management

P44/ For the Environment

·Financial performance

·Business development

·Investor relations

P36/ For the Shareholders·Compliance operation

·Business ethics management

P24/ For the Government

·Technological development

and innovation

·Supplier management

·Customer relations

P68/ For the Partners·Serve the community

P78/ For the Community

4

MESSAgE FRoM ThE ChAiRMAn AnD gEnERAL MAnAgER

Tianma supports a wide range of applications in mobile terminals,

vehicle-mounted devices, medical equipment, and industrial control

equipment, aiming at becoming a world's leading display company

respected by the society and loved by the employees. Over the

past year, facing the opportunities and challenges from the external

market, the whole company worked as one, sparing no effort to seize

market opportunities, develop major accounts, and focus on product

transformation. Base on the win-win relationship with whole industry

chain and all stakeholders. We expanded the market share, improved

the industrial position of the company, and constantly created

considerable profits.

The past year is a year of honor. First, the A-Si LCMs for

smartphones, topped the list of worldwide sales. Seeing a continuous

expansion in the middle and high-end markets, the products captured

the biggest market shares in the market segments concerning high-

end medical equipment, HMI, aero-entertainment, navigation and

measurement, laying a solid market foundation for building Tianma

into a world's leading brand. Second, with great achievements in

helping customers make successes, we were heavily awarded,

Brand image has been improved significantly. With awards covering

the Award of Global Best Partner, Best Service Award, Diamond

Award, Best Delivery & Support Award, Perfect Quality Award,

Core Supplier Award, Supplier Quality Award, Excellent Supplier

Strategy Cooperation Award, and so on, which laid a solid customer

foundation for building Tianma into a world's leading brand. Third,

our performance in CSR system construction was recognized by the

society. In 2014, Tianma ranked 24 on the list of "2013 Top 100 Listed

Companies in Social Responsibility Development in china", and held

the 7th position on the list of the "2013 Top 20 Listed Companies in

Social Responsibility Development in Guangdong".

The past year is a year of rapid growth. And to becoming a world's

leading enterprise. Tianma has done well in terms of industrial

layout. On the one hand, through the restructuring of major assets,

the equities of the production line jointly built by Tianma and the

local government were injected into the listed company. As a result,

the market capitalization, asset size, core competitiveness, risk

resistance capacity, and profitability of the listed company were

greatly increased, which indicates that more values were created for

the shareholders. On the other hand, to bear the social responsibility

as an industry leader, Tianma was active in building new production

lines. At present, the construction of the G5.5 AM-OLED mass

production line is in smooth progress, and the building of G6 LTPS

production line is in the works. Tianma has more actively fulfilled its

social responsibility.

The past year is a year of harvest in "innovation" and "science and

technology". Through technological progress and product application

innovation, Tianma created surprises one after another, reversing

people's understanding of traditional manufacturing. In terms of

technological progress, it developed a wide range of techniques,

including LTPS-TFT, Oxide-TFT, AM-OLED displays technology,

flexible displays, see-through displays, 3D displays, IN-CELL/

ON-CELL integrated touch screens. In terms of product R&D, as

a forerunner in the industry, we helped our customers realize the

world premieres of a number of products. Besides, the LTPS-TFT

developed by us was widely recognized by many famous brands, and

the "4.0 inch in-cell Capacitive Touch Panel", a key technological

innovation project of the company, won the title of "National Key New

Product" from the Ministry of Science and Technology.

Based on the core values of "Passion, Efficiency and win-win",

we created an upbeat and positive corporate cultural environment.

Various activities such as learning and sharing were conducted

to help the staff have a good understanding of the core values of

Tianma, and put these values in practice. From recruitment and

remuneration incentives, to performance assessment, promotion,

and awarding, the core values were injected into each link of the

company. For example, to award and motivate excellent teams and

individuals with great contributions to the company, Tianma held the

"Star of Sense of Value", and annual excellent teams and individuals

awarding activities. In addition, the company conducted a series of

cultural activities, for the purpose of guiding the staff to go ahead

towards the correct position. The healthy and positive corporate

environment played an effective role in enhancing the cohesion and

competitiveness of the company.

We made rapid progress in the implementation of corporate

cultural and talent development strategies. According to the

globally competitive strategic goals regarding talent development, it

developed the management standard of three types of core talents,

namely, key management talents, backbone technical talents, and

core professional talents, and built a echeloned talent pool through

Passion · Efficiency · Win-win

5

assessing, identifying and developing the core talents of the company.

Developing the leadership of the management talents is a focus

of Tianma's talent development plan. The "Roc Program" aiming

at middle managements who have High potential and the "LAMP

Series" training program aiming at middle and basic management

were conducted to accelerate the promotion of the leadership of

management. Company managers In terms of career development,

a position system integrating the "management sequence, technical

sequence, professional sequence and operating sequence" was

built to pave a straight road for the individual development of the

employees. And at the same time, a classified and layered promotion

assessment system was built based on the talent strategies and

core values of the company, for the purpose of matching employees

with positions, raising their enthusiasm and morale, and enhancing

the strength of the talents. Performance management reform is also

a part of the talent strategy. In line with its development strategy,

innovative idea, improvement requirements, and core values, the

company conducted a performance management reform, through

which, the leadership of the management, as well as the organizing

capacity and profitability of the company was continually increased.

To create a better working and living environment for employees, the

company built professional management platforms according to the

needs of employees in eating, accommodation, travel and working,

and the requirements of environmental protection. In addition, a

variety of activities, like sports games, singing contests and get-

togethers, were organized, forming a characteristic corporate cultural

environment in which everyone in Tianma works and lives happily.

As a corporate citizen, Tianma has never forgotten the responsibility

of promoting harmonious economic, social and environmental

development. Following the concept of "eco-friendly and harmonious

development", we have been engaged in realizing "green

manufacture". To save and improve the efficiency of resources,

a number of measures relating to energy saving, water saving,

comprehensive resource utilization, and resource recycling were

taken from a long-term perspective. In 2014, more subsidiaries

were covered by the ISO50001,and ISO14064,Clean energy was

actively used; a series of energy saving strategies and plans were

developed to lower energy consumption and reduce greenhouse

gas emission; eco-friendly materials were used to reduce the

generation and discharge of wastes; and continuous investment

was put into energy conservation and emissions reduction facilities,

environmental detection, and the treatment of waste gas, waste

water and solid waste. Occupational health, safety management and

risk management were still the focuses of the company, and more

efforts of risk management were put into ensuring intrinsic safety and

production line, so as to realize harmonious development of corporate

benefits, employee values, social benefits and environmental benefits.

In the future,tianma wil aim at becoming a world's leading innovative

technical company,and keep pushing forward its systematic

improvement in technology, culture, management and operation.To

progress faster in the future, we will increase investment in technical

R&D and innovation, while cooperating closer with upstream and

downstream business partners to expand market share. On the road

of sustainable development, Tianma, sticking to the goal of becoming

an excellent corporate citizen in the world, will join hands with our

stakeholders like business partners, employees, shareholders, as well

as environment, community and government, to build a brighter future

when more people can taste the fruits of technological innovation.

Passion · Efficiency · Win-win

Chairman

You Lei

General Manager

Liu Jingyu

6

our Mission

To Create A Wonderful World

our Vision

Being the world's leading display company respected by the society and loved by the employees.

ABouT ThE CoMPAny

our Values

Passion·Positive attitude, openness, sharing

·Respect people, develop people, provide the platform of

development for employees with willingness and capability

·Fair, open, justice and brainstorming environments

Efficiency·Set clear goals

·Maximize corporate values as a whole

·Responsibility and quality

·Simplified and value-added work process

Win-win·Win-win with employees: helping employees to realize

their dreams, enjoy work and enjoy life

·Win-win with customers: Helping Our customers to

succeed

·Win-win with shareholders: Continuously creating value

for our shareholders

·Win-win with our business partners

Be a responsible corporation to society

7

Tianma's people Tianma's strength

Tianma's image

·Honesty , sincerity, integrity

·Strive to practice the values

·Managers transfer positive energy, shouldering

responsibility for the healthy growth of team members

·Active, enthusiastic service

·Through cultural and talent strategy, quality strategy,

product and technology leadership strategy

to promote and enhance organizational capacity

·Information disclosure: VI, website

·Exhibitions & press conference: the administrative

system of entire company and other functional systems

Brand strategy

R&D Supply chain

Quality of workManufacture

Focus on the mass production of middle and high-end

smartphones and professional displays product

Care and meet customer demands, improve supplier

quality, support core business development

Pay attention to the normalized operating standards,

optimize the tache of process which is lengthy and not

value-added, create an efficient and positive learning

organization, and build high-quality combat-worthy

teams

Focus on the manufacturing capacity and quality

management system of middle and high-end

smartphones and professional displays product

Quality strategy

Marketing Supply chain supply

Manufacturing capacity

R&D technology

Pay close attention to target customer market

strategy; participate in the planning of customer

products in advance; focus on target customers'

middle and high-end smartphones market; improve

the market permeability of major products

Create a stable, flexible supply chain to meet the

company's core business needs, and actively cultivate

strategic business partners

Learn global excellent factories, looking for gaps, build

optimal production lines and the industry-leading ability

to achieve products.Reserve forward-looking technology, Lead the trend

and plan according to available resources, focus on

competitive smartphones products and professional

display areas.

Product & technology

leadership strategy

Passion Creativity Initiative Knowledge Diligence Obedience

35% 25% 20% 15% 5% 0%

·Talent review, and echelon construction

·Ability Cultivation of middle-level, grass-roots staff

·The development of top management leadership

·Respect and cultivate employees·Bring employees' potential into full play·Help employees fulfill their dreams

·Implant the core values in the behaviors of employees

·Let core values guide our work effectively

·Put corporate culture into practice

Cultural

& talent strategy

Strategic goals

Orientation: a world's leading innovative,

Growth high-tech company

Goal: a world's leading display producer

Business strategies

Consumer business

High-end mobile smart terminals

Key words: leading mass

production,leading technology.

Professional display business

A world's leading display producer

Key words: high quality; market leader

For the Government

About the Company

For The Shareholders

For the Environment

For the Employees

For the Partners

For the Community

8

industry bases

Business scope

The company is engaged in the design, production and sales of LCDs and related materials,

equipment and products; technical development, consulting, service and transfer related to

LCDs; ordinary freight transport; information technology & consulting service; the sales of

LCDs and related materials as an agent; the leasing of mechanical equipment and self-owned

properties (to the exclusion of financial leasing); and export & import businesses (businesses

forbidden by laws, administrative regulations and the State Council are not included, and

limited businesses are conducted upon administrative approval).

Main products

The company focuses on the consumer market of mobile terminal displays, and the market

of professional displays employed in vehicle-mounted devices, medical equipment, and

industrial control equipment. Displays for the two markets are widely used in the production

of smartphones, tablet PCs, vehicle-mounted devices, medical equipment, industrial

instruments, wearable smart devices, smart furnishing, and so on.

30%

Company name (Chinese)

天马微电子股份有限公司

Company name (English)

TIANMA MICROELECTRONICS CO.,LTD.

Legal representative

You Lei

Registered address

South Section, 22/F, Hangdu Building, CATIC, Middle Shennan Road, Shenzhen, China

Main office address

7/F, 64th Building, Jialong Industrial Zone, Majialong, Nanshan District, Shenzhen, China

Time of registration

November 8, 1983

Business area

Mainland China, Hong Kong, Japan, US, Korea and so on

ownership nature

Listed company

Stock exchange

Shenzhen Stock Exchange

Change of operation location or business

During the reporting period, Wuhan in mainland, and Japan were added as operation locations.

Company profile

Tianma Microelectronics Co., ltd., founded

in 1983 and listed on the Shenzhen Stock

Exchange (ShenTianma A; 000050) in

1995, is an innovative high-tech company

specializing in providing LCD solutions and

fast service support to our customers around

the world.

Tianma Microelectronics Co., Ltd. ("the company" or "Shenzhen industrial base" in short)

Shanghai Tianma Microelectronics Co., Ltd. ("Shanghai Tianma" or "Shanghai G4.5 industrial base" in short)

Chengdu Tianma Microelectronics Co., Ltd. ("Chengdu Tianma" or "Chengdu G4.5industrial base" in short)

Shanghai AViC optoelectronics Co., Ltd. ("AVIC Optoelectronics" or "Shanghai G5industrial base" in short)

Wuhan Tianma Microelectronics Co., Ltd. ("Wuhan Tianma" or "Wuhan industrial base" in short)

nLT Technologies, Ltd. ("NLT" in short)

CoMPAny oVERViEW

21,684.11million

100%

14.31% 14.31%

100%

35.63%

39.37%

6.88% 7.16%25.76%

62.52% 8.86%

State-owned Assets Supervision and Administration Commission of the State Council

AVIC International Shenzhen Co., Ltd.

AVIC International Holdings Limited

AVIC International Holding Corporation

Tianma Microelectronics Co., Ltd.

National Council for Social Security

Fund

Beijing Plateau Hanhua Equity Investment Fund (limited

partnership)

Aviation Industry

Corporation of China

AVIC CCB Aviation Industry Equity Investment (Tianjin)

Co., Ltd.

Equity & control relationship between the company and its controlling shareholders

Remarks: the "five companies in four cities" refer to Tianma Microelectronics Co., Ltd.,

Shanghai Tianma Microelectronics Co., Ltd., Chengdu Tianma Microelectronics Co., Ltd.,

Shanghai AVIC Optoelectronics Co., Ltd. and Wuhan Tianma Microelectronics Co., Ltd.

Total market value

9

organizational Chart

Tianma Micro-Electronics (USA) Inc. (TMUSA)

Tianma Micro-Electronics Korea Co., Ltd. (TMK)

Tianma Europe GmbH (TME)

Tianma NLT America Inc. (TNA)

Achievement Electronics Limited

Tianma Microelectronics Co., Ltd.

General Manager

Consumer GoodsBusiness Division

Professional Display Business Division

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Shanghai Tianma Microelectronics Co., ltd

Chengdu Tianma Microelectronics Co., ltd.

Wuhan Tianma Microelectronics Co., ltd.

Shanghai AVIC Optoelectronics Co., ltd.

NLT Technologies, Ltd.

For the Government

About the Company

For The Shareholders

For the Environment

For the Employees

For the Partners

For the Community

10

gLoBAL TEChniCAL SERViCE PLATFoRMS

We have built industrial bases in Shenzhen, Shanghai, Chengdu,

Wuhan and Japan, and have set up global technical service platforms

in major developed countries and regions like the USA, Korea,

Europe and Hong Kong.

11

Chengdu Tianma Microelectronics Co., ltd.

Wuhan Tianma Microelectronics Co., ltd.

Shanghai Tianma Microelectronics Co., ltd.

Shanghai AViC optoelectronics Co., ltd.

Tianma Micro-Electronics Korea Co., Ltd.

(TMK)

nLT Technologies, Ltd.

Achievement Electronics Limited

Tianma nLT America inc. (TnA)

Tianma Micro-Electronics (uSA) inc.

(TMuSA)

Tianma Europe gmbh (TME)

For the Government

About the Company

For The Shareholders

For the Environment

For the Employees

For the Partners

For the Community

Tianma Microelectronics Co., Ltd.

12

In November, Tianma was founded.

In November, Tianma built the first LCD production line in China.

In March, Shenzhen Tianma (ShenTianma A; 000050) was listed on the Shenzhen Stock Exchange.

In August, the STN-LCD developed by Tianma won the first prize of the Award for Scientific and Technical Progress in Shenzhen.

In July, Tianma was selected as the Vice Presidency of the First of Board of Directors of the China Optics and Optoelectronics Manufactures Association LCD Branch.

In August, Tianma obtained the Certificate of High-tech Enterprise issued by the National Science and Technology Council.

1983

1995

1996

In January, Tianma won the titles of "Top 50 Excellent Export-oriented Enterprises in Shenzhen" and "AVIC Advanced Foreign Exchange-earning Enterprise".

In March, Tianma invested 6 million dollars to import middle and high-grade TN-LCD production lines from Japan.

In February, the "640×400 Black-and-white and Color LCDs" high-tech project was approved, which filled a domestic gap.

In August, the high tech project was listed as a National "8th Five-Year Plan" Scientific Research Project and a Key Construction Project of Shenzhen.

In January, Tianjun Microelectronics Co., Ltd. was set up.

In November, Tianma undertook the Winter LCD Seminar of China.

1988

1989

1992

1993

1991

1990~1999

1983~1989

hiSToRiCAL EVEnTS

13

In July, Tianma was approved by the Bureau of Science and Technology and Bureau of Planning to set up the Shenzhen LCD Engineering Technology Research Center.

In December, Tianma undertook the FPD China.

In December, Tianma Postdoctoral Research Station was set up, and saw the coming of its first post doctor.

In August, Tianma passed the onsite assessment of TUV Rheinland, obtaining the ISO14001 Certificate.

In April, Shanghai Tianma was founded.

In July, the "Color STN LCD Project" was listed as a 2005 National New Product Planned Project. Besides, it won the grand prize of the Award for Scientific and Technical Progress in Longgang District, Shenzhen, and the first prize of the Award for Scientific and Technical Progress in Shenzhen. In October, Tianma appeared on the list of Top 100 Enterprises in Shenzhen.

In March, Shanghai Tianma TFT Plant was built, and the first G4.5 TFT production line with independent intellectual property in China was built.

In September, Chengdu Tianma was founded.

In December, "Tianma" was rated as a famous brand of Guangdong.

In November, the "National Engineering Lab for TFT-LCD Key Materials and Technology" Project jointly undertaken by Shanghai Tianma, Shanghai Jiaotong University, Shanghai Fudan University and Shanghai University was approved by the National Development and Reform Commission.

In July, Tianma became the first domestic mass producer of transflective TVA wide-viewing angle LCDs, and the IPS wide-viewing angle color LCM was successfully produced.

In September, Chengdu Tianma successfully trial-produced the 3.2&3.5 mixed organic film VA LCDs, which filled a domestic technical gap.

In April, Chengdu Tianma was titled as "Safe Production Enterprise 2010" by the police station and committee for comprehensive management of public security of the Chengdu High-tech Industrial Zone.

In November, Tianma was included in the National Torch Program as a key high-tech enterprise.

In December, Tianma won the title of "Model Enterprise in the National Transformation and Upgrading of the Processing Industry" for the first time.

In September, Chengdu Tianma participated in the 13th Western China International Fair 2012 for the first time.

In August, the technical similar of the "Basic Research of New High-resolution 3D Display and System" under the National Program on Key Basic Research Projects ("973" Program) was held in Shanghai Tianma. As the principal investigator and the only enterprise included in the project, Shanghai Tianma was responsible for the applied research of 3D displays.

In September, the "Integrated Capacitive Touch Screen R&D and Industrialization" Project undertaken by Tianma won the second prize of the CSAA Technology Awards.

In October, the "4.0 inch in-cell Capacitive Touch Panel" developed by Shanghai Tianma won the title of "National Key New Product" given by the Ministry of Science and Technology.

In March, Tianma participated in the 1st China Information Technology Expo, at which, its 12-inch AMOLED won the gold award of the 1st CITE Innovative Product Development & Application Awards.

In April, Shanghai Tianma undertook a "973" project, becoming the first enterprise included in the "973" Program.

In May, Tianma participated in the 6th Shenzhen International Touch Screen Technology & Equipment Expo, at which, it won the title of "Top 10 Famous Brands of the Touch Screen Industry".

In November, Shanghai Tianma won the title of "State Recognized Corporate Technical Research Center".

In November, Tianma celebrated its 30th anniversary.

In December, Shanghai Tianma was rated as a proposed CSR enterprise in the Shanghai Pudong New Area.

2000

2002

2003

2004

2006

2005

2008

2009

2010

2011

2012

2013

2014

2010~2014

2000~2009

For the Government

About the Company

For The Shareholders

For the Environment

For the Employees

For the Partners

For the Community

14

According to the requirements of relevant laws and regulations, the company spared no effort in

improving corporate governance system, and building standard corporate governance body and

decision making system. During the reporting period, the company further defined the scopes of

responsibilities and power in terms of decision making, execution and supervision, for the purpose

of forming scientific and effective systems concerning the segregation, as well as the checks &

balances of responsibility, thus ensuring the standard operation of the Shareholders' Meeting,

Board of Directors, and Board of Supervisors, and protecting the legal rights and interests of our

shareholders, especially the minority shareholders.

goVERnoRS AnD DECiSion MAKERS

15

The corporate governance body comprises the Shareholders' Meeting, Board

of Directors, and Board of Supervisors. The Board of Directors and Board of

Supervisors are formed in accordance with the requirements of relevant laws,

regulations and the Articles of Association, and the members thereof can all, in

line with their duties and responsibilities, exercise the power of decision making,

of execution, and of supervision in an earnest, honest and diligent manner,

effective protecting the interests and rights of the company and the shareholders.

The Board of Directors is the executive body of the company. It's composed

of 9 members, including 1 chairman, 1 deputy chairman, 4 directors and 3

independent directors. Among them, 1 is female, and the rest are male. The

average age of the board members is above 30. The ages of 2 persons fall in

between 30-40, of 4 persons fall in between 41-50, and of 3 persons are above

51. Besides, 2 members are of the doctor's degree, and 6 members are of the

master's degree. Pursuant to the Rules and Procedures for the Meeting of the

Board of Directors and the Regulations Governing Independent Directors, the

board members earnestly fulfill their responsibilities and duties. At the meetings

of the board, they always fully express their opinions and exchange ideas. In

addition, the independent directors, in line with relevant laws and regulations,

seriously perform their duties and responsibilities, participate in making major

decisions, and independently express their opinions on major events, for the

purpose of protecting the interests and rights of the company as a whole,

especially the legal interests and rights of the minority shareholders.

The Board of Directors, accountable to the Shareholders of Meeting, holds

meetings in line with legal procedures, and exercises its powers in strict

accordance with the requirements of laws, regulations and the Articles of

Association. Under the Board of Directors are the Audit Committee, Strategy

Committee, Risk Management Committee, and Nomination & Remuneration

Committee, which, overseeing the important topics of the company in

corresponding respects, play an important role in laying a solid foundation for the

correct and reasonable decision making of the Board of Directors. The Strategy

Committee, comprising 5 directors, is responsible for reviewing the long-

term development strategies and major investment decisions of the company

and making suggestions; the Audit Committee, consisting of 5 directors, is

responsible for the communication, supervision and verification of internal and

external audits; the Nomination & Remuneration Committee, made up of 5

directors, is responsible for reviewing standards and procedures regarding the

nomination and remuneration of directors and senior executives, and making

suggestions; the Risk Management Committee, composed of 5 directors

and senior executives, is responsible for reviewing and assessing the Risk

Management of the company, and making suggestions about risk management

and internal control.

The Board of Supervisors is the supervisory body of the company. Accountable

to the Shareholders' Meeting, it exercises its power of supervision in pursuance

of laws and regulations in a timely, fully and effective way. It consists of 5

supervisors, including 2 staff representatives. In accordance with relevant laws

and corporate regulations, it performs its responsibilities and duties earnestly,

including inspecting the financial condition and the performance of the senior

executives, and promoting the improvement of the internal control systems, so as

to protect the interests and rights of the company and shareholders.

The remuneration for the directors (including independent directors) and

supervisors are determined based on the regional and industrial levels. At

present, the company has developed the performance assessment and

remuneration incentive systems for the senior executives, according to which,

the annual remuneration of the senior executives is assessed base on the

performance of the general development strategy and annual business goals of

the company set at the beginning of a year, as well as the plans and goals made

by themselves.

During the reporting period, no corporate governor worked at any administrative

position. Totally 4 sessions of the Shareholders' Meeting, 11 meetings of the

Board of Directors, and 6 meetings of the Board of Supervisors were held. The

Strategy Committee, Audit Committee, Nomination & Remuneration Committee,

and Risk Management Committee held 3, 7, 1 and 2 meetings respectively.

Also in the reporting period, the Board of Directors reviewed 49 topics, including

major topics related to period reporting, profit distribution, external investment

and asset restructuring, and thus made corresponding strategic decisions, as

well as the long-term development plans of the company.

Corporate governance Diagram

Board of Directors

Risk Management

CommitteeAudit Committee Strategy Committee

nomination & Remuneration

Committee

For the Government

About the Company

For The Shareholders

For the Environment

For the Employees

For the Partners

For the Community

16

CSR MAnAgEMEnT SySTEM

CSR MissionPeople first. Green

operation. Harmonious and sustainable development of

economy,society and environment.

CSR VisionConstruct sustainable CSR system, being the world's leading display company. Respected by the society

and loved by the employees.

CSR StrategyDevelop the values

of employees, build a harmonious business

environment, achieve the win-win with partners, and

maximize the enterprise values.

CSR Practice Path

honesty,

compliance

operation

Active Return,

unselfish

contribution

Eco-friendly

Development,

Cleaner Production

People first,

Mutual Growth

Mutual

Development

To Win-Win

Stable Growth,

Create

ValueGovernment

Employee

Environmentpartner

Shareholder

Community

17

improvement

2015

Establishment

2012

optimization

2016

Consolidation

2013

Strengthening

2014

·Import the tools of GRI indicators data collection and statistics, and establish the GRI database

platform;

·Dynamic monitoring CSR performance, establish a control mechanism covering the whole

process;

·Integration of Tianma social responsibility culture into corporate culture, and push forward

representative CSR projects.

·Import the GRI-G4 indicator system and complete a third-party certification of the CSR report.

·Establish the concept of Tianma's corporate social responsibility;

·Initial establishment of CSR management structure and the corresponding duties;

·Study and borrow international CSR standards and industry best practices;

·Conduct preliminary stakeholder participation and dialogue;

·Establish CSR related systems, to carry out CSR internal audit, identify, evaluate and drive for

improvement of high-risk areas;

·Release the first CSR report of Tianma.

·Integrate and optimize the GRI indicator system and CSR management system;

·Further carry out excellent CSR projects, to establish a CSR brand image;.

·Complete a third-party certification of the CSR report.

·Strengthen the participation of and communication with the stakeholders;

·Build the ethics system, and constantly solve internal problems related to CSR;

·Coach key suppliers to build the CSR management system;

·Strengthen the training and promotion of knowledge about CSR.

·Include the ISO26000 social responsibility guidelines into operational processes;

·Develop CSR risk managementtools, build the CSR risk databases and CSR risk assessment

manual;

·Keep promoting the implementation of plans and projects related to employee care, community

service and green operation;

·Elevate the ethics management system, and build the ethics assessment mechanism;

·Complete a third-party certification of the CSR report.

CSR Five-year

Plan

For the Government

About the Company

For The Shareholders

For the Environment

For the Employees

For the Partners

For the Community

18

CSR organizational management

In 2012, the CSR Working Committee was set up as the supreme

CSR decision-making body of the company. The committee is

comprised by the general manager and other executives, who are

responsible for the development of the overall CSR strategies,

goals, missions and guidelines, leading the construction of CSR

management system, reviewing CSR work plans and publishing CSR

reports, and organizing important CSR activities.

The CSR Working Committee Office is set up under the CSR Working

Committee, The office is staffed by the principals of the Dept. of Risk

Management, Financial Management Center, Operation Center,

Human Resource Center, Supply Chain Center, and so on. The Dept.

of Risk Management is responsible for the daily work of the office.

The CSR Working Committee Office is primarily responsible for

carrying out the work arranged by the CSR Committee; organizing

and promoting the construction of CSR risk management system in

various project teams; coordinating and promoting CSR activities in

various project teams; collecting and analyzing the CSR data and

documents of various project teams; and writing the CSR report and

submitting it to the CSR Working Committee for reviewing.

The Dept. of CSR Supervision is set up under the CSR Working

Committee which is organized with people from the Dept. of Discipline

Inspection & Supervision, it's mainly responsible for supervising

specific work related to CSR ,and handling CSR complaints.

The CSR Working Committee consists of six project teams, including

Employee Affairs Team, Social Affairs Team, Economic / Shareholder

Affairs Team, Environmental Affairs Team, Supplier Affairs Team, and

Customer Affairs Team, these project teams are composed of the

principals of corresponding functional sectors. They are responsible

for CSR system construction, defect correction, indicator selection &

collection, and report disclosure of their own team.

CSR risk assessment

The company conducts periodical CSR risk assessment in the four

aspects of labor, environment, health & safety and ethics systems.

Pursuant to the requirements of the CSR Management Manual and

relevant systems. The company conducts CSR internal assessment

and CSR management review every year, tracks and supervises the

correction of defects continuously.

CSR internal assessment

In September 2014, the Dept. of Risk Management and Dept. of

Legal Affairs conducted the annual CSR internal assessment of

Chengdu, Shenzhen and Wuhan industrial bases. The proportion

of receiving CSR internal assessment is 38% among all operating

locations. According to the suggestions, correction plans and

correction deadlines, the defects found in CSR internal assessment

should be improved under the tracking and supervision of the Dept.

of Risk Management. Moreover, problems commonly existing in all

bases were reported to the senior management of the company as

major concerns.

In October 2014, according to the CSR non-conformance found

in the recent three years, the Dept. of Risk Management built the

database of CSR Risk Management, which includes relevant risks

and control goals regarding labor, environment, health & safety, and

ethics into the risk management system. Based on the database,

period supervision was conducted.

CSR management review

In order to assess the implementation, realization and progress of

the CSR guidelines, policies, Five-year plan and the 2014 CSR plan

of Company, reviewing the operating situation and results of the

CSR system; seeking opportunities for the improvement of the CSR

system; determining the CSR plan of the next year; and realizing an

appropriate, sufficient and effective CSR system, thus enhancing the

level of CSR management.

CSR Management System

Dept. of CSR SupervisionCSR Working

Committee Office

Employee Affairs Team

Social Affairs Team

Environmental Affairs Team

Supplier Affairs Team

Customer Affairs Team

Economic /Shareholder Affairs

Team

CSR Working Committee

19

CSR performance management

CSR performance management mainly includes the identification,

determination, priority sequencing and assessment of CSR topics.

(See "Communication with and feedback from our stakeholders" for

details.)

CSR report management

Pursuant to the GRI standard and relevant requirements, the

project teams are responsible for the collection of GRI indicators. In

October 2014, the company completed division of work, assigned

specific G4 indicators tasks to specific persons in various project

teams. Meanwhile, to effectively collect and audit data concerning

G4 indicators, and improve the accuracy of data in CSR report,

in November 2014, the company successfully developed the OA

procedure of "submission procedure of data concerning GRI-G4

indicators".

CSR training management

The company CSR training falls into new employee orientation

training, CSR professional module training, and CSR training for

middle & senior managers..

The content of new employee orientation training includes CSR

basic knowledge, corporate CSR policies, ethics, Employee code

of Conduct, etc. Through the training, new employees are familiar

with corporate CSR ideas and significance, and can have a good

understanding of the company's all standards and requirements.

The content of CSR professional module training includes the content

of new employee orientation training, as well as the basic knowledge

concerning supplier CSR audit, EICC, SA8000 and ISO26000,etc.

Through the training, the expertise level of the CSR team and relevant

staff can be promoted..

The content of CSR training for middle & senior management includes

the content mentioned above, as well as the history, idea, system

construction of CSR, etc. It is conducted to increase the awareness

of the middle and senior management about the significance of CSR,

thus laying a solid foundation for the promotion and implementation of

CSR culture.

At the 2013 CSR Performance Assessment Conference

held on October 26, 2014, Tianma ranked 24th on

the list of "2013 Top 100 Listed Companies in Social

Responsibility Development". Besides, it also held the 7th

position on the list of the 2013 Top 20 Listed Companies

in Social Responsibility Development in Guangdong.

The awards are the external affirmation of the CSR

performance of Tianma in CSR, and also the internal

affirmation of the joint efforts of all Tianma people. In the

future, the company will keep pushing forward the win-win

development with the stakeholders, and earnestly fulfill social

responsibility, thus being the world's leading display company

respected by the society and loved by the employees.

Memorabilia of 2014Tianma won the award of "CSR system construction".

During the reporting period, to improve the CSR management

level and show a good CSR image of the company,

based on the company's status quo of CSR and the audit

requirements of the customers, AVIC Optoelectronics and

Shanghai Tianma participated in the EICC-VAP on-site

audit conducted by EICC in October and November 2014

respectively. Later, the follow-up examination was conducted

to make sure that the problems found in the audits were

improved. This is the first time that the company participated

in the EICC-VAP audit. Through the audits, the CSR

management level of the company was further promoted.

EICC-VAP certification

For the Government

About the Company

For The Shareholders

For the Environment

For the Employees

For the Partners

For the Community

20

CoMMuniCATion WiTh AnD FEEDBACK FRoM ouR STAKEhoLDERS

identification of major stakeholders

Different stakeholders affect or are affected by the company

differently. In pursuance of the latest AA1000 Stakeholder

Participation Standard, the company has preliminary identified and

sequenced its stakeholders, and we finally select six stakeholders

including suppliers, governments, customers, employees,

communities, and shareholders.

Based on

(A) the possible economic, social and environmental effects that the

stakeholders have exerted on the company,

(B) the possible economic, social and environmental effects that the

stakeholders will exert on the company,

(C) the possible economic, social and environmental effects that the

company exerts on the shareholders, The company has made the

priority sequencing of the shareholders.

Communication and interaction with major stakeholders

The company has built diverse and unobstructed communication

with the stakeholders of different classifications, so as to make sure

that their demands can be timely, accurately and comprehensively

understood and responded by the company.

As a responsible listed company, Tianma not only focuses on achieving the performance and

balance of economic, environmental and social development, but also pays close attention to the

concerns of stakeholders and actively feedbacks and improves.

·Suppliers' Conference

·Periodical meeting

·On-site audit

·Internal self-inspection

·Conference discussion

·Information disclosure

·Telephone communication

·Customer satisfaction investigation

·Customer complaint handling

·Customer seminar

·Customer investigation and review

·Shareholders' Meeting

·Open day for investors

·Community service activities

·Tianma Volunteers Association

·Employee satisfaction investigation

·Internal symposium

·Labor union

·Employee suggestion box

Government

Employee

Community

Supplier customer

Shareholder

Major stakeholders

CThe possible economic, social

and environmental effects that the company exerts

on the shareholder

BThe possible economic, social

and environmental effects that the stakeholders will

exert on the company

ＡThe possible economic, social

and environmental effects that the stakeholders have exerted on the company

21

1. internal selection of important topics

In consideration of the strategies and development direction of the

company, and the CSR topics concerned by excellent companies

in the industry, we selected 95 candidate topics for the CSR project

teams. The 48 CSR team members, according to the significance of

the topics to the company, selected 3 topics respectively, and then,

22 topics were finally selected.

The 22 topics include sustainable growth, financial performance,

corporate governance, paying taxes according to law health & safety,

green supply chains & logistics, energy efficiency & climate change,

green operation, corporate culture, employee care, employee training

& development, supply chain sustainable development, customer

satisfaction management, green products and services, technical

development & innovation, respecting to intellectual property,

customer privacy & safety, Ethics management, communication with

and feedback from our stakeholders, good relationship with local

community, compliance operation, and volunteer activities.

In pursuance of the Stakeholders Dialogue Regulations developed

and enforced by the company, the company conducts dialogues with

the stakeholders periodically. On August 19, 2014, the CSR Working

Committee Office launched the 2014 stakeholder investigation.

According to the significance of the CSR topics and the concerns

of the stakeholders, the investigation was divided into the internal

selection and external investigation of key topics.

·Customer satisfaction investigation

·Customer complaint handling

·Customer seminar

·Customer investigation and review

·Employee satisfaction investigation

·Internal symposium

·Labor union

·Employee suggestion box

2. External investigation of important topics

A survey questionnaire was developed based on the 22 topics

determined by the CSR project teams. On the one hand, the

questionnaire was given to project team members for internal

investigation. The 22 items in the questionnaire were scored by the

project team members according to the significance of the topics,

and their effects on building the CSR image of the company. On

the other hand, each project team has sent the questionnaire out to

the respective corresponding stakeholders, the 22 topics were also

scored and sequenced by relevant stakeholders according to their

concerns.

To improve the quality of stakeholder investigation, and have a

better identification of the importance and degree of concern of the

important topics, the score range of each item was set to be 22-1,

and it's required that the points of all items cannot be the same. In this

way, important topics were further identified and sequenced, which

helped the company have a better understanding of the concerns and

demands of different stakeholders.

178 stakeholders (including all stakeholders participating in

the internal and external investigations), which were from the

government, shareholders, customers, suppliers, employees and

communities, were included in the 2014 stakeholder investigation.

54 internal survey questionnaires were completed by CSR team

members; and 92 external survey questionnaires were completed by

the stakeholders. The investigation was carried out through online,

telephone, on-site, e-mail and interview.

At last, based on the significance of the topics and the concerns of the

stakeholders, the topics were sequenced. The investigation results,

as well as most important topics concerned by the company and the

stakeholders were listed below.

For the Government

About the Company

For The Shareholders

For the Environment

For the Employees

For the Partners

For the Community

22

investigation results of material topics

De

gre

e o

f co

nc

ern

of m

ajo

r sta

ke

ho

lde

rs

S ignif icance to the companyLow High

High

Economy Environment Society

8

1

11

7

6

16

17

3

4

９

5

2

13

14

Customer satisfaction management

Business ethics management

15

10

12

Sustainable growth Health & safety Corporate culture Green products and services

Communication with and feedback from our stakeholders

18

Financial performance Green supply Chain & logistics

Employee care Technical development & innovation

Good relationship with local community

19

Corporate governance Energy efficiency & climate change

Employee training & development

Respecting to intellectual property

Compliance operation20

21paying taxes according to law Supply chain sustainable development

Customer privacy & safety

green operation Volunteer activities22

Remarks: Compared with the important topics in 2013, the 22 important topics basically remain unchanged (except the change of

names). For the response to the material topics concerned by the main stakeholders and imposing serious effects on Tianma, please see

chapters in this report.

2221

2019

1614

13

12

9

8

5

3

21

4

7

611

1018

17

15

Communication with and feedback from our stakeholders

23

3. Affecting boundary of topics with material impacts

The important topics have material impacts on the company and external organizations, the specific impacts are listed below.

Boundary Aspect of consideration

Internal boundary External boundary

Category Importanttopic

Shenzhen Tianma

Shanghai Tianma

Wuhan Tianma

Chengdu Tianma

AVIC Optoelectronics NLT Gov.

Share-holder

Customer Supplier Employee Community

Economy

Sustainable growth ● ● ● ● ● ● ● ● 一 一 一 一

Paying taxes according to law ● ● ● ● ● ● ● ● 一 一 一 一

Corporate governance ● ● ● ● ● ● ● ● 一 一 一 一

Financial performance ● ● ● ● ● ● ● ● 一 一 一 一

Environment

Energy efficiency & climate change ● ● ● ● ● ● ● 一 一 一 一 ●

Green supply chains logistics ● ● ● ● ● ● 一 一 ● ● 一 一

Health & safety ● ● ● ● ● ● ● 一 一 一 ● 一

Eco-friendly operation ● ● ● ● ● ● ● 一 一 一 一 一

Society

Sustainable development of the supply chain

● ● ● ● ● ● 一 一 ● ● 一 一

Employee training & development ● ● ● ● ● ● 一 一 一 一 ● 一

Ethics management ● ● ● ● ● ● ● ● ● ● 一 一

Communication with and feedback from the stakeholders

● ● ● ● ● ● ● ● ● ● ● ●

Technical development & innovation

● ● ● ● ● ● 一 一 ● 一 一 一

Green products and services ● ● ● ● ● ● ● ● ● ● 一 一

compliance operation ● ● ● ● ● ● ● ● 一 一 一 一

respecting to intellectual property

● ● ● ● ● ● ● 一 ● ● 一 一

Customer satisfaction management

● ● ● ● ● ● 一 一 ● 一 一 一

Employee care ● ● ● ● ● ● 一 一 一 一 ● 一

Corporate culture ● ● ● ● ● ● 一 一 一 一 ● 一

Volunteer activities ● ● ● ● ● ● ● 一 一 一 一 ●

Cusomer privacy & safety ● ● ● ● ● ● 一 一 ● 一 一 一

Good relationship with the local community

● ● ● ● ● ● ● 一 一 一 一 ●

Note “●” means “important, with material impacts and data”; “○” means “important, with material impacts, and the data are planned to be disclosed in the future”; “—” means important, without material impacts .

For the Government

About the Company

For The Shareholders

For the Environment

For the Employees

For the Partners

For the Community

25

2013 ／企业社会责任报告

We operate in pursuance of laws, and regulations, abide by ethics, and have zero tolerance for gray income.

FoR ThE goVERnMEnT

honESTy, CoMPLiAnCE oPERATion

26

CoMPLiAnCE oPERATion

Quarterly compliance assessment

According to the Compliance Management Procedure developed

by the company, the Dept. of Legal Affair shall conduct the quarterly

compliance assessment in departments with higher external

legal risks. During the quarterly assessment, a special task team

consisting of the principle of the assessed departed is set up by

the Dept. of Legal Affairs , the responsibility of the team members

shall be clearly identified, and the work schedule and the periodical

review mechanism shall be developed. In addition, the start-up

announcement of the compliance assessment shall be sent to all staff

members. According to twice quarterly compliance assessments

organized by the Dept. of Legal Affairs, the Dept. of Legal Affairs

organized the relevant personnel to learn laws and regulations

applicable to the department; the List of Applicable Laws and

Regulations was formed; and the assessed department conducted

self-assessment of their internal systems and the implementation

thereof in line with relevant laws and regulations. At last, the Dept.

of Legal Affair assessed the results of the self-assessment, and

drew up the Quarterly Compliance Assessment Report. Meantime,

the advises for rectification have been provided, and the follow-up

inspections were conducted to make sure the problems found in the

assessments had been solved.

In order to improve the legal knowledge of the staff, the

Dept. of Legal Affairs organized the Law Popularization

Contest in the form of electronic questionnaire. It begun from

December 4, the Constitution Day and the Day of National

Law Population, and ended on December 9. During the

activity, totally 625 papers were answered, and carefully

marked by the Dept. of Legal Affairs. According to the

contest results, 8 grand prizes, 26 first prizes, and several

second, third and honorable prizes were given. The start-

up notice and the awards list were published through e-mail

by the Dept. of Legal Affairs. The activity was responded and

supported by many employees and was widely praised.

During the reporting period, the Dept. of Legal Affairs continually conducted annual and quarterly

compliance assessment . In order to achieve maximum compliance operation, the Dept. of Legal

Affairs developed the OA procedure for the approval of new systems developed by various

departments. According to the OA procedure, all new systems can only be applied for approval

through the procedure, and once an OA application is submitted, it will be automatically transferred

to the Dept. of Legal Affairs to make sure that the new system is compliant with relevant laws and

regulations.

Law Popularization Contest was organized by the Dept. of Legal Affairs

It's estimated that at the beginning of 2015, laws and regulations related

to CSR topics like labor practice and ethics will be included in the List

of Applicable Laws and Regulations of the Compliance Management

Procedure by the Dept. of Legal Affairs, for the purpose of improving the

CSR management system and compliance assessment system of the

company.

27

Correction supervision and resultsconfirmation

Correction of defects

Review (qualified or not?)Ｎ

y

End

Recording

Approval& taking effect

Compliant or not?Ｎ

y

Summary

Annual compliance assessment

Promotion & implementation

Review & emendation

Obtain laws and regulations

Annual compliance assessment

The Dept. of Legal Affairs conducts the annual compliance

assessment at the end of a year. In pursuance of the Compliance

Management Procedure, the laws and regulations related to various

departments in 2014 were arranged systematically, and the annual

compliance summary and assessment were conducted. In addition,

according to the investigations and punishments from the external

organizations in 2014, the Dept. of Legal Affairs randomly examined

the possible non-compliant behaviors, and supervised relevant

departments to collect the defects found, thus realizing the close-

loop management.

In consideration of the problems found in the previous compliance

assessments, the Dept. of Legal Affairs asked relevant departments

for opinions about the emendation of the Compliance Management

Procedure. In addition, internal discussions on topics like whether

to lower the frequency of compliance assessment, how to adjust

the assessed departments, and how to conduct substantive

examinations on the compliance assessment were held by the

Dept. of Legal Affairs. It's estimated that the emendation of the third

version of the Compliance Management Procedure will be completed

at the beginning of 2015, relevant training and guidance on self-

assessment will be provided to the departments, and the collection

scope of laws and regulations will be expanded, for the purpose of

improving the compliance assessment and review of the company, as

well as enhancing the compliance management level of the company.

Remarks：only the compliance management information of the "five

companies in four cities" is disclosed.

Quarterly compliance assessment flow:

Identification of laws & regulations, compliance assessment planning

For the Government

About the Company

For The Shareholders

For the Environment

For the Employees

For the Partners

For the Community

28

2014 Work summary

I. The construction of integrity

1. Investigation and supervision were conducted from time to time to

make sure the compliance and incorruption of projects.

2. Measures, like special monitoring, on-site supervision and post-

reviews, were taken to prevent the occurrence of possible risks and

corruptive events.

3. The training about integrity was enhanced. In 2014, 8 such training

activities were conducted in the bases, and relevant knowledge was

spread by means of e-mails, OA and Tianma News.

II. signing the letter of responsibility on Party's style and integrity

During the reporting period, Eight ceremonies on signing the letter

of responsibility on Party's style honesty building were organized,

and more than 2,000 employees, including the deputy managers and

the management at higher positions, and all the employees of key

positions signed the letter of commitment.

incorruptible operation

Incorruptible operation management is in the charge of the Dept.

of Discipline Inspection. In 2014, sticking to the principle of "legal

compliance, integrity, anti-corruption and self-discipline", the

company made great progress in incorruptible operation.

The early-warning system was employed in key and sensitive fields

where corruptions are likely to happen based on the characteristics

of risks at low, middle and high levels. In addition, information

concerning incorruptible operation risks was collected through various

channels like tours, audits, investigations, internal supervision,

efficiency supervision, supervision by public opinions, style of work

analysis, whistle-blowing, and case analysis. Periodical and casual

corruption prevention analysis and early-warning information

reporting were also conducted, for the purpose of preventing possible

corruption from happening.

It's required by the company that the nepotism aversion application

shall be submitted in case of a possible nepotism. Leadership and

approval-relationship are forbidden among relatives in the same

department; and the relatives of middle and senior management are

forbidden to work as deputy manager or above titles at key positions

(finance, audit, procurement and sales) in the same business region.

BuSinESS EThiCS MAnAgEMEnT

The company always concerns the development of business ethics. To standardize the business

ethics management procedure, improve CSR management level, realize CSR strategic goals and

the Five-Year Plan, and control CSR risks, the company issued the Business Ethics Management

System on September 17, 2013. The procedure specifies the regulation and management

procedures related to incorruptible operation, information disclosure, intellectual property protection,

trade secrets, fair dealing, whistle-blowing, privacy protection, and conflict minerals.

2015 Annual Work PlanI. The company would further strengthen the construction of

integrity and pay attention to antecedent supervision.

II. Promoting the construction of Party's style and integrity

In 2015, the company wil l keep pushing forward the

construction of Party's style and integrity in various bases, so

as to make sure the incorruptible operation and compliance

management of the company.

1. Examine the fulfillment of the letter of responsibility

about integrity made at different levels, give suggestions,

and conduct follow-up supervision, to make sure effective

incorruptible operation.

2. Place integrity warnings on every issue of Tianma News,

and send integrity proverbs to deputy directors and the

management at higher positions every month, so as to

prevent corruption and bribery from happening.

III. Pay attention to bidding projects related to the construction

of new plants, the purchase of large equipment, and

other engineering construction projects, to make sure the

incorruption and compliance in the process of bidding.

The guideline of incorruptible operation :

Legal compliance, integrity, anti-corruption

and self-discipline

III. Requiring all suppliers to sign the letter of commitment on integrity

1. All suppliers were required to sign the letter of commitment,

and major suppliers were required to participate in the integrity

propaganda.

2. Requirements like "Do not accept gifts and cash gifts" were

stressed during the festival periods.

VI. The Business Ethics Management System was amended by

including "nepotism aversion" into the section of "Incorruptible

operation".

29

information disclosure

Information disclosure management is in the charge of the Dept.

of Securities Management. Pursuant to the requirements of laws,

regulations and the Articles of Association, the company discloses

real and accurate information completely and timely, without any false

records, misrepresentations, or major omissions.

The company promises to disclose information to all investors

simultaneously, so as to make sure that investors can obtain

information equally. It's stipulated in the period report, interim report,

and Regulations for the Listing of Stocks that corporate information

shall be disclosed truthfully, accurately and completely; no information

can be disclosed through any appointed channels before being

disclosed through public media; and information cannot be disclosed

through holding the press conference or Q&A.

Before any inside information is disclosed by law, no insider is

allowed to disclose or leak the information, or use the information for

insider transactions. Corporate information disclosed to the public

through informal announcement shall be approved level by level, so

as to prevent the leakage of substantive information before official

disclosure.

2014 Work summary

1. As of December 31, 2014, 87 announcements had been released

to timely disclose major events.

2. In case of any abnormality in market dynamics or stock price,

the clarification statement or stock exchange abnormal transaction

announcement was released.

3. Management regulations like the Regulations for Information

Disclosure Management were developed to identify the content of

insider information, define the scope of insiders, and improve the

accountability system of insider transactions.

4. The "Insider Transaction Control" training and other training

activities were held to improve the awareness of employees

accessible to insider information about the significance of preventing

insider transactions and regulating insider information management.

5. In 2014, the company was again awarded by the Shenzhen

Securities Regulatory Bureau for its good performance in "information

disclosure and investor relationship development" in 2013.

6. The cash bonus decision-making mechanism was improved

to practically protect the legal rights and interests of our minority

investors.

The guideline of information disclosure :

Disclose real and accurate information

completely and timely, without any false

records, misrepresentations, or major

omissions.

2015 Work Plan： 1. Timely get access to the latest supervision regulations and

requirements; keep a good relationship with the regulatory

agency; strictly abide by the latest regulations; and release

announcements by reference to excellent enterprises.

2. Expand the scope of voluntary information disclosure to

show the company actively.

For the Government

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intellectual property (iP) protection

IP protection management is in the charge of the Dept. of Intellectual

Property. Besides, the Patent Review Committee was set up to review

and supervise internal invents. The company is active in protecting

IP in line with the principle of "compliance to IP laws and regulations,

respect to third-party IP, active innovation, and effective application".

The company encourages the staff to conduct technical innovation

and develop independent IP. At the same time, it strengthens the

protection and utilization of IP, thus pushing forward the realization

of its patent strategy. Each employee is required to abide by all the

agreements related to IP and the confidentiality agreement signed

with his/her former employer, to make sure that the employee will

not violate such agreements during the period that he/she works at

Tianma, and that the rights of the former employer or the third-party

will not be infringed.

To improve the IP management level of the company, increase the

quality of inventions, and award employees making contributions

in innovation, the company has developed the IP award system,

according to which, the employee creator(s), employee inventor(s)

and the participant(s) of an invention will be awarded materially or

spiritually.

2014 Work summary

1. Institution management

A series of regulations and systems, like the Patent Review

Committee Management Methods, Patent Management System,

Incentives for Invention , Regulations on Incentives for Patent

compilation, and Product Patent Investigation, Analysis and

Assessment Procedures, were developed to encourage and protect

the technical innovation in the company.

2. Patent application management

① Technical innovation was greatly encouraged, and the invention

review was held periodically. Measures were taken to encourage

inventors to put forward high-quality invention proposals. For

example, the inventors in various industrial bases can join the

invention review meeting by telephone or video, which greatly

increased the efficiency of application review. In addition, the

R&D personnel of the company made inventions by means of

brainstorming, and collected patent information related to key

research fields.

② The Lean Six Sigma quality control method was employed in

patent management. On the basis of fully making use of internal &

external information and human resources, the applications of key

patents were compiled internally, and the compilation of most patent

applications were outsourced, so as to make sure the quality and

compilation efficiency of patent applications at a low cost. During

the reporting period, totally 870,000 Yuan agency commission was

saved.

③ The internal patent engineer incentive system was developed

for the purpose of motiving patent engineers to improve invention

proposals to high-quality patent application documents, raising the

enthusiasm for work of patent engineers, enhancing the cohesion of

the company, and training & retaining talents.

3. IP risk management

① The IP risk management mechanism was adopted throughout the

development of new product and new technology projects.

② The latest patent and IP information was disclosed periodically.

③ The reverse analyses of patents related to target products were

conducted.

4. Employee development & organizational growth

① An IP management team was built through multi-directional and

multi-layer training related to IP laws, patent technologies, patent

practice, and so on.

② IP lectures were held at various industrial bases periodically, for

the purpose of increasing the IP protection awareness of employees.

5. Information management

① The Dept. of Intellectual Property and R&D Center jointly built

1. In 2014, the company applied 429 patent applications in

China, 125 patent applications in the USA, and 111 patent

applications in Germany.

2. In 2014, 6 IP training exercises were conducted at various

bases.

3. An R&D and IP communication platform was built to realize

the timely interaction between R&D and IP, and make sure that

the requirements of R&D on IP can be met as fast as possible.

4. A well-featured intellectual property protection system was

built to stipulate the patent application procedure and realize

digital information-based management.

5. Measures were taken to progress the signing of the IP

confidentiality agreement with the staff.

6. IP-related items contained in agreements signed with new

suppliers, and in technical development agreements were

strictly reviewed, and the IP Guarantee Agreement was signed

with the suppliers.

IP achievement display

The guideline of intellectual property protection:

Compliance to IP laws and regulations, respect

to third-party IP, active innovation, and effective

application

Business ethics management

31

Trade secrets

Trade secret protection management is in the charge of the Dept. of

Legal Affairs. All staff members are required to abide by relevant laws

and regulations. The department is responsible for defining the scope

and grades of trade secrets, enhancing the management of trade

secrets and their carriers, and taking strict and proper measures to

effectively manage the computer system, network system and other

information safety control system of the company.

Employees are required to abide by confidentiality regulations in the

process of external communication and contacts. In case a trade

secret is required to be provided, an application shall be developed

and approved, and a confidentiality agreement shall be signed to

specify the protection scope of the trade secret. At news conferences,

exhibitions, visits and open meetings, relevant personal must abide

by the regulations related to trade secret protection, so as to prevent

the leakage of any trade secrets.

Education and training activities concerning trade secret protection

are held periodically, for the purpose of improving the awareness

of confidentiality of the employees. In addition, the company should

enhance the trade secrete management training on employees

accessible to trade secrets. The confidentiality agreement shall be

signed with the employees, clearly stipulating the protection scope of

trade secrets, as well as the obligations and liabilities of both sides.

2014 Work summary

1. To protect trade secrets, the company amended the existing

Regulations for Trade Secret Management as follows:

① The members and responsibilities and duties of the Confidentiality

Committee and its subordinates were further refined.

② The Confidentiality Joint Conference was newly added to promote

the cross-department cooperation on trade secrete management.

③ Trade secrets were newly graded, and the trade secret

identification procedure was detailed.

④ The protection, supervision and inspection measures of trade

secrets were improved.

2. The Confidentiality Joint Conference was held periodically, to

identify the key departments accessible to trade secrets, and to

effective supervise major risk departments.

3. Effective measures were taken to control the factories, offices and

mailboxes of the company.

4. Measures were taken to protect the trade secrets of the company,

as well as those of the customers and third parties.

2015 Work Plan1. Apply 410 patents in China, 123 patents in the USA, and

123 patents in Germany.

2. Conduct 6 IP training exercises at various bases.

3. Improve the R&D and IP communication platform to

enhance the interaction between R&D and IP.

4. Optimize the patent application and application review

procedures.

5. Arrange 4 members of a department every time to go to

Japan to learn overseas patent laws and practices.

6. Increase the signing rate of the Employee IP Agreement

and IP Guarantee Letter.

7. Progress the signing of the IP Guarantee Agreement with

the suppliers.

2015 Work Plan1. Keep enhancing the knowledge promotion of trade secrets,

thus creating a great atmosphere of trade secret protection.

2. Promote the effective progress of trade secret protection

by further strengthening the interaction between key

departments accessible to trade secrets, and holding the

Confidentiality Joint Conference.

3. Strengthen the supervision and inspection of trade secret

protection.

4. Cooperate with the IT department to provide powerful

support to the construction of the information security system.

The guideline of trade secret:

Abide by relevant laws and the confidentiality

regulations of the company; protect the trade secrets

of the company and all clients; enhance confidentiality

education; improve the awareness of confidentiality of

the staff; further develop the trade secret protection

measures; and prevent the occurrence of information

safety accidents.

a technical exchange & cooperation platform, to realize the timely

integration of R&D and IP, and make sure that the requirements of

R&D on IP can be met as fast as possible.

② A special patent database related to key technologies was built.

③ Professional patent retrieval & analysis tools were provided for all

technical personnel, enabling them to make technical innovations by

using the rich patent literature resources contained in the tools.

For the Government

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2014 Work summary

1.The fair dealing system was included in The Customer Development

and Management Procedure.

2. Measures were taken to prevent collaboration with our customers.

As the supplier of the upstream enterprises, the company competed

with other suppliers in a fair way without any unfair competition or

hostile attacks. High quality products with fair prices were provided

according to the requirements of our customers, so as to make sure

that product values are affirmed by the customers.

3. During the reporting period, no irregular dealings happened, and

no complaints from our customers, suppliers or peer companies were

received.

The guideline of fair dealing:

Deal with customers on a fair basis without

concealing, threat or any other improper

means.

Fair dealing

Fair dealing management is in the charge of Sales and Marketing

Center. As the continuous expansion of business scale, the company

has taken effective measures to realize fair dealing, advertising and

competition, and to put an end to deception, concealing, threat and

other improper means.

Averse to unfair competition and predatory dumping, the company

abides by laws, regulations and corporate rules concerning fair

dealing, and treats all our customers equally. The company shall not

adopt illegal or immoral means in market transactions, damage the

interests of rivals, dump products for the purpose of elbowing out

the rivals, or reach the monopoly agreement with competitors for

monopoly.

In the company, R&D management and transaction management

are separated, for the purpose of building a fair dealing system

,and providing the opportunity of fair dealing to all customers. In

case customers with similar qualifications and properties have the

requirements of the same products, the company shall provide the

opportunity of fair dealing to them, ensure identical or similar prices.

Through objective and fair customer analysis and decision-making

procedures, the company analyzes customers and makes internal

decisions based on sufficient facts and data. In addition, the company

shall, according to the qualifications and properties of different

customers, develop objective and complete dealing and decision

making regulations to ensure the objectiveness and completeness of

dealing and decision making processes.

The company shall disclose truthful and accurate information in a fair

way through such channels such exhibitions, media and documents,

in strict pursuance of internal review procedures.

Collusion is forbidden by the company. It's forbidden to deal or

cooperate with companies or organizations with the records of

noncompliance or serious violation of business ethics, so as to

protect fair dealing.

2015 Work Plan1. Complete the CRM system to realize effective management

of dealings with customers.

2. Build the VAP management system to regulate domestic

agent management.

3. Supervise the transactions with customers based on

relevant corporate systems, ensuring fair, just and open

transactions.

4. Further enhance the promotion of fair dealing regulations

and knowledge.

Business ethics management

33

2014 Work summary

1. Whistle-blowing system construction

During the reporting period, the Dept. of Discipline Inspection

amended a number of important regulations, such as the

Management Regulation for the Discipline Inspection & Punishment of

Employees, Regulations for the Blacklist Management, Management

Regulations for the Investigation and handling of Employees' Illegal

and Foul Conducts, and Code of Employee Conducts (section of

"Incorruptible operation").

2. "Iron" supervision on violations

"Iron" supervision was conducted, leaving no room of existence for

any violations.

Whistle-blowing

Whistle-blowing management is in the charge of the Dept. of

Discipline Inspection. Based on the principle of "fairness, justice,

objectiveness and facts-based judgment", the company calls for

real-name whistle-blowing and relevant personal information will be

kept secret.

The Dept. of Discipline Inspection specially appoints persons to

receive, record, file and handle whistle-blowing. The avoidance

system is adopted, namely, handlers having a stake in whistle-

blowing shall be kept out of it.

Any employee violating the confidentiality principle will be punished

according to corporate regulations, and any whistle blower, who is

proved to be right, will be awarded. Unless otherwise agreed by the

whistle blower, the name, department and address of the whistle

blower shall never be published. In case any department or employee

revenges the whistle blower for any reason, the department

or employee will be punished according to relevant corporate

regulations; and if the behavior constitutes a crime, relevant person(s)

will be handed over to the judicial organization.

The whistle blower must be responsible for his/her behavior. In case

anyone provides false information for the purpose of framing others,

or of making troubles on purpose, the company will punish him/her

according to corporate regulations; and if the behavior constitutes a

crime, the person will be handed over to the judicial organization.

2015 Work Plan1. Further optimize the whistle-blowing system.

2. Investigate and handle various violations; and as for

internal violations, the company will handles them in strict

accordance with relevant laws, regulations and corporate

rules.

3. Further improve the Whistle-blowing and Whistle Blower

Protection System, to enhance the protection on whistle

blowers and kept secret the personal information of whistle

blowers, preventing them from being revenged.

The guideline of whistle-blowing：

Based on the principle of "fairness, justice,

objectiveness and facts-based judgment", the

company calls for real-name whistle-blowing,

and relevant personal information will be kept

secret.

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The guideline of privacy protection:

Fully respect privacy, and do not collect

and spread private information through any

illegal channels.

Privacy protection

Privacy protection management is in the charge of Sales and

Marketing Center, Supply Chain Center and Dept. of Human

Resource, which are responsible for the management and supervision

of the confidential information and privacy of our customers, suppliers

and employees respectively. During the process, it's forbidden to

collect and spread private information through any illegal channels.

In 2014, the company amended the Business Ethics Management

System, including "respecting the privacy of suppliers and employees"

into the items of privacy protection. From guidelines to specific

regulations, the protection of the privacy of our customers, suppliers

and employees were concretely stipulated.

The technical drawings and product information shared by the

company with our customers and with our suppliers are strictly

confidential. The contracts and agreements signed with our

customers, and our suppliers are important secrets. No employee is

allowed to leak such secrets.

The confidential information is only accessible to certain appointed

personnel as per relevant regulations, and others are not allowed to

get access to it.

It's forbidden to leak the confidential information of the customers and

suppliers; forbidden to talk about the confidential information of the

customers and suppliers at non-work areas; and forbidden to spread

the confidential information of the customers and suppliers through

any unallowable channels.

To the exclusion that the judicial or administrative agency requires

to check and/or copy the private and confidential information of an

employee by law, such information, including the remuneration,

personal dossier, and information related to whistle-blowing,

complaints and impeaches, shall not be leaked by anyone without the

permission of the employee.

2015 Work Plan1. Improve the Regulations for Remuneration Management,

Regulations for Personnel Dossier Management, and other

documents related to employ privacy protection.

2. Enhance the promotion and supervision of customer,

supplier and employee privacy protection.

2014 Work summary

1. Times of supplier privacy leakage: 0.

2. Times of customer privacy leakage: 0.

3. Times of employ privacy leakage: 0.

Business ethics management

35

The Republicof Congo

Central Africa

Democratic Republic of Congo

Angola

In 2015, the company will keep improving the ethics management system. From the perspective

of institution, the company will further improve its institutional documents regarding incorruptible

operation, information disclosure, intellectual property protection, trade secrets, fair dealing, whistle-

blowing, and conflict minerals. From the perspective of operation, it will further develop the ethics risk

database, and assess ethics of the company and major suppliers, thus improving CSR management

level of Tianma.

Conflict minerals

Conflict mineral management is in the charge of the Marketing

Center, Supply Chain Center and the Dept. of Quality Control, and

other departments play the role of assistance.

Based on the principle of peaceful development, keeping away from

the conflict minerals, the company has promised the joint work group

of EICC and GESI that it would improve the condition of the e-supply

chain. According to the promise, the company will not accept mining

activity that may cause conflicts, or the tin, tantalum (columbite),

gold and tungsten used in the products required to be disclosed or

reported by the Dodd-Frank Wall Street Reform and Consumer

Protection Act, as well as the sources of such minerals.

In case a conflict mineral is required by a customer, the Marketing

Center shall deliver the customer requirement and mineral information

to the Dept. of Quality Control without delay. The Dept. of Quality

Control shall process the information, and give it back to the Marketing

Center, which shall, after receiving the processed information, reply

the customer in a timely manner. Besides, the Marketing Center shall

deliver the Conflict Mineral Agreement, Conflict Mineral Statement,

and other related documents signed by the customer to the Dept. of

Quality Control for review, and then reply the customer based on the

review results.

The Supply Chain Center, while selecting a new supplier, shall

introduce the conflict mineral guideline of the company to the supplier,

and ask it to sign the Conflict Mineral Agreement pursuant to the

Regulations for the Management of Supplier Contracts. Besides,

the Center shall investigate the supplier, and review and improve

the investigation report, so as to make sure the gold, tantalum, tin,

tungsten and/or other metals provided by the supplier are not conflict

mineral(s) or not, and to make sure that such metal(s) can be traced

back to the original smelting plant(s).

2015 Work Plan1. The signing rate of the Conflict Mineral Agreement by

conflict mineral suppliers reaches 100%.

2. The investigation rate of conflict mineral suppliers reaches

100%.

3. The feedback rate of the customer conflict mineral

investigation reaches 100%.

4. Gradually optimize conflict mineral investigation &

management regulations, and enhance the propaganda of

conflict mineral management.

The guideline of conflict mineral:

Say no to conflict minerals for peaceful

development．

2014 Work Summary

1. 57 suppliers signed the Conflict Mineral Agreement.

2. The conflict mineral investigation on the 57 suppliers was

conducted according to the requirements of customers.

3. The feedback rate of the customer conflict mineral investigation

was 100%.

South Sudan

Uganda

Rwanda

Burundi

Tanzania

Zambia

African countries related to conflict mineral

For the Government

About the Company

For The Shareholders

For the Environment

For the Employees

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36

37

We establish effective and sustainablecommunication channels as well as open, transparent, multi-layered communication mechanism, keep honest, sincere, incorruptible, proactive.

FoR ThEShAREhoLDERS

STABLE oPERATion VALuE CREATion

38

FinAnCiAL PERFoRMAnCE

Cost control

During the reporting period, "Say yes to saving and say no to waste" was the principle of the cost control for Tianma. The principle enhanced

the staffs' awareness of saving, and effectively lowered the administrative cost, and also increased the benefits to the shareholders. The Cost

Down team built by relevant departments which supervised the expenses, at the meantime, the team implemented self-criticism regularly.

Therefore, the team can constantly push forward the Cost Down Project.

2015 work plan1.Through high quality budget planning and reasonably resource allocating to improve

asset efficiency, in addition, to maximize profit.

2. By using cost and expenditure valuation to improve productivity.

3. Developing and implicating IT tools to increase data analysis efficiency.

4. Building a unified cost management platform and applying centralized purchasing

procedure to share resources and information through departments.

①The company implements localization

purchasing and maximizes the domestic

materials usage.

② All materials were purchased through

bidding. A bargain team was built to

compare prices and bargain with the

suppliers

③ Domestic parts and spares were

used for daily maintenance.

④ Make use of the idle assets of various

industrial bases and departments, so as

to rationally use existing resources and

reduce the expenditure on fixed assets.

① Reduce power cost through

equipment upgrading, such as real-

time supervision of power consumption

and trend, RO membrane improvement,

optimized power system MD control,

intelligent cold-hot water system

control, and acousto-optic lighting

control in public areas.

② Lower the unit consumption of

raw materials through the upgrading

equipment like the ITO etchant

concentration monitor, equipment

parameter optimization, and new

material application.

① Reduce labor cost by increasing

labor utilization, improving workforce

efficiency, and reducing the number of

employees for unit productivity.

② Cut down material and maintenance

costs by improving production

technology, setting the unit prices and

consumption targets of materials to

lower their unit prices and consumption,

and prolonging the service life of

assets.

③ Reduce logistics cost by adopting

the bidding system. In addition, the

company increases the load capacity

to lower the usage of air transportation

and express delivery, and changing the

transportation methods of bulk cargo.

④ Improve OA review efficiency by

simplifying the review procedure.

Meanwhile the company sets various

application forms to promote the review

efficiency.

Reduce purchasing cost improve energy efficiency optimize cost management

39

note: the numbers have been rounded up in CNY 10,000. The data of Wuhan Tianma wasfrom September to December.

Financial performance diagram

Revenue operating cost Salary and benefits Payment to the government

Payment to the investors

Community investment(excludes donation in kind)

Retained earning

932,236 740,465 141,831 16,142 26,846 11 17,136

net profit:68,693

For the Government

For The Shareholders

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For the Environment

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40

BuSinESS DEVELoPMEnT

2014 saw the uneven growth of global economy—sustainable

economic growth in developed countries, and economic slowdown

in developing countries. With the recovery of global economy, the

competition of the panel display market went up slightly. Thanks

to the increased demand of home entertainment terminals like the

LCD TV, the sales of large-sized LCDs experienced robust growth,

which reduced the pressure on LCD producers forced to change high

generation production lines to low generation production lines.

　　

Focusing on the markets of mobile terminal LCDs and the

professional LCDs for vehicle-mounted,, medical equipment and

industrial control equipment, the company aims at becoming an

industry leader in the field of small and middle sized LCDs. In 2014,

the A-Si LCMs for smartphones topped the list of worldwide sales.

Seeing a continuous expansion in the middle and high-end markets,

the products captured the biggest market shares in the market

segments concerning high-end medical equipment, HMI, aero-

entertainment, VOIP, navigation and measurement, laying a solid

market foundation for building Tianma into a world's leading brand.

In terms of customer development, we further developed major

accounts, and enhanced the cooperation with target brands. We

also helped our customers realize the world premieres of a number

of products. Our good performance as a partner was confirmed by

several awards, like the Award of Global Best Partner, Best Service

Award, Diamond Award, Best Delivery & Support Award, Perfect

Quality Award, Core Supplier Award, Supplier Quality Award, and

Excellent Supplier Strategy Cooperation Award, which laid a solid

customer foundation for building Tianma into a world's leading brand.

In terms of technical development, we enhanced the research of

start-up technology, and also strengthened the breakthrough and

promotion of integrated technology. So far, we have grasped such

advanced techniques like LTPSTFT, Oxide-TFT, AM-OLED display,

flexible display, transparent display, 3D display, and IN-CELL/ON-

CELL integrated touchscreen techniques, among which, the naked-

eye 3D technique has been recognized by our customers, and

Tianma thus became the first one realizing the mass production of

LCDs adopting the technique. Aside from the great achievements

in product transformation and product design innovation, we also

realized better and faster patent application, leading the industry

in this aspect. In addition, we made several breakthroughs in new

product and new technical platform projects. The 5" HD IN-CELL

developed by Tianma won the award of "Innovative Product and

Application" at the 2014 China Information Technology Expo.

1. In the domest ic smar tphones market , termina l

manufacturers have started to shift its focus to middle and

high-end products, the overall product structure and market

demand changed correspondingly.

2. The product structure and market demand of emerging

foreign markets have changed from feature phones to

smartphones. To meet the demand on small and middle-

sized (SMS) LCDs, many panel producers started to build the

G6 LTPS production lines, which intensified the competition

of the domestic middle and high-end smartphones LCD

market. In the emerging markets, the sales of smartphones

eyed a large rise.

Market trend

New products are showcased at the 2nd China Information Technology Expo.

41

On July 24th, 2014, the application of "issuing stock to buy assets

and raise supporting funds/related transaction" was approved

by the CSRC Review Committee for the Merger, Acquisition and

Reorganization of Listed Companies. On September 29th, new

stock was successfully issued, which indicated the successful

completion of the reorganization & fund-raising project.

Through reorganization, 100% corporate stock, including 70% stock

of Shanghai Tianma, 40% stock of Chengdu Tianma, 90% stock

of Wuhan Tianma, 100% stock of Shanghai AVIC Optoelectronics,

and 100% of Shenzhen AVIC Optoelectronics, was injected into

the listed company. In this way, the market value, revenue and total

assets of the listed company all exceeded 10 billion Yuan.

For the company, the reorganization and fund-raising are of the

significance of

① accelerating industrial integration and producing the synergistic

effect;

② increasing corporate asset quality and profitability;

③ enhancing corporate core competitiveness and anti-risk

capability;

④ optimizing corporate governance body.

Big event I: Successful corporate reorganization

Group photo of the reorganization project team at the door of the CSRC

On September 29th, 2014, Tianma signed an agreement with

the Administration Committee of the Wuhan East Lake New

Technology Development Zone to build the first G6 LTPS LCD

production line in the zone. With a planned investment of 12 billion

Yuan, the project has an annual production capacity of 30,000 TFT

and 30,000 CF which will create an annual output of almost 10

billion Yuan. It's estimated that the project will be official launched

at the end of the year, and will be completed in 2016.

As early as November 2008, Tianma cooperated with the

Administration Committee to build a G4.5 TFT-LCD production

line in the zone. The "G6" project marks the second strategic

cooperation between Tianma and Wuhan municipal government.

Upon the completion of the project, the company will further

consolidate its leading position in the SMS LCD market. The

project is of great significance for the implementation of the10

billion Yuan Display Panel Industry Plan of the Wuhan East

Lake New Technology Development Zone, for the accelerated

construction of national independent innovation demonstration

zones, and for the construction of a world-class technical zone.

Big event II: Launch of the "G6 LTPS" project

Rendering of the "G6" project

For the Government

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42

inVESToR RELATionS

information disclosure

During the reporting period, the company released temporary

announcements and periodical reports in strict accordance with

relevant laws, regulations, and the Articles of Association. Related

information was disclosed really, accurately, completely and timely,

to protect the legal interests and rights of our investors. In 2014, 87

announcements, including the annual, semi-annual and quarterly

reports, announcements made by the Shareholders' Meeting, Board

of Directors and Board of Supervisor, major assets restructuring

announcements, new product and technique progress reports, and

investor concerns announcements, were released through appointed

media, for the purpose of making sure that our investors can obtain

the information of the company timely and accurately.

To develop an open, fair and just information disclosure system, and

improve corporate transparency, the company, based on regulations

such as the Regulations for Information Disclosure Management,

Regulations for the Internal Reporting of Major Information, and

Regulations for the Registration and Filing of People Possessing

Corporate Inside Information, has been increasingly optimizing

its information disclosure procedure and practice through internal

discussion and external exchange, so as to improve its information

disclosure quality and effects.

In terms of the control of insider trading, measures were taken

to further regulate the management of inside information, and to

improve the awareness of the employees of key posts about the

control of insider trading. On November 3, 2014, the 2nd Insider

Trading Warning & Education Exhibition hosted by the CSRC and

the Ministry of Public Security, and undertaken by the Shenzhen

Securities Regulatory Bureau was held at Shenzhen Citizens Center.

On November 4, under the leadership of Vice Chairman Zhu Jun, a

20-member team visited the exhibition, which helped the employees

to have a better understanding of the importance of legal compliance

and insider trading control. In addition, by means of operation reviews,

insider trading control training and so on, the company educated the

staff, and the results were satisfactory.

In 2014, the company was again

awarded by the Shenzhen Securities

Regulatory Bureau for its outstanding

performance in the following aspects

in 2013:1. Further improving the autonomy and self-discipline

level, actively pushing forward controlling shareholders to

improve corporate governance system, and earnestly fulfilling

commitments to the capital market;

2. Taking effective measures in information disclosure and

investor relation construction, improving the cash bonus

decision-making mechanism, and effectively protecting the

legal rights of minority investors;

3. Taking effectively measures in insider trading control; and

4. Transmitting the regulatory requirements of the Shenzhen

Securities Regulatory Bureau in a timely manner, and

actively cooperating with securities regulatory agencies in the

supervision and research in various sectors.

87 announcements were released. 87announcements

43

investor relation management

During the reporting period, in strict accordance with the principles

and regulations concerning fair information disclosure, we actively

communicated with the investors by means of the telephone, mailbox,

the "Interactive Platform" of Shenzhen Stock Exchange, investor on-

site visit, and strategic reporting meeting. In particular, in the course

of reorganization, through interaction with investors, we fully displayed

and interpreted its operation condition, through which, investors had

an all-round understanding of us, and at the same time, we collected

the reasonable suggestions of investors. Such an effective and long-

term communication mode played an important role in protecting the

legal rights of investors.

In the process of communicating with investors, the "Interactive

Platform" of Shenzhen Stock Exchange acts as important channel of

communication. We answered the questions of our investors as fast

as possible on the premise of making sure the quality of the replies;

and at the same time, we accepted the reasonable suggestions of

investors and made corresponding improvements as appropriate.

Our timely and effective reply, and objective and sincere attitude

in communication were widely praised by our investors. During the

reporting period, we answered 1283 questions raised by our investors

through the Interactive Platform, with a reply rate of 100%.

2015 Work Plan

1. Keep optimizing the investor relation management system.

2. Increasingly improve the professional quality of relevant

personnel.

3. Actively participate in or hold investor presentations,

performance presentations and relevant road shows to keep

close communication with our investors.

4. Constantly update and improve the content of the corporate

website.

In 2014, we optimized the reply procedure and investor on-site

visits in an all-round way. Based on the principle of fair information

disclosure, we earnestly treated the visits and consultations of our

shareholders and investors, and took effective measures to prevent

anyone from selectively or privately leaking nonpublic information

in advance, so as to make sure that all shareholders are equal in

obtaining major information. In the reporting period, we received the

on-site investigations from 49 institutions and 61 investors in 24

batches, and reported the investigation results to Shenzhen Stock

Exchange timely as required.

In 2015, we will keep optimizing the investor relation management

system, and increasingly improve the professional quality of relevant

personnel. Additionally, we will actively participate in or hold investor

presentations, performance presentations and relevant road shows,

keep close communication with our investors, and constantly update

and improve the content of the corporate website, building a better

corporate image.

For the Government

For The Shareholders

About the Company

For the Environment

For the Employees

For the Partners

For the Community

Receive the on-site investigations from

batches institutions investors 24 49 61

Reply rate at the interactive Platform: 100%

44

45

We actively use clean energy, reduce wastes and emissions, pay attention to constant investment in environmental protection, and promote the harmonious development of economy, society, environment.

FoR ThE EnViRonMEnT

ECo-FRiEnDLy DEVELoPMEnT CLEAnER PRoDuCTion

46

Total investment in

environmental protection: 66.9675million yuan

EnViRonMEnTAL PRoTECTion

Energy strategy and management

During the reporting period, pursuant to its energy development

strategy, the company expanded the coverage of ISO50001 and

ISO14064 by taking 2013 as the base year. As a result, the energy

utilization rate increased greatly, which lowered corporate operation

cost, and increased the economic, social and environmental benefits

of the company.

Based on the energy management system, the company set up the

Energy Saving Committee, and set an annual average energy saving

goal of 5%. According to the general energy management strategy

and plan of the company, the industrial bases set energy saving

goals for subordinate departments and production sectors, and built

the Energy Saving Sub-Committee respectively. Department heads

signed the letter of commitment to energy saving, which ensured

that the energy management strategy of the company can be really

implemented from top to bottom in an all-round way. In addition,

energy saving inspection teams were organized in all industrial bases.

Through periodical inspections in production lines and workshops, the

teams effectively cut down energy waste.

In terms of environmental emergency control, the company developed

the Special Environmental Emergency Plan, installed leak detectors,

Following the operation concept of "green, low-carbon and sustainable development" , the company

adopts world's advanced production technology to lower energy consumption. In addition, it has

invested a lot in energy efficiency technology development, so as to lower energy cost, and reduce

the mission of greenhouse gases.

(Unit: Million Yuan)

Shenzhen

Industrial

Base:

3.7029Shanghai

Tianma:

6.0745

NLT

4.3097

Wuhan

Tianma:

10.2012

Chengdu

Tianma:

37.8253

Shanghai AVIC

Optoelectronics:

10.9754

Safety Committee

Safety Committee

office

Chengdu TianmaShenzhen industrial

baseShanghai Tianma

Shanghai AViC

optoelectronicsWuhan Tianma

Safety Committee Safety Committee Safety Committee Safety Committee Safety Committee

EhS Department EhS Department EhS Department EhS Department EhS Department

47

and periodically organized special environmental emergency response exercises. During the reporting period, no major leak accidents

happened, no economic or non-economic punishments were imposed, and no environmental complaints were received.

The Safety Committee comprises 176 members, including 73 employees, 41% of the total. In 2015, following the principles of "legal compliance

& people first; energy efficiency & pollution prevention, green production & sustainable development; healthy and safe production by all and for

all", the company will take effective measures to improve energy saving management, enhance the application of energy-saving techniques

and equipment, and optimize industrial structure, thus pushing forward stable economic, social and environmental development.

There are 6 water chiller units in Chengdu industrial base. The

working loads of the chillers will fluctuate when the thermal

demand of HVAC system and cooling system are changed due

to the changes of external air humidity and temperature. In the

past, the cooling pumps of the chillers worked at the same power

frequency, which meant the output power of the pumps would not

change when the loads of the chillers decrease, thus the energy

was wasted. To solve the problem, the converter technique was

employed to upgrade the pump, enabling the pumps automatically

to adjust the output flow of cooling water according to the change

of chiller loads, thus saving the consumption of power.

In 2014, 640,000 KWh power (79 tons of coal equivalent) was

saved, equaling to 400,000 Yuan a year.

Before the upgrading, CDA was used to provide vacuum for

M2 Module unit equipment through the vacuum generator. This

method cannot avoid the energy waste occurring in the process

of energy transfer, and besides, when CDA realizes vacuum

switching through the vacuum generator, continuous air supply will

generate noise at a certain level. After upgrading, PA is directly

provided to module unit equipment through the control of the

solenoid valve, without the application of the vacuum generator. In

addition, the solenoid valve can directly control the supply of PA to

the platform and vacuum chucks.

The project cut down the gas consumption from 160 m3/shift to

110 m3/shift. Besides, since 114 kwh/day electricity can be saved

for each production line, the totally 32 upgraded lines saved 1.09

million kwh electricity in 2014, equaling to 710,000 Yuan.

"The project of installing Converter on Cooling Pump of the Water Chiller" Project in Chengdu industrial base

CDA-to-PA upgrading in module unit equipment in Wuhan industrial base

Before upgrading After upgrading

For The Shareholders

For the Environment

For the Government

About the Company

For the Employees

For the Partners

For the Community

48

occupational health

In compliance with relevant laws and the principle of people first,

the company always focuses on the risk management of production

lines. On the basis of highlighting risk identification, analysis and

control, it enhanced the arrangement of safety equipment and the risk

management education to the employees. The occupational health

management goals of 2014 have been realized, and the employees'

awareness of occupational safety and health have been improved.

In the whole year of 2014, no occupational disease accidents or

occupational fatalities happened.

OD control jobs and corresponding duties

Occupational health & safety guideline:Legal compliance & people first; energy efficiency &

pollution prevention, green production & sustainable

development; healthy and safe production by all and

for all

2015 Work Plan1. Popularize occupational control knowledge among the employees,

and enhance their awareness of occupational health.

2. Develop the occupational health education plan, and conduct

diversified relevant education activities.

3. Enhance the regular examinations in the factory and other operation

sites, preventing occupational injuries and diseases from happening.

4. Arrange physical examinations for all new employees according to

relevant requirements.

5. Improve the safety levels of highly risk and hazardous workplaces,

and make sure that all employees working at such places can wear all

necessary protective equipment correctly.

6. Improve and implement various comprehensive and professional

occupational emergency response plans.

In 2014, Wuhan Tianma passed the occupational health status

evaluation. Together with 3M Company, it organized the

Occupational Health Tour, greatly improving the employee's

awareness and understanding of occupational health.

Chemicals-related jobs

Responsible for the daily management and use of chemicals, including using chemicals to wipe or seal products.

Factory service jobs

Responsible for the operation and maintenance of factory equipment.

Electric welding

Responsible for safe welding, and the UV protection suit, gloves and mask are required.

Laser repairing

Responsible for the repairing of defective products.

Manual welding Responsible for the safe factory welding.

Barcode printing

Responsible for the bar code printing of products.

Machining Responsible for the machining of products.

On July 3, 2014, Wuhan Tianma held the 2014 "Zero Hand

Injury" challenge activity which lasted for four months. In

the activity, the employees, mainly the foremen of various

posts, formed 35 teams to compete in the aspects of the

collection of key hazards, the visualization of key hazards,

the parallel inspection of countermeasures against accidents,

and development of "10 regulations" for hand protection, the

"Safety Knowledge" contest, the safety skill team contest, and

so on. These activities greatly improved the staff's quality in the

fields of occupational health, safety awareness and skills

Wuhan Tianma: "Zero Hand Injury" Challenge

Wuhan Tianma: Occupational Health Tour

in the reporting period, there were 1,059

employees working at occupational disease (oD)

control positions.

(The data is the monthly average in the reporting period.)

1059employees

Remarks: the occupational health and safety management of "NLT"

are not included.

Environmental protection

49

Safe production

In 2014, adhering to the guideline of "Comprehensive safety control

based on prevention", the company took a series of effective

measures to refine safe production control responsibility, enhance

on-site safe production supervision, further identify and remove the

hidden dangers in production, strengthen the construction of the

environmental safety control team, and enhance the promotion of

safe production concepts. In addition, the principals of all industrial

bases were required to sign the Commitment to Safe Production. In

the reporting period, no production accidents happened.

The safe production responsibility system is employed in all industrial

bases. Based on the "Environmental safety control team + executive

department" combined safety control mode, joint inspections,

special inspections, festival inspections, and routine inspections

were conducted, so as to identify and remove hidden dangers as

many as possible. In addition, the knowledge and importance of

safe production were promoted by means of newspaper, broadcast,

blackboard poster and contest, and various activities, like "Role

Exchange" (workers and safe production supervisors exchanged

their roles) were organized, so as to improve the safe production

awareness and skills of the employees.

In 2015, all the industrial bases are required to develop and

implement detailed safe production plans, and supervise the

implementation of the plans according to the requirements of

"effective planning, responsibility definition, measures, capital

arrangement and supervision", to ensure the fulfillment of the 2015

safe production goals.

2015 Work Plan1. Ensure safe production control through organizational

development, capital investment, and performance

assessment.

2. Take effective measures to remove hidden dangers and

control risks.

3. Push forward the development of the safe production

control system and standard according to the "energy

efficiency" strategy.

4. Enhance the safe production awareness of the employees

through education, and develop team safe production control

standards.

Group photo of the employees of Wuhan Tianma Color Filter Plant

For The Shareholders

For the Environment

For the Government

About the Company

For the Employees

For the Partners

For the Community

50

In Wuhan Tianma, the 32-watt ceiling lamps arranged

in the public area worked 12 hours a day on average,

and were lit during the night time, causing the waste of

electricity. In the last year, 774 lamps were replaced by

8-watt acousto-optic controlled LED lights which are

turned off automatically when there is light or no sound,

and turned on when someone move or make a sound.

In this way, the average working hours of the

lamps are shortened greatly to 2 hours.

Energy saving performance:

Before upgrading=774 lamps *32W*0.75 Yuan

*365 days *12 hours / 1000 =81,363 Yuan.

After upgrading =429 lamps *8W*0.75 Yuan*365

days *2 hours /1000+345 lamps*8W*0.75 Yuan*365

days *12 hours /1000=10,946 Yuan.

Annual electricity saving=81362.88-10945.62=70,418 Yuan.

Public area lighting upgrading

Virtualization Project

The Desktop Virtualization Project was conducted to lower energy

cost, improve equipment efficiency, and reduce CO2 emission, thus

realizing green operation.

Thanks to the Desktop Virtualization Project, the energy saving and

emission reduction goals of the company in 2014 were successfully

achieved. In 2014, totally 300,000 Yuan electricity cost was saved..

The employment of thin clients lowered the electricity consumption

of PCs by 50% yoy, from 291,168 KWH to 145,584 KWH, saving

110,644 Yuan electricity cost. The utilization of virtualization

technology played a great role in improving energy efficiency. First, it

enabled the computing resources of a single server to be shared by

multiple environments, increasing the efficiency of servers by 39%,

while decreasing the electricity consumption of servers from 401,977

KWH to 157,991 KWH, saving 190,000 Yuan electricity cost. Second,

it integrated several servers into one, which lowered the electricity

consumption used to cooling servers, and reduced the emission of

CO2 at the same time.

In 2015, the company will keep pushing forward the Desktop

Virtualization Project, lowering electricity consumption by 358,015

KWH. It's estimated that at the end of 2015, 270,000 Yuan electricity

cost will be saved.

unified Communication Platform Project

In 2014, the company upgraded the Lync software. After the

upgrading, the communication yield reached 87%, up 16.5% yoy.

From January to October, the per capita telephone rate dropped by

19% yoy from 53 Yuan/month to 43 Yuan/month, which meant a total

cut of 11,690 Yuan/month.

In 2015, the company will reach a communication yield of 95%. It's

estimated that the telephone rate will drop by 20,000 Yuan/month

over 2014, an annual cut of 240,000 Yuan.

ECo-FRiEnDLy oPERATion

Paperless office Project

By taking a number of measures like process integration &

optimization and paperless office promotion, the company saved

250,000 Yuan in 2014. Besides, 182 OA business processes were

used online,, and 313,298 OA applications were submitted, up 32%

over the last year.

The company saved a total of 190,000 Yuan in paper purchase

and printing in 2013, higher than the goal of 150,000 Yuan. In 2014,

250,000 Yuan was saved in paper purchase and printing, higher than

the goal of 180,000 Yuan. From 2010 to the end of 2014,952,438

OA applications in total were submitted which saving almost 760,000

Yuan in paper purchase and printing and exceeding the goal by

20.9% or 630,000 Yuan.

In 2015, the company will keep pushing forward the paperless office

project to reduce the number of paper documents. It's planned to

save 250,000 Yuan at least in paper purchase and printing.

51

Canteen AC upgradingBefore upgrading, without the time controller, the canteen ACs were on even

there were no people inside the canteen, which caused energy waste.

Upgrading plan: the time controller was added to control the AC panel. When

there is a need to use the AC, the AC panel will be opened, thus saving energy.

Upgrading results: 160*500/1000*5*4*30+220*500/1000*5*4*30=114,00

0 KWH electricity, equaling to 114,000*0.629=71,706 Yuan was saved.

Waste water system electric cabinet component

working environment improvement Before improvement: since the components in the electric cabinet

need to be cooled down by the ambient air, which, however, contains

corrosive gases, the components tend to be corroded easily and

aged more quickly, causing malfunction, and even the breakdown

of the whole system. As a result, the water discharged cannot meet

relevant requirements, leading to serious environmental risks.

Improvement plan: more N2 was supplied for cooling, and the power

supply of the fan in the cabinet was cut off so that the components

cannot contact with the air, and thus the corrosion was prevented.

Improvement results: component cost before improvement – component cost

after improvement = 2,800*(22-2)+150*(42-3)+80*(36-4) = 64,410 Yuan.

Lower the waste of WNS100Before the upgrading, during the process that the Photo resist was

stripped, a large amount of agent would evaporate through the exhaust

pipe, causing continuous agent reduction in the stripper tank. New

agent was supplied continuously, but the evaporated agent condense

in the exhaust pipe was discharged directly, causing a great waste.

Upgrading plan: the WNS100 exhaust pipe was upgraded so

that the agent of WNS100 can flow back to be reused.

Upgrading results: 362,556 Yuan was saved annually.　　

Improvement made according to employees' proposals

Before upgrading After upgrading

Before upgrading After upgrading

Before upgrading After upgrading

For The Shareholders

For the Environment

For the Government

About the Company

For the Employees

For the Partners

For the Community

52

　　Suppliers are not allowed to hire child labor, and child

labor relief and juvenile protection regulations are required to

be developed.

　　Suppliers shall not force employees to work, and shall

allow employees to leave at will. The business ethnics system

shall also be developed by the suppliers.

　　Supplier shall independently arrange places for the

storage of hazardous chemicals, and shall provide their

employees with protective equipment.

　　Suppliers are required to develop the waste treatment and

energy efficiency plans.

　　Suppliers are required to obtain the ISO14001 or

OHSAS18001 certificates, build the CSR management

system, and sign the CSR agreement with their downstream

suppliers.

Supplier CSR management in five aspects

green Logistic Project

The large-sized glass substrates, which are large and thin, tend to

be broken in the process of air transportation when the flight takes

off/lands, and when the glass substrates are loaded/unloaded. In

the reporting period, to lower the breakage rate and transport cost

of large-sized glass substrates, the company stipulated that large-

sized glass substrates can only be transported by air upon approval.

In addition, the company independently bought insurance for large-

sized glass substrates, which is more reasonable.

In terms of bulk cargo transportation, the transport cost was charged

per trunk or per cubic meter, the logistic plan was made on a

reasonable basis, and the loading of trunks was effectively increased,

thus reducing transportation cost, and the carbon emission at the

same time.

In terms of transportation mode, to reduce the emission of

greenhouse gases, the company kept optimizing the transportation

mode by reasonably integrating air and land transportation. For

example, through the mode of air transportation from Shanghai to

Shenzhen + land transportation from Zhonggang to Hong Kong, the

total transportation cost was cut by 30%~40%.

In terms of the utilization of packing materials, the company reduced

the cost by recycling packing materials and changing the way of

packaging. The packing materials from the suppliers, like trays, blister

trays and angle boards were collected and selected for recycling. In

addition, blister trays and PPBOX were used together and repeatedly.

Tracking and controlling measures were conducted to lower loss and

waste in various aspects, thus reducing the packing cost. At the end

of December 2014, the recycling rates of the PP-boxes and EPP-

boxes bought by the company reached 266% and 385%, respectively.

Eco-friendly operation

53

The company requires all its logistics service suppliers to sign the

CSR agreement to share corresponding social responsibility. As of

October 31, 2014, all the 14 logistics service suppliers had signed

the agreement, realizing a signing rate of 100%. This measure was

effective in improving the social responsibility awareness of the

logistics suppliers, and in realizing win-win.

To practically improve its CSR management level of the logistics

service suppliers, in October 2014, the company launched the CSR

performance assessment. As of December 2014, the assessments

on 10 suppliers had been finished, and the qualification rate was

100%.

2015 Work Plan1. Gradually reduce the air transportation of large-sized glass

substrates, lowering transportation risks.

2. Enhance the CSR management of the logistics service

suppliers, such as refining the CSR performance assessment

standard, and developing the admission and elimination

system.

4. Require all logistics service suppliers to sign the CSR

agreement, and finish the CSR performance assessment on

all logistics service suppliers.

5. Further expand the assessment scope to all export and

import logistics service suppliers.

For The Shareholders

For the Environment

For the Government

About the Company

For the Employees

For the Partners

For the Community

54

At present, the company has built the QC080000 management

system, receiving the annual verification from third-party verifier

TUV, thus constantly increasing its hazardous substance control

ability and level, continuously lowering the internal and supplier chain

management risks, lowering the impact of products on environment,

and improving the satisfaction of the customers.

On May 17, 2013, the company issued the Environmentally Hazardous

Substances Control Standard. Developed based on international

environmental directives like REACH, PoHS and RoHS, industrial

regulations and the requirements of the customers, the Standard

concretely specifies the limitation and scope of application of related

forbidden and restricted substances, the management standard of all

products, parts and raw materials, and the forbidden and restricted

hazardous substance management standard for the suppliers.

In 2014, adhering to the principle of "Green production, sustainable

development, and healthy and safe production by all and for all", the

company will do a better job in hazardous substance management.

hSF management platform

So far, the company has finished the integration of hazardous

substance management process and control standard, and built the

hazardous substance management platform. Through the internal

information sharing in the HSF management team, information can

be provided to the customers, suppliers and the internal departments

effectively and accurately.

hAzARDouS SuBSTAnCE MAnAgEMEnT

Application of non-halogen materials

Due to the inherent toxicity of halogen substances which has imposed

a serious threat to human health, non-halogen operation has

become a general trend in the global electronics industry. To reduce

environmental pollution and constantly satisfy customer requirements

on environmental protection, the company has independently

developed a series of halogen substance reduction plans. Until June

2012, the company had replaced all traditional universal auxiliary

materials with non-halogen materials. Besides, non-halogen can

be provided according to the requirements of the customers. In

2013, non-halogen main materials, like non-halogen POL and tape

were started to be employed, and the employment rate has been

increasing gradually. In 2014, the non-halogen universal material

application standard was developed. In the standard, the halogen

control requirements of more than 70 related materials are higher

than the requirements of the customers, which indicated that Tianma

had entered into the era of non-halogen production.

HSF Training

55

hSF education and promotion

In the reporting period, measures like opening the HSF Green Class

and starting the Green Information periodical were taken to promote

the HSF education on the employees at different levels.

From July to October 2014, the environmental protection team of

the company, according to different subjects, developed different

training courses. Through the more than 10 training activities, the

environmental protection and HSF awareness of the employees were

effectively improved.

Internal publication Green Information was issued monthly, for the

purpose of introducing knowledge, laws, regulations, as well as

the latest news of the customers concerning hazardous substance

management, non-halogen universal material management, and

HSF.

The environmental protection education and promotion conducted

by the company . Every year after the Environmentally Hazardous

Substances Control Standard was issued, the company would

organize the suppliers to participate in special training, making

sure that the suppliers can understand the hazardous substance

management requirements of the company, and can meet the

requirements specified in the IECQ certificate.

2015 Work Plan1. Provide special environmental protection training and

assessment to the suppliers, help the suppliers build the

hazardous substance management system, and improve the

hazardous substance management level in the supply chain

of the company.

2. Conduct in ternal HSF t ra in ing accord ing to the

characteristics of different departments and posts.

3. Improve the HS r isk database, and have deeper

understanding and analysis of hazardous substance risks

faced by the company, thus preventing such risks from

happening.

For The Shareholders

For the Environment

For the Government

About the Company

For the Employees

For the Partners

For the Community

We create fair, impartial and open mechanism, create a passionate, open environment to mutual growth, every employee works and lives happily.

FoR ThE EMPLoyEES

PEoPLE FiRSTMuTuAL gRoWTh

58

After the Spring Festival of 2014, a large number of new equipment operators

joined the family of Tianma, which filled the labor gap caused by increased

productivity, and the number of employees thus reached to 18,882 at the end of

2014. In July 2014, a batch of graduates entered the company through the "Blue

Road" campus recruitment program. During the process of recruitment, priority

was given to people in local communities according to corresponding recruitment

procedure according to the requirements of CSR. In Tianma, the personal

performance and progress of the employees are considered very valuable, and

act as the basis for promotion, namely, based on an open and fair assessment

mechanism, the performance of the employees is rated, and the excellent ones

are published, which, in turn, encourages the employees to compete and be

better.

The employment of child labor is forbidden in Tianma. In case a child is hired by

accident due to the reason that the applicant uses a fake ID card or assumes

another person's identity, the case shall be reported to the local labor agency,

and the child shall stop working immediately and receive a physical examination,

to make sure that his/her health hasn't been affected. Then, the child shall be fully

paid and delivered to his/her guardian, and the company shall make sure that the

child can receive education until reaching the age of 16.

Total employees: 18,882

Remarks: the above employees mean the permanent employees, interns, and

outsourced employees of the "five companies in four cities".

Male 8,174 Female 5,308

Permanent employees：13,482

Male 11,018 Female 6,316

Fixed-term employees: 17,334

Male 3,769 Female 1,631

Temporary employees：5,400

Male 925 Female 623

unfixed-term employees：1,548

Total female employees

11,943

Total female employees

6,939

Baby Care Lounge

huMAn RighTS AnD EQuAL TREATMEnT

59

Optimization and improvement of the Wechat

platform

Since the establishment of Tianma Wechat platform in February

2014, more than 9,000 employees have used it to get access

to information concerning the news, cultural concepts, cultural

activities, and so on. Interactive activities like investigations,

lottery draws, delivering blessings and requesting songs

can be held on the platform, and entertainment information

relating to making friends, games, film etc. are also available.

Covering various aspects of the employees' daily life, the

platform makes the life of the employees more diversified. In

2015, following the core corporate values of "live and work

happily", Tianma will keep improving the Wechat platform,

walking closer to the life and work of the employees.

Wechat platform

Labor unions were set up in all industrial bases, responsible for

collective bargaining & negotiation, as well as enriching the life

of employees. Employee representatives, polled by employees

democratically, are entitled to, on behalf of the employees, negotiate

with the company, and are protected from being revenged or

suppressed. The labor unions convene the conference of employee

representatives periodically, in order to listen to the concerns of the

employees, and make corresponding improvements. During the

reporting period, 100% of the employees in all the industrial bases are

under the protection of the collective agreement. (Remarks: the data

of "Wuhan Production Base" and "NLT" are not included.)

To realize collective negotiation and enrich the life of the employees,

the company organizes the employee exchange every month, through

which, the proposals and reasonable suggestions of employees

concerning their work and life are collected for the purpose of

developing effective solutions. Suggestion boxes are arranged

prominently in the canteens and dormitories, and the proposals

and suggestions are collected and replied periodically by specially

designed persons. In addition, the questions raised by the employees

are answered by administrative personnel by means of phone, email

and Wechat. During the reporting period, no complaints concerning

the infringement of human rights or discrimination were received.

The company always concerns the life and development of the

disadvantaged, like the disabled. For example, job opportunities are

provided to the disabled as many as possible. Besides, child labor

and discrimination have never happened since its foundation, and

the company has never been complained or legally punished due

to the violation of the laws or regulations concerning child labor and

decimation. In the future, the protection of the disadvantaged will still

be a great concern and responsibility of the company.

In 2015, the company will improve the communication platform, so

that more suggestions of the employees can be heard, and better

human-centered services can be provided to the employees.

Remarks: only the discrimination and child labor information of the

"five companies in four cities" is disclosed.

For the Environment

For the Employees

For The Shareholders

For the Government

About the Company

For the Partners

For the Community

60

In 2014, the company held various activities to meet the needs of the employees in their spare time.

For example, sports games like basketball games, football games and badminton games were held.

On the International Working Women's Day, a series of events ("Care for Women" lecture, makeup

training, and tonic presenting) was specially held for the female employees, to make them face

work and life more confidentially. In the Mid-autumn Festival, the garden party and evening party

were held, enriching the life of the employees. At the end of the year, activities like the "The Voice of

Tianma" and "Talent Show of Tianma" were organized, creating a stage for the employees to show

themselves.

On January 2014, the 2013 annual celebration was held in various industrial bases. Diverse excellent programs, which

contained the mission, vision, core values the 30 years' history of Tianma, were presented to the employees.

Annual celebration

EMPLoyEE CARE

61

Shenzhen industrial base

After conducting the Care for Left-behind Children Program in 2013, in 2014, Shenzhen industrial base provided more helps for the employee

families with left-behind children. For example, paid home leaves were provided so that the employees can have more time to stay with their

children. The base also organized a series of value practice activities, like the essay contest and panel discussion, for the purpose of deepening

the employees' understanding of corporate values, and putting the corporate culture and values into practice.

Sunny/Open/Sharing "Youth Stars Talent Show" –Chinese

dictation

On the evening of August 5, 2014, the winners of "Talent of Chinese"

finally stood out after 12 fierce "battles" in the 11-day "Youth Star"

Chinese dictation contest. The Panel Plant, No.1 Module Plant, No.5

Module Plant, Department of Quality Control, Department of Factory

Service, Department of Logistics, Department of Human Resource,

Department of New Product Introduction, Department of Purchase,

and all fresh graduates participate in the contest. In the contest,

totally 27,439 words were collected by 328 employees. Among the

938 people participating in the audition, 240 people from 48 teams

entered the preliminary contest, and with the winners of the 33 people

participating in the repechage, 55 people finally stood on the stage

of the final. The contest was fully supported by the employees, and

played an active role in improving the knowledge of employees and

enriching their life.

Care for front-line employees

Since the beginning of 2014, the Employee Care Center of the

Department of Administrative Service has started to visit the front-

line employees at dormitories periodically. During the process, a lot

of suggestions were collected, and solutions were given. The visit

is effective in solving the problems and meeting the requirements of

front-line employees, thus providing them with practical care in life.

Care for left-behind children

Engaged in creating a cultural environment where the employees can

live and work happily, Shenzhen industrial base has taken a series of

human-centered practical measures to provide care for left-behind

children. According to a policy taking effect in 2013, employees with

above one year's standing in the company and with children in their

hometowns are allowed to have paid home leaves. The employees

highly praised the policy, for it gave them a longer time to stay with

their children. In 2014, 115 employees were qualified to take paid

home leaves in Shenzhen industrial base. The company prepared the

tickets of the big parks in Shenzhen, and arranged the home leaves

in the summer holiday, so that the employees can have outings with

their children. Through the activity, the employees felt the warmth and

care from the company.

For the Environment

For the Employees

For The Shareholders

For the Government

About the Company

For the Partners

For the Community

62

Warm Spring Action

From March to June 2014, primary department heads had one-

to-one communications with all site directors, team heads and

engineers, to have a deeper understanding of the problems faced

by the workers in life and work. Problems found during the period

of time were solved as appropriate. The activity greatly enhanced

the communication between the management and the workers, and

boosted the employee morale the engagement.

Tianma Cooperative (Phase 3)

On the Arbor Day of 2014, the Department of Administrative Service

held the "Date with Spring" planting activity. More than 200 employees

participated in it with high enthusiasm. Like the past two years, this

time, plants were also grown in the internal passages to beautify the

environment. In the sunshine of spring, beautiful plants were grown

with the laughter and sweat of the employees, making the corporate

environment more vibrant.

Chengdu Tianma

Chengdu Tianma also conducted diversified activities in 2014. During the Spring Festival of 2014, Chengdu Tianma arranged festival dinners

for more than 300 employees, and organized the activity of "Happiness on Wishing Tree". In May 2014, Chengdu Tianma organized a 10 km

hiking which contained the parts of backpack gift, Wechat interaction and lottery draw. The activity played an effective role in building a vigorous

and aggressive team.

Employ care

63

Wuhan Tianma

Wuhan Tianma also conducted diverse activities. Company leaders spent the Spring Festival with employees on duty. At the Lantern Festival

& Valentine's Day Lantern Show, all the lanterns were made by the employees, bringing the sense of achievement to the employees while

enhancing their ability of practice. Intercommunications between the workers and management were conducted quarterly, for the purpose

of solving the practical problems of the employees and realizing the barrier-free communication between both sides. To enrich the life of

the employees in their spare time, and improve their physical fitness, ball games and other interesting league matches were organized. The

company also organized employees to participate in the entertainment and sports activities held by the Wuhan East Lake Hi-tech Development

Zone, promoting the communication between Tianma and other companies in the zone.

Family Show

On August 16, 2014, the 3rd Wuhan Tianma Family Show was held

at Wuhan Wanna Go Theme Park. 59 family teams formed by the

employees played in 6 technology-themed zones, and visited the

grand exhibition of transformers. The highlight of the activity was

those lovely children, who created waves of happiness. The activity

well interpreted the corporate cultural concept of "Work and live

happily", and delivered the support and love of the company to the

employees and their families.

Run in Spring

To implement the national fitness program, on March 29, 2014, the

Labor Union of the Wuhan East Lake Hi-tech Development Zone

organized the enterprises in the zone to participate in the "Run in

Spring" long-distance race. The contestants started from the gate

of Hubei Olympic Sports Center, then ran along Gaoxin Road and

Guanggu Seventh Road, and finally reached the finish of the 7.5 km

route—Callalily Square in Future Town. The12representatives of

Tianma all finished the race.

EAP-employee psychological counseling

The company has arranged psychological counselors to provide

psychological counseling to all new employees. Through on-

site questionnaire investigation, the psychological counselors can

judge the personalities and differences of them, and then offer

corresponding counseling.

The psychological counselors provide the employees with periodical

psychological counseling, and the employees can also ask for

counseling and help according to their needs. Every week, the

psychological counselors will, through mass mailing, introduce hot

social issues and psychological knowledge to the employees, helping

them develop a healthy psychological condition. 　

Excellent team outward bound

On August 2, 2014, the 2-day "2013 Excellent Team Outward Bound

at Lulin Camp, Mount Jingshan" kicked off. Activities like "Yuanyang

Brook Drifting" and "Campfire Party" were held. Competing in

impromptu teams named "Big Apple", "Hero", "China Team" as so on,

the employees felt growing friendship, cohesion and cooperation, and

thus had a better understanding of the corporate values of "Passion,

efficiency and win-win".

For the Environment

For the Employees

For The Shareholders

For the Government

About the Company

For the Partners

For the Community

64

Shanghai AViC optoelectronics

Family Open Day

On April 19, 2014, a warm spring day, Shanghai AVIC Optoelectronics

invited employee families to participate in the Family Open Day

activity, as a reward to the employees for their hard work, and to their

families for their unselfish support. It's also a good opportunity for the

employee families to have a better understanding of the company.

130 employee families participated in the activity. They signed

their names on the signature wall of the reception room, visited the

company, enjoyed delicious food, played games, and knew the values

of the company in the process of interaction. The company prepared

candy, balloons, and specially arranged cartoon SpongeBob and

Doraemon figures to take photos with the children. In the game of

cooking food, the funny cooperation between the fathers and their

children made the air full of excitement and laughter. At last, each

child received a cute backpack as a gift.

After the activity, the employees indicated that they had a great time,

and were proud of being Tianma people.

In 2015, the company will organize more activities for the employees

to relax themselves, making them live and work happily in Tianma.

At 16:30 on August 3, 2014, Xundian County in Zhaotong City,

Yunnan Province was hit by a magnitude 6.5 earthquake.

Hearing the news, the company immediately inquired

employees from Yunnan in various industrial bases. Knowing

that the families of 6 employees were affected by the disaster,

and their families were living in tents since their houses were

damaged to different degrees, the presidents of Wuhan

Tianma Labor Union and Shanghai Tianma Labor Union, on

behalf of the leaders of the company, delivered the concerns

and encouragement of the company to them, and also

provided them with financial supports on August 15.

Labor Union expressed sympathy and solicitude for the employees affected by the earthquake in Yunnan

Employee care

65

EMPLoyEE TRAining AnD CAREER DEVELoPMEnT

LAMP missions The LAMP programs were still a focus of the company in 2014.

Different training programs were developed for the management

of different levels. There was the Eyas Program which opened a

green channel for the fast growth of onsite operators; the LAMP1

Program which aimed at improving the basic management ability and

leadership of basic management like directors, senior directors and

senior engineers; and the LAMP2 Program aiming at improving the

management ability and leadership of middle management like deputy

managers, managers and experts. Those programs, lasting for 3-4

months, helped the employees realize the transformation from self-

management to managing others, and then to managing managers.

Roc Training ProgramThe Roc Training Program was conducted for those high potential middle management personnel. Excellent middle and senior management

personnel were selected from all branches and industrial bases to participate in a special training program lasting for one and a half

years. Through the method of action learning, training was provided from the aspects of strategic management, strategic human resource

management, financial management, BSC and corporate operation simulation, for the purpose of training management talents of different levels

as the backup of the senior management. In addition, excellent management personnel had the opportunity to receive the middle and senior

manager training at the AVIC Business School, improving their management ability and comprehensive ability in other aspects.

LAMP training site

Roc Training Program

66

TTT internal instructors

To build an internal instructor team, the company conducted the "TTT

Internal Instructor" training program. Every year, the company will

invite external experts to train the employees, or send the employees

to study at external training institutions. In this way, a training net was

formed, through which, the employees can improve their skills and

abilities.

In 2014, the company also held rotated training for all employees

themed on "corporate strategies, corporate core values, and quality

awareness", so that all employees can have a comprehensive

understanding of corporate strategies and values, as well as their job

quality.

The Blue Road

In 2014, the company specially conducted the "Blue Road" training

program for the 800 new graduates, helping them to understand the

corporate culture, to be competent at their jobs, and to become a part

of their teams. The training comprised the three parts of centralized

training, factory practice and on-the-job training, and instructors were

specially arranged for them. The content and forms of the training

were designed according to the needs of the graduates, so that they

can realize the transformation from students to professionals, and

feel comfortable in the big family of Tianma as fast as they can.

To dream of going to college

To improve the educational level of the employees, in 2014, the

company created opportunities for employees meeting relevant

requirements to choose majors and colleges related to their jobs to

study. Taking this opportunity, some employees realized the dream of

going to college.

2015 Work Plan1. Develop special training programs for technical and

professional personnel to improve their professional ability

and level.

2. Push the fast on-the-job training for operators, accelerating

their skill improvement.

3. Keep building the instructor team, so as to improve the

internal training system.

4. Develop a standard training procedure.

5. Conduct the training result assessment.

Blue Road training site

Group photo of the TTT internal instructors

Remarks: only the training and education indicators of the "five

companies in four cities" are disclosed.

Employee training and career development

67

The employees of Tianma are paid in compliance with relevant

laws and regulations, and according to their posts and the industrial

remuneration level, so as to make sure that they can live a relatively

comfortable life. The labor contract signing rate of the company is

100%.

The Remuneration Management Regulations have been developed

to guarantee the rights of the employees in remuneration and welfare,

and the welfare coverage rate of Tianma is 100%. The company

provides work-related injury insurance, endowment insurance,

medical insurance, unemployment insurance, maternity insurance

and housing fund for the employees. According the sex and the

nature of jobs of the employees, protective equipment, maternity

leaves, paternity leaves, breastfeeding leaves, marriage leaves

and paid leaves are provided, with a coverage rate of 100%. Every

year, the company will provide activity (dinner parties, entertainment

activities, sports games etc.) organization fund to the management

personnel and operators, with a coverage rate of 100%. The only-

child allowance is provided as required. On the International Working

Women's Day, gifts will be given or activities will be held, and on other

festival days, festival allowance will be granted. Meal allowance is

provided to night shifts and special posts. In 2014, the performance

assessment rate of the employees was 100%.

A number of human-centered management projects were conducted

in 2014. From the perspective of employees, convenient services,

like the Wechat platform salary query, were provided. To improve the

sense of safety of the employees, the company bought international

accident insurance for the employees working abroad, protecting the

interests of the employees in case of an accident.

In 2015, the company will improve the remuneration and welfare

system and performance management system. Multiple modes

and channels will be employed to better motive the employees,

improve their performance, and finally increase the comprehensive

performance and development height of the company.

REMunERATion AnD WELFARE

Wuhan Tianma Family Show

Remarks: only the welfare, fixed-term performance, and career

development assessment results of the "five companies in four cities"

are disclosed.

68

69

Through strategic transformation and a series of reforms in corporate culture, business and operation, we always fight for the win-win with our customers, suppliers and partners.

FoR ThE PARTnERS

MuTuAL DEVELoPMEnTFoR Win-Win

70

In-Cell technique (In-Cell integrated touch)

The technical approach is clear, the basic research has been

done, and the demo has been produced. Currently, the focus is

expanding multi-channel application of the technique.

On-Cell technique (On-Cell integrated touch)

A number of products using the technique have been produced in

quantity, and breakthroughs have been made one after another.

The PIN reduction plan not only improved product performance,

but also lowered product cost.

Flexible Display technique (flexible display)　　

The company has successfully developed unique substrate

release technique. It can meet the requirements of 400C+ TFT-

Array technical process, and effectively expand the selection

scope of TFT-Array, laying a solid foundation for the following

technical development.

AMOLED technique (active matrix/organic light emitting diode)

The technique holds a leading position domestically, and some

of its technical indicators have reached international levels, filling

corresponding domestic gaps. In 2014, the full-color AMOLED

was successfully produced, and the mura remuneration technique

was successfully developed.

Oxide TFT technique (metal oxide TFT)

The company has completed the design and development of a

series of IGZO LCD/OLED. Displays with different resolutions.

The oxide-driven AMOLED displays have been successfully trial-

produced.

EMTP technique (Electro-Magnetic Touch Panel)

The company has successfully developed the electrode-shared

electromagnetic-capacitive integrated dual module driven system,

based on which, several electromagnetic-capacitive integrated

technical solutions have been developed, and the technical

indicators of such solutions have reached international levels.

3D technique (3D display)

By optimizing panel pixel structure design, the company has

developed AHDDP naked-eye 3D module with independent

patented technology. In terms of the development of spectral

components, the company is the first one realizing the mass

production of LCD lens, and its self-developed LCD lens have

been fully recognized by the customers.

5.5inch FHD RGBW display technique

The first RGBW full HD display developed by the company is an

globe-leading product in the field of high resolution displays.

TEChniCAL DEVELoPMEnT & innoVATion

In the reporting period, the company kept a good partnership with a number of mainstream terminal

producers around the world as one of the main panel suppliers in the global smartphone market.

With increasingly increased independent innovation ability, the company has helped many world

famous cell phone brands realize the world premieres of several products. Before the development

and launch of new products, the company will always conduct the technical evaluation, and after the

trial production of new products, a series of reliability tests will be performed, and only qualified ones

will be produced in mass. Following the strategy of leading the industry in technology, the company

actively develops future technology, ensures the supply of core resources, and makes technical

innovation.

Technical strength

71

At the same time of exploring and developing new display techniques,

the company always adheres to the principle of "energy saving and

emission reduction". It has been working on improving the penetration

rate and lowering the energy consumption of displays technically

by means of aperture rate increase, size reduction, technical

development, electrode optimization, negative LCD switch, and so on.

As a result, the environmental pollution caused by display production

has been reduced.

The company strives to be an globe-leading producer of small and

middle-sized displays. To realize the goal of the coming year, it also

puts technical development and innovation first. In the coming year,

the company will focus on start-up application and start-up technical

development; take active measures in the development of advanced

techniques like integrated touch, Metal Oxide TFT, naked-eye 3D

technique, and Flexible Display; and turn the organic light-emitting

technique into products, trying hard to realize the strategic planning.

From April 10-12, 2014, the CITE 2014

was held at Shenzhen Convention and

Exhibition Center. At the expo, Tianma

showcased its latest achievements in

advanced techniques like LTPS, AM-

OLED and integrated touch panels made in

the past year.

The 4.3"AM-OLED display employing ONCELL technique

was also presented at the expo. Boasting the features of

both OLED and ON-CELL, the product has the advantages

of bright colors, a high contract ratio, a high anti-interference

capacity, and an ultrathin body.

The 5"HD INCELL display, well demonstrating the combination

of embedded touch and the high resolution SFT technique,

also had its debut at the expo. Featuring a wide viewing angle,

a high resolution, and the function of multi-point touch, it won

the 2014 CITE Innovative Product Development & Application

Award.

New products were showcased at the 2nd CITE

From September 23-27, 2014, the PT/EXPO COMM CHINA

2014 was held in Beijing. This biggest and most influential

world-class communication expo in Asia attracted the

information and communication magnates around the world.

As an globe-leading small and middle-sized display panel

producer, Tianma showcased its latest research results,

including the ultrahigh resolution LTPS panel, self-luminous

AM-OLED panel, and In-cell capacitive touch panel. Many

famous cellphone brands, like Huawei, Samsung, Sony, ZTE

and Gionee, displayed their latest high-end 4G cellphones,

presenting a feast of 4G cellphones to the visitors.

New products showed at PT/EXPO COMM CHINA

Award presentation site

2014 Tianma (Greater China) Industrial Products VAP Communication & Exhibition

For the Employees

For the Partners

For the Environment

For The Shareholders

For the Government

About the Company

For the Community

72

SuPPLiER CSR MAnAgEMEnT

The purchase amount of Tianma in 2014 was 6.1 billion Yuan. At

present, most of the suppliers are labor intensive companies, and only

a few suppliers engage in equipment manufacture, commissioned

sales of parts, culture & education, and e-business.

In the reporting period, the company newly introduced 283 suppliers,

and weeded out 56 suppliers. The suppliers of the company fall into

two categories—productive suppliers and non-productive suppliers.

The 565 productive suppliers provide the direct materials of LCDs &

LCMs, and the chemicals and gases needed in the production. The

1,416 non-productive suppliers provide the company with equipment,

parts & spares and fixed assets. According material characteristics,

the suppliers are divided into Type I, Type II, Type III and Type IV

suppliers. Type I, II and III suppliers are productive, and Type IV

suppliers are non-productive. There are 400 Type I suppliers. Among

the whole 1,981 suppliers, 1,518 are registered in China, and 463 are

registered abroad.

In the reporting period, 283 new suppliers signed contracts with the

company, and before signing, they were all required to sign the CSR

agreement before conclusion of contract.

As early as 2011, the company developed relevant documents such

as the Supplier Management Procedure, Supplier Import Certification

Procedure and Supplier Elimination Procedure】to regulate supplier

management. Based on such documents, the company compiled

Supplier CSR Assessment Form and other relevant documents on

November 20, 2012. On-site assessments, including the supplier

annual CSR performance assessment and new supplier CSR

performance assessment, are conducted according to the form. In

addition, all suppliers are required to sign the CSR agreement.

In 2014, the company kept pushing forward the CSR management

system. By the end of 2014, 45 suppliers had received the annual

CSR performance assessment, and the qualification rate was 100%.

In the reporting period, no suppliers with child labor, slave labor, or

significant or potential negative impacts on the environment, human

rights, labor and the society were found. The company assisted two

major suppliers (Xiamen Hongxin and Jiangxi Woge) to build the CSR

system, for the purpose of improving their CSR management and

thus realize common development. 2015 work plan1. Conduct CSR training for, and supervision and onsite

assessment on the suppliers.

2. Enhance supplier CSR promotion.

CSR training

In the reporting period, the company conducted 4 persons/

day supplier CSR training. The trainees were all the middle

and senior management of the suppliers, and the training

content included EICC, SA8000, ISO26000, etc. The training

was conducted to introduce the concepts, significance and

standards of CRS to the suppliers, improving their CSR

management level.

CSR performance assessment

To build a supply chain CSR management system, during

the reporting period, the company conducted on-site CSR

assessments on the major suppliers. The assessment

content included on-site inspection, data review and

employee interviews. No significant defects were found in the

assessments.

Assist major suppliers to build the CSR system

CSR training site

Remarks: only the supply chain indicators of the "five

companies in four cities" are disclosed.

73

outsourcer management At present, the outsourcers of the company include the contractors

of the canteens, real estate and shuttle bus leasing. The employees

of the outsourcer mainly fall into real estate personnel, canteen

personnel, resident personnel of the suppliers, and the personnel of

equipment suppliers. To enhance the CSR management of partners

like outsourcers, in 2013, the outsourcers of canteens and real estate

were included in the CSR management system, and the EICC Audit

Form was developed based on the requirements of EICC. As of July

2013, the EICC audits on such outsourcers had been finished, and

the scores of all the outsourcers were above passing grade of 60

points.

In 2014, the company managed its outsourcers in strict compliance

with the Staff Canteen Management Regulations, Sanitation and

Hygiene Management Regulations and Vehicle Management

Regulations. In addition, according to the requirements of EICC, it

asked the outsourcers of the canteens, real estate, cleaning business

and shuttle bus leasing to sign the CSR agreement or letter of

commitment, and conducted strict supervision and control according

to the requirements thereof.

In 2014, the company consumed 65,789 L gasoline. To reduce the

environmental pollution caused by the means of transportation, the

company provided that gasoline of the same standard shall be used;

that fuel additive shall be used to ensure the complete combustion

of gasoline, reducing the emission of exhaust; that drivers shall

drive according to relevant requirements, and avoid smashing the

accelerator as much as possible, reducing gasoline consumption; and

that vehicles failing to meet the exhaust emission standard and with

high emission shall not be used.

　　

2014 work summary

1. Introduce high quality canteen outsourcers, and push forward the

reasonable competition among different outsourcers, thus improving

the service level of the canteens.

2. Ask the canteens to provide diverse dishes and ensure continual

food supply.

3. Assess external housing resources ahead of time and select good

ones to meet the growing dormitory demands caused by the increase

of employees.

4. Improve the quality of dormitory outsourcers to create a more

comfortable living environmental for the employees.

5. Optimize the departure schedule and route of the shuttle buses to

save cost and reduce carbon emission.

2015 Work Plan1. Keep introducing high quality canteen outsourcers, and

pushing forward the reasonable competition among different

outsourcers, thus improving the service level of the canteens.

2. Organize and improve the safety management regulations

and procedures, and conduct safety inspections periodically.

3. Improve the living conditions of the dormitories, provide

more administrative services, thus further improving the living

conditions of the employees.

Canteen

Dormitory

For the Employees

For the Partners

For the Environment

For The Shareholders

For the Government

About the Company

For the Community

74

i. Customer service

The Marketing Center comprises the professional display team and

consumer product team to meet the demands of different types of

customers. To provide our customers with timely technical support,

the professional display team has set up service stations in domestic

cities such as Shenzhen, Xuzhou, Shanghai, Wuhu, Zhongshan,

Zhuhai and Tianjin, and arranged third-party technical resources in

foreign markets such as Mexico, Japan and Europe. Beyond that, we

has also built a matrix team and a CQ work team which can response

quickly to the demands of the strategic and major customers of its

professional display business. The consumer product team has

service stations in domestic cities such as Shenzhen, Guangzhou,

Huizhou, Xiamen and Shanghai, and sales & service stations in USA,

Japan, Korea, Taiwan, etc.

We conduct the satisfaction survey on target customers annually to

deepen the communication with them and make improvements based

on the feedback of the customers. We select target customers from

the strategic and major customers defined by the professional display

team at the beginning of the year and major customers of CQ team

and conduct the survey via the e-questionnaire. The final customer

satisfaction results are obtained based on the weighted average

cores of the e-questionnaires.

The customer satisfaction survey of 2014 was completed in

December 2014. The survey covered 6 aspects—product prices &

delivery, quality service, new product development, environmental&

hazardous substance management, after-sales service, and

business communication. Each item is scored within a scale of 5~1,

which are corresponding to the five grades of "excellent, satisfactory,

acceptable, unacceptable, and horrible". In addition, the suggestions

of the customers were also collected, so that both the satisfaction and

expectation of the customers were known to the company.

Compared with previous survey results, those of 2014 showed an

overall improvement. The company will develop solutions to the

problems found, and try to provide the customers with a better service

in the next year.

Supporting a wide range of applications in mobile terminals, vehicle-mounted devices, medical

equipment, and industrial control equipment, Tianma aims at being the world's leading display

company respected by the society and loved by the employees. At present, we have built a global

technical support platform. Our consumer products go to both domestic and foreign markets, and our

professional display products are sold to the Greater China, European, American and Asia markets.

CuSToMER RELATionS

75

Strengthen the backstage/Increase competitiveness

Solve problems

Rate of timely customer complaint (8D) closure

Repeat complaint Customer deeper information

exploration

1. Customer feeling2. External quality cost

internally Push forward company

promotion

Externally Promote business development

Announcement

Clear status quo/problem solved

During the reporting period, the company strictly followed the laws

and regulations regarding advertisement and promotion during

the process of conducting marketing and advertising activities. It

has never sold forbidden products, or any products questioned or

disputed by the stakeholders.

During the reporting period, the company never violated laws or

regulation regarding product & service health and safety, regarding

information & product marking, or regarding voluntary codes. Never

was it seriously fined due to providing products or service against

relevant laws and regulations, or complained by the customers due

to infringing customer privacy or losing customer data. In the future,

the company will develop regulations concerning the above issues as

preventive measures, thus improving the CSR image of Tianma.

For the Employees

For the Partners

For the Environment

For The Shareholders

For the Government

About the Company

For the Community

Core values of

customer service

Remarks: only the product responsibility indicators of the

"five companies in four cities" are disclosed.

76

GE"2014 China Supplier Technical Innovation Award"

At the 2014 GE China Supplier Conference held in Beijing on May

22, 2014, the X-ray digital flat panel detector developed by Tianma

won the technical innovation award, which meant that Tianma, as

the only domestic provider of the device, had broken the mode that

the production of such core devices was monopolized by foreign big

producers. This award also showed GE's trust in Tianma.

OPPO"2014 Supplier Perfect Quality Award"

On December 9, 2014, Tianma General Manager Liu Jingyu and

Deputy General Manager Lou Jun attended the 2014 Global Supplier

Conference of famous cellphone brand OPPO. At the conference,

Tianma won the "2014 Supplier Perfect Quality Award" presented by

OPPO COO Mac. As a confirmation to suppliers ensuring products

with excellent quality and great support to OPPO, the award was

only presented to 6 suppliers from totally more than 480 suppliers.

Therefore, it's a very high reorganization of Tianma's product quality,

and an expectation of closer cooperation and higher product quality

form OPPO.

AVAYA "2014 Best Supplier Award"

On May 20, 2014, AVAYA, the second biggest VOIP producers in

the world held its 2014 supplier summary conference in Singapore.

Tianma won the "2014 Best Supplier Award" for the solid quality

of its products and its excellent service concerning MONO and

TFT products in 2013. The award indicated that the quality and

performance of Tianma's LCDs for universal industrial products were

highly regarded by international customers.

ZTE"2014 Global Best Partner Award"

At the ZTE 2014 Supplier Conference held on November 24, 2014

at Intercontinental Hotel Shenzhen, Tianma won the highest award

"2014 Global Best Partner Award" as a confirmation to its excellent

performance in 2014.

Lenovo "Diamond Award" & "Best Service Award"

On May 22, 2014 Lenovo Core Supplier Conference was held at

the Wuhan East Lake New Technology Development Zone. Awards

covering technology, service, supply and quality and the diamond

award were handed out to its suppliers. Tianma won the Diamond

Award and Best Service Reward. The Diamond Award is the highest

award to the global suppliers of Lenovo, only belonging to suppliers

performing excellently in technology, service, supply and quality

during their cooperation with Lenovo in the past year. Tianma General

Manager Liu Jingyu attended the conference and accepted the

awards on behalf of the company.

Customer relations

77

ii. Customer complaint handling

Rejects, the proportion of rejects, the places of reject occurrence,

and the pictures of rejects will be handled by Tianma effectively.

Where a reject is complained, the CS engineer will, right after

receiving the complaint, confirm relevant 2D information, make a

preliminary judgment of the reason, and at the same time, report it

to the company. The company will, according to the conditions of

the product (product stored by the customer, assembled product,

product in translation, product stored by the company, or product

in process), give an emergency response within 24 hours. In case

it's the company's fault, the company will provide corresponding

maintenance, remuneration, return or exchange service as soon as

possible. If the customer has no specific requirements, the company

will provide the reason analysis report within 3 working days, and the

8D improvement report within 5 working days. A customer complaint

can only be closed upon the verification and confirmation of the

customer.

On May 31, 2014, customer A reported a problem of blurred screen. After

receiving the complaint, the company acted soon to find out the reason.

Through communication at teleconferences, it's preliminary judged

that the problem was caused by the temperature remuneration of the

software used by the customer. Later, the company sent engineers to

the customer to help solving the problem. Through a week's analysis and

tests, the problem was finally solved.

Although the problem was caused by the customer, the company still

provided timely on-site service, ensuring the normal production and

qualified delivery of the customer. This also full interpreted Tianma's core

values of "Passion, Efficiency and Win-win", and presented Tianma's

good corporate image.

Case II

At 10:00 on October 20, 2014, customer B complained the scratches

of LCDs produced on a production line. Among the 5,000 pcs, rejects

were found in 50 pcs, with a reject ratio of 1%. After receiving the call,

our personnel rushed to the customer's plant, and determined that it's an

accident of single lot rejects. The risk lot was determined quickly, and the

normal production of the customer was not interrupted.

At 11:50 the same day, our personnel tracked and sorted the rejects

according to code information to ensure the normal production of the

customer.

At around 14:00, the raw materials were unpacked at the company, and

20K rejects were found from the risk lot, and were isolated and sorted.

Totally 120 pcs of scratched LCDs were found at last. The materials of

other lots were also examined, and no rejects were found.

The efficient performance of Tianma was highly praised by the customer.

This case is a good demonstration of Tianma's core values of "Passion,

Efficiency and Win-win", and a good presentation of Tianma's corporate

image.

Case I

2015 Work Plan1. Conduct quarterly visits to strategic customers, to collect

information concerning product quality and performance.

2. Develop the cross-department weekly review system to

handle the complaints of strategic and major customers.

Follow up complaint handling every week to make sure timely

and effective resolution.

3. Further improve the CQ team by increasing CQ resources,

improving CQ ability and focusing on the demands of major

accounts.

4. Build the customer complaint analysis lab, and increase the

number of analysts, so as to handle complaints effectively.

5. Optimize the customer complaint procedure to support the

major account strategy of the company.

For the Employees

For the Partners

For the Environment

For The Shareholders

For the Government

About the Company

For the Community

78

79

Always committing ourselves to serving the community and philanthropy, we have been pushing forward our community development plan for the purpose of building a better society.

FoR ThE CoMMuniTy

ACTiVE RETuRn unSELFiSh DEDiCATion

80

Organize and promote voluntary activities;

Develop volunteers' activity plans and regulations;

Recruit, train and commend volunteers;

Expand the range of voluntary service;

Conduct internal mutual assistance and fellowship parties;

Enhance the communication with other non-profit organizations;

Other voluntary activities.

Tianma Volunteers Association (TVA), founded in March 2009, is a

non-profit organization subordinated to AVIC International Volunteers

Association. It's formed by Tianma employees who provide voluntary

service to the society.

SERVE ThE CoMMuniTy

We are Tianma volunteers, and our names are "responsibility" and "dedication". We melt the cold

indifference with the warmth of love, we arouse the love of more with our sincerity, we challenge

difficulties with courage, and we help others with action.

We believe: love is something real. It's I give you a helping hand when you are in need.

Today, we serve the society as a member of it. Tomorrow, hand in hand, we create a better future.

Service scope

Voluntary activity site

81

Shenzhen industrial base—Visit the senior citizens center 　　

On November 16, 2014, TVA joined Baolong Community Volunteer

Team of Longgang District, Shenzhen to visit Longgang Senior

Citizens Center. During the one-day activity, the members of TVA

helped the seniors hang mosquito nets, assisted them in cutting their

hair, and chatted with them while sharing the fruits they brought there.

The activity was ended by a wonderful magic show.

Happy times always fly. With the company of Tianma volunteers, the

seniors had a great day. When sending off the volunteers, the seniors

asked the volunteers to work hard and come to visit them often. In

the activity, the seniors felt the love and care from Tianma volunteer

as from their children. During the process of bringing happiness and

care to the seniors, the volunteers fulfilled their social responsibility in

a practical way.

Shenzhen industry base—An Adventure with Children 　　

On November 16, 2014, TVA members had an adventure with the

children from a child welfare home at Vanguard Supermarket in

Longgang District, Shenzhen. Forming families with the children in

the one-to-one way, the volunteers offered their love and support in

a special way.

Guided by the volunteers, the children carefully observed the

commodities in the supermarket with great interest and passion.

From the volunteers, the children learned that the commodities

were placed according to certain orders, each commodity had a tag,

everything in the supermarket must be paid before being taken out,

customers must wait in line to pay, and so on. At last, the children

shopped independently with the help of the volunteers. During the

process, those children learned how to use courtesy expressions in

communication.

The day passed quickly. Before leaving, the volunteers received

beautiful pendants from those lovely children. They were small, but

were filled with the gratitude of the children. From the smiles and

the eyes kindled by happiness of the children, they understood that

happiness is not just about being loved and cared, actually, it's more

about loving and caring others. Through this activity, we offered our

love and care, which, in turn, improve our CSR image.

My heart was warm

From TVA member Zeng Xiaohua

I feel honored that I had the opportunity to visit those seniors on behalf of

TVA. After getting close to them, I realized that they didn't live happily as

we thought. I felt what they really needed are love and care.

I remembered that an old woman sitting by me said a lot with Cantonese.

I couldn't understand her. I just looked at eyes, smiling. From her eyes,

I can see that she really wanted to find someone to talk. We prepared

fruits and a magic show, and improvised a musical show for them. They

were happy, and I felt that my heart was warm.

For the Partners

For the Community

For the Employees

For the Environment

For The Shareholders

For the Government

About the Company

82

Shanghai Tianma—Donation to Xiedui Village　　

Xiedui Village in Xiexiong Township, Dingqing County, Changdu

Prefecture, Tibet Autonomous Region is a remote village 32 km away

from the township government. Standing 4,200 m above sea level,

this little village had 986 people from 141 families. Limited by the poor

traffic and communication conditions, people there seldom touch the

outside world. When winter comes, the village will be inaccessible

due to heavy snow, and villagers can only get warm and cook with

cow dung. Lacking labor and threatened by Kaschin-Beck disease, a

popular disease there, the village is very poor.

To help the villagers, Shanghai Tianma solicited donations from

employees and their families, calling them to donate cloth, toys and

school supplies that they didn't need. The donation site witnessed

many touching moments. A five-year girl put her favorite toys into the

collection box; some people forgetting preparing donations hurried

to dormitories to get what they had; and a little girl said to her mother

that she wished that the children there can live healthy and happily as

her.

During the process of donation, we learned how to love, and what's

more, we taught our later generations the significance of love. This

activity is a demonstration of Tianma's corporate value of "Win-win",

and also the CSR of Tianma.

Love is a simple gesture　　

　　

　　　　From TVA member Huo Sitao

The donation was very successful. They did much more than

we expected. As a volunteer of the activity, I was very moved,

and I deeply felt the power of love.

Even in today's China where the economy booms, there are

still people living in poverty, and they need the care and help of

the society. To help this group of people, the fifth Party branch

of Tianma organized the donation, so that Tianma people can

send their love and care to the primary school students in

Xiedui Village. This activity was held not only to pass our love,

but also to encourage the children that although life is hard,

they are still loved and helped by many people.

Love is a simple gesture. I hope that it's just a start. Living

under the same sky and on the same land, we can do more for

them, to give them strength and hope, helping them live happily

and healthy.

Serve the community

83

Wuhan Tianma--Student grant project

To actively give back to the society, send care and love, offer help

to the disadvantaged, and fulfill CSR, the Party committee of Wuhan

Tianma conducted a student grant project. Through one-to-one

assistance, three poor students in Wuxue City, Hubei received the

grant until they graduate from the high school. The basic information

of the three students is as follows:

Tang XX, male, 16 years old, is an excellent high school junior of

Wuhan Wuxue Middle School. The salary of his father who works

outside is the only economic income of this poor family, and none of

the family members is covered by the subsistence allowance or any

other welfare.

Mei XX, male, 18 years old, is a high school senior acting as the

Secretary of the Youth League Committee of his class. His father,

a farmer, suffers from eye disease. His mother suffers from aplstic

anemia. Due to the repeated relapse of the disease, she visited

many hospitals like Wuhan Center South Hospital, but still hasn't fully

recovered. The high medical expenditure is a huge burden for this

poor family.

Wu X, male, 18, is a high school senior. Ranking No. 1 in his class,

Wu acts as the Monitor on Duty and also the Representative of

Physics. His father has been suffering from hepatitis B and stomach

trouble for many years, but still works in a chemical factory to support

the family. His mother is a housewife, staying at home to take care of

Wu and his younger brother. What makes the condition of the family

worse is that Wu has been diagnosed with cyst of jaw, and a lot of

money has been used on it. Osteotomy is possibly needed in the

future.

Besides, Wuhan Tianma Party committee also called other Party

members to help these students economically and psychologically,

making them feel warmer from the society, have the confidence to

overcome difficulties, and be a useful person in the future.

Shanghai AViC optoelectronics—Voluntary activity at the Former Residence of Chen yun

On November 29, 2014, Shanghai AVIC Optoelectronics organized

employees to visit the Former Residence of Chen Yun at Liantang,

Qingpu District, Shanghai and Qingpu Revolution History Memorial

Hall, and conducted a voluntary activity.

The employees first visited the Former Residence of Chen Yun.

In the process, they deeply felt Chen Yun's spirit of "A man must

have his goals, and then he fights with a group of people with the

same goals", and thus had a better understanding of Tianma's core

values of "Passion, Efficiency and Win-win". After the visit, under

the arrangement of the volunteers at the residence, the employees

cleaned part of the residence by wiping furniture, wiping windows,

sweeping the floor, and collecting litters. This voluntary activity helped

the employees understand Chen Yun's spirit of "persistence and

struggle".

Voluntary service makes me happy　　

　　

　　From TVA member Zhao Shuohua

Chen Yun was a great revolutionist, a politician, and one of

the main leaders of the New China. He was also one of the

founders of the China's socialist economic development cause.

On November 29, 2014, we visited the Former Residence of

Chen Yun. Despite of the drizzle, we visited the residence in

high spirits, having a close understanding of the great man's

life. After the visit, we cleaned the exhibition hall and the

backyard garden. The activity made me feel the happiness

of voluntary service, and also inspired me to contribute more

to corporate development, and to the socialist economic

development.

For the Partners

For the Community

For the Employees

For the Environment

For The Shareholders

For the Government

About the Company

84

Shanghai AViC optoelectronics—huihong Village Assistance Program　　

Huihong Village Assistance Program is always a focus of Shanghai AVIC Optoelectronics. To

make sure the progress of the program, in 2014, the company developed detailed assistance

plan which covered five items, namely, a mutual visit, a Party seminar, a donation, an

employment training exercise, and a student grant.

In January 2014, a team headed by Party secretary Li Li visited the impoverished families

and the villagers suffering from serious illness in the village, and offered them some financial

support. During the process, they chatted with the villagers, asking them their employment and

economic conditions, the education of their children, and their difficulties and problems that

need to be solved by the local village Party committee. They also encouraged the villagers to

face life with confidence and a positive attitude.

In the four years since 2010, Shanghai AVIC Optoelectronics visited the needy families in the

village everyone, helping them solve practical problems, and making them feel the warmth and

care of the society. This activity is a good demonstration of Tianma's CSR image.

Shanghai AViC optoelectronics—The 7th"To Walk, To Love" urban Charity hiking

Duxia Temple, located at the hillside of Yazhuokawalarong Mountain

in Zhaba, Daofu County, Sichuan Province, has a history of more

than 500 years. Since 2009, the temple has adopted over 150

Tibetan children. Living in poverty, these children cannot get access

to normal education, and Duxia Temple thus became the school for

them to learn natural and social knowledge, and the home to be fed

and sheltered. However, as the coming of more and more children,

the temple faces increasing economic burden, and sometime even

cannot make sure the food supply of the children.

To help these children, the "Children from the Snowy Land" team of

Shanghai "To Walk, To Love" Charity Development Center held the

7th"To Walk, To Love" Charity Hiking on Chongming Island, Shanghai

on November 8, 2014. With the slogan of "I walk one km, you donate

one Yuan", the organizer called the society to walk for the pass of

love. Hearing the news, many employees of Tianma joined the 30 km

hiking, hoping to help the children with their efforts.

In the process of hiking, the love of the society was passed to children

in Duxia Temple, helping them

grow in the world of love.

Love makes the world better

　　TVA member Song Liangliang

　　

It was November 8, 2014. When I was reading the messages

from my Wechat friends in my morning drowsiness, I was

attracted by a message called "To Walk, To Love". A sense

of shame awakened me completely, because I realized that

when I was still dreaming, many of my friends have arrived

at the beautiful Chongming Island to participate in the 7th"To

Walk, To Love" Charity Hiking, for the purpose of funding for

the children in Duxia Temple. I was moved by their kindness,

and I believe that my other colleagues had the same feeling.

It's heard that they spent 5 and a half hours to finish the 30 km

hiking, and a lot of money was raised to help the children in

Duxia Temple.

Although the hiking is over, the transfer of love will never stop.

Like one song says, "Love makes the world better."

Serve the community

85

Note：" ● ": full disclosure; " ○ ": UndisclosedStandard disclosure (Part i) general Standard Disclosure

APPEnDiX

　G4 indicators Index Disclosure degree Remarks

1.

Strategy & analysis

G4-1Provide a statement from the most senior decision-maker of the organization about the relevance of sustainability to the organization and the organization's strategy for addressing sustainability.

P4、P5、P21、P40 ●

G4-2 Provide a description of key impacts, risks, and opportunities. - ○

2.

organizational Profile

G4-3 Report the name of the organization P8 ●See theannual report for details

G4-4 Report the primary brands, products, and/or services. P8 ●See the annual report for details

G4-5 Report the location of the organization's headquarters. P8 ●See the annual report for details

G4-6Report 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.

P10、P11 ●See the annual report for details

G4-7 Report the nature of ownership and legal form. P8 ●

G4-8Report the markets served (including geographic breakdown, sectors served,and types of customer and /beneficiaries).

P8、P39、P74 ●

See the annual report for details

G4-9 Report the scale of the organization. P8 ●G4-10 Report the total number of employees by employment contract and gender P58 ●

G4-11Report the percentage of total employees covered by collective bargaining agreements.

P59 ●

G4-12 Describe the organization's supply chain. P72、P73 ●

G4-13Report any significant changes during the reporting period Regarding the organization's size, structure, ownership,or its supply chain.

P41、P72、P73 ●

G4-14Report whether and how the precautionary approach or principle is addressed by the organization.

P70 ●

G4-15List externally developed economic, environmental, and social charters, principles, or other initiatives to which the organization subscribes or which it endorses.

P89 ●

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;·Provides substantive funding beyond routine membership dues; ·Views membership as strategic. This refers primarily to memberships maintained at kept in the name of the organization level..

P89 ●

3.

identified Material

Aspects and Boundaries

G4-17

List all entities included in the oganization's consolidated financial statements or equivalent documents.Report whether any entity included in the organization's consolidated financial statements or equivalent documents is not covered by the report.

P8 ●

G4-18 Explain the process for defining the report content and the Aspect Boundaries.Explain how the organization has implemented the Reporting Principles for Defining Report Cotent.

P20、P21 ●

G4-19 List all the material Aspects identified in the process for defining report content.

P20、P21 ●

G4-20For each material Aspect,report the Aspect Boundary within the organization.

P23 ●

G4-21 For each material Aspect, report the Aspect Boundary outside the organization.

P23 ●

G4-22 Report the effect of any restatements of information provided in previous reports, and the reasons for such restatements.

P2 ●

G4-23 Report significant changes from previous reporting periods in the Scope and Aspect Boundaries.

P22 ●

gRi guideline

86

　G4 indicators Index Disclosure degree Remarks

4. Stakeholder Engagement

G4-24 Provide a list of stakeholder groups engaged by the organization. P20 ●See the annual report for details

G4-25Report the basis for identification and selection of stakeholders with whom to engage.

P20 ●See the annual report for details

G4-26

Report the organization's approaches 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.

P20 ●

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 of the topics and concerns.

P21 ●

5.

Report Profile

G4-28 Reporting period (such as fisca or calendar year) for information provided. P2 ●G4-29 Date of most recent previous report (if any). P2 ●G4-30 Reporting cycle (such as annual, biennial, etc.) P2 ●G4-31 Provide the contact point for questions regarding the report or its contents. P2 ●G4-32 Report the "in accordance"option the organizaton has chosen. P2 ●

G4-33 Report the organization's policy and current practice with regard to seeking external assurance for the report.

P2 ●

6.

governance

G4-34 Report the governance structure of the organization, including committees under of the highest governance body.Identify any committees responsible for decision-making on economic,environmental and social impacts.

P15 ●

G4-35 Report the process for delegating authority for economic,environmental and social topic from the highest governance body to senior executives and other employees.

- ○

G4-36 Report whether the organization has appointed an executive-level position with responsibility for economic, environmental, and social topics and whether post holders report directly to the highest governance body.

- ○

G4-37

Report process for consultation between stakeholders and the highest governance body on economic, environmental, and social topics. If consultation is delegated, describe to whom and any feedback processes to the highest governance body.

- ○

G4-38 Report the composition of the highest governance body and its committees. - ○

G4-39 Report whether the Chair of the highest governance body is also an executive officer. (and, If so, his/her function within the organization's management and the reasons of this arrangement).

- ○

G4-40 Report the nomination and selection process for the highest governance body and its committees and the criteria used for nominating and selecting highest governance body members.

- ○

G4-41 Report processes for the highest governance body to ensure conflicts of interest are avoided and managed.

- ○

G4-42

Report the highest governance body's and senior executives'roles in the development, approval, and updating of organization's purpose, value or mission statements, strategies, policies, and goals related to economic, environmental and social impacts.

- ○

G4-43 Report the measures taken to develop and enhance the highest governance body's collective knowledge of economic, environmental and social topics.

- ○

G4-44

Report the processes for evaluating of the highest governance body's performance with respect to governance of economic, environmental and social topics.Report whether such evaluation is independent or not, and its frequency. Report whether such evaluation is a self-assessment; Report actions taken in response to evaluation of the highest governance with respect to governance of economic, environmental and social topics,including,as a minimum,changes in membership and organizational practice.

- ○

G4-45

Report the highest governance body's role in the identification and management of economic, environmental and social impacts, risks, and opportunities, include the highest governance body's role in the implementation of due diligence processes.Report whether stakeholder consultation is used to support the highest governance body's identification and management of economic, environmental and social impacts, risks and opportunities.

- ○

87

　G4 indicators Index Disclosure degree Remarks

6.

governance

G4-46 Report the highest governance body's role in reviewing the effectiveness of the organization's risk management processes for economic, environmental and social topics.

- ○

G4-47 Report the frequency of highest governance body's review of economic, environmental and social impacts, risks, and opportunities.

- ○

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.

- ○

G4-49 Report the process for communicating critical concerns to the highest governance body.

- ○

G4-50 Report the nature and total number of critical concerns that were communicated to the highest governance body and the mechanism(s) used to address and resolve them.

- ○

G4-51

Report the remuneration policies of the highest governance body and the senior executives.Report how performance criteria in the remuneration policy to the highest governance body's and senior executives'economic,environmental and social objectives.

- ○

G4-52 Report the process for determining remuneration. - ○

G4-53 Report how stakeholders'views are sought and taken into account regarding remuneration,including the results of votes on remuneration policies and proposals, if applicable.

- ○

G4-54

Report the ratio of the annual total remuneration for the organization's highest-paid individual in each country of significant operations to the median annual total remuneration for all employees (excluding the highest-paid individual)in the same country.

- ○

G4-55

Report the ratio of percentage increase in annual total remuneration for the organization's highest-paid individual in each country of significant to the median percentage increase in annual total remuneration for all employees(excluding the highest-paid individual)in the same country.

- ○

G4-56Describe the organization's values, principles, standards and norms of behavior such as codes of conduct and codes of ethics.

P28, P8 ●

88

Category Management approach and indicators Page

Economic Performance

Management approach P38

G4-EC1 Direct economic value generated and distributed by the organization P39

G4-EC2 Financial implications and other risks and opportunities for the organization’s activities due to climate change

－

G4-EC3 Coverage of the organization's defined benefit plan obligations P67

G4-EC4 Financial assistance received from government -

G4-EC5 Ratios of standard entry level wage by gender compared to local minimum wage at significant locations of operation

-

G4-EC6 Proportion of senior management hired from the local community at significant locations of operation

-

G4-EC7 Development and impact of infrastructure investments and services supported -

G4-EC8 Significant indirect economic impacts, including the extent of impacts -

G4-EC9 Proportion of spending on local suppliers at significant locations of operation -

Management approach P46

Environmental Performance

G4-EN1 Materials used by weight or volume -

G4-EN2 Percentage of materials used that are recycled input materials -

G4-EN3 Energy consumption within the organization -

G4-EN4 Energy consumption outside of the organization -

G4-EN5 Energy intensity -

G4-EN6 Reduction of energy consumption -

G4-EN7 Reductions in energy requirements of products and services -

G4-EN8 Total water withdrawal by source -

G4-EN9 Water sources significantly affected by withdrawal of water -

G4-EN10 Percentage and total volume of water recycled and reused -

G4-EN11 Operational sites owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas

-

G4-EN12 Description of significant impacts of activities, products, and services on biodiversity in protected areas and areas of high biodiversity value outside protected areas

-

G4-EN13 Habitats protected or restored -

G4-EN14 Total 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) emissions (Scope 1) -

G4-EN16 Energy indirect greenhouse gas (GHG) emissions (Scope 2) -

G4-EN17 Other indirect greenhouse gas (GHG) emissions (Scope 3) -

G4-EN18 Greenhouse gas (GHG) emissions intensity -

G4-EN19 Reduction of greenhouse gas (GHG) emissions -

G4-EN20 Emissions of ozone-depleting substances (ODS) -

G4-EN21 NOx,SOx,and other significant air emissions -

G4-EN22 Total water discharge by quality and destination -

G4-EN23 Total weight of waste by type and disposal method -

G4-EN24 Total number and volume of significant spills P47

G4-EN25 Weight of transported, imported, exported, or treated waste deemed hazardous under the terms of the Basel Convention Annex I, II, III, and VIII, and percentage of transported waste shipped internationally

-

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

-

Standard Disclosures (Part ii): Specific Standard Disclosures

附录

89

Category Management approach and indicators Page

Environmental Performance

G4-EN27 Extent of impact mitigation of environmental impacts of products and services -

G4-EN28 Percentage of products sold and their packaging materials that are reclaimed by category -

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

P47

G4-EN30 Significant environmental impacts of transporting products and other goods and materials for the organization's operations, and transporting members of the workforce

P73

G4-EN31 Total environmental protection expenditures and investments by type P46

G4-EN32 Percentage of new suppliers that were screened using environmental criteria P72

G4-EN33 Significant actual and potential negative environmental impacts in the supply chain and actions taken

P72

G4-EN34 Number of grievances ab out environmental impacts filed, addressed, and resolved through formal grievance mechanisms

P47

Social Performance

–

Labor Practices and Decent Work

Management approach P58、P66、P67

G4-LA1 Total number and rates of new employee hires and employee turnover by age group, gender and region

-

G4-LA2 Benefits provided to full-time employees that are not provided to temporary or part-time employees, by significant location of operation

P67

G4-LA3 Return to work and retention rates after parental leave, by gender -

G4-LA4 Minimum notice periods regarding operational changes, including whether these are specified in collective agreements

-

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

P46

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

-

G4-LA7 Workers with high incidence or high risk of diseases related to their occupation P48

G4-LA8 Health and safety topics covered in formal agreements with trade unions -

G4-LA9 Average hours of training per year per employee by gender, and by employee category -

G4-LA10 Programs for skills management and lifelong learning that support the continued employability of employees and assist them in managing career endings

P65、P66

G4-LA11 Percentage of employees receiving regular performance and career development reviews, by gender and by employee category

P67

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

-

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 P72

G4-LA15 Significant actual and potential negative impacts for labor practices in the supply chain and actions taken

P72

G4-LA16 Number of grievances about labor practices filed, addressed, and resolved through formal grievance mechanisms

-

Social Performance

–

human Rights

Management approach P58

G4-HR1 Total number and percentage of significant investment agreements and contracts that include human rights clauses or that underwent human rights screening

-

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

-

G4-HR3 Total number of incidents of discrimination and corrective actions taken P59

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

-

90

Category Management approach and indicators Page

Social Performanc

－

human Rights

Management approach P58

G4-HR5 Operations and suppliers identified as having significant risk for incidents of child labor, and measures taken to contribute to the effective abolition of child labor

P58、P72

G4-HR6 Operations and suppliers 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

P72

G4-HR7 Percentage of security personnel trained in the organization's human rights policies or procedures that are relevant to operations

-

G4-HR8 Total number of incidents 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

P72

G4-HR10 Percentage of new suppliers that were screened using human rights criteria P72

G4-HR11 Significant actual and potential negative human rights impacts in the supply chain and actions taken

P72

G4-HR12 Number of grievances about human rights impacts filed, addressed, and resolved through formal grievance mechanisms

-

Social Performance

－

Society

Management approach P80

G4-SO1 Percentage of operations with implemented local community engagement, impact assessments, and development programs

-

G4-SO2 Operations with significant actual and potential negative impacts on local communities -

G4-SO3 Total number and percentage of operations assessed for risks related to corruption and the significant risks identified

-

G4-SO4 Communication and training on anti-corruption policies and procedures －

G4-SO5 Confirmed incidents of corruption and actions taken -

G4-SO6 Total value of political contributions by country and recipient/beneficiary -

G4-SO7 Total number of legal actions for anti-competitive behavior, anti-trust, and monopoly practices and their outcomes

P75

G4-SO8 Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with laws and regulations

-

G4-SO9 Percentage of new suppliers that were screened using criteria for impacts on society P72

G4-SO10 Significant actual and potential negative impacts on society in the supply chain and actions taken

P72

G4-SO11 Number of grievances about impacts on society filed, addressed, and resolved through formal grievance mechanisms

-

附录

91

Category Management approach and indicators Page

Social Performance

－

Product Responsibility

Management approach P54、P55

G4-PR1 Percentage of significant product and service categories for which health and safety impacts are assessed for improvement

-

G4-PR2 Total number of incidents of non-compliance with regulations and voluntary codes concerning the health and safety impacts of products and services during their life cycle, by type of outcomes

P54、P55、P75

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

-

G4-PR4 Total number of incidents of non-compliance with regulations and voluntary codes concerning product and service information and labeling, by type of outcomes

P26、P27、P75

G4-PR5 Results of surveys measuring customer satisfaction P74

G4-PR6 Sale of banned or disputed products -

G4-PR7Total number of incidents of non-compliance with regulations and voluntary codes concerning marketing communications, including advertising, promotion, and sponsorship, by type of outcomes

P75

G4-PR8 Total number of substantiated complaints regarding breaches of customer privacy and losses of customer data

P75

G4-PR9 Monetary value of significant fines for non-compliance with laws and regulations concerning the provision and use of products and services

P75

92

Terminology Definition Location

gRi Global Reporting Initiative

About the companyg4 GRI Sustainability Reporting Guidelines 4.0

EiCC Electronic Industry Code of Conduct

iP Intellectual Property For the Government-Intellectual property (IP) protection

CRM Customer Relationship Management For the Government-Fair dealing

Ro membrane Reverse Osmosis membraneFor the Shareholders-Cost control

hMi Human Machine InterfaceFor the Shareholders-Business development

VoiP Voice over Internet Protocol

3M Minnesota Mining and ManufacturingFor the Environment-Occupational health

Bar Pressure unit, 1 Bar=100,000 Pa=10 N/square centimetersFor the Environment-Safe production

Di 水 Deionized water

For the Environment-Eco-friendly operation

CDA Compressed dry air

瘦客户机

A thin client is a small professional PC equipped with an embedded processor, a small local flash, and a lite operating system based on the PC industrial standard. Without moveable components, the thin client ensures a more reliable service environment, lower energy consumption, and a higher safety level.

TAnK The container for the storage of chemical solution

hSF Hazardous substances free

For the Environment-Hazardous substance management

XRF X Ray Fluorescence , which is used for the detection of hazardous substances like lead and cadmium.

SQE Supplier Quality Engineer

iECQ International Electrotechnical Commission Quality Assessment System for Electronic Components

hS Hazardous substances

g5.5 LTPS production line 5.5 generation low temperature poly-silicon production line

For the Partners-Technical development and innovation

12phase ASg 12-phase active matrix display

300PPi SFT 300 PPI Super-Fine TFT

FD Flexible Display

TFT-Array Thin film transistor array

on-Cell Integrated touch technique: embed the functions of the touch panel between the color filter substrate and the polarizer.

in-Cell Integrated touch technique: embed the functions of the touch panel into LCD pixels.

EMTP Electro-Magnetic Transient Program

oxide TFT Oxide thin film transistor

AMoLED Active Matrix/Organic Light Emitting Diode

5.5" FhD RgBW FHD (px 1920 × 1080 panel)

R (red ) G (green) B (blue) W (white)

CQ Customer QualityFor the Partners-Customer relations

Terminology definition

93

Federation of Shenzhen industries

Vice Chairman

China optics and optoelectronics

Manufactures Association LCD BranchVice President

Shenzhen Enterprise Confederation

Shenzhen Entrepreneur AssociationVice Chairman

Shenzhen Flat Panel Display industry Association

Vice President

Shenzhen integrity Federation

Member

national Technical Committee on Flat

Panel Display Devices of Standardization

Administration of ChinaVice Chairman

Chamber of CommerceCommon member

Shenzhen high-tech industry Association

Common member

Associations &organizations

In pursuance of the strategic goals of Tianma, and the concern of the stakeholders, we support the following associations and organizations to

launch economic, environmental and social treaties, principles or other proposals.

94

Dear readers,

Thanks for reading the 2014 CSR Report of Tianma.Your opinions and suggestions are valued and welcomed by us. Thanks for your participation.

Tianma Microelectronics Co., Ltd.

February 2015

Thanks for your support to the CSR

development of Tianma. Your letters and

calls are welcomed.

Fax: (0755) 8622 5772

Mailing address: 7/F. 64th Building, Jinlong

Industrial Zone, Majialong, Nanshan

District, Shenzhen

Email: CSR_office@tianma.cn

Tel: (0755) 8622 5773/8622 5777

Report evaluation

Balance Comparability Accuracy Timeliness Reliability Definition

About the company

For the Government

For the Shareholders

For the Environment

For the Employees

For the Partners

For the Community

Note: each indicators is scored within a scale of 1~5.

Feedback Form

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Address: 7/F. 64th Building, Jinlong Industrial Zone,

Majialong, Nanshan District, Shenzhen

Tel: (86) 755 - 8622 5773 / 8622 5777

Fax:(86) 755 - 8622 5772

Website: www.tianma.cn

Copyright © Tianma Microelectronics Co., Ltd.

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Tianma Microelectronics Co., Ltd.

DisclaimerThis document may contain predictive information, including but not limited to such information related to

finance, operation, product series and new technique. Since the uncertainties in practice may cause the

great differences between the actual results and the predictive information, this document is for reference

only, and does not constitute any offers or commitments. The company is entitled to revise the above

information without notice.