LITE-ON CSR Report...for its customers around the world. In 2017, LITE-ON continued to focus on IoT applications in cloud computing, LED lighting, auto electronics, industrial automation,

2017 LITE-ON CSR Report

Contents

1 CorporateCommitmentandStakeholdersEngagement 1.1CorporateCommitmentandCorporateSocialResponsibilityVision 8

1.2StakeholdersandMaterialIssues 13

2 CorporateGovernance 2.1CompanyOverview 25

2.2OrganizationStructureofCorporateGovernance 28

2.3CorporateRiskManagement 32

2.4Compliance,EthicsandAnti-Corruption 38

2.5InformationSecurityandPrivacyManagement 40

3 GreenProductsandValueChain 3.1GoalsandStrategiesforReducingImpactofProductsandSupplyChain 43

3.22017GreenDesignsandAchievements 43

3.3RestrictionontheUseofHazardousSubstances 46

3.4SupplyChainManagement 47

3.5CustomerServiceandSatisfaction 50

4 LITE-ONandtheEnvironment 4.1CommitmenttoEnvironmentalSustainabilityandPolicy 54

4.2ResponsestoClimateChangeandGlobalWarmingPolicy 56

4.3ReducingGreenhouseGases 57

4.4WaterResourceConservation 63

4.5MainRawMaterials 64

4.6GreenFactory 66

5 LITE-ONandEmployees 5.1EmployeePolicy 68

5.2EmployeeProfile 69

5.3EmployeeDevelopmentandTraining 77

5.4ProtectionofInterest 79

5.5EmployeeRelations 81

5.6LOHASLITE-ON 84

6 LITE-ONandSociety 6.1SocialInclusionPolicy 90

6.2MeasuringSocialImpactofProducts:SROI 91

6.3SupportingInternships 92

6.42017LITE-ONAward 93

6.5LITE-ONVolunteers 95

6.6LITE-ONCulturalFoundation 96

6.6.1CommunityAssistanceandHolisticServices 96

6.6.2TaipeiXinyiCommunityCollege 101

AboutThisReport2017LITE-ONSustainableResultsLetterfromtheChairmanandGroupCEO

235

106119122

GRIStandardsIndexISO26000IndexThirdPartyAssuranceStatement

About This Report

ReportingTimeandScopeofReportTime:FromJanuary01,2017toDecember31,2017Scope: Financialdatapresentedinthisreportreflectsperformanceoftheparentcompany

anditssubsidiaries. Fornonfinancialdata, the reportcovers thesevenbusinessgroups,namely

MobileMechanics,PortableImageDevice,PowerConversion,Storage,MechanicalCompetence,SmartLife&Applications,andOptoelectronicProductSolution.Comparingtothe financialperformance, thenonfinancialperformancedataexclude IPO/OTCsubsidiaries,SilitechandLITE-ONJapan.Unlesselsewherespecified,informationwillbedisclosedinthereport.Thereisnochangefromthe2016Reportingscope.

ReportManagementIssuespresentedinthisreporthavebeenidentifiedwithmaterialityanalysisthroughstakeholder engagementprogress, anddiscussed in "LITE-ONTechnologyCSERCommittee"meetingstoreviewandapprovethisreport.

Data calculation basis:AllfinancialfiguresinthisreportarepresentedinNewTaiwanDollars,occupationalsafetyandhealthperformancedataareusinggloballyacceptedindicators.Anyestimatesorassumptionsareelaboratedintherespectivesections.Anynewdisclosuresmadeinthisreportascomparedtothepreviousreporthavealsobeenhighlighted.

Data verificationCategory Contents Verification / CertificationEconomic Financialdata Deloitte&ToucheEnvironmental Greenhousegasemissions

(ISO14064-1)SGSTaiwanLtd.

EnvironmentalManagementInternationalStandards(ISO14001)

LITE-ON'sallmajorplantsworldwidehavebeenindividuallycertificatedby3rdpartiesHazardousSubstanceProcess

ManagementSystem(IECQQC080000)

Social Occupationalsafetymanagement(OHSAS18001)

LITE-ON'sallmajorplantsworldwidehavebeenindividuallycertificatedby3rdparties

CompilationBasisThesustainabilityissuesaswellasstrategies,goalsandpracticesofthereportaredraftedbasedonGRIStandards2016publishedbyGlobalReportingInitiativewhilerespondingtoCorporateSocialResponsibilityBestPracticePrinciplesforTWSE/GTSMListedCompanies,SustainableDevelopmentGoals(SDGs)andISO2600GuidanceonSocialResponsibility.Moreover,contentsofthisreporthavebeendiscussedandcategorizedusingAA1000APS-compliantprocedures.

ReportAssuranceAn independent thirdparty (SGSTaiwanLtd.)hasbeenengagedtoprovideassurance forAA1000AS (2008) type-2,high-levelaccountabilityandGRIStandarddisclosureinaccordancewithComprehensiveOption.AThirdPartyAttestationStatementhasbeenattachedasanappendixtothisreport.

ReleaseOverviewFirstissue:2007Currentissue:PublishedinJune2018Nextissue:ExpectedtobepublishedinJune2019Previousissue:June2017Startedfrom2008CSRReport,allreportsinChineseandEnglishversionsonanannualbasisarepostedonLITE-ONcompanywebsite:www.liteon.com/zh-tw/globalcitizenship/365

ContactinformationFeelfreetocontactusthroughthefollowingchannelsifyouhaveanyquestionsorsuggestionsconcerningthisreport:LITE-ONTechnologyCSERCommitteeOfficeAddress:No.392RuiguangRoad,NeihuDistrict,Taipei114Tel:+886-2-87982888E-mail:[email protected]

CompanywebsiteWWW.LITEON.COM

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1 2 3 4 5 6GRIStandards Index | Contents

HTTPS://WWW.LITEON.COM/ZH-TW/GLOBALCITIZENSHIP/365

http://WWW.LITEON.COM

GOLDEN AWARD

Included in theMSCI ESG Leaders Indexesfor four consecutive years

Ranked as top 5% of public companies list in the Fourth Corporate Governance

Evaluation by TWSE

A total of 16 plants have passed Product Liability Insurance AAA

Certification to date

The intensity of water consumption decreased 9.10% compared

to the based year

The intensity of waste generation decreased 6.92% compared

to the based year

Carbon Disclosure Project (CDP) Supplier Engagement Rating A-

Selected as member of "Dow Jones Sustainability Indices (DJSI)"

for seven consecutive year years

Awarded the Golden Award of "Taiwan Corporate Sustainability Report Award"

in the Electronics Sector by TAISE.

Won the "Corporate Citizen Award of "CommonWealth Magazine"

for the eleventh year in a row.

3

1 2 3 4 5 6GRI Standards Index | Contents

interns

Ranked first in the "Electronic Sector" by CommonWealth Magazine in its Top 1,000

Manufacturer Review for nine consecutive years

“2017 Mercury Lamp Sunset Project” created 2.85 times of

Social Return on Investment

The Xinyi Community College was ranked excellent by Department of Education,

Taipei City Government

A total of 128 internship jobs offered to colleague students

A total of 1,162 works participated in competition for LITE-ON Award

Recognition of partnering with Dell on Supply Chain Social & Environmental

Responsibility capability building program

Awarded the supplier award of “Grater Together” by Philips.

GOLDEN AWARD

Included in the MSCI Global Sustainability Indexes

for four consecutive years

Ranked as top 5% of public companies list in the Fourth Corporate Governance

Evaluation by TWSE

A total of 16 plants have passed Product Liability Insurance AAA

Certification to date

The intensity of water consumption decreased 9.10% compared

to the based year

The intensity of waste generation decreased 6.92% compared

to the based year

Carbon Disclosure Project (CDP) Supplier Engagement Rating A-

Selected as member of "Dow Jones Sustainability Indices (DJSI)"

for seven consecutive year years

Awarded the Golden Award of "Taiwan Corporate Sustainability Report Award"

in the Electronics Sector by TAISE.

Won the "Corporate Citizen Award of "CommonWealth Magazine"

for the eleventh year in a row.

4


Letter from the Chairman and Group CEO

DearStakeholders,Givenanindustryundergoingtransformationandthechallengesofclimatechange,LITE-ONsetsitselftorealizethevisionofsustainabilitybybeing"BestPartnerinOpto-Electronic,Eco-friendly,andIntelligentTechnologies"foritscustomersaroundtheworld.In2017,LITE-ONcontinuedtofocusonIoTapplicationsincloudcomputing,LEDlighting,autoelectronics,industrialautomation,andsmarthealthcareasitsfivekeyareasoftransformation.Inparticular,cloudapplications,LEDandoutdoorlighting,AIsmarthomesystems,andconsumerelectronicscontributedtocloseto40%oftherevenuein2017,showingtheresultsofLITE-ON'sefforttocultivatenewbusinesses,andreflecteditsdeterminationtotransformandbuildahundred-year-oldcompany.

LITE-ONbelievesthatbusinessactivitiesmustbesustainable;socialandenvironmentalsustainabilityarealsopartofcorporatesocialresponsibility.WekeepexaminingourresponsibilitiesandopportunitiesforimplementationinenvironmentalconservationandCSR.LITE-ONadoptedtheUnitedNations'sustainabledevelopmentgoals(UNSDGs)in2016,andintegratedthemwithourcorevaluesinESGpractices.Wefocusonatotalofeightsustainabilitygoalsandexamineourrolesandpotentialcontributioninsales,operation,andorganization,settingspecifictargetstoachieveSDGswiththeuseof“valuechain.”LITE-ONhasbeenlistedasaconstituentstockontheDowJonesSustainabilityIndex(DJSI)forsevenyearsinarowsince2011,andhashadaplaceontheMorganStanley(MSCI)SustainabilityReportforfouryearsinarow.

LITE-ONreformulated its lowcarbonstrategyaftertheParisAgreementtorespondtoenvironmental issuesadequately.WecommitourselvestoimplementingtheTaskForceonClimate-RelatedFinancialDisclosures(TCFD),makingclimaterelatedfinancialstatementsoneofthemeansofstakeholdercommunicationandanalyzingpotentialopportunitiesandthreatsinclimatechangeinsupportoftheCDPandtheWeMeanBusinessCoalition's“CommittoAction”initiative.Intermsofexecution,LITE-ONcontinuestodevelopgreendesign,greenfactory,andoperationalefficiency,andcoordinatespartnershipsamongclients,industryplayers(alliances),andsupplychainstodevelopefficientenergycreation,conservation,andconversionproducts,andenergymanagementsolutionsaimedatachievingmoreeffectiveenvironmentalmanagementandmeetingthechallengesofclimatechangeandtheireffects.

In2018,giventheGlobalCarbonBudget,LITE-ONstartsusingscientificandweightedmethodstocalculateandsetareasonablecarbonemissionreductiontargetforthecompany.Inaddition,LITE-ONformallysubmitssciencebasedtargets(SBTi)forcompliancereview.Themedium-andlong-termenvironmentalmanagementtargetsare:(1)areductionperunitrevenueof39.9%by2025comparedto2014;and(2)a2%(sciencebasedtarget*)increaseinenergyconversionefficiencyofhighendserverpowersupplyunitsby2023basedonproductsandtechnologiesdevelopedin2016,todemonstrateLITE-ON'ssupportfortheefforttokeepglobalwarmingunder2℃ . RaymondSoong

LITE-ONGroupChairman

5


Regardingstrategicsustainabledevelopment,LITE-ONexpandsitscorebusinessinLEDstreetlightsaroundtheglobe,andinvestsintheMercuryLampSunsetProjectinTaiwan,andhasbecomeTaiwan'slargestLEDstreetlightsupplier.Atotalofabout400,000LeotekstreetlightsilluminatethestreetsacrossTaiwanandhelplocalresidentsandpedestriansstaysafeontheroad.InadditiontoofferingcompletesmartstreetlightplanningandsolutionsthatcontributetoimprovedqualityandenergyefficiencyofstreetlightsacrossTaiwan,LITE-ONuseslocallyproducedpartsfromlocalmanufacturers,andworkswithlocalcontractorstosupportthegrowthof localsupplychain.WetookLeotekstreetlightinthe2017MercuryLampSunsetProjectandperformedTaiwan'sfirstsocialimpactassessmentonaproduct.Theanalysismeasuredthesocialreturnonmorethan20,000street lightsreplacedinClass4andClass5ruralareasinTaiwan.TheSocialValueInternationalcertifiedresultestimatedLITE-ON’scontributionatamultiplierof2.85.LITE-ONworkswithmunicipalgovernments,clients,suppliers,contractorsandotherstakeholderscloselytoachievesustainabilityandinitiateachainofpositivechangesinthesociety.

Wecontinue tomakestrategicplans forcommunity involvementandengage localcommunities, charityorganizations,and industry/government/academiastakeholders.Wedevelopcollaborativerelationshipsandmakelong-termplanscombiningourcorecompetenciesandinvestment.Weaimtocontributetoprogress insociety,createsocialvalue,enhanceourcorporateimageandincreaseourinfluence,andtherebyboostemployeeloyaltyandwintrustofourstakeholders.Inordertoachieveourvisionofasocietyfullofmulti-culture,education,creativity,andenvironmentalsustainability,LITE-ONhasbeenallocatingresourcestoprojectssuchasCommunityAssistance,thecommunitycollege,andtheLITE-ONAwardforaround20years.Wealsocampaignforotherprojectssuchaseducationalsupport,corporatevolunteering,andsustainabletechproductsaspartofourefforttosupportandresolveissuesincludingimmigrantsandsocialinclusion,teeneducation,agedpopulation,shortageoflifetimelearningresources,shortageoftechdesignandinnovationtalent,andenvironmentalconservation.Itisestimatedthatcloseto34,000peoplebenefiteddirectlyfromLITE-ON'scharityworkin2017.

Lookingforward,LITE-ONwillcontinueenhancingitscompetitivenessandfollowingitsentrepreneurialapproachtotransformandstriveforhealthygrowthandexcellentbusinessresultsunderOneLITE-ON.Givenitscommitmenttosustainability,LITE-ONwillkeepworkingtogetherwithemployees,customers,suppliers,shareholders,governmentagenciesandcompetentauthorities,NGOs,researchinstitutions,communities,mediaandotherstakeholderstocreateeconomic,environmental,andsocialsustainabilityvalues.

RaymondSoong WarrenChenLITE-ONGroupCEOLITE-ONGroupChairman LITE-ONGroupCEO

6


To reach the expectations from stakeholders, LITE-ON Corporate Social Environmental Responsibility Committee practices to all commitments including labor relations, employee care, corporate governance, environmental protection

and social welfare, etc., while focusing on government regulation compliance, working interest protection, occupational safety and health improvement, green

product development, and environmental impact mitigation

1.1 Corporate Commitment and Corporate Social Responsibility (CSR) Vision

Tofulfillthevisionofbeing"thebestpartnerinoptoelectronics,energyconservationandsmarttechnologies",LITE-ONChairmanRaymondSoongandtheexecutiveofficersledthewayandcreatedtheCorporateSocialandEnvironmentResponsibility(CSER)Committee.ThecommitteeoverseesateamresponsibleforpromotingcorporatesocialresponsibilityandmakingitpartofLITE-ON'scorevaluesandcorporateculture.Itisalsotheteam'smissiontoapplystrengthsinexecution,innovation,andintegritytodevelopapathtosustainability.LITE-ON,initspursuitofrevenueandprofitgrowth,neverstraysfromitsCSRcommitments,which inturnprovideconstant fuel forbusinessmomentumandkeepthecompanycompetitive.Furthermore,LITE-ONisdedicatedtoinnovationandconstantimprovementaimedatdevelopinghighaddedvalueproductsandmaximizingvalueandbenefitsforLITE-ONemployeesandshareholdersaswellasthesocietyasawhole.In2017,LITE-ONmadeadjustmentstotheexistingcommitteestoreflectactualperformance.Inaddition,theboardofdirectorsapprovedanamendmentoftheLITE-ONCorporateSocialResponsibilityBestPracticePrinciples,whichwasintendedtoensureLITE-ONfulfilleditscorporatesocialresponsibilitythrougheffectiveimplementationofcorporategovernance,developmentofasustainableenvironment,ongoingsupportofpublicinterest,andimprovedinformationdisclosure.

TheCSERCommitteewasestablishedforthepurposeofrealizingLITE-ON'svarioussocialpledges,includingemployer-employeerelations,employeecare,corporategovernance,environmentalprotection,andpubliccharityworks.TheCSERCommitteeplacesagreatemphasisoncomplyingwithgovernmentlawsandregulations,protectingworkrights,improvingworkplacehealthandsafety,developinggreenproducts,reducingdamagetotheenvironment,andupholdingsocialandenvironmentalresponsibilitiesinordertomeetstakeholders'expectationsineconomic,environmental,andsocialaspectsofthebusiness.TheCSERCommitteeissupervisedbytheboardofdirectors. It ischairedbyChairmanRaymondSoong.CEOWarrenChenistheCommitteeHeadandleadsLITE-ON'sexecutivemanagementinimplementingmanagementpractices.AnnualCSRtargetsareset intermsoftheeconomic,environmental,andsocialaspectsofthebusiness.ProgressismonitoredregularlysotoensureLITE-ON'scontinuingadvancementtowardsustainabilityandfulfillmentofitsshort-andmedium-termgoals. Inaddition,updatesandresultsarereportedtotheboardofdirectorsasappropriateeveryyear.

Management Board

CSER Secretary

RBAEnforcement

CommunityInvolvement

Supply Chain Management

GreenDesign

EnvironmentSustainability

PublicRelations

Cultural Foundation

RBA Comply & Local Compliance

Labor Safety & Health

Employee Relations

LTC Volunteer Training Program

LTC Volunteer Opportunities &

Involvement

Conduct Supplier Chain Audit

Supply Chain Risk Management

HSF Compliance

Green Products Excellence &

Green Design Technology

Matchmaking

Eco Friendly Product

Climate Change Strategy

Risk & Opportunity

GHG Emission Management

and Inventory

Green Factory and Cleaner

Production

CSER Reporting

CSER:CorporateSocialandEnvironmentalResponsibility|RBA:ResponsibleBusinessAlliance|HSF:HazardousSubstanceFree

8

GRIStandards Index | Contents。CorporateCommitmentandStakeholdersEngagement 1 2 3 4 5 6

LITE-ONtakesabusiness-drivenapproachtowardsCSER,andplansCSEReffortsasinvestmentswhilemeasuringreturnsbasedonthethreelayersofearningproducedtherefrom.TheLondonBenchmarkGroup(LBG)modelisananalyticaltoolusedinLITE-ON.ItfocusesonthethreeaspectsofanyCSERinvestment,whichareinput,output,andlastingimpact.Bysystematicallyplanningandexecutingourstrategies,weareabletoensurethesuccessand improvementofourCSERefforts.Inresponsetochanges intheenvironmentandtheconcernsofstakeholders,LITE-ONhasdevelopedsixmainCSERprinciplesbasedonthecompany'scapacityandincorporatedthemintodailyoperationstoeffectivelyfacilitateadoptionofCSERpractices.Thesesixprinciplesare:RBAmanagement,socialengagement,supplychainmanagement,greendesign,environmentalsustainability,andinformationdisclosureandaddedvalue.

Strengthening existing CSR projects

Introducing new sustainability tools

Communicating and promoting sustainability in/outside LITE-ON

Increase depth and intensity of existing CSR projects

Leading companies in and outside Taiwan have started implementing new assessment and management tools as new trends of sustainability are formed every day.

It takes a united workforce to achieve sustainability and then spread the results to the rest of the world. Inquiries of external stakeholders must be handled as appropriate.

LED lighting

industrial automation

cloud computing

auto electronics

biomedicine

LITE-ON 5 IOT applications

Best Partner in Opto-Electronic, Eco-Friendly and

Intelligent Technologies

9


1.1.2 Sustainability Strategy and Blueprint LITE-ON,aspartofitsvisionofbeing"thebestpartnerinoptoelectronics,energyconservationandsmarttechnologies",choosessustainablegovernance,toleranceandinnovation,andenvironmentalsustainabilityasitsstrategicgoals.ThecompanybuildsontheUnitedNationsSustainableDevelopmentGoals(SDGs)andapplies itscorevaluestoensureeffectiveimplementationofcorporategovernance,developmentofasustainableenvironment,andongoingsupportofpublic interest.LITE-ONhasformulated8sustainabilitytargetsandidentified22materialissues,allofwhicharedisclosedherein.

LITE-ONsupportsCSRinclimatechangewithactionandfullparticipation.Ithassetmedium-andlong-termcarbonreductiontargetsaccordingtotheWeMeanBusinessclimatechangedisclosure,carbonreductionpolicy,andvoluntarycarbonreductioncommitment.InsupportofthefinalTaskForceonClimate-RelatedFinancialDisclosures(TCFD)recommendationsonclimatechangerelatedfinancialdisclosure,LITE-ONincludesclimaterelatedfinancialreportsinstakeholdercommunications.LITE-ONalsoworksonadaptingtoandmediatingtheeffectsofgreenhousegasesandperformsanalysisandmanagementofinternalenergyconsumptiononanongoingbasisasaproactiveapproachtoreducinggreenhousegasemission.

LITE-ONcomplieswithinternationallyrecognizedhumanrightsstandards,includingUniversalDeclarationofHumanRights(UDHR)andInternationalLabourOrganization(ILO)andUNGuidingPrinciplesofBusinessandHumanRights.LITE-ONfollowstheaforesaidstandards,localregulationswhereitconductsbusinessactivities,SA8000(SocialAccountability8000),andResponsibleBusinessAlliance(RBA)andestablishesitslaborstandards,LITE-ONHumanRightsPolicyandLITE-ONCSERCodeofConduct(COC).

TheLITE-ONHumanRightsPolicyandCSERCOCapplytoLITE-ONGroupanditssubsidiaries(ofwhichLITE-ONisaprincipalshareholderandinvolvedinmanagement),supplychain,contractorsandsubcontractors.LITE-ONholdsitssupplierstothesamestandardsandexpectsLITE-ONsupplierstocommittocompliancewithLITE-ONHumanRightsPolicyandCOC.ThescopeofCSERCOCencompassesallactivities,includingtrade,investment,subcontracting,supply,businessdevelopment,andotherbusinessactivitiesandemploymentrelationships.TheCSERCOCdescribesacommitmenttoissuessuchasbusinessethics,employer-employeerelations,environmentalprotection,healthandsafety,managementsystems,corporategovernance,andsocialengagement.Thecompany'sperformanceinthisregardhasbeenattestedtobyinternalaswellasexternalinspectors.FormoredetailsontheCSERCOC,pleasevisitLITE-ON'swebsite:https://www.liteon.com/en-us/globalcitizenship/287

Sustainable Governance

Sustainable Enviro

nmen

t

Inclusive Innovation

Lifelong LearningXinyi community college

Employee training and development

Talent Development

Industry-academia-research collaboration

Talent Development

Clean EnergyRenew

able energy promotion

Renewable e nergy usages

Resp

onsib

le P

rodu

ctio

nGr

een

oper

atio

n

Sust

aina

ble

supp

ly ch

ain

man

agem

ent

Climate Acti

ons

Energy saving and carbon re

ductio

n

Climate change mitig

ation an

d adap

tion

Socia

l Inclusive Policy

Social p

articipatio

n

Affor

dable te

chnology product

Sustainable Product Strategy

Smart home products

Smart city application products

Product StrategySmart strategy

Renewable energy usages

Eco-Friendly Opto-Electronics

Best

Par

tner

Intelligent Technologies

10


https://www.liteon.com/en-us/globalcitizenship/287

1.1.3 LITE-ON'S Major Contribution to United Nations Sustainable Development Goals (SDGs)SDGs Targets Report Sections page

Endpovertyinallitsformseverywhere

1.3 Implementnationallyappropriatesocialprotectionsystemsandmeasures forall, includingfloors,andby2030achievesubstantialcoverageofthepoorandthevulnerable

1.4 By2030,ensurethatallmenandwomen,inparticularthepoorandthevulnerable,haveequalrightstoeconomicresources,aswellasaccesstobasicservices,ownershipandcontroloverlandandotherformsofproperty,inheritance,naturalresources,appropriatenewtechnologyandfinancialservices,includingmicrofinance

1.5 By2030,buildtheresilienceofthepoorandthoseinvulnerablesituationsandreducetheirexposureandvulnerabilitytoclimate-relatedextremeeventsandothereconomic,socialandenvironmentalshocksanddisasters

3.2.1 InnovativeApplicationsofSmartandEnergySavingProducts

4.1 CommitmenttoEnvironmentalSustainabilityandPolicy

4.2 ResponsestoClimateChangeandGlobalWarmingPolicy

6.1 SocialInclusionPolicy6.6.1 CommunityAssistanceandHolistic

Services

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Ensureinclusiveandequitablequalityeducationandpromotelifelonglearningopportunitiesforall

4.3 By2030,ensureequalaccessforallwomenandmentoaffordableandqualitytechnical,vocationalandtertiaryeducation,includinguniversity

4.5 By2030,eliminategenderdisparitiesineducationandensureequalaccesstoalllevelsofeducationandvocationaltrainingforthevulnerable,includingpersonswithdisabilities,indigenouspeoplesandchildreninvulnerablesituations

4.7 By2030,ensurethatall learnersacquiretheknowledgeandskillsneededtopromotesustainabledevelopment, including,amongothers,througheducationforsustainabledevelopmentandsustainable lifestyles,humanrights,genderequality,promotionofacultureofpeaceandnon-violence,globalcitizenshipandappreciationofculturaldiversityandofculture'scontributiontosustainabledevelopment

4.a. Buildandupgradeeducationfacilitiesthatarechild,disabilityandgendersensitiveandprovidesafe,non-violent,inclusiveandeffectivelearningenvironmentsforall

5.3 EmployeeDevelopmentandTraining

6.1 SocialInclusionPolicy6.6.2 TaipeiXinyiCommunityCollege6.3 SupportingInternships6.4 0172017LITE-ONAward6.6.1 CommunityAssistanceandHolistic

Services

77

90101929396

Ensureaccesstoaffordable,reliable,sustainableandmodernenergyforall

7.2 By2030,increasesubstantiallytheshareofrenewableenergyintheglobalenergymix7.3 By2030,doubletheglobalrateofimprovementinenergyefficiency7.a. By2030,enhanceinternationalcooperationtofacilitateaccesstocleanenergyresearchandtechnology,includingrenewable

energy,energyefficiencyandadvancedandcleanerfossil-fueltechnology,andpromoteinvestmentinenergyinfrastructureandcleanenergytechnology

3.2.1 InnovativeApplicationsofSmartandEnergySavingProducts



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54

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Promotesustained,inclusiveandsustainableeconomicgrowth,fullandproductiveemploymentanddecentworkforall

8.2 Achievehigherlevelsofeconomicproductivitythroughdiversification,technologicalupgradingandinnovation,includingthroughafocusonhigh-valueaddedandlabour-intensivesectors

8.3 Promotedevelopment-orientedpoliciesthatsupportproductiveactivities,decentjobcreation,entrepreneurship,creativityandinnovation,andencouragetheformalizationandgrowthofmicro-,small-andmedium-sizedenterprises,includingthroughaccesstofinancialservices

8.4 Improveprogressively,through2030,globalresourceefficiencyinconsumptionandproductionandendeavourtodecoupleeconomicgrowthfromenvironmentaldegradation,inaccordancewiththe10-yearframeworkofprogrammesonsustainableconsumptionandproduction,withdevelopedcountriestakingthelead

8.5 By2030,achievefullandproductiveemploymentanddecentworkforallwomenandmen, includingforyoungpeopleandpersonswithdisabilities,andequalpayforworkofequalvalue

8.6 By2020,substantiallyreducetheproportionofyouthnotinemployment,educationortraining8.7 Takeimmediateandeffectivemeasurestoeradicateforcedlabour,endmodernslaveryandhumantraffickingandsecurethe

prohibitionandeliminationoftheworstformsofchildlabour,includingrecruitmentanduseofchildsoldiers,andby2025endchildlabourinallitsforms

8.8 Protectlabourrightsandpromotesafeandsecureworkingenvironmentsforallworkers,includingmigrantworkers,inparticularwomenmigrants,andthoseinprecariousemployment

8.b. By2020,developandoperationalizeaglobalstrategy foryouthemploymentand implementtheGlobalJobsPactof theInternationalLabourOrganization

2.1 CompanyOverview3.4 SupplyChainManagement4.6 GreenFactory5.1 EmployeePolicy5.2.3 PersonnelRecruitment5.2.4 RBA(formerlyEICC)CodeofConduct

Committee5.3 EmployeeDevelopmentandTraining5.4 ProtectionofInterest

254766687576

7779

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SDGs Targets Report Sections page

Buildresilientinfrastructure,promoteinclusiveandsustainableindustrializationandfosterinnovation

9.1 Developquality,reliable,sustainableandresilientinfrastructure,includingregionalandtransborderinfrastructure,tosupporteconomicdevelopmentandhumanwell-being,withafocusonaffordableandequitableaccessforall

9.4 By2030,upgradeinfrastructureandretrofit industriestomakethemsustainable,withincreasedresource-useefficiencyandgreateradoptionofcleanandenvironmentallysoundtechnologiesandindustrialprocesses,withallcountriestakingactioninaccordancewiththeirrespectivecapabilities

9.5 Enhancescientificresearch,upgradethetechnologicalcapabilitiesofindustrialsectorsinallcountries,inparticulardevelopingcountries, including,by2030,encouraginginnovationandsubstantially increasingthenumberofresearchanddevelopmentworkersper1millionpeopleandpublicandprivateresearchanddevelopmentspending

9.b. Supportdomestictechnologydevelopment,researchandinnovationindevelopingcountries,includingbyensuringaconducivepolicyenvironmentfor,interalia,industrialdiversificationandvalueadditiontocommodities

9.c. SignificantlyincreaseaccesstoinformationandcommunicationstechnologyandstrivetoprovideuniversalandaffordableaccesstotheInternetinleastdevelopedcountriesby2020

1.1 CorporateCommitmentandCSRVision


4.6 GreenFactory6.2 MeasuringSocialImpactofProducts:

SROI

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Makecitiesandhumansettlementsinclusive,safe,resilientandsustainable

11.2By2030,provideaccesstosafe,affordable,accessibleandsustainabletransportsystemsforall,improvingroadsafety,notablybyexpandingpublictransport,withspecialattentiontotheneedsofthoseinvulnerablesituations,women,children,personswithdisabilitiesandolderpersons

11.6By2030,reducetheadversepercapitaenvironmentalimpactofcities,includingbypayingspecialattentiontoairqualityandmunicipalandotherwastemanagement

11.bBy2020,substantiallyincreasethenumberofcitiesandhumansettlementsadoptingandimplementingintegratedpoliciesandplanstowardsinclusion,resourceefficiency,mitigationandadaptationtoclimatechange,resiliencetodisasters,anddevelopandimplement,inlinewiththeSendaiFrameworkforDisasterRiskReduction2015-2030,holisticdisasterriskmanagementatalllevels

1.1 CorporateCommitmentandCSRVision

4.3.4 AirPollutionControl4.5.4 WasteManagement,Recyclingand

Reuse6.2 MeasuringSocialImpactofProducts:

SROI6.6.2 TaipeiXinyiCommunityCollege

8

6165

91

101

Ensuresustainableconsumptionandproductionpatterns

12.2 By2030,achievethesustainablemanagementandefficientuseofnaturalresources12.4 By2020,achievetheenvironmentallysoundmanagementofchemicalsandallwastesthroughouttheirlifecycle,inaccordance

withagreedinternationalframeworks,andsignificantlyreducetheirreleasetoair,waterandsoilinordertominimizetheiradverseimpactsonhumanhealthandtheenvironment

12.5 By2030,substantiallyreducewastegenerationthroughprevention,reduction,recyclingandreuse12.8 By2030,ensurethatpeopleeverywherehavetherelevantinformationandawarenessforsustainabledevelopmentandlifestyles

inharmonywithnature

3.2 2017GreenDesignsandAchievements

4.5 MainRawMaterials4.5.4 WasteManagement,Recyclingand

Reuse4.6 GreenFactory

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6465

66

Takeurgentactiontocombatclimatechangeanditsimpacts

13.1 Strengthenresilienceandadaptivecapacitytoclimate-relatedhazardsandnaturaldisastersinallcountries13.3 Improveeducation,awareness-raisingandhumanandinstitutionalcapacityonclimatechangemitigation,adaptation,impact

reductionandearlywarning



4.3 ReducingGreenhouseGases

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12


1.2 Stakeholders and Material Issues

Beingabletocommunicateeffectivelywithstakeholdersiskeytodevelopingasustainablebusiness.Itisimportanttobeabletoidentifystakeholderswhoarecriticallyconnectedtothecompany'soperationsamongthemanyothers.Itisequallyimportanttoidentifyandprioritize issuesthathavethehighest levelofrelevancetotheabovementionedstakeholders.LITE-ONhasstakeholdersfromawidevarietyofbackgrounds.Topresentstakeholderssufficientlyrepresentativeoftheircategories,wesummonedrepresentativesfromalldepartments in2017,andreferredto theAA1000StakeholderEngagementStandard (SES)2015 inopendiscussionsofstakeholder identification.Theprimaryconsiderationswereastakeholder'sdependencyonLITE-ON,influenceoverthecompany,amountofattentionpaidtothecompany,andresponsibilitiesaswellasdiversity.Intheend,atotalofninestakeholdercategorieswereselectedbyimportance.

Thenine stakeholder categoriesareemployees, customers, suppliers, investors/shareholders,governmentsandcompetentauthorities,nonprofitorganizations,researchinstitutions,communities,andmedia.

LITE-ONisconstantlycommunicatingandworkingwithdifferentstakeholders.In2017,thecompanyengagedkeystakeholdersintheninecategoriesthroughregularandadhoccommunicationchannels,andachievedvariousresultsandcreatedvaluesforthesocietyasawhole.Wewillcontinuetoaddressissuesimportanttoourstakeholdersviavariouschannelsaswellasintheappropriatechaptersofthisreport.

1.2.1 Stakeholder Identification and Communication

13


1.2.1.1 Stakeholder Engagement Performance in 2017

AudienceImportance of stakeholders to LITE-ON

Method and frequency of engagement Issues Engagement results

Response measures and counter measures page

Investors(shareholders)

Allshareholders(andpotentialshareholders)investinginLITE-ONshouldbegivenequalaccesstomaterialinformationofthecompanysotopresentthecompany'smarketvalueinasustainablemanner.

1. Theexecutivemanagementteammeetsregularlyeveryyear.

-Shareholdermeetings:(1time) -Investorconferences:(4times)2. Materialinformationbriefings(1time)3. Participationinglobalinvestorforums

(4times)4. Investorhotline(real-time)and

mailingaddress

- Visionandcorporategovernance

- Supplychainmanagement

- Customerrelationsmanagement

- Productqualityandsafety

Thecompanyengagesinvestorsregularlyorasneededtoconveyitsbusinessperformanceandprospects.Annualreports,quarterlyfinancialstatements,quarterlyreports,andmonthlyrevenuesareuploadedtotheinvestorrelationssectionofthecorporatewebsite.

Meanwhile,asummaryofcommentsgatheredfrominvestorsandexternalpartiesaresubmittedquarterlytotheboardofdirectorsandtheexecutivemanagementtoprovideabasisforimprovementofcorporategovernancepractices.

2. CorporateGovernance3.4 SupplyChain

Management3.5 CustomerServiceand

Satisfaction3.2 GreenDesignsand

Achievements

2347

49

43

Themedia ThemediaactasabridgebetweenLITE-ONanditsstakeholders.Mediacoveragebasedontimelyaccesstoinformationreleasedbythecompanywillhelpstakeholdersacquirecorrectinformationregardingthecompanyviapublicchannels.ItwillalsohelpLITE-ONcontinuetoupholditsreputation.

1. Regularinvestorconferencestopublishbusinessresults,interviewsinshareholdersmeetings,andpressreleases(5times)

2. Adhocbusinessresultupdates,interviewsinpressconferences,andpressreleases(6times)

3. Regularpressreleasestopublishmonthlyrevenues(12times)

4. Adhocpressreleasestopublishbusinessupdates(5times)

5. Mediaandpublicrelationshotlineandmediainterviewsandinquiries(realtime)

- Visionandcorporategovernance


- Customerrelationsmanagement

- Riskmanagement- Wastemanagement- Integrityand

compliance

Thecompanyengagesthemediaregularlyorasneeded,acceptsmediainterviewsandissuespressreleasestoconveyitsbusinessperformanceandprospects.Pressreleasesarealsopublishedonthecorporatewebsite.Meanwhile,asummaryofrelevantissuesandarticlesgatheredfromthemediaaresubmittedtotheexecutivemanagementtoprovideabasisforimprovementofcorporategovernancepractices.

2. CorporateGovernance3.4 SupplyChain

Management3.5 CustomerServiceand

Satisfaction3.2 GreenDesignsand

Achievements4.5.4 WasteManagement,

RecyclingandReuse

2347

50

43

65

Customers CustomersareLITE-ON'ssourceofrevenue,andwelistentocustomersandtheirneeds.LITE-ONmonitorsindustrytrendscloselyandprovidesprofessionalservicesinordertomeetthecustomers'standardsandkeepabreastwiththelatestdevelopments.

1. Quarterlybusinessreviewmeetings(quarterly)

2. SupplierConference(asneeded)3. Special-purposemeetings(asneeded)4. Meetingappointments(asneeded)5. Adhocmeetingsonurgentissues(as

needed)6. Auditsbycustomers(asneeded)7. RBA-ONplatform(annual)

- Servicequalityandconsumerrights

- Datasecurityandclientprivacy

- Customerrelationshipmanagement

- Legalandregulatorycompliance


TheSupplierQualityManagement(SQM)unitiscreatedtostrengthensupplierqualitymanagementinordertoprovidefast,efficient,andhighqualityproductsandservicesandbeabletoinformcustomersofupdatesonsuppliermanagement.Thecompanyisconstantlymakingimprovementstocustomerservices,andstaysinclosecommunicationwithcustomers.Weprotectclientprivacyandarealwayspreparedtoacceptreviewrequestsfromcustomers.

Visitsbetweentheseniormanagementofthecompanyandthatofourcustomersarearrangedtostrengthenthepartnershipsandcreateawin-winsituation.

3.5 CustomerServiceandSatisfaction

2.5 InformationSecurityandPrivacyManagement

2.4 Compliance,EthicsandAnti-corruption

3.4 SupplyChainManagement

50

40

38

47

Suppliers SuppliersplayakeyroleinLITE-ON'scampaigntoachievesustainability.Inadditiontoproduction,serviceandoperationalconcerns,thecompanyhastoconsideritscorporatesocialresponsibilityandreputationrisk.LITE-ONtriestolearnaboutsupplierconcernsthroughthecommunicationchannelsinplaceinordertoreducebusinessrisksandcostsandcontinuetoprovideresponsibleandhighqualityservicesforcustomers.

1. Regularsuppliertrainingconferences2. Supplieraudits3. Projectmeetings4. Operationalreviewmeetings

- Productorservicelifecycles


- Rawmaterialsmanagement

- Productqualityandsafety

- Servicequalityandconsumerrights

Thecompanyholdsannualsuppliermeetingsandadhocsupplierauditstocommunicatewithsuppliersonbusinessperformanceandannualtargets.Theseconferencesserveasameansofactiveresponsetosupplierconcerns,andprovideopportunitiesforthecompanytoencouragesupplierstoadoptnewbusinessmodelsthathavelessimpactontheenvironment,promotecompliancewiththerequirementsofgloballyrenownedbrands,andworktogethertoachievesustainability.

3.2 GreenDesignsandAchievements

3.4 SupplyChainManagement

3.5 CustomerServiceandSatisfaction

4.5 MainRawMaterials

43

47

50

64

14


AudienceImportance of stakeholders to LITE-ON

Method and frequency of engagement Issues Engagement results

Response measures and counter measures page

Employees(union)

Employees are LITE-ON'smost importantpartnersinachievingsustainability.Inadditiontoprotectingemployees'employmentrights,acompanyhastooffercompetitivecompensationand benefits, and show respect and careforemployees inorder toattract toptalent.Employeeswhoareable to realize their fullpotentialandworkwiththecompanywilldeliverthebestbusinessperformance.

1. Unionmeetings(asneeded)2. Employee/employermeetings

(quarterly)3. Businessunitmeetings(quarterly)4. Hotlinesandmailboxes5. Businessmeetingsandinternal

correspondence

- Compensationandbenefits

- Businessperformance- Laborrelations- Organizational

identificationandemployeeretention

Thecompanycommunicateswithemployeesoncompanypoliciesanddirections throughvariouschannels,andis already open to employee feedback andmakingadjustmentstostrategiesorproposalsforimprovementasappropriate.

2.1 CompanyOverview5.2.2 EmployeeRetention5.4 ProtectionofInterests5.5 EmployeeRelations

25737981

Governmentauthorities

Inaddition to complyingwithgovernmentregulat ions, L ITE-ON act ively supportsgovernmentpoliciesandengagesgovernmentagencies intwo-wayopencommunicationtowintheirtrust,support,andcooperation.

1. RegularupdateofcorporatewebsiteandinformationontheMarketObservationPostSystem

(monthly/Quarterly/annually)2. Questionnairesandinterviews(as

needed)

-Compliance-Laborrelations

Thecompanyworkswithgovernmentagenciesregularlyandasneededinimplementingandcoordinatingrelatedprograms.Thecompanyalsolearnsdetailsofpoliciesandregulationsandassistsinpromotingthem.

2.4 Compliance,EthicsandAnti-corruption

5.4 ProtectionofInterests5.5 EmployeeRelations

38

7981

Thecommunity LITE-ONimprovesitssustainabilitycampaignbased on i ts e f for t to improve i ts CSRperformance.Bygivingbacktothecommunity,LITE-ONcreatesastrongerpositiveinfluenceonsociety.LITE-ONalsoimplementsstakeholdercommunicationmechanisms to add to itspositiveinfluenceonsociety.

Communityassistance1. Emailatthefoundation(threetimesin

sixmonths)2. Socialmediawebpage(asneeded)3. Coursefeedback(semiannually) XinyiCommunityCollege1. Coursesatisfactionquestionnaires

(semiannually)2. Instructormeetings(semiannually)3. Volunteermeetings(quarterly)

-Charity-Communitybuilding-Environmentalissues

Thecompanycommunicatesviaemailandtelephones.Intheeventofamajorincident,notificationswillbemadebyemail,andupdatesanddiscussionswilltakeplaceonsocialmediawebsites.

Coursequestionnairesareusedtocollectsuggestionsandfeedbackfromvolunteersandcourseparticipants.Instructormeetingsareheldona regularbasis tokeep instructorsfocusedontheprioritiesofthecommunitycollege.


6.5 LITE-ONVolunteers6.6.1 CommunityAssistance

andholisticservices6.6.2 TaipeiXinyiCommunity

College

54

9596

101

Researchinstitutions

Researchinstitutionsplaytheroleofpioneersinadvancedtechnologiesandtheirapplications.Theyhelpcompanies innovateandbecomemore competitive so tomake it easier forcompaniestowintheapprovalofcustomersandinvestors.

1. Onsitevisitsandmeetings(asneeded)2. Seminarplanning(asneeded)3. Governmentprojectexecution(as

needed)4. Collaborativetechnologydevelopment

(asneeded)

-Corporategovernance-Integrityandcompliance

-Corporateimage

Byapplyingforgovernmentsubsidiesorearmarkedgrants,thecompanyformsacademia-industrypartnershipsinspecificfieldswithresearchinstitutions.ThesefieldsincludeMOSTprojectapplications,ISOmanagementsystemimplementation,andassistanceforenvironmentalproductlabelsorcertification.

Thecompanycollaborateswithothersindevelopingindustrytechnologiesbymeansoftechnologytransferorcommissionedresearchinordertoimplementnewtechnologiesneededtoenableproductdevelopment.

Thecompanyworkswithresearchinstitutionsinbuildinguptalentpoolsandnecessarytechniquesbyprovidingfundingorcreatingjointresearchcenters.

2. CorporateGovernance3.1 Goalsandstrategies

forreducingimpactofproductsandsupplychain

2343

Non-ProfitOrganizations

Asanethicalandresponsiblebusiness,LITE-ON understands the needs of nonprofitorganizations. Itpromotesandpracticesthephilosophyofgivingbacktothecommunity,andtriestomakeitselfapositiveinfluenceonsociety.

1. Membershipassociations(asneeded)2. Eventco-sponsorships(asneeded)

-Integrityandcompliance

-Corporateimage-Humanrights-Laborrelations-Environmentalmanagement

Thecompanyplaysanactive role in tradeassociations,includingtheTaiwanCorporateSustainabilityForum,TaiwanElectricalandElectronicManufacturer'sAssociationandTaiwanOptoelectronicSemiconductorIndustryAssociation,tofacilitatefrequentinteractionamongmembersoftheindustry.ThecompanyalsoworkswithNGOsonemployeecareandenvironmentadaptationinitiatives,includingclimatechangeresponsemeasuresandenergysavingandcarbonreductionmeasures.


4.3 ReducingGreenhouseGases5.2.4 RBA(formerlyEICC)Code

ofConductCommittee5.4 ProtectionofInterest5.5 EmployeeRelations5.6 LOHASLITE-ON

56

5776

798184

15


1.2.1.2 Stakeholder Engagement Performance Highlights

Project:TenSquarde Project- Improving occupational health and safety management in plant Partners:1. HP (client), 2. Social Accountability International (SAI) (NGO) Participants:All employees in the power segment at Guangzhou Plant Period:April 2017 - July 2017

BackgroundandobjectivesHPisalongtermstrategicpartnerofthepowersegmentatLITE-ONGuangzhouPlant.Inadditiontooverseeingproductionmanagementcompliance,thecompanybroughtinathirdparty,SocialAccountabilityInternational(SAI),toprovideprofessionalassistanceforLITE-ONtoimproveoccupationalhealthandsafetymanagementintheplant.

ActivitiesandresultsLITE-ONselectedfivemanagersandfiveemployeestoformateamtoattendSAIcourses.Thegoalswereachievedthroughgrouptrainingandpractices.Thecompanystartedbytrainingparticipantsinanalysisandenablingthemtoidentifypotentialsafetyhazardsintheworkplace,listkeypoints,andsetimprovementtargets.TheLITE-ONteamchoseimprovementoffiresafetymanagementinallplantsasthesubjectoftheimprovementplanandsetthetargetaccordingly,whichwasreducingtheevacuationtimeinafiredrillfrom12minutesto5minutesin100days.

Theimprovementplanincludedtheitems,timetocompletion,andalistofpersonsincharge.Theplanwasimplementedintwostages,thefirst50-dayplanandthesecond50-dayplan.Thefirst50-dayplaninvolvedhiringprofessionalsfromoutsidethecompanytoprovidefiresafetytrainingforallemployees intheplants.Firesafetyofficersweregivenclearlydefinedresponsibilitiesandassignedtodifferentareas.Thelistwouldbeupdatedregularly,andallfiresafetyfacilitiesintheplanswouldundergoextensiveinspectionsandonsitedrills.SAIledtheteaminperformingadiscrepancyanalysistoexaminethedifferencesbetweenthetargetandactualresults.SAIalsoprovidedtrainingoneffectivecommunicationmethodsandwaystoaccomplishgoalswithefficiencyandreachoverandabovethegoals.

Thesecond50-daysplanhadtheteamimplementtheamendedplanandformanemergencytaskforce.Theteamalsodevisedafiresafetyaccountabilitysystem.Intheend,allshiftsreachedtheinitialevacuationtimetargetoffiveminutes,andwentontoimprovethetimetounderthreeminutes.

16


1.2.2 Identification of Material Issues TheLITE-ONCorporateSocialResponsibilityReportcomplieswiththeGlobalReportingInitiative (GRI)Standards.Material issuesareanalyzedby following theprocessofidentification,prioritization,validation,reviewinordertovalidatethescopeofdisclosureinthereportaswellasmajor internal/externalsustainabilitychallengesfacedbythecompany.Theprocessalsoservesasacomprehensivereviewofbusinessperformance.

IdentificationLITE-ONemployeesbasedidentificationofstakeholdersonexperiencefromeverydaybusinessactivitiesandpreviousassignments,andlistedsustainabilityissuesthatwouldbeofinteresttodifferentstakeholders.Toensurethelistofmaterialissuesisgeneratedwithobjectivity, integrity,andinclusiveness,thecompanyalsolookedbackonthematerialissuematrix inthepreviousreportandexaminedkeyconcernsof leadingcompetitorsinthedomesticandinternationalmarketsandtheirindicatorsdisclosedinGRIreportsbeforeitconfirmedthefinallistofissues.Alistof22sustainabilityissueswaseventuallycreatedasthescopeofmaterialissueidentificationinthereport.

PrioritizationPrioritizationofsustainabilityissueswasbasedontwofactors,"thedegreeofinfluenceoverstakeholders'assessmentanddecisionmakesprocesses"and"thedegreeofimpactofacompanyontheeconomy,theenvironment,andsociety".Thedegreeofimportanceofeachissuewasassessedaccordinglytoestablishthepreliminaryorderofissues.Weusedexternalquestionnairesagainthisyeartocollectopinionsfromkeystakeholdersinordertomakethedatamorerepresentative.Thecompanyreceived1,591validreplies,includingopinionsfromemployees(1,350)andfromexternalstakeholdersintheothereightcategories (241).Statistical techniquesandquantitativeanalysiswereappliedtoanalyzethe influenceanddegreeof impactof individual issuesandgeneratethepreliminarymaterialissuematrix.

Media

Investors/Shareholders

Research institutions

0.31%

84.85% Employees

0.38%

0.63%

Government authorities1.45%

Suppliers1.45%

Nonprofit organizations1.63%

Customers2.64%

Communities6.66%

Identification of Material Issues

Identification Prioritization Validation Review

17


ValidationToensure the results from identificationofmaterial issueswouldcomplywith theGRI integrityandstakeholder inclusivenessprinciples,membersof theLITE-ONCSRCommitteeperformedapreliminaryreviewoftheresultsfromidentificationofmaterialissuesandconsidered internationalbenchmarkinganalysis results, sustainabilitytrends,andbusinessdevelopmentstrategybeforeallocatingmoreweighttothefourissues,"productorservicelifecycles","corporategovernance","talentrecruitmentandretention",and"climatechangestrategies".TheadjustedresultswerereviewedbytheCEO,andthematerial issuematrixwasdiscussedandvalidated.Weclassifiedthe22sustainability issuesabove intosignificant impact,secondary impact,andnegligibleimpactaccordingtotheirlocationsonthematrix.Theidentificationresultsprovidedtheframeworkforthereportandanswerstothestakeholders'questions.

The22issuesweredividedinto6significantimpactissues,13secondaryimpactissues,and3negligibleimpactissues.Inparticular,"significantimpactissues"and"secondaryimpact issues"arecovered inthescopeofmaterialdisclosure inthereport;andthenegligibleimpactissuesweredeemednonmaterialissues,andwouldnotbedisclosedinthereport,exceptwherenon-materialissueswouldaffectthepresentationofmaterialissues.Suchnon-material issueswouldbedescribedanddisclosed inthereportasappropriate.

Furthermore,wesummarizedGRIindicatorsmatchingthematerialissuesinto11LITE-ONspecificissues,andprovidedanswersinthereport.

ReviewTheCSRReport is intendedasa reviewofLITE-ON'sprogress toward thevisionofsustainabilityandapresentationofthecompany'sperformanceinthearea.Meanwhile,thereportservestomaintainatwo-wayopencommunicationchannelbetweenLITE-ONanditsstakeholderssotoenableLITE-ONtofollowtheneedsandexpectationsofitsstakeholdersandtaketheinitiativetoanswerissuesofinterestintermsofCSRtargetsandroutinebusinessactivities.Whenthenextreportisdueforpublication,wewillreviewthematerial issuematrixagain,andmakeplansandengagethestakeholdersasneededtodetermineifanyadjustmentisrequired.

Negligibleimpact1Socialengagement 2Corporateimage 3Rawmaterials

management4Waterresourcemanagement

Secondaryimpact5Supplychainmanagement

6Privacyanddatasecurity 7Riskmanagement 8Datasecurityandclientprivacy

9Customerrelationsmanagement

10Diversityandinclusion 11Productqualityandsafety

12Talentrecruitmentandretention

13Wastemanagement 14Talenttrainingandeducation

15Energyefficiency 16Climatechangestrategies

Significantimpact17Integrityandcompliance 18Corporategovernance 19Occupationalsafetyand

health20Humanrights

21Productandservicelifecycles 22Laborrelationsandfairtreatmentofemployees

LITE-ON analysis of material issues in 2017 (suggestions)

LITE-ON's ESG impact on society

Negligible impact Secondary impact Significant impact

1

2

3 4

56

7 89

10

11 12

1314

1516

17

18

19

20

21

22

Degree of influence over stakeholders' decision making process

18


The communityLITE-ON’s headquarters and business locations

Major CustomersElectronic components manufacturersPacking material manufacturersRaw materials (e.g., steel, copper, and tin etc.) processing manufacturersProduction equipment manufacturers

Branded electronic equipment (mobile devices, computers, and networking equipment etc.) and home appliances manufacturers Electronic equipment and home appliances contract manufacturers

Electronic components manufacturers

Suppliers

Contractors

Publically-listed Subsidiaries

Subsidiaries

1.2.3 The Scope and Boundary of Material Topics in the Report

Havingidentified22issuesofinteresttothestakeholdersandhadtheCESRCommitteediscusstheresults;LITE-ONchosesixsignificantmaterialimpactissuesandfivesecondaryimpactissuestobethematerialissuesthisyear.Theissuesarefullydisclosedinthereport,andtherestoftheissuesaredisclosedonavoluntarybasis.TheextentofinterestwasdeterminedtoensurethetransparencyandadequacyofLITE-ON'sdisclosurewouldbesufficienttodemonstrateitsvaluechain.Sincethescopeofcoverageisdifferentforeachindicator,LITE-ONhasaddressedeachstakeholder'sconcerninthemaximumscopepossible.Theextentofdisclosureforeachindicatorwillbeexplainedinthecorrespondingchaptersofthisreport.

Withintheorganization Outsideoftheorganization

19


MaterialTopicsandSustainableIssuesIndex ○ Indirectimpact◎ Businessimpact● Directimpact

Materiality Material topics GRI disclosure Report Chapter Page

Involvement and Impact Scope

Employees Customers Suppliers

Sharehold-ers(Investors)

Govern-ment authorities

Non Profit Organiza-tions

ResearchInstitutions The Media

The com-munity

Significantimpact

Productandservicelifecycles

GRI301:Materials 4.5 MainRawMaterials 64● ● ○ ○

GRI303:Water 4.4 WaterResourceConservation 63

Significantimpact

CorporateGovernance

GRI201:EconomicPerformance 2.1 CompanyOverview5.4 ProtectionofInterest5.6 LOHASLITE-ON6.1 SocialInclusionPolicy

25798490

● ◎ ● ● ○GRI205:Anti-Corruption 2.4 Compliance,EthicsandAnti-Corruption3.4.1.3SupplierSustainabilityGuidelines5.2.4. RBA(formerlyEICC)CodeofConductCommittee

384776

GRI405:DiversityandEqualOpportunity

2.2.1 BoardofDirectors5.2.1 EmployeeStructureandDistribution5.4 ProtectionofInterest

296979

Significantimpact

Integrityandcompliance

GRI205:Anti-Corruption 2.4 Compliance,EthicsandAnti-Corruption3.4.1.3SupplierSustainabilityGuidelines5.2.4. RBA(formerlyEICC)CodeofConductCommittee

384776

● ● ○ ◎ ○ ○

GRI206:Anti-CompetitiveBehavior 2.4 Compliance,EthicsandAnti-Corruption 38

GRI307: EnvironmentalCompliance 4.1.2 EnvironmentalExpenditure 55

GRI416:CustomerHealthandSafety

3.5.3 ProductHealthandSafety 52

GRI417:MarketingandLabeling 3.2.2 ProductCertification 45

GRI418:CustomerPrivacy 2.5 InformationSecurityandPrivacyManagement 40

GRI419:SocioeconomicCompliance

2.4.1 ViolationofLaborStandardsAct 39

Significantimpact

Occupationalsafetyandhealth

GRI403:OccupationalHealthandSafety

5.6.3 OccupationalSafetyandHealthManagement 87 ● ◎ ◎ ○

Significantimpact

Laborrelationsandfairtreatmentofemployees

GRI202:MarketPresence 5.2.1 EmployeeStructureandDistribution5.4 ProtectionofInterest

6979

● ◎ ◎ ○ ○ ○ ○

GRI402:Labor/ManagementRelations

5.4 ProtectionofInterest 79

GRI407:FreedomofAssociationandCollectiveBargaining

3.4.3 SupplierManagementMechanisms5.5 EmployeeRelations5.6.2 DiverseRecreationalActivities

508186

GRI409:ForcedorCompulsoryLabor 3.4.3 SupplierManagementMechanisms5.2.4. RBA(formerlyEICC)CodeofConductCommittee

5076

20


MaterialTopicsandSustainableIssuesIndex

Materiality Material topics GRI disclosure Report Chapter Page

Involvement and Impact Scope

Employees Customers Suppliers

Sharehold-ers(Investors)

Govern-ment authorities

Non Profit Organiza-tions

ResearchInstitutions The Media

The com-munity

Significantimpact

HumanRights GRI405:DiversityandEqualOpportunity

2.2.1 BoardofDirectors5.2.1 EmployeeStructureandDistribution5.4 ProtectionofInterest

296979

● ◎ ◎ ○ ○ ○ ○

GRI406:Non-Discrimination 5.4 ProtectionofInterest5.5 EmployeeRelations

7981

GRI408:ChildLabor 3.4.3 SupplierManagementMechanisms5.1 EmployeePolicy5.2.4 RBA(formerlyEICC)CodeofConductCommittee

506876

GRI407:FreedomofAssociationandCollectiveBargaining

3.4.3 SupplierManagementMechanisms5.5 EmployeeRelations5.6.2 DiverseRecreationalActivities

508186

GRI409:ForcedorCompulsoryLabor 3.4.3 SupplierManagementMechanisms5.2.4 RBA(formerlyEICC)CodeofConductCommittee

5076

GRI412:HumanRightsAssessment 5.3 EmployeeDevelopmentandTraining 77

Secondaryimpact

SupplyChainManagement

GRI204:ProcurementPractices 3.4.2 SupplyChainRiskManagement 50

● ◎ ● ◎ ○

GRI308:SupplierEnvironmentalAssessment

3.4 SupplyChainManagement 47

GRI414:SupplierSocialAssessment 3.4 SupplyChainManagement3.4.2 SupplyChainRiskManagement3.4.3 SupplierManagementMechanisms

474850

Secondaryimpact

Privacyanddatasecurity

GRI418:CustomerPrivacy 2.5 InformationSecurityandPrivacyManagement 40 ● ● ● ○

Secondaryimpact

Climatechangestrategies

GRI201:EconomicPerformance LetterformGroupChairmanandGroupCEO4.2 ResponsestoClimateChangeandGlobal

WarmingPolicy

556

● ◎ ○ ○ ○ ◎ ○ ○

GRI305:Emissions 4.3 ReducingGreenhouseGases 57

Secondaryimpact

Datasecurityandclientprivacy

GRI417:MarketandLabeling 3.5.3 ProductHealthandSafety 52● ● ◎ ◎ ○

GRI418:CustomerPrivacy 2.5 InformationSecurityandPrivacyManagement 40

Secondaryimpact

Energyefficiency GRI302:Energy 4.1 CommitmenttoEnvironmentalSustainabilityandPolicy

4.3.2 Energy-savingMeasures4.3.3 DirectandIndirectEnergyConsumption

54

5960

● ◎ ◎ ○ ○ ○

○ Indirectimpact◎ Businessimpact● Directimpact

21


Ranked as top 5% of public

companies list in the Fourth Corporate

Governance Evaluation by

TWSE

Total employees in 2017: 51, 879

2017 annual revenue: NT$215

billion

A total of 16 plants have

passed Product Liability

Insurance AAA Certification to

date

Direct grievance reporting channel

to board of management

As the best partners for our customers, we attentively listen to their needs, mastering market trends and using our strong expertise to fulfill their goals.

With open minds and innovative technology, we are at the forefront of the mass production of next-gen technology.

With outstanding execution, we dedicate ourselves to fulfilling our commitments to customers, while creating innovative competitive advantages.

Customer Satisfaction

Excellence in Execution

Innovation

Integrity

We emphasize integrity, transparency, and doing the right thing to earn the respect of our employees and trust of our customers and stakeholders to ensure solid and sustainable business operations.

LITE-ONdevelopseffective corporategovernanceandimplementpractices inaccordancewiththeLawoftheCompanyAct, theSecurities ExchangeAct andother relevant laws and regulations.The company continues to improveitsmanagementperformance,whilesafeguardingtherightsandinterestsofinvestorsandotherstakeholders.LITE-ONplacesagreatemphasisonopen,impartialdisclosure.Thecompanydisclosesfinancialdataandstatements,annualreports,andimportantinformationinatimely,accurate,andtransparentmannerontheMarketObservationPostSystem.ItalsomakesrelateddetailsavailableontheLITE-ONwebsite(WWW.LITEON.COM)tolocalandinternationalstakeholders.

LITE-ONCorporateValuesCustomerSatisfaction, Excellence inExecution, Innovation,andIntegrityaretheguidingprinciples,commitments,and beliefs of LITE-ON Technology.Thesevaluesareappliedthroughoutthecompany'sdailybusinessoperationsandmanagement.

2 Corporate Governance

23

GRIStandards Index | Contents。CorporateGovernance 1 2 3 4 5 6

www.liteon.com

ActionsandresultsTarget Action Progress

ConsistenttopperformanceinCorporateGovernanceEvaluation(Top5%TWSE-listedcompanies)

-Createdareportingchannelwithdirectaccesstotheboardofdirectors-EstablishedtheRulesforEvaluatingBoardofDirectorsandFunctionalCommitteePerformance-Createdthecorporategovernancetaskforceandtheethicalmanagementtaskforce-Discloseddividendpoliciesindetail-Movedthereleasedateforannualfinancialstatementsaheadtowithintwomonthsaftertheendofafiscalyear-Startedrequiring50%ormoreofmembersoftheGrowthStrategyCommitteebeindependentdirectors

TWSECorporateGovernanceEvaluation-Top5%infirsttwoyears-Top6%-20%inthethirdyear-Top5%inthefourthyear

AllfactoriesreceivedProductLiabilityInsuranceAAACertification

AEWuxiPlantandLiShinHuizhouPlantreceivedProductLiabilityInsuranceAAACertificationfromtheACEGroupin2017

A totalof16 factories receivedProductLiabilityInsuranceAAACertification

Corporategovernancecourseswereincludedinorientationtraininginkeyregions

Redesignedandstrengthenedorientationtrainingbyaddingcorporategovernancecourses Corporate governance courseswere added toorientationtraininginallkeyregions

Refreshertrainingoncorporategovernancecourse¹wasprovidedtoallindirectworkersinTaiwan

- Thecorporategovernancee-learningcourses¹havebeenrenewedandimplementedinMarch- TheheadoftheLegalDepartmentpersonallyexplainedantitrustcasestudiestosalespersonsandclientsoremployeesincontactwithsuppliers

- EstablishedtrainingguidelinesforcorporategovernancecourseforindirectworkersinTaiwan

Refreshertrainingoncorporategovernancecourse¹inTaiwanhada92.9%completionrate

FuturegoalsFuture goals Completion

ConsistenttopperformanceinCorporateGovernanceEvaluation(Top5%TWSE-listedcompanies) Ongoing

Increasethecompletionrateofrefreshertrainingoncorporategovernancecourse¹ for indirectworkersinTaiwanto99%

2018

Note1:CoursesincludingMaterialInsiderInformationandAnti-trustandCompliance

24


2.1 Company Overview

Company Name: LITE-ON Technology CorporationStock code：2301

Foundedin1975,LITE-ONembracesbeing“BestPartnerinOpto-Electronic,Eco-Friendlyand IntelligentTechnologies”as itsvision to focuson thedevelopmentofoptoelectronicsandkeyelectroniccomponents,andstrivestobuildupcompetitiveedgethroughresource integrationandoptimizedmanagement.LITE-ONproducesproductsthatareusedinabroadrangeofapplications,suchascomputers,communications,consumerelectronics,automotiveelectronics,LED/lighting,cloudcomputingaswellassmarthealthcare,andLITE-ONisaworldwideleadingproviderofoptoelectronics,informationtechnology,storagedevices,andmobiledevicescomponents.NowLITE-ONisoneoftheworldwidetop2PowerSuppliessupplier*.

Formorethan40yearsLITE-ONhasconcentratedonestablishingacompetitiveadvantageinmassproduction.Throughresourceintegrationandmanagement,wemaximizethereturnsfromadiverseproductportfoliotorealizeexcellentrevenuegrowthandprofits.LITE-ON'smainbusinessstrategy focusesonimprovingresourceutilization,automation,productionoptimization,andstreamlinedprocessesforbetterproductivityandefficiency.Inthelong-term,thefocus isonprofitability,soundgovernanceandimprovingshareholderreturns to laydownthe foundation forasustainablecenturyenterprise.

Inrecentyears,LITE-ONhasbeenshiftingitsproductionfocusfromITandcommunicationtowardscloudcomputing,LEDcomponentsandoutdoor/automotivelighting,automotiveelectronics,smarthealthcare,andindustrialautomation tocreateanewwaveofgrowthmomentum.LITE-ONhopestoleverageitsexistingadvantageasaworld-classenterpriseinthisageofchanges,andchallengestobecomethebestpartnerofchoice forglobalcustomersdevelopinginnovationsandapplicationsforOpto-Electronic,Eco-FriendlyandIntelligentTechnologies.

1. ForinformationofLITE-ON'sproductdevelopment,pleaserefertofollowingcompanywebpage: https://www.liteon.com/en-us/globalcitizenship/3722. Formoredetailsonbusinessperformanceincludingfinancialstatement,liabilities,shareholders'equity,andretained

earningsetc.pleaserefertoLITE-O'sAnnualReportpublishedonthecompanywebsite: https://www.liteon.com/en-us/investor/financialreports/93. *Source:MTCPowerElectronicsIndustryNewsletter#265publishedinMay20184. **2016&2015numbersareadjustedtobethenumbersofparentcompanyaccordingtoLITE-ON’sAnnualReport.

2017 Revenue: NT$215 billion 2016: NT$230 billion2015: NT$217 billion

2016:12.40%**2015: 9.57%**

2016: NT$3,270 million2015: NT$2,690 million

2016: NT$12.71 billion2015: NT$8.65 billion

2016: NT$4.052015: NT$3.10

2017 Operating Income: NT$8.34 billion 2017 Earning Per Share: NT$1.13

2017 Return on Equity: 3.59% 2017 Tax Expense: NT$740 million2016: Top 22015: Top 2

2017 Worldwide Top 2 Power Supplies Suppler

NTD$215

billion

NTD8.34billion

NTD7.4

million

NTD1.13

3.6% TOP2WW

supplier

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https://www.liteon.com/en-us/investor/financialreports/9

2.1.1 LITE-ON'S Major Operations Centers Worldwide 2017

Salt Lake City

Fremont

Milpitas

San Jose

Dallas

Austin

Houston

Guadalajara

Bangkok Singapore

KaohshungTainan

Taipei

New Taipei City

Taoyuan

Hsinchu

Northumberland

Eindoven

JinanSuzhouNanjing

XianningGanzhou

Guangzhou

Beijing

Tianjin

Yantai

Seoul

Tokyo

ChangzhouShanghaiWuxiQingxiDongguan

Haiphong Beihai Shijie

ZhuhaiHongkong

Troy

AtlantaChicago

Headquarters Manufacturing Site R&D Center Business (Sales and Other Management) Center

Wetzlar Neumuenster

Jordan

Manaus

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2.1.2 List Major Shareholders 2.1.3 Membership in Groups and Associations

Name of Shareholders Number of shares held Shareholding%

1. TaiwanBank in custody for SilchesterInternationalInvestorsInternationalValueEquityTrust

101,740,857 4.33%

2. Ta-RongInvestmentCo.Ltd. 85,402,698 3.63%

3. RaymondSoong 79,302,560 3.37%

4. TaiwanBank in custody for SilchesterInternationalInvestorsInternationalValueEquityTrust

55,220,953 2.35%

5. CapitalSecuritiesNomineeLimited 51,584,000 2.19%

6. Ta-SungInvestmentCo.Ltd. 47,088,399 2.00%

7. FubonLifeInsuranceCo.,Ltd. 47,000,000 2.00%

8. Ming-HsingInvestmentCo.,Ltd. 46,905,330 2.00%

9. YuanPaoDevelopment& InvestmentCo.Ltd.

39,473,599 1.68%

10. TaiwanBank in custody for SilchesterInternationalInvestorsInternationalValueTaxableEquityTrust

36,446,459 1.55%

11. Governmentfundsandshareholders- NewLaborPensionFund- LaborInsuranceFund- PublicServicePensionFund- ChunghwaPostCo.,Ltd.- LaborPensionFund- NationalAnnuityFund- DepartmentofGovernmentEmployees

Insurance,BankofTaiwan

25,902,14225,582,98219,149,50316,146,97311,661,46210,791,7123,064,846

1.10%1.09%0.81%0.69%0.50%0.46%0.13%

Total sharesheldbygovernment fundsand shareholdersTotal sharesheldbygovernmentfundsandshareholders

112,299,620 4.78%

category Taiwan Mainland China Thailand and other regions

Industry １. InstituteofInformationIndustry２. PhotonicsIndustryandTechnology

DevelopmentAssociation３. TaipeiComputerAssociation

(ExecutiveDirector)４. TaiwanElectricalandElectronic

Manufacturers'Association(ExecutiveSupervisor)

５. TheInternationalCommissiononIllumination

６. TaiwanOptoelectronicSemiconductorIndustryAssociation,TOSIA(Chairman)

７. TaiwanMedicalandBiotechIndustryAssociation

８. TaiwanLightingFixtureExportAssociation

９. (AsiaIOTAlliance;AIoTA)10. TaipeiElectronicComponents

Suppliers'Association11. TaiwanTelematicsIndustry

Association12. TaiwanTransportationVehicle

ManufacturersAssociation

1. InternationalSolidStateLightingAlliance

2. ChinaSolidStateLightingAlliance

3. Electronics&CommunicationsAssociationofGuangzhou(DevelopmentDistrict)

４. Electronic&ComputerEmployers'Association(Thailand)

Chai-KlongPersonnelManagement(Thailand)

R&DandTechnology

1. TaiwaninformationStorageAssociation

2. TaiwanIoTTechnologyandIndustryAssociation

１. Anti-StaticEquipmentBranchofChinaElectronicInstrumentIndustryAssociation

２. OpenDataCenterComittee

１. OpenComputeProject

２. Wi-FiAlliance３. HighDefinition

MultimediaInterfaceInc.,HDMI

other １. BusinessCouncilforSustainableDevelopmentofTaiwan,BCSD-Taiwan(PermanentMember)

２. TaiwanCorporateSustainabilityForum

３. TaipeiNeihuTechnologyParkDevelopmentAssociation(Director)

４. TheInstituteofInternalAuditors-Chinese

５. TaiwanCorporateGovernanceAssociation

1. JiangsuAssociationforQuality

April24,2018

LITE-ONactivelyparticipatesintheactivitiesofindustryassociation,andjoiningregularorirregularindustryassociationconferencesastheintensivecommunicationmechanismwithothermembersintheindustry.

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董事會集團董事長

2.2 Organization Structure of Corporate Governance

Therewasnomajorchangesinthecorporateorganizationcomparingwithyear2016

Since2007,thecompanyintroducedtheroleofindependentdirectortoreplacesupervisors,andestablisheditsfirstAuditCommittee.In2008and2010,aCompensationCommitteeandaGrowthStrategyCommitteewereestablishedrespectivelyundertheboardofdirectors.LITE-ON'sBoardofDirectors,AuditCommittee,CompensationCommitteeandGrowthStrategyCommitteeperformtheirdutiesinaccordancewiththe"BoardofDirectorsMeetingRules,""AuditCommitteeOrganizationalRules,""CompensationCommitteeOrganizationalRules,"and"GrowthStrategyCommitteeOrganizationalRules.

CorporateInternalAudit

AuditCommittee

CompensationCommittee

GrowthStrategyCommittee

Shareholder'sMeeting

BoardofDirectorsGroupChairman

ViceChairman&GroupCEO

CSEROffice InvestorRelations/PublicRelations

BusinessUnitsRegions BusinessUnits

USEU

PowerConversionMobileMechanicsStorageMechanicalCompetence

StrategyInvestmentFinanceOperationControllingInformationTechnologyHumanResource

SmartLife&ApplicationsPortableImageDeviceOptoelectronicProductSolutions

Legal&IntellectualPropertyManufacturingOperationExcellenceManufacturingTechnologyOccupationalSafetyandHealthManagement

SGPSHHOperationCenter

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2.2.1 Board of DirectorsThecompany'sdirectorsareelectedaccordingtoits"RulesGoverningtheElectionofDirectors,"wherecandidatesarenominatedbasedonthesystemstipulatedinArticle192-1of theCompanyAct.Thecompany is requiredby lawtoannouncebeforethebookclosuredateof itsannualgeneralmeetingtheperiodofdirectors' (includingindependentdirectors)nomination(nolessthan10days)andthenumberofdirectors(includingindependentdirectors)tobeelected.Thelistofdirectorcandidates(includingindependentdirectors)needstobereviewedbytheboardtomakesurethatallcandidatesarequalified(includingindependentdirectors)beforetheelectioncommencesduringtheannualgeneralmeeting.

Theboardconsistsof10members;allofwhomareelectedbyshareholders.Boardmemberscurrently includeoneChairman;six institutional investor representativesfromLITE-ONCapital,Dorcas InvestmentCo.Ltd.,Ta-SungInv.Co.Ltd.andYuanPaoDevelopment&Inv.Co.,Ltd.andthreeindependentdirectors:

Thememberscomefromabroadvarietyofbackgroundsandexperience,andarecapableoffulfillingtheirduties.Theyhavebeengiventhedutytoexercisepropergovernanceoftheboardofdirectors,tosupervise/appoint/instructthemanagement,andtooverseethecompany'sfinancial,social,andenvironmentalperformanceinwaysthatmaximizestakeholders'interests.

Boardmembers'backgrounds,education,concurrentrolesatothercompaniesandfunctioningoftheboardofdirectorsaswellasvariousfunctionalcommitteeshavealreadybeendisclosedinthecompany'sannualreport.TheannualreportisaccessibleontheMarketObservationPostSystemandfromthecompany'swebsiteWWW.LITEON.COM.

Inresponsetotheworld'srisingawarenesstowardscorporategovernanceandCSRissues,thecompanyhastakentheapproachtoencouragedirectors'ongoingeducation.Detailsregardingdirectors'ongoingeducationhavebeenpublishedontotheMarketObservationPostSystem.

AccordingtoLITE-ON's"RegulationandProcedureforBoardofDirectorsMeetings,"boardmeetingsareheldatleastonceeveryquarter.Atotaloftenboardmeetingswereheldin2017.

LITE-ON Board Members Gender

Chairman RaymondSoong

Male

ViceChairman WarrenChen,RepresentativeofLITE-ONCapitalInc.

Director JosephLin,RepresentativeofDorcasInvestmentCo.,Ltd.Keh-ShewLu,RepresentativeofTa-SungInvestmentCo.,Ltd.TomSoong,RepresentativeofTa-SungInvestmentCo.,Ltd.C.H.Chen,Representativeof YuanPaoDevelopment&InvestmentCo.,Ltd.DavidLee,Representativeof YuanPaoDevelopment&InvestmentCo.,Ltd.

IndependentDirectors

HarveyChangEdwardYao-WuYangAlbertHsueh

Note：Ta-SungInvestmentassignedTomSoongasitsRepresentativeDirectoronOct.19,2017

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WWW.LITEON.COM

2.2.2 Audit Committee 2.2.3 Compensation CommitteeChairperson: Independent Director Albert Hsueh Members: Independent Director Harvey Chang, Independent Director Edward Yao-Wu Yang

TheAuditCommitteeconsistsentirelyofindependentdirectorswith3members.Thedutiesofitsthreemembersaretoassisttheboardofdirectorsinreviewingthecompany'sfinancialstatements,internalcontrolsystems,auditpractices,accountingpolicies,majorassettransactions,andappointment/dismissalofexternalauditors,financeofficers,accountingofficers,andinternalauditorssoastoensurecompliancewithgovernmentregulations.

Effectiveinternalcontrolsystemsandauditoperationsarethefoundationofsoundcorporategovernance.Inordertomaintainaneffectiveinternalcontrolsystem,particularlyintheareaofriskmanagement,financialandoperationalcontrol,theAuditCommitteeregularlyreviewsreportssubmittedbyinternalauditorsandassessestheindependenceofthecompany'sfinancialstatementauditors,therebyensuringtheutmostintegrityinfinancialreporting.

1. ThecommunicationsbetweentheindependentdirectorandtheChiefAuditOfficerandthecertifiedpublicaccountantsareestablishedthroughAuditCommitteeorindividuallywithindependentdirectorsviameetingsore-mails,communicationitemsareasfollows:1.TheChiefAuditOfficerreportedtotheAuditCommitteeontheestablishmentand

amendmenttotheinternalcontrolsystem.2.TheChiefAuditOfficerreportedtotheAuditCommitteeontheannualself-assessmentof

theimplementationandresultsontheinternalcontrolsystems.3.TheChiefAuditOfficerreportedtotheAuditCommitteeontheannualauditplanandthe

implementationoftheplan.4.TheChiefAuditOfficerreportedtotheAuditCommitteeonthefindingsofeachauditand

thetrackingofcorrectiveactionsandpreventiveactions.5.TheChiefAuditOfficerprovidedinformationontheadditionoramendmentoflaws

governingsecuritiesandexchangetotheAuditCommittee.6.TheChiefAuditOfficerpresentedtotheAuditCommitteethereportontheconductof

specialauditsprescribedbythecommitteeandthefindings.7.ThecertifiedpublicaccountantsreportedtotheAuditCommitteethefindingsoftheir

quarterly/annuallyrevieworauditsontheCompany'sfinancialresults,andalsothecommunicationoftherelevantlawandregulationoranyothermodifyissues.

2. ThecommunicationchannelbetweentheindependentdirectorsandtheChiefAuditOfficerfunctionedwell.Thecommunicationbetweenindependentdirectorsandtheinternalauditorsarelistedonthecompanywebsite:https://www.liteon.com/en-us/globalcitizenship/313

AccordingtoLITE-ON's"AuditCommitteeOrganizationalRules,"theAuditCommitteemeetsatleastonceeveryquarter.AtotalofnineAuditCommitteemeetingswereheldin2017,andthemembers'attendancerate(includingattendinpersonandbyproxy)is100%.

Chairperson: Independent Director Harvey ChangMembers: Independent Director Edward Yao-Wu Yang, Independent Director Albert Hsueh

TheCompensationCommitteewasestablishedin2009tostrengthencorporategovernanceandalignthecompanywithinternationalpractices.TheCompensationCommitteehasbeenauthorizedbytheboardofdirectorstosupervise,reviewanddecidethecompany'scompensationpolicies.ItwasthefirstCompensationCommitteeinTaiwantobegrantedpowerssecondonlytothoseoftheboardofdirectorsamongpublicly-listedcompaniesatthattime,somethingwhichsoonbecamenormforalllocalcompanies.

ThesupervisionscopeofCompensationCommitteeincludesperformanceappraisalsandcompensationpoliciesofdirectorsandoverallexecutivemanagers,buildingupthesalarypolicybyregularlyinvitingtheprofessional3rdpartytoinspectthecompany'scompensationaccordingtoLITE-ON's“BoardofDirectorsandFunctionalCommitteePerformanceEvaluationNorms”,aswellasemployees'incentivesandbonuses.LITE-ON'sCompensationCommitteeconsistsofthreemembers;allofwhomarechosenfromindependentdirectorstoensureobjectivity,professionalismandfairnessofthecommittee,whileavoidinganyconflictsofinterestthosemembersmayhavewiththecompany.

TheCompensationCommitteereviewsthecompany'scompensationpoliciesandplansonaregularbasistoensurethattheyaresufficienttoattract,motivateandretaintalent.Thecommitteereviewstheperformanceandcompensationofdirectors,theCEOandgeneralmanagers,andevaluatesemployeebonusesonayearlybasis.

AccordingtoLITE-ON's"CompensationCommitteeOrganizationalRules,"theCompensationCommitteeconvenesatleastonceeverysixmonths.AtotaloftwoCompensationCommitteemeetingswereheldin2017.

Locations

Ratio of highest compensation to the

median **%

Ratio of salary increase for highest compensation to the

median %

Taiwan* 9139% 0.0%Brazil 1217% 22.1%MainlandChina*** 603% 30%Thailand 396% 298%

* Thecompensationincludessalary,mealallowance,fixedbonus,andemployeeremuneration(annualbonus);onlyinformationoftheparentcompanyisdisclosed.

** Annualsalaryhasbeenestimatedbasedonemployees'monthlysalaryasattheendofDecember.***DatainmainlandChinaarecalculatedbasedonthe5majorsitesincludingDongguan,Guangzhou,Changzhou,Beihai,andTianjin

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2.2.4 Growth Strategy CommitteeChairperson: Independent Director Edward Yao-Wu YangMembers: Director Warren Chen, Director Keh-Shew Lu, and Independent Director Harvey Chang, Independent Director Albert Hsueh

TheGrowthStrategyCommitteewasestablishedin2010inanattempttostrengthenandacceleratethegrowthofLITE-ON.Thecommitteeisauthorizedbytheboardofdirectorstoreviewgrowthstrategiesforthecompanyasawhole.Itisalsoresponsibleforthepreliminaryassessmentofallmajorinvestmentsofthecompany.Itreportsitsresolutionsregularlytotheboardofdirectors.

ThescopeofresponsibilityofLITE-ON'sGrowthStrategyCommitteecoversLITE-ONTechnologyCorporationaswellasitssubsidiariesandcertainbusinessunits.Committeememberscomprisefivedirectors,allofwhomareappointedbytheboardofdirectors

TheGrowthStrategyCommitteemeetingsshouldbeheldatleastonceeverysixmonthsinaccordancewithLITE-ON"GrowthStrategyCommitteeOrganizationalRules."AtotaloftwoGrowthStrategyCommitteemeetingswereheldin2017,themembers'attendancerateincludingattendinpersonandbyproxy)is100%.

RulesforManagingBoardofDirectorsanFunctionalCommitteePerformanceToimplementcorporategovernanceandenhancetheroleofLITE-ON'sboardofdirectorsandfunctionalcommitteesandtoestablishperformancetargetsforbetteroperationalefficiency,LITE-ONhasfollowedtheRulesforEvaluatingBoardofDirectorsandFunctionalCommitteePerformance*andpresentedtheresultsofthe2017performanceevaluationinthefirstboardmeetingin2018andinrelatedcommitteemeetings.Theresultsofthe2017performanceevaluationandthemeetingattendancerecordsareavailableonthecompanywebsite:https://www.liteon.com/en-us/globalcitizenship/312

*RulesforEvaluatingBoardofDirectorsandFunctionalCommitteePerformancewaspublishedonthecompanywebsite:https://www.liteon.com/en-us/investor/corporategovernance

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https://www.liteon.com/en-us/investor/corporategovernance

董事會(審計委員會)

2.3.1 The Risk Management Framework LITE-ON'sriskmanagementframeworkandinternalcontrolsystemallowittotaketheinitiativeandrespondtotherisksassociatedwithitsoperationsinthemostcost-effectivemanner.TheGroupCEOservesasthehighestrankingofficerinthecompany'sriskmanagementframework.

Asitincreasinglyconductsitselfasaninternationalbusiness,LITE-ONstartsfacingtheimpactandgrowingchallengesofafastchangingglobaleconomy.Therefore,LITE-ONidentifiespotentialrisksthatmayhaveaneffectonsustainability,andformulatesmanagementstrategiesandresponsemeasuresinordertoreducethepotentialriskofbusinessinterruption.Thecompanyhasdevoteditselftoensuringthefinancial,environmentalandsocialsustainabilityofstakeholdersincludingitscustomers,shareholders,andemployeesandthecommunity.Whiletakingstepstorealizethisgoal,LITE-ONadoptsarobustriskmanagementframework,andperformsriskassessmentswithrespecttostrategy,finance,operations,andhazardsinordertodeterminetopthreehighrisks.Thecompanyalsoidentifiesandcontrolsthevariousrisksofconcern,sothatsaidriskcanthenbetransferred,mitigated,minimizedoreveneliminatedentirelyandturnedintobusinessopportunities.

2.3 Corporate Risk Management

BoardofDirectors(AuditCommittee)

GroupCEO

CorporateInternalAudit

CorporateFunctions/Operations

StrategyInvestment

ManufacturingTechnology

Finance

OccupationalSafetyandHealth

Management

OperationControlling

CSEROffice

InformationTechnology

InvestorRelations/PublicRelations

HumanResource

ManufacturingOperationExcellence

Legal&

IntellectualPropertyStorage

PowerConversion

SmartLife&Applications

MobileMechanics

MechanicalCompetence

OptoelectronicProductSolutions

PortableImageDevice

BusinessUnits

RegionsUS SingaporeEurope Shanghai

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2.3.2 Risk Management Life CycleLITE-ON has been able to develop a comprehensive r iskmanagement frameworkwith job functions and areas ofresponsibilityclearlysegregatedforrisk identificationpurposes.Risksidentifiedwithintheorganizationareclassifiedinto"ExternalRisks,""OperationalRisks,"and"InformationDisclosureRisks."Each risk is furtherassessedandassigneda severity levelofhigh,medium,or low,andmappedontoariskmapforeaseofidentification.Thisenablestheorganizationtotakefurtherstepsto transfer,accept,mitigate,andavoid the identifiedrisks.ByexecutingthePDCAcycle(plan,do,check,andact)thecompanyisabletoimproveitscontrolovervariousriskfactorsandreducethechancesofrisksoccurringandtheimpacttheymighthave.

"ExternalRisks"refertoexternalfactors;"OperationalRisks"refertoproblemsthatareassociatedwiththecompanyitself;"InformationDisclosureRisks"refertorisksassociatedwiththedisclosureofpublicinformationaspartofthecompany'soperations.Bysettingkeyperformance indicators (KPI)withintheorganization,LITE-ON isable toassesswhetherkeyriskshaveemerged,andtakenecessaryactionstotransfer,accept,mitigateoravoidsuchrisks.Inordertominimizethepossibilityanddegreeofloss,thecompanyadoptsariskmanagementsystemthatisevenmoreproactivethaninsurance.Meanwhile,LITE-ONisprogressivelyimplementingan"AAAProductLiabilityControlProject"asenhancedmanagementovermanufacturingandsalesrisk.Furthermore,wehasincludedidentificationandmanagementoflongtermemergingrisksinthecorporateriskmanagementplan.

Operations(neglectofsafetyrules/lossofpersonalproperty)Healthandsafety(lighting)

Environment(chemicals)Environment(climatechange)Humanresources(orders/childlabor/workinghour)Finance(Electricitybills)Businessstrategy(shareholderrelations)

Marketrisk(customers'needsandsatisfaction)

Politics(politicaldevelopment)Healthandsafety(chemicalcorrosion)Business(businessperformance)Finance(liquidity)Compliance(legalandreputationrisks)Strategies(businessmodel/organization)

Safetyandhealth(safetyofgastanks)Environmentalsafety(poisonousgasandfire)Humanresources(limitationoffreedom)Finance(derivatives)

Operations(useofwater/mistakes)Humanresources(hazardousjobs)Environment(noise)Finance(carbontax)

Safetyandhealth(highfurnacetemperature)Humanresources(workinghours/grievancechannels)Business(budgetspending)Operations(productsandservices)

Business(pension)Humanresources(bribery)Safetyandhealth(substanceexposure/fatigue/burns)

Compliance(localenvironmentalprotectionlaws)Humanresources(protectionofwhistle-blowers)

HighMediumLowImpact

Occurrence

HighMedium

Low

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2.3.3 Risk Management ProjectsInordertoaddressexternalandoperationalrisksofhigheroccurrenceorimpact,LITE-ONhasimplementedariskmanagementplanthroughoutallplantsitesthatfocuseson"RaisingSafetyAwareness,""ProtectingCriticalAssets,"and"EstablishingSafetySystemsandRules."

• Raising safety awareness TheRiskManagementDepartmentarrangesregulartrainingandseminars,andraise

theirawarenesstowardssafetyandriskmanagement.

• Protecting critical assets Eachyear,thecompanyconductsinfraredtestsonelectricalappliancesusedinplant

sites,andscrutinizeeverythingthecompanydoesfromproductdesign,manufacturingtoafter-saleliabilities

• Establishing safety systems and rules Throughregular inspectionsand improvements,LITE-ON isable tooptimize the

riskprofilesof itsproductionsites,reducingthepossibilityofaccidentsandhenceminimizinglossofworkers,plant,equipment,rawmaterials,andoperations.

Theriskratingandauditsystemalsohelpsreflecttheriskstatusofvariousproductionsites.Itremindsworkersofthepotentialdangerspresentintheworkplace,andallowsquantifiabletargetstobesetandimprovedupon.Intheshortterm,thesystemhelpseliminaterisksassoonastheyarediscovered;inthelongrun,itenablesmanagementtobetterplanitsriskcontrolsandimplementation.

LITE-ONwillbeintroducingnewbusinesscontinuitymanagementtomakesurethatthecompanycanresumeoperationsrapidlyandremaincompetitivewhenfacinganydisaster.Atthecurrentstage,thecompanyisfocusedondevelopingaBusinessContinuityPlan(BCP)thatachievesthefollowingbenefits:

• Ensurebusinessrecoverabilityandsustainability;reduceoveralloperationalrisksandmaintaincompetitiveness.

• Provideassurancestocustomersandsecureorevenexpandmarketshare.• Protectthecompany'sreputationandshareholders'interests.• Reducecostsofsupplychainmanagementandcreateindustryservicevalue.

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2017Riskidentificationandcontrolmeasures

ConcernsRisk identification Risk control measures

Economicconcerns

Finance 1.CashsecurityandinterestrateriskpreventionCashmanagementincludesdebtandriskcontrol,fundutilizationcontrol,andinvestmentsizecontrol.(1)Globalcashinventoryisperformedregularlyandanyabnormalityisfollowedup.Theobjectiveistoincreasereturnoncash,improveprofitability,andprevent

lossofassetsduetoexternaldisasters.(2)CalculateAR/APestimatesonamonthlybasistofacilitatecashplanning.(3)LevelsofauthorizationareestablishedinaccordancewiththeSOPs,andpaymentsareERPencryptedandthenpaidviaelectronicbankingservicestoensure

moresecurepayments.(4)Optimalcashandassetstructuresarereviewedregularlyforcashplanningpurposeandtoachieveoptimalcashsize.

2.Exchangerateriskprevention(1)Thecompanymonitorsforeigncurrencydenominatedpositions,revenuetargetcompletionrate,andinventorychangesonadailybasis.(2)CurrentmonthYTDandmonthendforeignexchangegainsandlossesarecalculatedonadailybasis.(3)Financialforecastmodelsarecreatedforforeignexchangepositionstoenablereal-timehedging.(4)Differencesinpositionforecastandreasonsforforeignexchangegainsandlossesareexaminedonamonthlybasis.Theobjectiveistokeeptrackofthenet

balanceafteroffsettingofforeigncurrencydenominatedassetsandliabilitiesandreduceoperationalrisksarisingfromexchangeratevolatility.3.Assetsecurityanddamageriskprevention

Assetriskmanagementisperformedjointlywiththeinsurerandinsurancebroker.(1)Assetrisksareinsuredasneededtotransferriskstotheinsurer.(2)Regularinsurancecoursesorseminarsareheldtoaddressassetrisks,cargotransport,productliabilityandmanagementofotherrisks.Theobjectiveisto

ensurethedepartmentsandfactoriesarefullyawareoftherisksourcesandabletoeliminaterisksandreducepotentiallossesinatimelymanner.(3)Cargotransport,productliability(AAA)andfactorysafety(infraredthermographytesting,propertyprotection)areinspectedregularly.(4)Thefactoriesareriskgraded,andreceiveongoingsupportwithriskmanagementplanning.

4.Factoringsecurityandpreventionofclientcreditrisk(1)Performregularcreditchecksonclientsandidentifycharacteristicstheirlinesofworkinordertofacilitatecreditratingmanagement.(2)Performregularreviewsofclients'credittermsandpaymentconditionsinordertoreduceexposureandoptimizepaymentperiods.(3)Implementannualcreditreviewstoexamineclients'businessactivitiesinordertoavoidexternalunforeseenrisksandarrangeforadequateinsurance

coveragetotransferfactoringrisks.(4)Implementspecialtransactionreviewstoavoidshippingrisks;andmonitorclients'paymentsandaccountstoensuretimelypaymentrecoveryandkeep

creditriskslow.(5)Organizeregularcreditriskeducationandtrainingtoraiseawarenessofriskmanagementintheworkplace.

Operationcontrolling

Assistthebusinessunitscarryingoutlong-termandannualbusinessplanning,andestablishtheinternaloperatinginformationmanagementsystemtohelpthemanagementtoeffectivelycontroltheimportantoperatingkeyfactorsaswellasoperatingperformanceriskswhileproperlyallocatingandcontrollingresourcesforoptimizationofoveralloperatingresultsaccordingtothecompany'sdevelopmentstrategy.

Informationtechnology

DesignandimplementaninformationmanagementsystemtohandleonlineandsystemITsecuritymanagementandpreventivemeasures.Thesystemwillfacilitatefullconversiontodigitaloperationsandprovidethemanagementwithcorrectandrelevantreal-timebusinessinformation,andimprovetheflowefficiencyaswellasdecisionqualityinordertoreduceoperationalandITsecurityrisks.

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2017Riskidentificationandcontrolmeasures

ConcernsRisk identification Risk control measures

Economicconcerns

Legal Responsibleforassessinglegalrisks,including:identifyingcontractrisksbyreviewingcontractsandrecommendmanagementstrategy;providinglegaladviceandrecommendationsregardinginternalsystems,compliance,disputeresolution,mergersandacquisitions,andintellectualpropertymanagement;andoverseeingproduction,utilizationandcancellationofthecorporatesealsinordertoreducetheoveralllegalrisk.

Auditor Formulateandimplementtheannualauditplanbasedonresultsoftheriskassessments.Assesstheeffectivenessofthedesignandexecutionofinternalcontrolandassisttheriskmanagementorganizationandbusinessunitsindesigningriskmanagementbasedoncontrolprocesses.

Corporateinvestment

TobebasedontheGroup'sstrategy,industrydevelopmentandglobaleconomicconditionsandtorespondtotheGroup'sbusinesstacticplanning.Analyzeandassessstrategicobjectivesandperformanceofinvestments,monitorholdingperformance,andimplementgroupmanagementtoreduceinvestmentrisks.

Public/Investorrelations

Actasthebridgethatconnectsthecompanyandinvestors,mediaandthegeneralpublic.Conveyeffectivelybusinessrelatedinformationtoexternalpartiestoensuretimely,accurate,andtransparentdisclosureinordertoavoidcorporateimagerelatedoperationalrisks.Furthermore,enableinvestorstohavefullaccesstomaterialinformationregardingthecompany'sbusinessoperationsinanopen,fairandjustenvironmentinordertoreducetheinvestorrisk.

Supplychainmanagement

•EnsuresourcingandoriginarenotcontainwithConflictMineralsinoursupplychain.•Newsuppliersselectionstandards•Conductsupplychaintraining.•SupplychainRiskidentification/assessmentandtreatment

BusinessEthicsandanti-corruption

•ConductGroupCodeofConduct,EthicalManagementPrinciples,andEthicalpolicy&Procedures.•ConductemployeesBusinessethicsandanti-corruptiontraining.•Bypassmanagementgrievancechannel.

Environmentalconcerns

Climatechange •Developgreen,innovativeenergyefficiencyproducts.•Developmentgreenadvancedproductiontechniques.•Buildagreenfactorymanagementsystem.•Useactiontosaveenergyandreducecarbon.•Energyconsumptioninventoryandsourcemanagement

Environmentalregulations

•Environmentalregulations&compliance.•WorkplaceHealthandSafety.

Socialconcerns

Humancapitalmanagement

•Humancapitalplansdevelopment•Designforemployeedevelopmentandtraining•Designcompetitivecompensationandpackages.•Localization&localtalentdevelopment.

Productqualityandsafetymanagement

•Productdesignbyinternationalstandardsandbrandnameclients'specifications•Strengthentechnicalteams.

36


LongtermemergingrisksmanagementEnvironmentalrisksmanagementLITE-ONidentifiespotentialshort-,medium-,andlong-termeffectsofclimatechangebasedonresultsof internalandexternal investigationsanditsowndecisionsandjudgmentsafterstudyinginternationalresearch,industrytrends,and2℃scenarioanalysisanduncertaintiesandtakingintoaccountclimatechangerelatedinternationalagreementsandenvironmentallaws.Italsomeasurestheprobabilityofincurringsuchrisksandthedegreeofimpactonthecompany.Theprimaryclimatechangerisksestablishedin2017were(1)riskofmarketconditionchangesandtechnologicalevolution,(2)regulatoryandcompliancerisk,(3)reputationrisk,and(4)riskofphysicaldisasters.

RegulatoryandcomplianceriskIssuessuchasclimatechangeinducedtrends,carbonemissionreduction,totalemissioncontrol,andcarbonemissionstradingmayleadtonewregulationsandamendmentsofexistingonestostrengthenregulatorycontrolofenvironmentalinformationdisclosureandtoimposemorerigorouscontrolongreenhousegasemission.Suchregulationswouldspurbusinessestotakeamoreactiveapproachtocarbonemissionreduction,whichmayalsoleadtohigheroperatingexpenses.TheymayalsoleadtochangesinLITE-ON'sproducts,productionprocesses,andbusinessmodels.

RiskofmarketconditionchangesandtechnologicalevolutionTheeffectsofclimatechangeonbusinessesarenotlimitedtotightercontrolongreenhousegasemission.Developmentof lowcarbontechnologyandagreatervarietyofservicesmayinfluenceconsumerpreferencesforproducts,andcausechangesinconsumerbehaviors.LITE-ONwillbeobservingconstantlyclimatechangeinducedchangesinmarketconditions,andinvestinresearchanddevelopmentofgreentechnologiestoenabletimelyresponsestoshiftsinconsumerpreferencesforgreenproducts.

ReputationriskLITE-ON'sperformanceonenvironmentalissuesisunderconstantscrutinyfromstakeholders.Publicopinionmayhaveanimpactonbrandvalueandcausechangesinconsumerbehavior.Inparticular,negativeexposureinanenvironmentallyconsciousmarketmayalterconsumerbuyingbehavior.LITE-ONwillcontinuetoadvocatecorporatesocialresponsibility, fulfill itsenvironmentalpromises, improve itsenvironmental informationdisclosure,andachievesustainabilitytodevelopapositiveimage.

RiskofphysicaldisastersEffectsofclimatechangemay includerisingtemperaturesaroundtheworld,changes inrainfallpatterns,andextremeweatherconditions(intermsofbothfrequencyandseverity).

Theseeffectsmayleadtoflood,slopelanddisaster,ordrought,andcausedamagetocriticalinfrastructures,waterresources, landuse,coastlines,biodiversity,andhealth,allofwhichinturnhaveanimpactonbusinessmanagement,employees,andsupplychains.Intermsofcontrolmeasures,LITE-ONdeploysariskmanagementcycleandusesittotrackandimproveriskfactorsinordertoreducetheprobabilityandseverityofriskinducedlosses.LITE-ONalsoseekopportunitiesinclimatechangerisksatthesametime.Inresponsetoidentifiedkeyrisks,LITE-ONhas implementedmeasurestomitigatethebusiness impactofclimatechange.Risksaremonitoredregularlyandmanagedtoproduceasummaryofriskmanagementmeasures, including(1)researchandinnovationingreentechnologytodeveloplowcarbon,highperformancegreenproducts,(2)developmentofautomatedenergysavingtechniquesandinnovativecleanenergy,and(3)introductionofgreenpowerplanstoimproveenergyefficiencymanagement.Pleasesee4.2ResponsetoClimateChangeandGlobalWarmingformoredetails.

SupplychainriskmanagementAspartofitsefforttobuildasustainablesupplychain,LITE-ONperformssuppliersustainabilityriskassessmentseveryyear.LITE-ONscreenssupplierrisksonapreliminarybasisbyanalyzingpotential risks intermsof locationofasupplier,amountofprocurement,andproductionprocessofa supplier. Furthermore, tobetterunderstanda supplier's risks,we surveysustainabilityrisksinallkeysuppliersandfirsttiersuppliers,andrequirekeysupplierscompleteandreturnsustainabilityriskquestionnaires.Whenthequestionnairesarecompleted,wewillperformamoredetailedriskassessmentonhighrisksuppliersidentifiedintheprocess.HighriskkeysupplierswillbesubjecttoonsiteauditsorberequiredtocompletetheRBAValidatedAuditProcess(VAP).HighriskfirsttiersupplierswillberequiredtocompleteandreturntheRBASelf-AssessmentQuestionnaireinordertoverifyandkeepreducingtheirrisks.Theriskassessmentsaboveareperformedtoidentifypotentialeconomic,environmental,andsocialrisksinthesupplychainaswellassupplierswithpotentiallyhigherrisks.Wetargetsupplierswithpotentiallyhigherrisksandperformauditsandprovideassistancetoensuretheirrisksareeffectivelykeptundercontrolandminimized.Pleasesee3.3.SupplyChainManagementformoredetailsonstrategiesandresponsemeasures.

ChangesinlaborlawsaroundtheworldChangesinlaborlawsandregulationsmayleadtoincreasedcosts,whichcanaffectbusinessperformance.Forexample,therequirementofonefixeddayoffandoneflexibledayoffeachweekundertheLaborStandardsActinTaiwanstipulatesthatworkersaregivenonefixeddayoffthattheyhavetotakeandoneflexibledayoffthattheymayormaynotbeabletotake.Thecostoflaborroseaftertherulecameintoeffect,leadingtoanegativeimpactonprofitabilityandgrossprofit. Inaddition,shiftschedulingbecameharder formanufacturers.Therearesometimesdifficultiesinmeetingrequesteddeliverydates.Ourwayofresolvingthesituationissendingrepresentativestoexplainchangesinthelaborlaws,developingschedulingsoftware,providingtrainingforemployeestoacquiredifferentskills,andreplacingmanuallaborwithautomatedsystems.

37


LITE-ONpledges toupholdhonestyand integrity inbusinessmanagement,and toobeythelawsandethicalstandardsofthecountriesinwhichitcarriesoutitsbusinessactivities.LITE-ONalsocommits itself tomakingcompletecomplianceoneof itskeypolicies.LITE-ONhasimplementedawell-designedmanagementsystem,anddeploysregulationidentificationandeducationandtrainingasmeanstostrengthencomplianceonanongoingbasis.

TheLegalDepartmentatLITE-ONhasbuiltanextensivecompliancesystemanddevisedcompliancepolicies.Thedepartmentmonitorsregularlychangesindomesticandforeignregulationsthatmayhaveapotentiallymaterial impactonthecompany'sbusinessoperations.Inthepresenceofanysuchchange,theappropriatelocallegaldepartmentwillproceedtoperformregulationidentificationinordertoensureallbusinessactivitiesaroundtheworldcomplywiththelocalandinternationallawsandregulations.Meanwhile,LITE-ON'smanagementstructureprovidesarobustriskmanagementframeworkandaneffectiveimplementationroadmapfor identifyingandmanagingtherisksthatrequiretheattentionofbusinessmanagers. Inaddition,LITE-ON's internalcontrolspreventpotentialfraudandinappropriatebehaviorsinordertominimizerelatedrisks.Internalinterdepartmentalreviewsandexternalinspectionsareinplacetoensurecomplianceofimplementationandperformance.Taskforceswillbecreatedforlargeinvestmentprojectsinordertoapplycertainprocessestomanageandpreventtheriskoffraudandpreventillegalactivities.Tostrengthencomplianceandcorporategovernancepractices,theboardofdirectorspassedoramendedoperatingproceduresincludingthecorporategovernancebestpracticeprinciples,thecodeofconduct,theethicalcorporatemanagementbestpracticeprinciples,andcomplianceproceduresin2017.

LITE-ONrequiresthat itsemployees,supervisors,managers,anddirectorsnotengageinoruseanyreasontoinstructanothertoengageinanyillegalorunethicalbehavior.Therulesof integritymustbestrictlyadheredtoandestablishexplicitlytheemployeecodeofconductinareasincludingprofessionalethics,lawsandregulations,employeerelations,giftsandhospitality,clientprivacy,intellectualpropertyrights,discrimination,bribery,conflictofinterest,protectionofcorporateassetsandreputationandotherrulestobeobservedbyemployees.Compliance is implementedthroughoutthebusinessactivities,productdesign,procurementproceduresandotherprocessesanddiscipline

2.4 Compliance, Ethics and Anti-Corruption

isstrictlyenforced.Westateexplicitlyintheethicalcorporatemanagementbestpracticeprinciplesprohibitionofofferingortakingofbribes;offeringofillegalpoliticaldonations,inappropriatesponsorshiporcharitydonations,andimpropergifts,treatments,orotherunjustifiedbenefits; infringementofintellectualpropertyrights;andunfaircompetitionaswellaspreventionmeasuresandproceduresthatpreventproductsorservicesfromcausingdamagestostakeholders.Therulesareintendedtoprotecttherightsofcustomersandpreventlossofassets,penalties,anddamageofreputation.

LITE-ONrequiresnewemployeessignastatementofcommitmenttoethicalconductwhenthey jointhecompanysotohelp itsemployeesunderstandthe importanceofethicalconductandtheneedforit.Furthermore,LITE-ONrequiresemployeescompleteanti-corruptiontraining.Toraiseawarenessof integrityandself-discipline,LITE-ONadvocatescomplianceeducationandtrainingonanongoingbasis,and, inadditiontovariousseminarsfromtimetotime,organizescoursesthathelpparticipantslearnaboutthelawandkeycomplianceissues,includingLITE-ONworkethics,anti-corruption,insiderinformation,andanti-trustissues.TheResponsibleBusinessAlliance(RBAandformerlyEICC)offersthefollowingin-personcourses:businessintegrity,avoidanceofillegitimategains,protectionof confidential information,protectionof intellectualproperty,intellectualpropertyrights,advertisingandcompetition,contractriskmanagement,fairtrade,anonymityandconfidentiality,anti-corruption,conflictfreeminerals(metalprocurement),environmentalprotection,privacy,andprohibitionagainstretaliation.Thecoursesareprovidedtoraiseawarenessofethicalstandardsintheworkplace.(Pleaseseethechapteronemployeedevelopmentandtrainingfordetailsofrelatedtraining.)

Aspartofthe internalcontrolandauditsystem, internal inspectionsandreviewsareconductedinindividualunitsandsubsidiaries,andtheupdatesandresultsaredisclosedintheannualreport.PleaserefertoPage37forresultsofinternalcontrolin2017AnnualReport.

38


ReportingmechanismsLITE-ON isequippedwith internalandexternal reportingmechanisms thatbypassthemanagementandoffer internalandexternalcontacts.TheboardofdirectorsapprovedthedecisiontoappointtheOfficeofChairmanasthecontactresponsibleforhandlingcorruptionreportsbyfollowingtheappropriateprocedures. Inaddition,task forceswillbecreated for large investmentprojects inorder toapplycertainprocesses tomanageandprevent the riskof fraudandprevent illegalactivities.Regularinternalauditsareperformedtostrengtheninternalcontrolandpreventfraud.

Internal report ingmechanisms are avai lable so thatdiscoveryofunethicalbehaviorsor suspectedviolationofthecodeof conduct canbe reported internallybycallingthehotline at 1234orby sending email to [email protected]. LITE-ONwill keep informants' identities and theirreports confidential, and take action to investigate andhandle the cases. Employeeswhoare confirmed tohaveviolated theethical corporatemanagementbestpracticeprincipleswillbesubjecttodisciplinaryactionasappropriate.

Externalreportingcontactsarepublishedonthecompany'sCSRwebsiteasfollows.https://www.liteon.com/en-us/globalcitizenship/354

ContactinformationTelephone:+886-2-87936833Email:[email protected]:OfficeofChairmanReportingMailbox,P.O.BOX156-21,NeihuJiangnan,TaipeiCity11499

Corruptionreportsandcomplaintsthatarereceivedbythecontactwillbeassignedtotheappropriateunitstobeinvestigatedaccordingtothereportandcomplaintprocessingprocedures.Ifacomplaintisconfirmedtobevalid,acommitteeconsistingofdepartmentrepresentativesandexpertswillbecreatedtoreviewandruleonthecomplaint.

Grievancesin2017In2017,LITE-ONreceivedatotalofeightgrievancesthroughexternalchannels,withonesubmittedbytelephone,onebymail,andsixbyemail.TheOfficeofChairmanreportinvestigationtaskforcereceivedthereportsandpromptlylaunchedaninvestigationeach

2.4.1 Violation of Labor Standards Act

Date Site Unit of labor inspectionApplicable article(s)

2017/1/4 Zhonghe NewTaipeiCityLaborInspectionDivision Article30Subparagraph6

2017/1/18 Kaohsiung ExportProcessingZoneAdministration Article30Subparagraph5

2017/7/25 Zhonghe NewTaipeiCityLaborInspectionDivision Article30Subparagraph6

1. TheaboveviolationofArticle30,Subparagraph5and6weremainlycausedbythefactthatthecompanywasfinedbytheDepartmentofLaborfornotkeepinganemployeeattendancerecord.ThecompanyhadexplainedtotheDepartmentofLaborthatthecompany'sofficepersonneladherestoanhonorsystembasedonmutualrespectbetweenmanagersandemployees.Thecompanyconsistentlycomplieswithlawsandregulations.However,thecompanyoperatesinvariouscitiesacrossTaiwan,anditsemployeesmovearoundquitefrequently.Thecompanyhasalsoestablishedoverseasofficesaroundtheworld,thereforetofacilitatebusinessactivitiesonaglobalscale,thecompanyhasgivenconsentthatmanagersandemployeesmayworkflexiblehoursasneeded.Duetotheabovereasons,thecompanyisunabletocomplywithregulatoryrequirementsatthepresent,butcontinuestotryandfindafeasiblesolutionthatcomplieswiththeregulatoryrequirements.

2. AllinformationabovehasbeenpublishedontheLITE-ONwebsite:www.liteon.com/en-us/globalcitizenship/3033. OperationsinChina(includingmajorplantsinDongguan,Guangzhou,Changzhou,Beihai,Tianjin)andinThailandreportednoviolationof

locallaborregulations.

time.Sofar,fiveofthecaseswereclosed,andthreearestillunderinvestigation.

Case studies in lawsuits involving employee corruption Internalcontrols:1.Compliancetrainingisgivenmoreweightinorientationandon-the-jobtraining.Regular

bulletinsarepublishedtoraiseawarenessoftherulesandhelpemployeesunderstandtheimportanceofinternalcontrolstothecompany.

2.Closedcasesinvolvingmoresevereviolationsaredescribedbelow:2.1Case1:Asectionchiefunderacertainbusinessunitwassuspectedofaccepting

hospitalityfromasupplierandpaddingtravelexpenses.Thecasewasinvestigatedandtheresult reportedtotheheadofsaidbusinessunit.Thesectionchiefwasdismissedgiventheseverityofthecase.

2.2Case2:Amanagerunderacertainbusinessunitattemptedtosolicitabribefromanexistingsupplier.Thefactwasconfirmedtobetrue,andthemanagerwasdismissed.

3.AsummaryoftheabovecaseswaspresentedregularlytotheAuditCommittee. Inaddition,assistancewasgiventorespectivebusinessunits intakingappropriatedisciplinaryactions,andsaiddisciplinaryactionswereannouncedaccordingly.

39



www.liteon.com/en-us/globalcitizenship/303

ThescopeofinformationsecurityatLITE-ONencompassesemployees,clients,suppliers,andshareholdersandallITsoftwareandhardwareassociatedwithitsbusinessactivities.All informationsecuritystandardsandregulationsarebasedontechnicalsupportandestablishmentofapplicationsanddatasecuritystandards.ThestandardsandregulationsaremadepartofthemanagementsysteminordertoprotecttheprivacyofLITE-ON'semployees,suppliers,andclientsandmaintain informationsecuritywhiletheabovepartiesdiscussbusinessmatters.Aninformationsecuritymonitoringsystemhasbeenimplementedtoperformvulnerabilityscanningandpreventexternalhackerattacksandinternalconfidential informationleakage. IThardware/softwarecontrolappliestotheestablishmentofaninformationsecuritynetworkthatincludestheInternetandpersonalITequipment,suchasdesktopcomputers,notebooks,tablets,andsmartphones.Thecontrolmeasuresare intendedtoensurepersonal information, internalconfidential

2.5 Information Security and Privacy Management

information,andclientandsupplierinformationareeffectivelyprotected.

The informationsecuritymanagementsystemandenforcementrulesare inplacetoensureeffectivecontrolandestablishcleardefinitionofresponsibilitiesandmanageraccountabilities.Withrespecttointernalcontrol,LITE-ON'sITdepartmentisconstantlyworkingtoimprovetheinformationsecuritymanagementsystem.Newemployeessignanemployeecodeofconductagreementandreceiveinformationsecuritytrainingonthesamedaywhentheyjointhecompany.Annualinformationsecuritytrainingisalsoprovidedafterward.LITE-ONprovidesongoingtrainingasmeanstoraiseawarenessofinformationsecurityintheworkplaceandincorporatetheelementsintotheprocessesinordertoachievethemostsecureandrigorousinformationprotection.Nocomplaintregardinginvasionofclientprivacyorlossofclientdatawasreceivedin2017.

Employee training

Error reporting system

Incident response exercise

Internal/External audits

Information security

management practices

Record retention and digital identification

Employee and segment

performance evaluation

Establish framework of information security management practices

Create shared information security management standards for corporate functions and pilot SBGs

Gradual incorporation of SBGs/BUs into information security management practices

·Create an information security management organization ·Create a framework of information security management practices ·Create information security standards and specifications in the organization ·Establish targets and indicators of information security management ·Make information security management practices part of the corporate ·culture through employee training ·Assess future results and potential reasons for failure and keep making ·adjustments and improvements

·Select 1-2 members from each SBG/BU to join the information security management task force ·Adjust according to SBG/BU attributes ·Enhance and strengthen systems to suit different SBG attributes and processes ·Shorten project schedule effectively and allow system flexibility ·Implement processes and assess results

Assess SBG/BU characteristics for improvement and modification

Build a strong

corporate culture

Long term goals: Complete implementation of corporate functions and SBGs/BUs that will contribute to the corporate culture ·Ensure full implementation and incorporate elements into processes ·Make improvements and adjustments on an ongoing basis ·Make continuing system improvements to match the corporate culture and applicability

Step

-by-

step

plan

ning

and

impl

emen

tatio

n

LITE-ONinformationsecuritymanagementstrategyandframework

40


Informationsecuritymanagementcampaignandblueprint

Width

Law trainingConfidentiality training ……

Confidentiality and law training 1

Establishment of information classification 2

Establishment of corporate information confidentiality 3

Data protection and evidence retention 4

Irregularity analysis and early warnings 5

Establishment of information classification Information classification planning Information management planning ……

Corporate information protection organization Corporate information confidentiality measures Personnel confidentiality measures Noncompetition measures Information system security management Information leakage reporting mechanisms Information leakage response exercise Ongoing improvement (PDCA)……

Access control Transmission control Storage control Usage control Physical environment security control Trade secret management and evidence retention planning ……

Include data protection in ERM Include data protection KPIs in performance evaluation Irregularity monitoring, analysis and early warnings……

Dept

h

41


Major power supply products

reduced CO2e emission of

261,646 Tonnes

100% of products compliance with environmental directive(EU)

Customer satisfaction: 96%

Sustainable supply chain

100% compliance with LITE-ON COC

3.1 Goals and Strategies for Reducing Impact of Products and Supply Chain

3.2 2017 Green Designs and Achievements

LITE-ON'sapproachtogreendesignalwaysbeginswiththeproductlifecycleandfollowstheprinciplessuchasreducingeffectsoftoxicsubstancesintheenvironment,reducinguseofmaterials, improvedeaseofassembly,makingmoreefficientuseofenergy,andimprovedeaseofdisassemblyandrecycling.Inaddition,LITE-ONsystematicallyintegratesproductdevelopmentresults,andworkswithsupplierstobecomethebestpartnerofcustomersinachievinglowcarbonemission,ensuringenvironmentalfriendliness,andcreatingsustainablevaluechains.It isLITE-ON'smissiontoenableuserstoliveasafer,morecomfortable,andmoreenergyefficientlifestyle.

Results in 2017Business targets in 2017 Strategies and actions Progress

Continuedefforttomakerawmaterialsandothersupplies100%compliantwiththeEU'sRoHSandREACHrestrictedsubstancedirective

Strengthenedtheextendedresponsibilitymanagement ingreensupplychainandimplementationoftherestrictedsubstancemanagementsystem

100%compliant

2 tons/daywater savingonnotebookkeyboardproductionprocess

Improved product ion processes andmaterials

3tonnes/daywatersaving

Reductionofweighofenclosureproductsby30%ormoretoreducecarbonemissionduringshipping

Adoptedgreenpackagingdesigns thatreducedvolumeanduseofmaterials

32%weightreduction

Desktopenergyconversionefficiencyupby2%comparedto2015

Improvedenergysavingcircuitrydesign 2%improvement

Standbypowerconsumptionofnotebookpoweradaptorandmobilephonechargerdownby20%comparedto2015

Improvedenergysavingcircuitrydesign Reduction>20%

Recycl ing 25% or more of res ins inenclosureproducts

Increasedthepercentageofrecyclable/easytodisassembleparts

28%recyclable

Averagecustomersatisfactionat90%orhigher

Acceleratedresolutionofmajordefectsandstrengthenedtechnicalcapabilities

Overallsatisfactionat96%

Asustainablesupplychain100%compliantwiththeLITE-ONcodeofconductregardinglabor,humanrights,andenvironmentalissues

- Pe r f o rmed s upp l i e r a ud i t s a ndassessments , and fo l lowed up onimprovementsinkeyareas

- Providedsuppliertraining

100%compliant

100%conflictmineralfree - Requ i red suppl ie rs to commit toprocurementofconflictfreeminerals

- Performed due diligence along thesupplychain

100%compliant

Setting future goals Future goals Completion

Serverpowersupplies'powerconversionefficiencyupby2%comparedto2016 2023Averagecustomersatisfactionkeptat90%orhigher Ongoing100%completionofCSRassessmentsofhighrisksuppliers 2018100%conflictmineralfree Ongoing

(1) Acquisitionofrawmaterials:● Since2010, LITE-ONhas implemented the "LS301 standardsonhazardous

substances:218controlledsubstances"andthe"GreenProcurementGuidelines".Inadditiontoimplementinginternalcontrol,thecompanyrequiresthatupstreamsupplierssubmitevidencetoprovecompliancewiththerequirementsforLITE-ONcertifiedsuppliers.Meanwhile,LITE-ONtakesanactiveapproachtoworkwithwell-establishedcustomersworldwidetoensureeffectivemanagementanduseofenvironmentallyfriendlymaterials.

● DesktopenclosureproductsareRoHS&REACHcompliant.Itnotonlyhelpustoreceivedomesticandinternationalenvironmentallabelsorcertification,butalsohelpourclientstoobtainEPEATsilverlabel.

(2) Production:● Forproducts includingopticaldiscdrives,magnetic components,desktop

enclosures,minicomputers,andautomotivehead-updisplay,materialinputduringproductionisreducedbyreducingthenumberofpartsorusingcommonpartsandmolds;andtool-freeeasy-to-assembledesigns(e.g.thumbscrewsorlatchesforeasydisassembly)andsimplifiedproductionprocesses(e.g.replacingspotweldingwith)havealsobeenimplemented.Inaddition,automatedproductionisintroducedtoincreaseproductioncapacityandshortentheproductionhoursbyonethird.Automatedproductionalsoreducespowerconsumptionperunitproductduringproductionaswellasproductcarbonfootprint.

● Greenproductionprocessesforlaptopkeyboardsaredevelopedtoreplacemanualspraypaintingwithspraypaintprinting.Quickdrypaintthatdoesnotrequirecuringorcleaning isalsoused.Thesystemsavesupto3 tonsofwatereveryday,whichistheequivalentof0.43litersper item.Italsosignificantlyreduceswastewatergeneratedduringcleaningaftercuring.

(3) Distributionandshipping:● Thedesktopenclosuredesignwithreducedvolumeanduseofmaterialscanbe

demonstratedinacomparisonbetweenG558andG557,thelatestseries.Packagingmaterialsaremodified,andthenumberofpartsreducedby43%.Thickness isreducedandproductstructurelesscomplicatedtocuttheweightby32%inordertoincreasetransportcapacityandreducecarbonemission.

(4) Productapplication:● Streetlightsandtrafficsignalproducts:Innovativein-housecalibrationmethods

areusedtoredesignpowersupplyequipmentandtocalibratepowercontrolcomponents.Applicationsinin-houseLEDenergysavingstreetlightsandtraffic

43

GRIStandards Index | Contents。GreenProductsandValueChain 1 2 3 4 5 6

signalproductshaveimprovedenergyconversionefficiencyinlightingproductsby20%ormore.

● Powersupplyproducts:•High-endserverpowersupplyproductshaveenergyconversionefficiency

improvedby0.22%onaveragein2017comparedto2016.Basedontheshipmentof3,000kin2017,powerconsumptioncanbereducedby33.53millionkWhandcarbonemissionsby17,736tonscomparedto2016.

•DesktopPCpowersupplyunitsare improveduponresearchtechnologiesof2015,andtheenergyconversionefficiencyisincreasedby2%in2017.Basedontheshipmentof17,491kin2017,powerconsumptioncanbereducedby438.97millionkWhandcarbonemissionsby232,216tonnescomparedto2016.

•ImprovementsmadebytheR&Ddepartmentto laptoppowersupplyunitsandmobilephonechargershave reducedstandbypowerconsumptionby

20%compared to2015.Basedon theshipmentof92,395k in2017,powerconsumptioncanbereducedby22.11millionkWhandcarbonemissionsby11,694tonnescomparedto2016.

● Solidstatedrives(SSD): Theaveragepowerconsumption is6.2W,which isconsistentwith theenergy

savingdataontheEPseries,andbetter(lower)thanthecustomers' lowenergyconsumptionrequirementat8.25W.Energyefficiencyisimprovedby24%,which,basedontheproductionvolumein2017,225thousandmachines,translatestoreducedby4.6millionkWhand2,422tonnesofcarbonemissionreduction.

(5) Wastedisposal:● Forproductsincludingall-in-oneworkstations(AIO),desktopenclosures,andserver

chassis,useofrecyclableresinisincreasedto28%orhigher.Inparticular,upto87,500kgofresincanberecycledfromAIOsinayear.

Raw materials Production Distribution Use Disposal & Recycling

Managementofupstreamsupplies(LS301+greenprocurementguidelines)In‐plantmaterialmanagementWorkingwithdownstreamcustomers

CommonmoldsandpartsReducednumberofpartsToolfreeassemblyImprovedprocessesandmaterials

Numberofironandplasticpartsreducedby43% ↑Weightofenclosureproductsreducedby32% ↑Modifiedproductpackagingmaterials

Increaseduseofrecyclableresinby28% ↑87tonsofrecyclableresinuseperyear

Lightingproductsby20% ↑Totalenergysavingforpowerproductsofserver,PCandmobilephoneapplicationsat494.61millionkWhperyearandreductionofcarbonemissionat261,646tonnesEnergyconsumptionforSSDreducedby2W,cuttingcarbonemissionby2,422tonnesperyear

Materials100%compliantwithRoHS/REACHDirectiveCAMDScertifiedandhelpingclientsobtainEPEATlabel

ProductionhoursforPC/enclosureproductsreducedby1/3Watersavingforlaptopkeyboardproductsreaching3tons/day

EasytodisassembleIncreaseduseofrecyclablematerials

ReducedenergyconsumptionperproductMoreefficientenergyconversion

Designstoreduceproductvolume,materials,andweightImprovedpackagingdesign

ProductLifeCycleAnalysis

Environmentallyfriendlymaterials

Easytoassemble

Improvedtransportefficiency

Recyclingmaterialsandsupplies

Moreefficientenergyconversion

Environmentalcompliance

Reducedemissionperunitproduct

Increasedpercentageofrecyclableparts

Lowenergyconsumption

Reducedvolumeandmaterials

44


Smart traffic Smart living

Smart manufacturing

Industrial automation

solutions

Smart city solutions

SmartInternet

of Vehicles

solutions

Smart officesolutions

Smart home solutions

Electric car charging solutions

Smart care solutions

3.2.1 Innovative applications of smart and energy saving products

3.2.2 Product certification

Withyearsofworkandinvestmentinanumberofsmartandenergysavingproductsaswellassystemicintegrationofthreeorsevenapplications,LITE-ONtriestocreateasafer,friendlier,andmoreenergyefficientuserexperienceandestablishitselfasthebestpartnerforusersofitsproducts.

(1) Smarttrafficapplications: Thiscategorycovers"smartcitysolutions","smartInternetofVehiclessolutions",and"electric

carchargingsolutions".Theseapplicationscombine"appactivatedenergysavingsmartstreetlights"and"IoTandcloudmodulebasedplatforms"andworkwithdevelopmentin"IoVandautomateddrivingsystems"andelectricvehiclechargingstations(IC3)toprovideasafer,morecomfortable,andmoreenergyefficientexperienceontheroad.

(2) Smartlivingapplications: Thiscategorycovers"smarthomesolutions","smartofficesolutions",and"smartcare

solutions".Theseapplicationsarebuiltoncloudcoredevices,mobileapps,smartoutlets,socialmediaandcommunitybasedandhighperformanceofficeequipment,andsecuritymonitoringterminalsensors,andutilizecloudautomationtocontrolelectricalappliances,suchaslighting,airconditioning,orsecurityandsurveillance,tocreateasafe,smart,andenergyefficientlifestyle.

(3) Smartmanufacturingapplications: Thiscategoryconsistsmainlyof"industrialautomationsolutions".Theapproachof"focusing

onIndustry4.0andbigdataanalytics"istakentodevelopvariable-frequencydrives(VFD)thatareessentialtotheplants,andsmart,energysaving,andhighperformanceequipmentsuchasprogrammablelogiccontrollers(PLC)orindustrialPCs(IPC)areusedincombinationwithappstoachievehighperformance,highspeed,andshortprocess.

LITE-ONnotonlycommitsitselftocomplyingwithenvironmentalpoliciesandhealthandsafetyrequirementsofgovernmentsandcustomersindifferentcountries,butalsomakesanactiveefforttoobtainproductcertification.AllLITE-ONproductsareconsistentwiththeirrespectivedescriptionsandcomplywiththelabelingrequirements.In2017,LITE-ONdidnotviolateanyproductorserviceinformationorlabelingregulations.

Atotalof257productscertifiedwithenergy

savinglabels

Atotalof455productscertifiedwithHealth,

environmental,andsafetydirectives

Atotalof1149productsareincomplianceEU'selectricalandelectronicdirectives,i.e.,

RoHS,REACH,WEEE,ErP45


3.3 Restriction on the Use of Hazardous Substances

Inordertoensurethatitusesonlymaterialsthatareenvironmentallyfriendlyandconformtointernationalstandardsandcustomerrequirements,LITE-ONstrictlydemandsallsupplierscomplywithitsLS301standardsonhazardoussubstances.AllprocurementcontractsexplicitlyrequirethatallproductsprovidedbysupplierscomplywiththeEU'sRoHSDirectiveandrelatedenvironmentalregulations.TherestrictionorprohibitionontheusesofHazardouschemicalsubstancesareclassifiedintothreecategories,Prohibited,Controlled,andPossiblyProhibited(includingveryhighconcernatREACH).Currently,LITE-ONrestrictedsubstancescovers218items:prohibitedsubstances24itemsandcontrolledsubstances26itemswhileongoingcloselypayattentiontopotentialharmfulnessofthe168itemsnotyetlistedasprohibited/restrictedsubstances.Wehopetobringcustomerstheleasttoxicandleastpollutingproductsaspossible,andminimizeanyharmfulimpacttheymayhaveontheenvironmentorthehumanbeingduringtheprocess.

Prohibited substances 24 items

Lead and its compounds (Pb),Cadmium and its compounds(Cd),Mercuryanditscompounds(Hg),Hexavalentchromiumanditscompounds(Cr(VI)),Polybrominatedbiphenyls(PBBs),Polybrominatedbiphenyl ethers (PBDEs), Azo

compounds,Shortchainchlorinatedparaffins (C10-C13,

SCCP)etc

Possibly prohibited substances 168 items

REACHGroup1-Group8substancesofveryhighconcern(SVHC),Berylliumanditscompounds(Be),Bismuthandits compounds (Bi),Mediumchainchlorinatedparaffins(C14-C17,MCCP),

Dimethylfumarate(DMF)etc.

Controlled substances 26 itemsBFRs/PVC,Arsenicanditscompound(As),Arsenicanditscompound(As),Trichloroethylene,PhthalatesDEHP/

DBP/BBP/DINP/DIDP/DNOP)etc.

Inadditiontoestablishingasetofstandardsforhazardoussubstancecontrolandrelatedprocurementcontract templates,LITE-ONhas implementedtheGreenManagementSystem(GMS)toensureallrawmaterialsandproductsprovidedbyitssupplierscomplywiththehazardoussubstancerequirementsofLITE-ONandthoseof itsdownstreamclients.TheGMScombinesmaterialrequirements,internationallaws,customerpolicies,andcodesofconduct.SuppliersarerequiredtoreporttheresultsoftheirgreenproducttestsandsubstancecontrolsontheGMS,wherethecompanywillanalyzetoconfirmthattheyhavecompliedwiththegreenproductguidelinesandmetinternationalstandardsbeforereleasing informationregarding itsgreenproductmanagementtocustomers.Customers'greenproductrequirementssuchasErP(Energy-relatedProduct),3R(Reuse,Recycle,Replace)andWEEE(WasteElectricalandElectronicEquipment)havebeenincorporatedintothecompany'smanagement,andserveasabasisforgreenproductdesign.

LITE-ONRestrictedSubstances218items

Suppliers Customers

GMSInput

Review

Output

Provide green information on parts (Material Composition Declaration, MCD)

Review and approve information from suppliers

Check green part information; green BOM available for download

LITE-ON (Procurement/RD/PM)

46


3.4 Supply Chain Management

3.4.1 Supply Chain Sustainability ManagementPurchasingdecisionisnotonlybaseontheproduction,serviceandoperationalconcerns,butalsoneedtoberesponsewithcorporatesocialresponsibility.ThusLITE-ONbuildssupplychainmanagementoncompliancewithitsregulatoryobligations,andfocusesonworkers'rights,environmentalconservation,andhealthandsafetyalongthesupplychainaskeycontrolpointsforidentifyinghighrisksuppliers.Assessmentresultsareusedtodeviseimprovementplanstohelpsuppliersenhancetheirmanagementpractices.TheobjectiveistoreducebusinessrisksandcostsforbothLITE-ONanditssuppliersanddevelopsustainablepartnerships.

3.4.1.1 Supply Chain Management Commitment•Establishasustainablesupplychain.• Leadingsuppliers'dedicateoncorporatesocial responsibilityonenvironmental

protection,healthandsafety,andhumanrights.•Encouragessupplierdevelopinnovativebusinessmodelstoreduceenvironmental

impact.•Enhancecompetitivenessthroughsupplychainquality,cost,delivery,serviceand

sustainabilitycapabilities.•EnsuresourcingandproductsnotcontainwithConflictMinerals.

3.4.1.2 Supply Chain Management AspectSupplychainmanagementaspect:

3.4.1.3 Supplier Sustainability GuidelinesSupplierexecutivecertificateofcomplianceLITE-ONhassetupaadoptedtheResponsibleBusinessAlliance(RBA)CodeofConductandreferences internationalregulations includingtheGuidingPrinciplesonBusinessandHumanRights, InternationalLaborOrganization'sDeclarationonFundamentalPrinciplesandRightsatWorkandtheUniversalDeclarationofHumanRightsetc.,andrequiresitssupplierstocomplywiththeruleshereinregardingworkers,healthandsafety,environmentalconcerns,businessethics,andmanagementstructuresandcomplywiththelawsandregulationsinthecountries/regionswheretheyoperatetheirbusinesses.Meanwhile,LITE-ONrequires first tiersuppliers implement thesameguidelinesassuppliersonthenexttier.

GreenprocurementandsupplierselectionInadditiontoevaluatesuppliers'quality,cost,timelydelivery,service,andtechnologicalcapability,LITE-ONhasadopted the followingsupplierevaluationprincipleswithprocurementmanagementbasedongreensupplychain:•Suppliersof LITE-ONmustestablish relevant systems for themanagementof

environmentalprotection,healthandsafetyofemployees,and thecontrolofhazardousmaterials.

•MeettheLS-301standardsofLITE-ONon“Concentration limitof toxicchemicalsubstancesinprohibitedmaterials”.

•Providesuitableandupdateddeclarationdocumentsorevidence in linewiththerequirementsofthehazardoussubstancesfreemanagementplanofLITE-ON.

Supplier Sustainability Guidelines

Supply Chain Risk Management

Management mechanism

SupplierExecutiveCertificateofComplianceHazardousSubstancesFreeManagementPromotionofGreenProcurementGuidelineConflictMineralsPolicy

LocalprocurementCriticalsuppliersHighrisksuppliers'identificationNon-tier1suppliersmanagement

NewsuppliersselectionprocessGradingsuppliers'managementConductsuppliertrainingAuditandcounselsupplier'scorporatesocialresponsibilitycapability

47


3.4.1.4 Management of Conflict MineralsLITE-ONsupportstheResponsibleBusinessAlliance(RBA)anditsResponsibleMineralsInitiative(RMI),andrequiressuppliersbuyconflictfreematerials.LITE-ONhasimposedfullrestrictionsagainsttheuseofmineralssourcedfromconflictminesinAfricasince2010,andadoptedthetoolssuggestedbyRBAtomanageitscommitments.Meanwhile,LITE-ONhasimplementedaduediligencestructureincompliancewiththeOECDDueDiligenceGuidanceforResponsibleSupplyChainsofMineralsfromConflict-AffectedandHigh-RiskAreas.

Management of material certification

Management of material control

Education and training

Conflict minerals reporting

Supply chain risk assessment

3.4.2 Supply Chain Risk ManagementLITE-ONconsiderssupplychainriskmanagement isoneofacompany'scompetitiveadvantagesandexpectssupplierstoworktogetherwiththecompanytostrengthsupplychain.Therefore,LITE-ONteamsupwithseveralTaiwanese ICTcompanies to formthe“CorporateGreenCompetitivenessAlliance,CCGA”,whichsupportsamutuallybeneficialandsustainableenvironmenttorespondtogreenregulationsaroundtheworldandfollowgreentrendstocreategreenvalue.

SupplychainandlocalizedpurchasingLITE-ONoffersadiverseandflexiblerangeofproductsandservices;itusessuppliersfromvarioussourcesthatformanextensivesupplychaintosupportLITE-ON'sbusinesses.Thereare1,685certifiedfirsttiersuppliersofferinganextensivevarietyofgoods.SuppliersaremainlycategorizedbytheirrelevancetoLITE-ON'sproducts,andaredistinguishedbetweendirectandindirectsuppliers.Directsuppliershaveaccountedforthemajorityofdirectpurchasesmadeinthepast,totaling90.76%in2017.

In2017,65.14%ofpurchasesmadetodirectsuppliersinvolvedpartsandcomponentssuppliedbymanufacturers; thesemanufacturers representedthemajorityofLITE-ON'ssupplierlistat70.39%.Distributorsofcriticalpartsandcomponentsaccountedfor25.62%,whereassuppliersofindirectmaterialsandservices(includingtransportationandprofessionalservices)accountedfor9.24%.Seethefigureontherightforadetailedanalysis.

Conflictmineralsmanagementprocess

2017Supplier Categories and Purchasing Ratios

9.24% Others

Manufacturers65.14%

Distributors (including wholesalers) 25.62%

48


Regardingthepercentagesuppliedbylocalprocurement,LITE-ON'sproductionsitesaremainlylocatedinChina,ThailandandTaiwan.Regardingproductionfacilities,localsuppliersrepresented66.9%ofthesupplierlistinChinain2017;andlocalsuppliersrepresented10.5%,whichwaslowerthan35.4%in2016,ofthesupplierlistinThailand.Ashiftintheprocurementpolicyalsomeansthatinsteadofbuyingfromlocaldistributorsorwholesalers,thecompanybuysdirectlyfrommanufacturersinChinaorTaiwan.Localsuppliersrepresented100.0%ofthesupplierlistinTaiwan.

CriticalSuppliersmanagementToensureeffectivemanagementofsuppliers,stringentscreeningcriteriaareappliedduringtheselectionstage.Passingsupplierswillbefollowedupwithon-siteinspectionsandreviewmeetingstoevaluatetheirperformance.LITE-ONthenfocusesitsmanagementeffortsonthekeysuppliersitidentifies.In2017,thesekeysuppliersrepresented31.81%ofthesuppliers,andaccountedfor81.27%ofLITE-ON'spurchases.Inparticular,in2017,thepercentageofkeysupplierswhowerealsolocalsupplierswas60.88%inChina;3.13%inThailand,whichappearedtobeonadownwardtrendsince2016thatwasmainlyattributedtothechangeinthenumberoflocalsuppliersinThailandin2017;and100%inTaiwan.Keysuppliersareidentifiedbasedonthefollowingcriteria:

• HighproportionsinLITE-ON'sspending• Hightechnologicalandcreativeabilities• Uniquesource

IdentificationofhighrisksuppliersLITE-ONassesspotentialenvironmentalorsocialrisksfacedbykeysuppliersbasedonthelocationsoftheiroperations,productionprocesses,theGlobalWaterToolreleasedbytheWorldBusinessCouncilforSustainableDevelopment(WBCSD),andresultsofitsaudits.Thefactorsintheriskassessmentsincludethefollowing:

Economic Environmental Social

• Quality,cost,deliverydate,servicesandtechnicalcapabilities

•BusinessEthics•Compliance•Suppliermanagement• Capabilityofprocess

automation•Criticalingredient

cannotbeobtainedintimeandinvolume

•Uniquesource

•Environmentalregulationcompliance

• EnvironmentalmanagementsystemsClimatechange

• WaterResourcesManagement

•Wasteandairpollutionmanagement

•Employeehealthandsafety

•HumanRight•Worker'swelfare• Conflictminerals

management•Workhours

Majorsustainabilityrisksin2017 Economic

•Exclusiveness•Supply of key rare

metals•Supplier's automation

capability

Environmental•Environmental law

compliance•Water resource

management•Climate change

Social•Employee health and

safety•Work hours

Highrisksuppliers'Category

IC Printedcircuitboard/powersupplyproducts/cables/casing

Printed circuit board/powersupplyproducts/cables/casing

• Management of sustainability risks in tier 1 supplier In2017,LITE-ONadded171companies(excludingsuppliersspecifiedbyclients)to

itssupplierslist;100%ofwhichpassedLITE-ON'sEICCauditandsatisfiedcompanystandardsregardingenvironmentalprotection,worker'swelfare,humanrights,andsocialimpact. Meanwhile,31supplierswereremovedfromthelistduetochangeofsuppliernameandlackofcompetitivecosts.

• Non tier1 supplier management Inadditiontoourrequirementsfortier1suppliers,wealsorequirethatoursuppliers

managetheirtier1suppliersinordertocreateamorereliablesupplychain.

• Highlevelofcustomization• Laborintensiveorhighpolluting

processindustry• AbilitytofulfillCSER

Mainland China0%

20%

40%

60%

80%

33.1%

89.5%

100%

Thailand Taiwan

Number of non-local suppliersNumber of local suppliers

49


AuditandGuidanceonSupplierCSR-HumanRights,Environment,Safety,Health,andManagementSystemsLITE-ONhasincorporatedtheRBACodeofConductintothesupplychain.Theseruleshelpthecompanymonitorsuppliersonissuesregardingmanagementethics,protectionofworkers'rights,andhealthandsafetymanagementpractices.LITE-ONalsoencouragessupplierstodevelopmaterialsandproductionprocessesthatminimizeenvironmentalimpacts.WeutilizetheRBAAuditToolstoreviewandevaluatesupplierperformanceinfulfillmentoftheircorporatesocialresponsibility.In2017,LITE-ONperformedauditson528keysuppliersidentifiedashighpriority,andnonewaslistedasanunqualifiedsupplierforbeinginviolationofCSRregulations.Theauditresultsovertheyearsareshowninthechartbelow.

Customersatisfactionisoneofourcorevalues.AtLITE-ON,wedeliverexcellentexecutiontoprovidequalityandinnovativeservicesthatconsistentlymeetourcustomers'highstandardsandmakeusthebestpartnerforourcustomers.

Ourbusinessunitsallhavecrossfunctionteams(CFTs)providingtargetedservicestoindividualcustomers;theseteamsbearresponsibilityfortakingorders,performingproductR&Dandmanufacturing,andensuringquality,delivery,cost,andafter-salesservice.OurCFTscanquicklyproposeresponsemethodsandoverallsolutionsbasedoncustomerissuesandfeedback.

Inordertosatisfycustomers'needsforpromptdelivery;wehandlepurchasing,planning,logistics,andcashflowprocessesonline,anduseonlineinformationasthebasisforouroperations.Wealsointegratedatafromexternalsuppliers,customers,andbanks,etc.,toensurethatmanagementanddeliveryinformationiscorrectandup-to-date.Furthermore,toshortentheprocessingtimefortechnicalsupport,transportanddelivery,andafter-saleservices,LITE-ONhasinstalledproductionfacilities,branches,anddistributionwarehousesinlocationsclosetocustomersaroundtheworldthatareabletorespondpromptlytocustomers'needs.

Supplierseminarson"SupplierFulfillmentofCorporateSocialResponsibilities"9seminarsandworkshopson"SupplierFulfillmentofCorporateSocialResponsibilities"wereheldin2017toexplainthecompany'sCSRcommitments.Executivemanagementofsupplierswasrequestedtosign"ManagementCommitments"thatbindthemtocomplywith"RBAstandards".

3.4.3 Supplier Management Mechanisms 3.5.1 Customer Service

20150

100

200

300

400

560

464

524

4 40

500

600

2016 2017

Pass Fail

3.5 Customer Service and Satisfaction

LongtermpartnershipsbetweenLITE-ONandcustomers

Surveyandunderstandneedsofinternal/externalcustomers

SixSigmatrainingandqualitytraining

ManagementParticipationandcommitmentto

quality

Deliversatisfaction

Makecontinuousimprovementofinternalprocesses• Productdesign• Supplychain• Productiontechnologies• Informationtransmission

50


"CustomerSatisfaction"hasalwaysbeenLITE-ON'stoppriority.UnderstandingandanalyzingcustomersatisfactionisoneoftheimportantwaysforLITE-ONtocontinuallyimproveitsproductqualityandserviceproceduresandimplementnewsystemstofurthersatisfycustomers'needs.

Buildingonscoresofregularcustomerevaluationandauditsaswellasresultsofthequalitymanagementsystem,LITE-ONsendscustomersatisfactionsurveystolargecustomers*1everyyear.Surveyresultsareusedtomakeimprovementplans.Inaddition,improvementofcustomerevaluationscoresisalsomadeoneoftheperformanceindicatorsforcertaindepartmentsasappropriate.Acustomersatisfactionscorebelow4willrequiretheresponsibledepartmentsproposeimprovementmeasures.Thesalesdepartmentwilltracktheprogressinimprovement,whichshouldbecompletedontimetoensuresatisfiedcustomers.

BelowaretheresultsofCustomersatisfactionsurveyconductedbyLITE-ON'scorebusinessin2017

Satisfaction Survey ItemsOverall

satisfactionGreen

Compliance Quality PurgeSupply / Delivery Technology Responsive-

AverageSatisfaction

Score(outof5) 5 4.7 4.8 4.9 4.7 4.9 4.8

Satisfaction(%) 100 94 96 98 94 98 96

Satisfaction>4.5

Count 10 9 8 6 6 9 9

Percentage 100% 90% 80% 60% 60% 90% 90%

Satisfaction<4.5~>4.0

Count 0 0 2 4 4 1 1

Percentage 0% 0% 20% 40% 40% 10% 10%

Satisfaction<4.0

Count 0 1*2 0 0 0 0 0

Percentage 0% 10% 0% 0% 0% 0% 0%*1:maincustomersaredefinedascustomergroupsthataccountfor70%ofrevenuesofthePowerConversionbusinessgroup**2:Improvementofthequalityissuewithasatisfactionscorebelow4wascompletedinthecurrentyear,andthefileswereverifiedbyrespectivecustomersandfiledinthesystem

3.5.2 Customer Satisfaction

SendoutCustomer

SatisfactionSurvey

Followuptoensurecustomersreturnresultson

time

Analyzecustomersatisfaction

Improvementmeasuresand

follow-up

Managementreviewmeeting

Seniormanagement

review

Feedbackforcustomers

Customerservicerepresentativesfilethedocuments

Processofcustomersatisfactionsurvey

2 0 1 585%

88%

91%

94%

97%

100%

2 0 1 6 2 0 1 7

Cust

oem

r Sat

isfa

ctio

n

91%

94%

96%

51


LITE-ONiscommittedtocomplyingwithinternationalhealthandsafetyregulations,customers'safetyrequirements,andrecommendationsforimprovementbysafetycertificationagenciesovertheyears.Thecompanycombinestherulesandmakeshealthandsafetypartoftheconsiderationsforproductdesign,production,anddistributionforbettermanagement.Thecompanyalsoprovidescustomersanduserswithproductsthatcanbesafelyused.LITE-ONfollowsaproductsafetymanagementprocessthatbeginsasearlyasintheproductdevelopmentstagesotocomplywithinternationalsafetyregulationsandcustomers'safetyrequirements.Thedesignservesalsotoavoidreworkandwasteofmoneyandlabor.In2017,LITE-ONreceivednocustomercomplaintregardinghealthandsafetyregulationsforproductsandservices.

Productsafetymanagement

3.5.3 Product Health and Safety

Product design Engineering validation test

Design verification test

Trial production

Mass production

Includedindesignaccordingtothesafetyinspectionchecklist

Failuremodeandeffectsanalysis(SafetyFMEA)Productdesignreview

ListofkeysafetycomponentsSafetytestmethodsandreportsOpen/ShortcircuittestFailuremodeandeffectsanalysis(SafetyFMEA)Productdesignreview

YellowBookcheckComponentapprovalsheetcheckProductdesignreviewFailuremodeandeffectsanalysis(SafetyFMEA)

Incomingqualitycontrol(IQC)Billofmaterials(BOM)confirmationProductsafetyinspectionInternalsafetyaudit

52


Science Based Targets for GHG Reduction Goals

Carbon Disclosure

Project: Supplier Engagement

Rating A-

Intensity of waste reduced 6.92%

compared to the based year,

exceeded the goal

Intensity of water consumption

reduced 9.10% compare to the

based year, exceeded the goal

Clean production NBKB chassis

saved electricity of 76,800 kWh

and water of 550 tonnes

４.1 Commitment to Environmental Sustainability and Policy

LITE-ON reformulated its lowcarbon strategyafter theParisAgreement.WeusetheRecommendationsof theTaskForceonClimate-RelatedFinancialdisclosures,announcedbyTaskForceClimate-RelatedFinancialDisclosures(TCFD)asareferenceintheimplementationofdisclosingclimatechangeinformationandrelatedrisksandopportunitiesinimportantbusinessreports.LITE-ONmaketheclimaterelatedfinancialstatementsasoneofthemeansofstakeholdercommunication, insupportofCarbonDisclosureProject(CDP)andtheWeMeanBusinessCoalition'sCommittoActionInitiative.

Regardingitscommitmenttocarbonemissionreductiontargets,LITE-ONformallysubmitssciencebasedtargets(SBTs)forthecompliancereviewin2018inordertocalculateareasonablecarbonemissionreductiontargetforLITE-ONgiventheGlobalCarbonBudget.LITE-ONalso followsasetofadaptationandmitigationstrategiesandcontinuestodevelopgreendesign,greenfactory,energymanagement,andhighperformanceenergycreation,conservation,andconversionproductsandsolutionsinordertocountertheimpactandchallengesofclimatechange.

AdaptationandmitigationstrategiesEnergy creationDeveloprenewableenergyandincreasetheenergyusefromrenewablesourcesLITE-ON

Energy conservation•Optimizeproductionprocessesandimproveplantoperationstoeffectivelyachieve

energyandwaterconservation,wastereduction,andairpollutionprevention•Devoteeffortstominimizingtheimpactofproductpackagingandbusinessactivities

ontheenvironment• Improveenergyconservationandenvironmentalprotectionperformanceatallplants

Energy conversion •Implementgreendesignto improveenergyefficiencyforproductsandreducethe

environmentalimpactsofproductsatusestages•Continuetoencouragesupplierstoexploreinnovativemeansofoperationthathave

lessimpactontheenvironment

LITE-ONhave established clear short-,medium, and long-termenvironmentalmanagementgoalsforusesofenergyandresourcesanddischargeofpollutants.Thecompanymakescontinuousimprovementofitsenvironmentalmanagementsystemwiththeaimtoachieve lowpollution, lowenergyconsumption,easy-to-recycleandotherenvironmentalfriendlygoalsinproductdevelopment,production,use,anddisposal.Thecoverageofenvironmentalinformationaccountsto92%ofthecompany'stotalrevenue.LITE-ON'slatestenvironmentalmanagementgoals,whicharethosesetfor2017against2014asthebaselineyear,havebeencompleted.Startingin2018,LITE-ONisgoingtoreset itsshort-,medium,andlong-termenvironmentalmanagementgoals.Forcarbonreductiongoals, thecompanyformallysubmitssciencebasedtargets (SBTs) for thecompliancereviewtosupporttheefforttokeepglobalwarmingunder2℃ .

LITE-ONhassetcleargoalsonenvironmentalprotectionandenergyconservation,andimplementedanumberofmanagementpracticestoaddressusesofenergyandresourcesanddischargeofpollutants.Thefollowingisalistofmanagementgoalscreatedtoaddresskeyenvironmentalconcerns.

Progress in latest goals Goals 2017 Result

GHGemissionreductiongoals

GHGemissionperunitofrevenue(carbonintensity)in2017reducedby6%comparedtothebaselineyear2014

Reducedby2.00%*

Energysavinggoals

Energyconsumptionperunitofrevenue(energyintensity)in2017reducedby6%comparedtothebaselineyear2014

Increasedby0.67%*

Wastereductiongoals

Wastegeneratedperunitofrevenue(wasteintensity)in2017reducedby6%comparedtothebaselineyear2014

Reducedby6.92%

Waterconservationgoals

Waterconsumptionperunitofrevenue(waterintensity)in2017reducedby6%comparedtothebaselineyear2014

Reducedby9.10%

*InresponsetoChina'slaborshortage;LITE-ONhasbeeninvestingmoreinautomationinrecentyearstoincreaseproduction.Thecompanyalsomakesanefforttoimproveenergyefficiencyandreducetotalgreenhousegasemission.Carbonemissionandenergyconsumptionin2017werereducedby7.2%and4.2%,respectively,comparedto2014(baselineyear).However,revenuefellduetoaloweraverageretailprice.Asaresult,thecarbonintensityfellby2.00%andenergyintensityroseby0.67%in2017comparedto2014(baselineyear),andneithergoalsweremet.

4.1.1 Environmental Management Goals

54

GRIStandards Index | Contents。LITE-ONandtheEnvironment 1 2 3 4 5 6

LITE-ON'senvironmentalexpenditureswereNT$392million,or0.20%ofthetotalrevenue,in2017.Thefigurewas30%higherthanitwas(NT$301million)in2016.Moreover,LITE-ONdidnotincuranyfinancialcompensationorlossesarisingfrommajorenvironmentalpollutionrelatedincidents.Environmentalexpenditurescountdatafrommajorproductionfacilities,includingthoseinTaiwan,China,andThailand.

Category Expenditure (NTD million)(1)Operatingcosts 238.63

(2)Upstream-downstreamcosts 67.70

(3)Managementcosts 22.95

(4)R&Dcosts 49.26

(5)Socialactivitycosts 4.42

(6)Lossandcompensationcosts 1.05

(7)Taxes,levies,energysurchargesandotherexpenses 7.99

Total 392.01

4.1.2 Environmental Expenditure 1. Medium, and Long-term Environmental Management Goals

• 39.3%(sciencebasedtarget*)GHGemissionreductionperunitofrevenueby2025• Productenergyefficiencygoals:Basedonproductsandtechnologiesdevelopedin

2016,increaseenergyconversionefficiencyofhighendserverpowersupplyunitsby2%(sciencebasedtarget*)by2023

• Continue tooptimizeproductionprocessesand improveplantoperations toeffectivelyincreasewateruseefficiencyandrealizethevisionofminimizingwasteandmaximizingresourcerecyclingandreuse.

*LITE-ON'ssciencebasedtargetswereformallysubmittedinApril2018,andarecurrentlypendingreviewbytheScienceBasedTargetsinitiative(SBTi).

2. Short-term environmental management goals Goals Completion

Energysavinggoals Absolutereductioninenergyconsumptioncomparedto2017(baselineyear)

2020

Wastereductiongoals

6%absolutereductioninwastecomparedto2017(baselineyear)

2020

Waterconservationgoals

6%absolutereductioninwaterconsumptioncomparedto2017(baselineyear)

2020

Renewableenergytarget

100%energyfromrenewablesourceinTaiwaneseplants

2020

Operating costs

0.27% Loss and compensation costs

60.87%

Upstream-downstream costs17.27%

R&D costs12.57%

Management costs5.86%

Taxes, levies, energy surcharges and other expenses2.04%

Social activity costs1.13%

$Environmental

Expenditure

55


４.2 Responses to Climate Change and Global Warming Policy

LITE-ONpayscloseattentiontothewaysglobalclimatesarechangingandtohowtheworldisreactingtothisphenomenon.Thecompanyseesclimatechangeasamajorriskandanimportantopportunity.LITE-ONfollowsTCFDrecommendationsonclimaterelatedfinancialdisclosuresandmakesclimaterelatedfinancialstatementsoneofthemeansofstakeholdercommunication.Thecompanyalsoworksonadaptingtoandmitigatingtheeffectsofgreenhousegasesandperformsanalysisandmanagementofinternalenergyconsumptiononanongoingbasisasaproactiveapproachtoreducinggreenhousegasemission.

Whensettingcarbonemissionreductiontargets,LITE-ONformallysubmitsciencebasedtargets(SBTs)forcompliancethereviewin2018inordertocalculateareasonablecarbonemissionreductiontargetforLITE-ONgiventheGlobalCarbonBudget.AsetofadaptationandmitigationstrategieswillbedeployedtosignificantlyreducetheenergyconsumptionofproductsandmitigateLITE-ON'seffectsontheenvironment.

OverallimpactandchallengesofclimatechangeLITE-ONseesclimatechangeasamajorriskandanimportantopportunity.Thecompanyidentifiesitemsthatmaybeaffectedbypotentialshort-,medium-,andlong-termeffectsofclimatechangebasedoninternationalresearch,industrytrends,resultsofinternalandexternalinvestigations,anditsowndecisionsandjudgmentsafterstudyingthe2DegreeCelsiusScenario(2DS)anduncertainties.These itemsincludetheriskofmarketandtechnologyshifts,PolicyandLegal,reputation,andPhysicalRisks.LITE-ONalsoassessestheprobabilityandpotentialimpactofeachriskanddevisesappropriateresponsemeasures.

PolicyandLegalGivenissuessuchasclimatechangeinducedtrends,carbonemissionreduction,totalemissioncontrol,andcarbonemissionstradingmayleadtonewregulationsandamendmentsofexistingones.Itpushcompaniestostrengthenthedisclosureofenvironmentalinformationisstrengthenedandimplementmorerigorousemissionsreductionstandardsascountermeasures.Asaresult,businessesarespurredtotakeamoreactiveapproachtocarbonemissionreductionandcleanproduction,whichmayleadtohigheroperatingexpenses.TheseregulationsmayalsoleadtochangesinLITE-ON'sproducts,productionprocesses,andbusinessmodels.

MarketandTechnologyShiftsTheeffectsofclimatechangeonbusinessesarenotlimitedtotightercontrolongreenhousegasemission.Developmentoflowcarbontechnologyandagreatervarietyofservicesmayinfluenceconsumerpreferencesforproducts,andchangesconsumerbehavior.LITE-ONconstantlyobserveclimatechangeinducedchangesinmarketconditionsandinvestinresearchanddevelopmentoflowcarbon,highperformancegreenproductsasthelongtermsustainablestrategyforgreentechnologytoenabletimelyresponsestoshiftsinconsumerpreferences.

ReputationLITE-ON'sperformanceonenvironmentalissuesisunderconstantscrutinyfromstakeholders.Publicopinionmayhaveanimpactonbrandvalueandcausechangesinconsumerbehavior.Inparticular,negativeexposureinanenvironmentallyconsciousmarketmayalterconsumerbuyingbehavior.LITE-ONwilldedicateitselftoadvocatingcorporatesocialresponsibility,fulfillingitsenvironmentalpromises,improvingitsenvironmentalinformationdisclosureandincorporatingtheeffortsintoroutinemanagementpractices,andachievingsustainabilitytodevelopapositiveimage.

PhysicalRisksEffectsofglobalclimatechangeincluderisingintemperaturesaroundtheworld,differentrainfallpatterns,andextremeweather(intermsofbothfrequencyandseverity).Theseeffectsmay,intheshortterm,leadtoflood,slopelanddisaster,ordrought,andcausedamagetocriticalinfrastructures,waterresources,landuse,coastlines,biodiversity,andhealth,allofwhichinturnhaveanimpactonbusinessmanagement,employees,andsupplychains.

VisionandstrategyofadaptationtoclimatechangeIntermsofitsclimatechangeadaptationstrategy,LITE-ONtakesintoaccountproducts,equipment,managementandotherfactors,andcontinuestodevelopgreendesign,greenfactory,energymanagement,andhighperformanceenergycreation,conservation,andconversionproductsandsolutions.Inaddition,LITE-ONfocusesonenergymanagementsystems,renewableenergydevelopment,andinternationalrenewableenergycertificatesaskeystrategies,andmakesplansforinternalcarbonpricingtoprovideabasisforinvestmentstrategiesandriskmanagement.Tostartearlyinmakingpreparationsforpotentialeffectsofclimatechange,LITE-ONisimplementingthefollowingkeystrategies:

56


４.3 Reducing Greenhouse Gases

LITE-ONhasadoptedISO14064-1standardsinitsperformanceofannualgreenhousegasinventorysince2007.ThemostrecentstatementofverificationhasmettherequirementsforreasonableassuranceconsistentwiththeISO14064-3standardfromathird-partytoconfirmthatouremissiondataishigh-quality,reliableandhonest.

LITE-ON 2017 Greenhouse Gas Emission

CO2 CH4 N2O HFCs PFCs SF6 Total

Scope 1Direct emission

Scope 2 Indirect emission

359,944 8,421 38 4,034 0.0 0.0 372,445.80 17,755 354,690

96.64% 2.26% 0.01% 1.08% 0.0% 0.0% 100.00% 4.77% 95.23%

4.3.1 Greenhouse Gas Inventory 1.Developingenvironmentallyfriendlyandenergyefficientproductsisthefirstandmost

importantclimateadaptationstrategy.Examplesincludedevelopinghighperformancepowersupplysystems,LEDcomponents,lighting,andotherenergysavingproductsinanticipationofchallengesofclimatechangeinthefuture.

2.Developingautomatedenergysavingtechnologiesandcleanenergyinnovations.3.Expandingthescopeofrecyclingandreuseandmakingplansforintroductionofgreen

energy.

EnergymanagementstrategyLITE-ONimplementsISO50001energymanagementsystems,andmonitorsconstantlyenergyconsumptioninplantsandoffices.Theobjectivesaretoidentifypotentiallyfeasibleoptimization,toimproveenergyefficiency,toreduceconsumptionofnaturalgas,oil,andpurchasedelectricity,andtosupportthecampaignforautomatedenergysavingtechnologiesandcleanenergyinnovations.

RenewableenergydevelopmentLITE-ONElectronics(Dongguan)wasfirsttoinvestininstallationofrenewableenergy.Itssolarpowerplantisexpectedtogenerateupto1.18millionkWH,or2.6%oftotalpowerconsumptionbytheplantinayear,in2018.Moreeffortswillbeinvestedinthefuturetoinstallrenewableenergyinotherplantstoincreasethepercentageofrenewableenergyuse.

PurchasinginternationalrenewableenergycertificatesLITE-ONisTaiwan'sfirstdomesticenterprisetopurchaseaninternationalrenewableenergycertificatefromtheInternationalRECStandard(I-REC).Thecompanypurchased15,385thousandkWhofregisteredandcertifiedI-RECsinthecurrentyear.TheseI-RECswouldbeusedtooffsetallcarbonemissionsattheLITE-ONheadquartersandtheZhongheplantandpartofcarbonemissionsattheHsinchuplant.TheprocessembodiesLITE-ON'scommitmenttocarbonreduction.

InternalcarbonpricingstrategyLITE-ONfollowsinternationalcarbontradingissuesclosely.Thecompanyhasalsostartedformulatinginternalcarbonpricingplansforitsownsciencebasedtargetstointernalizecostsofcarbonemission.Weaimtoapplythetotalemissioncontrolconcepttosetreductiontargetsforindividualbusinessunitsaspartofourstrategytoresponsethechangesintheenergymarketafternewcarbonreductionandcarbontradingregulationslaunchedandreducingbusinessrisks.

CO296.64%

CH42.26%

PFCs0%SF60%

HFCs1.08%

N2O0.01%

LITE-ON 2017 Greenhouse Gas Emission

57


In2017,ourtotalgreenhousegasemissionis372,445TonnesCO2e,whichisequalto1.94tonnesofCO2epermillionNTDrevenue.ItachievesourGHGemissionreductiontargetofa7.2%(28,941tonnes)absoluteCO2eemissiondecreasecomparedwith2014,and2.8%(10,560tonnes)comparedwith2016.However,ourCO2eemissionintensityshowsa7%increasecomparedwith2016and2%lowerthanbaseyear,whichlowerthanwasexpected.ThissituationisprimarilyduetothedeclineinaveragesalepriceandthedevelopmentofautomatedproductionprocessesinordertohelpsolvethelaborshortageinChinaplants.

2014(Base year) 2015 2016 2017

Greenhousegasemission(Scope1),TonnesofCO2e 15,925 17,206 19,493 17,755

Greenhousegasemission(Scope2),TonnesofCO2e 385,459 364,671 363,512 354,690

Greenhousegasemission(Scope3),TonnesofCO2e Overseasbusinesstrips：1,892 Fuelsandenergy-relatedactivities：403overseasbusinesstrips：2,165Waste：11,922EmployeeCommuting：22,721

Fuelsandenergy-relatedactivities:4204overseasbusinesstrips：2,967Waste：9,992EmployeeCommuting：3,850

Fuelsandenergy-relatedactivities:6,152overseasbusinesstrips*4：4,589Waste：10,654Commuting：3,965

Greenhousegasemissionintensity,TonnesofCO2e/millionNTD

1.98 1.97 1.81 1.94

VolumeofScope1andScope2emissions-bygastype CO2:392,139CH4:7,740N2O:61HFCs:1,471

CO2:371,025CH4:7,047N2O:60HFCs:3,745

CO2:369,219CH4:8,048N2O:55HFCs:5,684

CO2:359,944CH4:8,421N2O:38HFCs:4,034

PercentageofScope1andScope2emissions-bygastype

CO2:97.69%CH4:1.93%N2O:0.02%HFCs:0.37%

CO2:97.43%CH4:1.70%N2O:0.01%HFCs:0.86%

CO2:96.40%CH4:2.10%N2O:0.01%HFCs:1.48%

CO2:96.64%CH4:2.26%N2O:0.01%HFCs:1.08%

2014-2017 Greenhovuse Gas Emission

2014(Base Year)

2015300,000

350,000

400,000

450,000401384

381877 383005372445

500,000

550,000

1.2

1.4

1.6

1.8

2.0

2.2

2016 2017

Tonn

es C

O2e

Tonn

es C

O2e

/mill

ion

NTD

2014-2017Greenhousegasemissionandintensity

58


2014(Base year) 2015 2016 2017

Biomassemissions(Scope1),TonnesofCO2e 745 532 280 0

Whetherexceedsthesignificancethreshold(3%) No No No No

Significantchangesbeyondthesignificancethreshold No No No No

Standardsandmethodology ISO14064-1 ISO14064-1 ISO14064-1 ISO14064-1

Sourceofemissioncoefficient IPCC2006 IPCC2006 IPCC2006 IPCC2006

Operational/financialcontrol(Scope1andScope2) Operationalcontrol Operationalcontrol Operationalcontrol Operationalcontrol

Note1:Directemissionofgreenhousegases(Scope1)includes:fuelcombustioninfixedequipment,productionactivities,fuelcombustionintransportationequipment,anddiffusion(e.g.fireextinguishersandrefrigerants).Note2:Indirectemissionofgreenhousegases(Scope2)includes:purchasedelectricityandsteam.Note3:Forothersourcesofindirectgreenhousegasemissions(Scope3)in2017,identifieditemsincludefuelandenergy-relatedactivities,overseasbusinesstrips,wastegeneratedinoperations,andemployeecommuting.Note4:Duetothelimitationondatacollection,ouroverseasbusinesstripsdataisforourofficesandplantsinTaiwan.

2014-2017 Greenhovuse Gas Emission

4.3.2 Energy-saving MeasuresLITE-ONcontinuallyupgradesourequipmentatofficesandplantstoachievehigherenergyefficiency.In2017,wefocusingonimprovingtheenergyefficiencyoflightingsystem,manufacturingprocess,airconditioningsystem,andbebetteratbuildingmanagement.Asaresult,16,587.11TonnesCO2ewassavedintotal,andthefollowingisadetailedbreakdownofourenergy-savingmeasures:

Site Energy-saving Measures Emissions Reduction (Tonnes)

Taiwansite -Lightingsystemupgrades-Manufacturingprocessimprovement-Improvingefficiencyofproductionequipment

216.06

Chinasite

North -Lightingsystemupgrades-Improveairconditioner'sefficiency-Invertersonaircompressors-Winterenergysavingprojectforabsorptionfreezedryers

894.47

East -Productionequipmentreplacementforabettercombustionefficiency-Lightingsystemupgrades-Winterenergysavingprojectforabsorptionfreezedryers

3101.46

South -Lightingsystemupgrades-Manufacturingprocessimprovement-Upgradeairconditioners-Buildingmanagementimprovement

12375.12

total 16587.11*Duetothelimitationondatacollection,ourenergy-savingmeasuresdataisforourofficesandplantsinTaiwanandChina.

59


1.DirectenergyIn2017,LITE-ONconsumed83,521GJoffossilfuel,equivalenttoanintensitylevelof0.43GJ/NTDmillion.Thetotalfossilfuelconsumptionis6%decreasecomparedwith2016,but2.4%higherinintensityprimarilyduetothedeclineinaveragesaleprice.

Belowaredetailsontheuseoffossilfuel:• 359.7kilolitersofdieselwasusedin2017,andabout35%lowerthan549.1kilolitersusedin2016.

ItisbecausemostofourmanufacturingplantsinChinahasappliedforandbecomeaNoBreakPowerSupplyPlantstoavoidcuttingpower.Therefore,ourconsumptionoffossilfuelsisgoingdown.

• 571.2kilolitersofgasolinewasusedin2017,and9%lesserthan626.6kilolitersin2016.• 894.8cubicmetersofnaturalgaswasusedin2017,and13%higherthan791.4cubicmetersin

2016.• 314.6tonsofLPGwasusedin2017,and4%lowerthan327.3tonsin2016.• 86.5tonsofMethylAlcoholwasusedin2017,and7%lowerthan92.7tonsin2016.

2.IndirectenergyIn2017,LITE-ON's indirectenergyconsumption (purchasedelectricity) totaled424,134MWh(megawatt-hours)or1,526,881GJ,whichwas0.7%or1,986MWhor7,150GJmorethan2016,andwas4.4%lowerthanthebaseyear'sconsumption. Intermsofconsumption intensity,LITE-ONaveraged7.95GJ/NTDmillionin2017,whichwas10.65%increasecomparedto7.81GJ/NTDmillionin2016,and0.67%higherthaninthebaseyear.ThisisprimarilyduetothedeclineinaveragesalepriceandthedevelopmentofautomatedproductionprocessesinordertohelpsolvethelaborshortageinChinaplants.

3.TotalEnergyConsumptionIn2017,LITE-ONtotallyconsumed1,625,423GJofenergy,and895JGhigherthan2016whilepostingintensityof8.46GJ/NTDmillion,10.19%higherthan7.68GJ/NTDmillionin2016duetothereasonmentionedabove.

4.3.3 Direct and Indirect Energy Consumption2014-2017Fossilfuelconsumption

2014-2017Electricityconsumptionandintensity

2014-2017Totalenergyconsumptionintensity

0

50,000

100,000105,765

0.52 0.50

0.42 0.43

97,798 88,813 83,521

150,000

200,000

250,000

0.1

0.2

0.3

0.4

0.5

0.6

2 0 1 4 2 0 1 5 2 0 1 6 2 0 1 7

Giga

joul

eGi

gajo

ule

GJ /

Mill

ion

NTD

GJ /

Mill

ion

NTD

Giga

joul

e

GJ /

Mill

ion

NTD

1,000,000

7.90 7.817.19

7.95

1,400,000

1,600,000

1,800,000

2,000,000

2,200,000

4

5

6

7

8

9

4

5

6

7

8

9

2 0 1 4 2 0 1 5 2 0 1 6 2 0 1 7

1,718,616

8.50 8.42 7.68 8.46

1,631,248 1,624,528 1,625,423

3,750,000

0

750,000

1,500,000

2,250,000

3,000,000

2 0 1 4 2 0 1 5 2 0 1 6 2 0 1 7

1,597,774 1,513,007 1,519,732 1,526,881

Diesel Gasoline

Direct Energy Indirect Energy

Nature Gas LPG GJ / Million NTD

60


LITE-ON'sairpollutioncontrol canbedivided into indoor (includingproductionenvironment)airqualitymanagementandoutdoorairpollutioncontrol.Preventivecontrolsareimplementedthroughdifferentmanagementmeans,procedureimprovement,andtraining.Inaddition,fluegasdesulfurizationequipment,scrubbers,andhighefficiencyprocessingequipmentareinstalledintheproductionprocesstomanagepollutionandreduceairpollutantemissionssotokeeptheconcentrationfarbelowthestatutorythreshold.In2017,LITE-ON(Tianjin)installedthreesetsofphotocatalyticequipmentforVOCtreatmentandimprovedVOCoxidationefficiencytofacilitateproductionofCO2andH2O.WesucceededinreducingVOCconcentrationinemissionsfrom18ppmto2ppm,farbelowthestatutorythresholdat60ppm.Thekeypreventivecontrolsandpollutioncontrolmeasuresaresummarizedasfollows:

Preventive management Pollution control

Indoorairqualitymanagement

• Reduceandreplaceuseoftoxicorhighlyvolatilereagents(e.g.reducingtheinventorystorageorusingethanolinsteadofisopropylalcohol).

• Avoiduseofvolatileconsumerproductsinoffices.

• Monitorventilationattheproductionareatomaintainairquality.

• Monitor,washandreplacefiltersinair-conditionregularlytomaintainindoorairquality.

• Growgreeneryinofficeareas.

Airpollutioncontrol

• Reduceorceasepollutingprocesses.

• Usefuelswithlowsulfurcontent.

• Applycentralizedmanagementofcorporatevehiclesandreducethenumberoftripstaken.

• Installphotocatalyticequipmentforvolatileorganiccompoundtreatment

• Usewetscrubbersforinorganicwasteair.

• Installfluegasdesulfurizationequipmentfordiesel-basedpowergeneration(foremergencies).

4.3.4 Air Pollution Control 4.3.5 Green Logistics Producttransportationandemployees'businesstravelare importantaspectsofourbusiness.LITE-ONiscommittedtousinggreentransportationanddistributionmethodstoenhanceoureffortsforcarbonreduction.Inregardstoproducttransportation,LITE-ONhascontinuallyimprovedproductpackagingtoincreaseproductspershipmentandappliedeffectivecontroloverproductionandlogisticsactivitiestoavoiddeliveryviaairfreightwhichconsumesmuchgreateramountsofenergy.Moreover,regardingemployeebusinesstravel,thecompanyhasinstalledadvancedcommunicationandmeetingroomequipmentinallofficestoenablereal-timeonlinegroupconferencecalls.Thecompanyisalsoassessingthefeasibilityofkeepingbusinesstraveldownbymakingmoretelephoneandvideoconferencingcalls.Forvehicledispatch,thecompanyusesanonlineapplicationsystemtoarrangecarpoolinordertoreducethenumberofvehiclestobedispatched.BelowaretheLITE-ON'spracticesresults:

4.3.5.1 Increasing Products per Shipment Toincreaseproductspershipment,LITE-ONcontinuesto improvepackagedesigninordertoutilizecontainerspacemoreeffectivelyandreducethenumberofland,seaandairshipmentstakentoshipthesamequantityofgoods,andthuscutdownonenergyconsumptionwhiledecreasingpackagingmaterialsconsumption.

ThefollowingisanexampleofLITE-ONimplementingpackagedesignimprovementforthedesktopkeyboardSK2063in2017.Thenewdesignwithasmallergiftboxallowsareductionoftheexteriorvolume,whichenablespalletstobemodifiedaccordingly,andincreasedthecapacityby11%.

1.Thegiftboxdesignwasimprovedtoreducematerialsandvolume

596*579mm 475*531mm61


2.The cartonwas redesigned for increasingproduct capacitywithsmallerdimensions

1685*535mm

Palletcapacity:54cartons/540pcsboxes Palletcapacity:72cartons/720boxes

1575*535mm

Load (pcs)

Load (pcs)Before After

20'container 6,480 7,200 11%

40'container 12,960 14,400 11%

3.Thepalletvolumewasmadesmallerforalargerloadaccordingtothenewcartonspecifications,makingshipmentsmoreefficient

4.3.5.2 Employees' Business Travel

In2017,LITE-ON'semployeesinTaiwantraveledatotalof22,415kmilesonbusinesstrips,up5.75%Y-o-Y.BecauseofstructuralchangesintheindustryandshrinkingPCindustry,LITE-ONhavetoturntodevelopnewbusinessessuchasoutdoor/automotivelighting,automotiveelectronics,smarthealthcareandindustrialautomationetc.,thetechnicalteamshavetotakemoreinternationaltrips.

2 0 1 65000

10000

15000

20000

25000

30000

2 0 1 7

21,19722,415

Thou

sand

mile

s

62


2 0 1 52 0 1 4 2 0 1 61,000,000

2,500,000

5,000,000

7,500,000

10,000,000

12,500,000

5

10

15

20

25

30

2 0 1 7

5,513,229

26.35 25.67 25.1723.96

5,322,7165,103,0874,600,317

M3

M3 /N

TD m

illio

n

2 0 1 52 0 1 4 2 0 1 60

75,000

150,000

225,000

300,000

375,000

2 0 1 7

22,368

228,468

10,633

243,199

Tonn

es

４.4 Water Resource Conservation

LITE-ONhasadopteditswaterresourcemanagementsystemonISO14001standardsanduseacentralcontrolsystemtomonitorwaterdischargedatainreal-time,andtrackswatermanagementperformanceatmajoroperationsitesaroundtheworld.In2017,LITE-ONcontinuetoimplementwaterresourceconservationmeasuresandleadtotheintensityofwaterconsumptionwas9.10%lowerthanitwasin2014,andmetthetargetin2017.

AllLITE-ONoperationsitesdrawwaterentirelyfromthelocalwatersystem(i.e.tapwater),andposenosignificantimpactonlocalwaterresourcesoronwateraccessibilityofthelocalcommunity.Themajorwaterdemandsareforplantfacilities(e.g.watercirculationinairconditioners,compressorsetc.)andemployees'dailyuse. Inrecentyears, ourconservationmeasureswerefocusingonthe investment inreplacingtraditionalwetprocesseswithdryprocesses,replacementandupdateofoldcablesandpipes,spotcheckofwateroutletsandroutineinspectionofwaterusage,andadditionalwaterrecyclingandreusemeasures.LITE-ONhasalso incorporatewaterconservationmeasures intodailymanagementbyreinforcingwatersavingfacilitiesattheplantsandstrengtheningtrainingtochangeemployeewaterusebehaviors.Meanwhile,LITE-ONmakeswatercostmanagementtobethepartofthecostmanagementpracticebythedepartmentsforachievingmoreefficientwaterresourceconservation.

In2017, the totalwaterconsumptionwas4,600,317m3and the intensityofwaterconsumptionwas23.96m3permillionNTD,whichwere13.57%and4.82%,respectively,lower than the figures in2016.Compared to2014 (baselineyear), the totalwaterconsumptionfellby16.56%,andtheintensityofwaterconsumptionfellby9.10%.In2017,atotalof243,199tonnes,or5.66%oftotalconsumption,ofwaterwererecycled.Thefigurewas10.87timeshigherthanthatin2014,andwasattributedtotheadditionofrecyclingandreuseofairconditioningcondensationwaterandROwastewater,recyclingandreuseofpurewaterfromproductionworkshopfacilities,andrainwaterharvesting.LITE-ONwillcontinuetorefineitswaterresourcemanagementsystem,implementwatersavingmeasures,andexecutewaterrecyclingandreusetoachieveournewtargetthatreducesabsolutewaterconsumptionby6%by2020comparedto2017.

2014-2017RecycledWaterConsumption

2014-2017RecycledWater

63


4.5 Main Raw Materials

LITE-ONrecordsmaterialsusedinproductandpackaginginordertoassesstheefficiencyofrawmaterialusage.Thisresultcanbeusedtomaximizeresourceutilizationandreducethenecessaryamountofpackagingandshippingmaterials. Itcanhelpustoachieveeconomicandenvironmentalgrowthandthegreatercorporatesustainability.

LITE-ON'smajorproducts includeoptoelectronics,electroniccomponents,aswellasmodulecomponents,andtherowmaterialcanbedefinedinthreecategoriesincludingmetallic,non-metallicandpackaging.AllproductshavebeendesignedinaccordancewithEUWEEE(WasteElectricalandElectronicEquipment)Directive,whichrequiresatleast80%ofrecyclablematerialsused.

4.5.1 Metallic MaterialsSteel :mainlyusedinchassis,screws,transformers,andfanpartsAluminum :mainlyusedinheatsinksCopper :mainlyusedinwires,cablesandprintedcircuitboardsTin :mainlycomprisingtinwire,tinbars,andtinpaste;theywereusedmostlyfor

thepowerconversionbusinessMagnet :mainlyusedintransformers

4.5.2 Non-metallic MaterialsPlasticmaterialsweremainlyusedinexternalcasing,insulation,andsocket,etc.,forallproducts.Theconsumptionofplasticincreased4%in2017,mainlyduetoa20%growthofPowerBusiness.

VolumeofPlasticUsedinCoreBusiness

4.5.3 Packaging and Shipping MaterialsFor"localshipments,"LITE-ONusesreusablepackagingmaterialsasmuchaspossible.Theusages*ofpaper,padding(foamandbubblewrap)andwoodincreasedin2017,mainlyduetoa20%growthofPowerBusiness.

VolumeofPackagingandShippingMaterialsUsedinCoreBusiness

Copper,TinandMagnetconsumptionincreasedin2017,mainlyduetoa20%growthofPowerBusiness. *Rawmaterialusagesvolumearecalculatedaccordingtoannualpurchased.

VolumeofMetallicMaterialsUsedinCoreBusiness

AluminumSteel Copper0

20,000

40,000

60,000

80,000

100,000

Tin Magnet

-2.2%69,65168,46766,936

5,127 5,1486,634

Tonn

es

-22.4%

4,978 5,0314,2817,978 8,6517,504

625 712623

15.3%14.2% 17.5%

2015 2016 2017

2 0 1 62 0 1 5 2 0 1 710,000

20,000

30,000

40,000

50,000

60,000

Tonn

es 4.2%

44,951 43,473 45,283

Padding Paper Wood 0

10,000

20,000

30,000

40,000

50,000

29,28130,42434,543

1,8593,4982,203

Tonn

es

13.5%

58.8%7,855

10,1948,957

13.8%

2015 2016 2017

64


LITE-ONfollowstheISO14001proceduresandsetsupaspecialmanagementunittoberesponsibleforefficientlymonitoringandmanagingwasteproductionbysource.Toachieveeffectivemanagementandwastereduction,weadoptstheprinciplesofminimumwasteandmaximumrecyclingand reusing,andselectsqualified recyclingserviceprovidersforwastetreatment.LITE-ONplanstoreach6%totalwastereductionperunitrevenuecomparedto2014by2017.

TheLITE-ONwastereductionprogramfocusesonsourcemanagement.Thewasteareclassifiedbysources intothreetypesasresourcewaste,general industrialwaste,andhazardousindustrialwaste.Reductionmeasuressuchasoptimizedpackagingmaterials,reductionatsources,andareducedpercentageofhazardouswasteareimplementedintheproductionprocess.Takethedesignofmagneticcomponentsforexample,volumewasreducedby22%andweightby36%bymodifyingmaterialformulae,firingmethodswasoptimized,andtheparticlesizewasnarrowed.Buildingthesmartplant,forexample,encouragestheadoptionofautomatedproductionlines,whichincreasesproductyieldto99.81%andreducesmaterialinputby2.4%.Regardingdailyactivitiesofemployees,thecompanyprovideseducationandtraining,supplementedbythecodeofconduct,topromoteeffectivelyreductionandseparationofwasteandincreaseresourceutilizationandvalue.

Thethreetypesofwasteaggregatedtoasumof31,519tonnesin2017.Inotherwords,thewasteintensitywas0.164tonnes/NTDmillion.Totalwastewasdownby8.6%andintensityupby0.69%comparedto2016.Totalwastewasdownby14.6%andintensityby6.9%comparedto2014(baselineyear).Havingmetthetarget,LITE-ONwillcontinuetopromotesourcemanagementaswellasrecyclingandreuse,meanwhileperformregularonsiteauditstoensuretotalwastewillbedecreasedbyanother6%by2020comparedto2017.

4.5.4 Waste Management, Recycling and Reuse

2 0 1 52 0 1 4 2 0 1 610,000

20,000

30,000

40,000

50,000

60,000

0.12

0.10

0.14

0.16

0.18

0.20

2 0 1 7

36,892

0.176 0.173 0.163 0.164

34,47334,375 31,519

Tonn

es/N

TD m

illio

ns

2 0 1 52 0 1 4 2 0 1 60

20%

40%

60%

80%

100%

2 0 1 7

80.00%

4.10%

15.90%

76.50%

8.60%

14.90%

71.57%

11.94%

16.49%

69.88%

10.17%

19.95%

Tonn

es

General industrial wasteHazardous wasteWaste from resources

2014-2017Totalwasteandwasteintensity

2014-2017Wastetypesbypercentage

65


wasteintotheenvironment.Inkjetcoatingforlaptopbottompanels,forexample,usesUVcuringinsteadoftraditionalovenbakingtoachieveasignificantsavingof76,800kWhinpowerconsumptionand550tonsofwater.Theresulteffectivelyimprovestheworkingconditionsfortraditionalcoatingoperators,andenablesamoreefficientprocessthatrequireslessmanuallabor.

ProductionefficiencythroughautomationRegarding implementationofautomatedproductionprocesses,LITE-ONiscurrentlycapableofsimultaneousoperationwithproducts,processesandequipment installedonthesameplatform.Thestructureisequippedwithdifficult,highprecisionautomaticassembly, testing,andvisual/mechanical inspection forcompletecontrolanddatacollection.Thecompanyhasdevelopedthecapabilitytocreatedifferentiateddesignandproductionprocessesformanufacturingfacilities.In2017,LITE-ONwentontocombineautomationandsmartoperationsinordertoachievehighspeedunmannedoperations.Resultssofarinclude:• Modifyingtheautomatictransformerwindingmachinefrom8spindlesto12spindles.

Desktoppowersupplyunitsmanufacturedbyautomatedproduction, forexample,areexpectedtorequire12milliontransformerinductorunitsandsave29,000kWhinpowerconsumptioneveryyear.

４.6 Green Factory

4.6.1 Green ArchitectureLITE-ON implementgreendesignonscheming fornewplantsor improvements forexistingplants.Thedesignofexteriorhollowbrickwallsandextensiveuseofrecyclablebuildingmaterialsofferclimatecontrol features.Thecompanyalsotakesadvantageofcharacteristicsof the localnaturalenvironmentandclimatetoreduceheat insertfromsunlightandkeepindoortemperaturesmaintainedwithenoughluminance,thusminimizing the loadonairconditioner insummerandachievingoptimumenergyefficiency.

Regardingbuildingandfacility improvementfortheexistingplants,LITE-ONreplacedmorethan25,000lightfixtureswithLEDlightbulbsorotherenergyefficientunitsin2017.Thecompanysavedmorethan2millionkWhinelectricityconsumptionintheyear.Energyconsumingairconditioningunitsandaircompressorswerereplacedorhad invertermodificationinstalled.Recycledwaterforcoolingtowerswasimplementedtoprovidecooling fortheplantsandreduceuseof refrigerationequipmentduringwinter.Thecompanysavedmorethan1millionkWhintheyear.

4.6.2 Advanced Manufacturing and Green ProductionLITE-ONreducesconsumptionofresources(materials),raisesenergyefficiency,mitigatestoxicitytotheenvironment,andlightensemployees'workloadsaspartofanongoingefforttoimplementimprovementsundertheCleanerProductioninitiativeandfollowtheprojectmanagementapproach.TheIEbasedImprovementProjectTracking(IPT)platformisbuiltandusedtomonitorandrateimprovementsimplementedbyindividualplantsundervariousbusinessunits.Thetop-performingprojectsofeachbusinessunitarepublishedontotheBestPractice(BP)platformwheretheymayserveasmodelsandreferencesfor improvementstobeimplementedbyotherbusinessunitsandfacilitatefutureprojects.

CleanerProductionforlowerresourcewastageTheCleanerProductioninitiativehelpsmakemoreefficientuseofdirectandindirectenergy/resourcesduringproduction,whilereducinguseofchemicalsanddischargeof

66


Employee remuneration and

benefits: 2017: NT$26.12 billion,

12.2% of total revenue

Total of 1,216 new jobs were created

in Taiwan

Employee frequency of

disabling injuries rate decreased

39%Y/Y and Severity of

disabling injuries Rate decreased

35%

99% of Employee grievance cases were solved and

closed

Total 44 communication meetings were

held in Business Units

Average training 30 hours per

employee

Sinceitsestablishment,LITE-ON'ssuccesshasbeenfoundedonLITE-ONBeliefs,whichare "CustomerSatisfaction,""Execution,""Innovation,"and"Integrity."Itisthecompany'sgoaltodifferentiateitselffromthecompetitionbyofferingthebestqualityandbyhelpingcustomerscreateopportunitiesand profits, thusmaking LITE-ON a sustainable andtrustworthycompanytoshareholders,customers,employees,andotherstakeholders.

Employees are LITE-ON'smost important partners inachievingworld-classexcellenceandsustainability,fortheyarethekeythathelpsthecompanygrowandimprove.Hence,LITE-ONalwaysworkssidebysidewithitsemployeesonthepathtorealize itsvisionofachievingLITE-ON'scorevaluesandsustainabledevelopment.

LITE-ONguaranteesandprotectstherightsofallof itsemployees intheworkplace.Thecompanyisconstantlyworkingtocreateahealthyworkplace.Italsocomplieswithemployment lawsandinternationalstandards inall locationsofoperation, includinggivingemployeesthefreedomofassociationandprivacywhileprohibitingallformsofforcedlabor,childlabor,anddiscrimination.

2017ProgressontargetsBusiness targets in 2017 Actions in 2017 Progress25traininghoursperpersononaverage

Ongoingtrainingoptimization 26traininghoursperpersononaverage

Developdigitallearningcourses Continuetodevelopin-housedigitallearningcoursesDevelopdigitalcoursesviaindustry-academiacooperation

70newcourseslaunched9newcoursescompletedunderindustry-academiacooperation

Intangiblestrengthsofemployeesimproved

Officecoursesrefined Atotalof24coursesoffered

Disabilityfrequencyandseverityfellby10%each

Ongoingenvironmentalhealthandsafetytrainingandtakingcorrectiveandpreventiveactions

Disabilityfrequencyfellby39%Disabilityseverityfellby35%

Monthlyaveragerateofkeypersonretentionat97%orhigher

Employeecommunicationandtrainingstrengthenedtoimproveemployeerelations

Keypersonretentionrateat93.7%*

*Thekeypersonretentionratefailedtoreachthetargetduetoashortageoftechtalentandfiercecompetitionamongcompanies.

5.1 Employee Policy

2017: NT$26.12 billion2016: NT$26.80 billion 2015: NT$27.73 billion

NTD$26.12

billion

EmployeeRemunerationandBenefits

FuturegoalsFuture goals Completion

30traininghoursperpersononaverage 2018

Continuetodevelop15digitalcoursesviaindustry-academiacooperation

2018

Hirequalityexpertstoteach25in-housecourses 2018

Disabilityfrequencyandseverityreducedby10%eachcomparedtopreviousyear

2018

Monthlyaveragerateofkeypersonretentionat97%orhigher 2018

LITE-ON'sEmployeeCareVisionandStrategy• Complywithinternationalregulationsandlocallawstoeffectivelyprotecttherightsof

ouremployees.• Provideafriendlyworkplacetoensuretherightsofouremployeesarenotviolated.• Promotedifferentactivitiesandemployeecareprogramsonanongoingbasistohelp

employeesmaintainahealthybalancebetweenbodyandmind.

RecruitmentRecruitmentatLITE-ONalwayscomplieswithlocallawsandRBAdirectives.Internalandexternalauditsareperformed,andthenecessaryduediligencereportsareprovidedtostakeholderstoensurethecompanyfulfillsitscorporatesocialresponsibilities.

Suchresponsibilitiesincludeprohibitionofchildlabor,forcedlabor,andhavingminorsperformhazardouswork.Thediscriminationfreeworkplacepolicyisstrictlyenforced,andequalemploymentopportunitiesaregivenregardlessofrace,gender,religion,skincolor,nationality,age,politicalaffiliation,sexualorientation,pregnancy,mental/physicaldisability,andsocialbackground.

TalentcultivationLITE-ONiscommittedtotrainingandinvestingintalentandprovidingacompletecareerpathandblueprinttohelpemployeesrealizetheirfullpotentialandsatisfytheirneedsandgoalsalongtheirindividualcareerpaths.Thecompanyisalsocommittedtoofferingcompetitivecompensationpackageswhileaccumulatingskilledandexperiencedhumancapitalforthecompany.

68

GRIStandards Index | Contents。LITE-ONandEmployees 1 2 3 4 5 6

EmployeePolicy

Recruitment

Talent cultivation

A Healthy workplace

Protection of r ights

5.2 Employee Profile

ProtectionofrightsLITE-ONrespectsthehumanrightsofitsemployees.Thecompanystrengthensinformationsecuritymanagementsystemsand implementseffectivepersonaldataandprivacyprotection.Italsoestablishesguidelinesandrulesandutilizestwowaycommunicationchannelstoeffectivelyprotecttherightsofemployees.LITE-ONsupportsitsemployeesinorganizingaunionandrespectstheirrighttonegotiatewiththemanagement.

AHealthyworkplaceLITE-ONbuildstheworkplaceonasafetyculturethatputspeoplefirst.Thecompanymakesanefforttoprovideandmaintainaworkplacethatpaysattentiontothementalandphysicalhealthofemployees.It isconstantlypushingforemployeecareprogramsthatcontributethementalandphysicalhealthofemployeesandreducehealthandsafetyrisksintheworkplace.Variousmotivationaleventsareorganizedtohelpemployeesbondandraiseworkmoralesothattheymayenjoyabalanced,healthyandjoyfulworklife.

AllLITE-ON'shumanresourcepolicieshavebeenbasedon"passionate,motivating,innovative,andgrowing",andaredesignedtogiveemployeesoptimalcareinwork,life,andhealth.Treatingeveryemployeeasabestpartner,LITE-ONwishestoseeemployeesenjoytheirworkandtheirgoalsarealignedtothecompany'stoachievegreatersuccessaswellasarewardingcareer.

5.2.1 Employee Structure and DistributionAsattheendof2017,LITE-ONhad51,879employeesworldwide;55.8%ofwhomweremaleand44.2%werefemale.Therewere5,042employeesinTaiwan,whiletheremaining46,837werelocatedthroughoutMainlandChinaandotheroverseas(includingThailand,Brazil,Vietnam,Malaysia,Singapore,EuropeandUSAetc.).99%ofemployeeswereinAsia.

TaiwanMainland

China Thailand Brazil Others Total

Male 11.4% 85.7% 1.6% 0.3% 0.9% 55.8%

Female 7.6% 82.3% 8.9% 0.5% 0.8% 44.2%

0.4% Brazil

Taiwan9.7%

Mainland China84.2%

Thailand4.8%

Others0.9%

LITE-ON Worldwide Employee

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Employee composition contract type

Gender & Type

Region

Male Female

TotalFull Time Part Time Subtotal Full Time Part Time SubtotalTaiwan 3,295 15 3,310 1,724 8 1,732 5,042MainlandChina 19,898 4,935 24,833 14,661 4,188 18,849 43,682Thailand 474 0 474 2,040 0 2,040 2,514Brazil 89 0 89 111 0 111 200Others 254 4 258 182 1 183 441Worldwidetotal 24,010 4,954 28,964 18,718 4,197 22,915 51,879

Note：1.Thedataexcluding114dispatchemployees

Disabled and Foreigner Employment

Type & Gender

Region

Disabled Foreigner

Male Female Total Male Female TotalTaiwan 30 19 49 27 182 209MainlandChina 203 104 307 18 3 21Thailand 0 0 0 0 0 0Brazil 0 0 0 0 0 0Others 0 0 0 1 0 1Worldwidetotal 233 123 356 46 185 231

Recruiting local residents in high-level managementTaiwan Mainland China Thailand Brazil Other

High-levelmanagementemployees 4.9% 1.6% 1.7% 8.0% 20.0%Percentageoflocalresidentsrecruitedinhigh-levelmanagementpositions

98.8% 98.0% 100.0% 100.0% 97.7%

Notes:1.Director&abovearedefinedasHigh-levelmanagementpositionsinTaiwanNotes:2.DeputyManager&abovearedefinedashigh-levelmanagementpositionsinMainlandChina,Thailand,Brazilandotherregionswhicharemainlymanufacturingsites.

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EmployeeStructureGender and age distribution by region

Gender & Age

Rebion

Male Female

<30 30-40 41-50 >50 合計 <30 30-40 41-50 >50 合計

Taiwan 13.7% 23.4% 22.6% 6.0% 65.6% 8.3% 13.4% 9.8% 2.9% 34.4%

MainlandChina 40.7% 12.9% 3.0% 0.3% 56.8% 26.1% 12.4% 4.5% 0.1% 43.2%

Thailand 8.0% 6.3% 4.1% 0.5% 18.9% 29.4% 28.3% 21.5% 2.0% 81.1%

Brzil 11.0% 24.0% 8.0% 1.5% 44.5% 12.5% 26.0% 14.5% 2.5% 55.5%

Others 32.4% 7.5% 6.3% 12.2% 58.5% 24.5% 6.1% 3.2% 7.7% 41.5%

Worldwidetotal 36.3% 13.6% 5.0% 1.0% 55.8% 24.4% 13.3% 5.9% 0.6% 44.2%

Gender and education distribution by regionGender &

Education

Region

Male Female

Masters & above Bachelor Others Masters & above Bachelor Others

Taiwan 35.4% 28.9% 1.4% 6.9% 21.8% 5.6%

MainlandChina 0.2% 9.4% 47.2% 0.1% 5.1% 38.0%

Thailand 0.1% 11.0% 7.8% 0.3% 15.8% 65.0%

Brazil 0.5% 6.5% 37.5% 0.0% 6.0% 49.5%

Other 6.8% 27.9% 23.8% 2.3% 27.2% 12.0%

Worldwidetotal 3.7% 11.5% 40.6% 0.8% 7.4% 36.0%

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Employee grade distribution

Grade and Gender 2015 2016 2017

Executivemanagement

Male 43 97.7% 38 97.4% 30 96.8%

Female 1 2.3% 1 2.6% 1 3.2%

total 44 100.0% 39 100.0% 31 100.0%

Seniormanager Male 212 90.6% 209 89.7% 216 88.5%

Female 22 9.4% 24 10.3% 28 11.5%

total 234 100.0% 233 100.0% 244 100.0%

Mid-levelmanager Male 1,860 78.4% 1,993 77.9% 2,119 77.6%

Female 511 21.6% 567 22.1% 610 22.4%

Total 2,371 100.0% 2,560 100.0% 2,729 100.0%

Grade and Gender 2015 2016 2017

Generalemployees(indirectlabor.IDL)

Male 9,435 67.0% 9,674 66.1% 9,685 66.4%

Female 4,655 33.0% 4,970 33.9% 4,896 33.6%

total 14,090 100.0% 14,644 100.0% 14,581 100.0%

Generalemployees(directlabor,DL)

Male 20,409 50.7% 19,323 50.4% 19,279 51.7%

Female 19,883 49.3% 19,000 49.6% 18,019 48.3%

total 40,292 100.0% 38,323 100.0% 37,298 100.0%

Allemployees Male 29,844 54.9% 28,997 54.7% 28,964 55.8%

Female 24,538 45.1% 23,970 45.3% 22,915 44.2%

Total 54,382 100.0% 52,967 100.0% 51,879 100.0%

Year

Year

Notes:1.Indirectlaborincludesallexecutivemanagementmembers,seniormanagersandmid-levelmanagersNotes:2.Mid-levelmanagementincludesfromDeputyManagerstoManagers

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5.2.2 Employee Retention

1.Employeeturnoverrate2017 Monthly average turnover rate (including voluntary and involuntary departures) - by age and region

Type and age

Region

Direct Labor (DL) Indirect Labor (IDL)

<30 % 30-40 % 41-50 % >50 % <30 % 30-40 % 41-50 % >50 %Taiwan 110 3.7% 60 2.8% 2 0.3% 2 0.5% 263 2.7% 354 1.8% 163 0.9% 57 1.2%MainlandChina 63,215 20.6% 9,438 11.4% 1,449 5.3% 28 2.2% 2,446 4.5% 1,183 2.5% 130 1.4% 20 2.6%Thailand 831 8.0% 378 4.0% 49 0.9% 1 0.3% 30 4.9% 32 2.8% 10 0.6% 6 2.1%Brazil 6 1.2% 9 1.2% 3 1.0% 0 0.0% 2 3.3% 3 0.7% 2 0.8% 1 2.1%Others 198 13.9% 9 7.2% 0 0.0% 0 0.0% 25 2.7% 13 2.2% 8 1.3% 10 1.0%Worldwidetotal 64,360 20.0% 9,894 10.4% 1,503 4.4% 31 1.5% 2,766 4.2% 1,585 2.3% 313 1.1% 94 1.3%

2017 Monthly average turnover rate (including voluntary and involuntary departures) - by gender and region

Type & gender

Region


male % Female % male % Female %Taiwan 30 3.4% 144 2.7% 582 1.6% 255 1.7%MainlandChina 47,415 20.7% 26,715 14.0% 2,555 3.6% 1,224 3.1%Thailand 193 4.9% 1,066 4.9% 41 2.4% 37 1.7%Brazil 10 1.7% 8 0.8% 6 1.2% 2 0.7%Others 134 15.0% 73 11.1% 31 1.8% 25 1.9%Total 47,782 20.3% 28,006 12.8% 3,215 2.8% 1,543 2.7%

Notes:1.Thecalculationofmonthlyaverageturnoverrate:(monthlyaveragenumberofdepartedemployeesin2017)/(sumofmonth-endemployeecountfromJantoDec/12)*100%.Notes:2.TherelativelyhighemployeeturnoverinChinaislargelyattributabletothelocallaborshortageaswellasfiercecompetitionintheindustry.Notes:3.TheturnoverrateinBrazilwasrelativelyhighduetolaborshortage

LITE-ONoffersacomprehensive rangeof trainingcoursesandcompensationandbenefitstoencourageemployeespursueself improvementandachievecareergrowth.Jobdescriptionsgivenduringinterviewswillremainconsistentafterrecruitsreportforwork.Managersandhumanresourcesofficerswillalsotrytoreducenewhireturnoverbyinterviewingnewemployeestofindouthowtheyaresettlingintotheirpositions.Newemployeeswillbegivenassistanceintheformofeducationandtrainingtohelpthemfitintothecorporateenvironment.Whenanemployeesubmitsaresignation,thehumanresourcesdepartmentwillconductaninterviewandanalyzekeyfactorsinretentionandresignationinordertoimprovetheretentionrate.

Intermsofcompensationpackages,LITE-ONhasdesignedregularcompensationreviews

toensurethecompanyisabletoretaintalentwhileensuringallemployeesreceiveabove-averagecompensation.LITE-ONalsoencouragesindividualdepartmentstoimplementrewardprogramstoboostmoraleandimprovebusinessperformance,effectivelycreatingawin-winsituation.

Intermsoftalentmanagementstrategies,LITE-ONhasimplementedahumanresourcesmanagementblueprintandaneducationandtrainingsystemtoprovidecoursesoncoremanagementcompetenciesandessentialprofessionalskills.Theseprogramsareintendedtobroadenthehorizonforemployees,enhancemanagementknowledgeandskillsformanagers,developacommonmanagementlanguage,createahealthycorporateculture,andlaythefoundationforsustainabledevelopment.

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2.Employeesonchildcarelong-termleavebetween2014&2016(Taiwan)LITE-ONoffersavarietyofassistancetoemployeeswithchildcareneeds,suchastheoptiontotakeextendedleave,choosedifferentcareerpaths,andreceivesubsidies.Atotalof64employeesappliedthechildcarelong-termleave,and85%ofthosewhodidcomebacktojobin2017.ThisisatestamenttohowemployeesapproveofLITE-ON'spolicies.

2017 child-care long-term leave status Definition 2016~2017 Total 2017

Male Female Male Female Total Male Female Total

No.ofpeoplequalifiedforlong-termchildcareleave(No.ofpeopleapplyingformaternity/paternityleaveinthelastthreeyears)

A1 A2 261 182 443 137 58 195

Actualno.ofapplicants B1 B2 21 37 58 12 26 38

No.ofpeopleexpectedtobereinstatedinthecurrentyear C1 C2 19 40 59 8 19 27

Actualno.ofpeoplereinstatedinthecurrentyear D1 D2 13 32 45 4 18 22

No.ofpeoplereinstatedfromlong-termchildcareleaveinthepreviousyear,andwhohaveworkedforoneyearsince

E1 E2 13 12 25 7 10 17

Percentageoflong-termchildcareleaveapplicants (B1/A1)*100% 8.05% 20.33% 13.09% 8.76% 44.83% 19.49%

Long-termchildcareleaveretentionrate (E1/LastYearD1)/100% 61.90% 40.00% 49.02% 77.78% 71.43% 73.91%

Long-termchildcareleavereinstatementrate (D1/C1)*100% 68.42% 80.00% 76.27% 50.00% 94.74% 81.48%

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5.2.3 Personnel Recruitment

LITE-ONutilizesabroadvarietyofmeanstorecruittoptalentstosupportitsoperatingstrategies,andinreturnprovidesthemwithpromisingcareerpaths.Someofthecompany'srecruitmentchannelsincludecollaborativeprogramswithuniversitiesandcolleges,summerinternships(inTaiwan),thegovernment'semploymentpromotionprograms,andR&Dsubstituteservicecandidates.

Thenewhireratebelowiscalculatedas:(monthlyaveragenumberofnewemployeesin2017)/(sumofmonth-endemployeecountfromJantoDec/12)*100%.

2017 Monthly average new hire rate - by age

Type & age

Region


<30 % 30-40 % 41-50 % >50 % <30 % 30-40 % 41-50 % >50 %Taiwan 69 2.3% 4 0.2% 0 0.0% 0 0.0% 468 4.8% 432 2.2% 216 1.2% 27 0.6%MainlandChina 63,391 20.6% 8,368 10.1% 1,076 3.9% 9 0.7% 2,150 4.0% 690 1.5% 56 0.6% 5 0.6%Thailand 1,056 10.2% 413 4.3% 30 0.5% 0 0.0% 46 7.5% 24 2.1% 7 0.4% 0 0.0%Brazil 20 4.0% 16 2.1% 7 2.4% 1 2.1% 0 0.0% 2 0.5% 1 0.4% 2 4.2%Others 304 21.4% 27 21.6% 1 8.3% 0 0.0% 30 3.3% 12 2.2% 5 0.9% 6 0.6%Worldwidetotal 64,840 20.1% 8,828 9.2% 1,114 3.3% 10 0.0% 2,694 4.1% 1,160 1.7% 285 1.0% 40 0.6%

By Gender

Type & Gender

Region


Male % Female % Male % Female %Taiwan 8 1.0% 65 1.1% 818 2.4% 325 2.4%MainlandChina 47,415 19.5% 25,429 11.8% 1,974 2.6% 927 2.3%Thailand 236 6.4% 1,263 6.2% 34 2.1% 43 2.1%Brazil 29 8.3% 15 1.6% 4 0.8% 1 0.3%Others 215 38.7% 117 22.6% 26 1.5% 27 2.2%Worldwidetotal 47,903 19.2% 26,889 11.1% 2,856 2.5% 1,323 2.3%

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5.2.4 Responsible Business Alliance, RBA (formerly EICC) Code of Conduct Committee

Inter-plantcrossauditflowchart

CSER Committee RBA Task Force Auditor's plant In-plant RBA Committees

ConfirmAuditorandAuditee(unitsinsamedivisiondonotauditeachother;pairingchangeseveryyear) ConfirmthelistofauditteammembersPreparethecrossauditplanforthecurrentyear

VisitAuditeetoperformaudit Acceptaudit

Includeerrorsinthemonthlyfollow-upchecklist Submittheauditreporttothe

committeeoftheregion

Submittheauditreporttothe

committeeoftheregion

Confirmauditdates/time Sendanauditnotice Preparefilesforaudit

Shareauditresultswithinthecommittees Submittheauditreportandnoticeforimprovement Makeimprovementsandreplies

Reportauditstatus/resultintheregionCSERCommitteereport

Auditee's plant

Fail

Pass

LITE-ONhasestablisheditsownRBACodeofConductauditprocedurestoensuretheadequacy,effectivenessandappropriatenessofitsCSRframework,andtomonitorhowprogresscomplieswithprescribedguidelines,goalsandregulations.Theauditproceduresclearlyoutlinetheresponsibilities,processes,principlesandcyclesofeachaudit,aswellaswhatdetailsareexpectedinanauditreportandhowauditfindingsshouldbefollowedup.

TheRBACodeofConductcoversabroadrangeofissuesfromemployees'healthandsafety,environmentalprotection,tobusinessethics.Thecompanyfollowstheseguidelinestoconductself-inspectionsateachofitsplantseverymonth,whileplantslocatedinGuangzhou,DongguanandeasternChinahaveallassembledRBACodeofConductcommitteestocross-auditeachotherandensure100%compliance.AnyconductthatdoesnotcomplywiththeRBACodeofconductisraisedfordiscussionandimproveduponwithinthegiventimeframe.

AllLITE-ONplantsareequippedwithCSERprojectteamsthatfollowtheRBAauditprogramandperformregularinternalandexternalaudits.ToensureLITE-ONfulfillsitscorporatesocialresponsibility,theteamsarealsoresponsibleforreviewingtheplants'performanceintermsoftheindicators,includingemployees,ethics,environment,andhealthandsafety,andimprovementsintheseareas.

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LITE-ON's vision and strategies

LITE-ON's values

On-the-job training

Individual development plans and career development

LITE-ON'scommitmenttolearninganddevelopmentLITE-ON'smissionstatementis"thepurposeoftrainingistoprovideemployeeswiththerightmanagementskills,professionalknowledgeandteamworktohelptheorganizationthriveandmaintainsustainablegrowth."Asaconsequence,learninganddevelopmentreceivethehighestdegreeofemphasisatLITE-ON.

5.3 Employee Development and Training

LITE-ON'sLearningStructureandRoadmapLearningatLITE-ONisbasedonon-the-jobtrainingandpersonaldevelopment,andincludesthe fourmajorelementsofneworientation,specializedtraining, leadershiptrainingformanagersatdifferentlevels,andpersonaldevelopment.TrainingisintendedtohelpemployeesidentifywithLITE-ON'scorevaluesandrealizethecompany'svisionandstrategies.

Corporate operational targets

Improve employee skills

Raise performance

Enhance organizational

efficiency

Orientation•Stageone Firstdayofwork•Stagetwo Basicskills/Cultureshaping/Corporate

governance•Stagethree Departmentspecificcourses

Hierarchicalmanagementtraining•LITE-ONCollege•Leadership•Coremanagementcompetencies

Personaldevelopment•LITE-ONLectures•Digitalmedialearning•In-officecourses

•Foreignlanguagetraining•In-serviceemployee

education

Specializedtraining•R&Dtraining•Qualitycourses•Procurementtraining•Businesstraining

•Advancedprocesstraining•Financialtraining•Employeetraining•Supportunittraining

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LITE-ON's strategies andplans on comprehensive employeelearninganddevelopment•Comprehensiveorientationsystem

- Basictrainingfornewemployees:Inadditiontotrainingprovidedonthefirstdayofwork,newemployeesarerequiredtocompleteorientationtraininginthreetosixmonthsafterwardsinordertoquicklyintegratethemselvesintotheorganization.ThelistofcoursesincludebasicLITE-ONtraining,cultureshaping,andcorporategovernancecoursessuchas"LITE-ONVision,Mission,BeliefsandValues","EthicalCorporateManagementBestPracticePrinciples","InformationSecurityTraining",and"On-the-jobOccupationalHealthandSafetyTraining".

- Specializedtrainingfornewhires:Havingcommencedtheirdutieswithintheirassigneddepartments,newemployeesstillhavetocompletefulltraininginproductknowledge,qualityandhands-onpracticeso that theymaybegin tomakeacontributionassoonaspossible.

•Specializedtraining: internal/externalprofessionalcoursesaimedatemployeeswithdifferentresponsibilitiesanddesignedtoimprovespecializedknowledgeandskills

relevanttotheresponsibilitiesathand.Thelistincludesmanufacturing,sales,quality,procurement,R&D,humanresources,finance,andITcourses.

•Hierarchicalmanagementtraining: internal/externalprofessionalcoursesaimedatmanagersandarrangedby levelofauthority.The list includesLITE-ONCollege,acollaborativeprojectinvolvingtopuniversities,andleadershipandcoremanagementcompetencycourses.Inparticular,managerswhoaretobesubmittedforpromotioninthecurrentyearwillberequiredtocompletethecoremanagementcompetencycoursescorrespondingtothelevelstowhichtheyaretobepromotedbeforethenominationsmaybesubmitted.

•Personaldevelopment:a learningenvironmentprovidedbyLITE-ONtoencourageemployeestoengageinlifelonglearningandimprovethemselves.Theeffortsincludeinvitingoutstandingmembersof thebusiness tospeakat theLITE-ONLectures,procuringdigitalmedia learningmaterials fromoutside,providing in-officetrainingcourses,andworkingtogetherwiththelanguagecentertoofferforeignlanguagecoursesandencourageemployeestoengageinon-the-jobtraining.

2017 Training overview for LITE-ON's major operation sites

Training method Level

Taiwan Mainland China Thailand** Total

Average training hours per employee Total training

hours


hours


hours


hoursMale Female total Male Female total Male Female total Male Female totalPracticaltraining

Executivemanagement

21.8 20.0 21.7 631 - - - - 0 0 0 0 21.8 20.0 21.7 631

Seniormanager

26.8 61.3 30.4 7,519 14.5 6.0 13.8 180 0 0 0 0 26.2 59.3 29.6 7,699

Mid-levelmanager

22.4 29.1 24.1 73,087 4.6 4.9 4.6 8,958 34.1 30.5 14.6 1067 15.5 20.5 16.5 83,112

IndirectLabor 27.6 25.4 26.7 32,483 17.8 17.5 17.7 132,352 14.7 13.5 8.1 2015 19.1 18.4 18.7 166,851DirectLabor 1.9 0.9 1.1 555 36.5 26.6 32.0 1,097,104 74.5 82.9 70.3 154,136 37.1 31.8 33.9 1,251,795

e-Learning IndirectLabor 5.9 5.8 5.9 26,566 0.4 0.3 0.3 3,282 - - - - 2.3 1.9 2.1 29,848Externalonlinecourses*

- - - - - - - - - - - - - - 0.2 11,218

Total 29.1 25.6 27.9 140,839 31.2 24.7 28.4 1,241,876 58.5 77.0 62.5 157,219 31.4 29.5 30.3 1,551,153Noofindirectlabor 4,521 9,418 322 14,261Noofdirectlabor 521 34,264 2,192 36,977TotalEmployee 5,042 43,682 2,514 51,238

Note:Thebaselinehaschangedandsoonlydatain2017areshownandnotcomparedto2015/2016.*OnlinecoursesofferedbyexternalsuppliersarepaidbyLITE-ONdirectlytotheexternalsupplierandmadeavailabletoallLITE-ONemployeesaroundtheworld.Theadministrationsystemisunabletodistinguishregionandgenderatpresent.**InternalonlinecoursesarecurrentlyunavailableinThailand.

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HR Employee

Discussingtosetuptheemployee'sgoalsNotifytoproceedwithperformanceappraisal

Employeedevelopmentplan

GoalSetting

Approval

Q2Goalsreview

Annualperformancereview

Approval

Performancereview

DiscussingtheprogressofGoalsinQ2

Q2Selfassessment

DiscussingtheprogressofGoalsinQ4

Annualassessment

Level1Manager Level2Manager

Corporategovernanceandanticorruptioncoursesandtraining•MaterialInsiderInformation,Anti-trustandCompliancecoursesin2017

Location

Male total number of attendees

Female total number of attendees

Total number of attendees

Percentage out of total

Taiwan 8,771 3,747 12,518 248.3%

MainlandChina 43,813 23,332 67,145 153.7%

Total 52,584 27,079 79,663 163.5%

•RBAelectronicindustrycodeofconductcoursesin2017

Location

Male total number of attendees

Female total

number of attendee

Total number of attendees

Percentage out of total

Total work hours

Taiwan 10,434 4,321 14,755 292.6% 7,967

MainlandChina 46,373 25,173 71,546 163.8% 665,013

Thailand 420 1,563 1,983 78.9% 15,123

Total 57,227 31,057 88,284 172.3% 688,103

•BeginnerandadvancedrefreshertrainingonMaterial InsiderInformation,Anti-trustandComplianceforindirectworkersinTaiwan

Location

Number of refresher training

participants

Male total number of

participants

Female total number of

participants

Total number of

participants

Training completion rate

Taiwan 3,991 2,615 1,093 3,708 92.9%

Note:ThenumberofrefreshingtrainingparticipantsisthetotalnumberofindirectworkerswhojoinedthecompanybytheendofDecember2016.

Totalnumberofparticipants

Numberofemployees( )

5.4 Protection of Interest

5.4.1 Protection of Interests of EmploymentToensureprotectionofemployees’interest,LITE-ONsetupalloftherelevantpolicies inaccordancewiththeregulationsandlaws:• Lawfulhiringpractices LITE-ONcompliesstrictlywithemploymentregulationsbyprohibitingtheuseofchildlabor

agedbelow15;meanwhile,employeesagedbelow18arenotallowedtoperformdangerouswork.Allchangestotermsofemploymenthavebeendulynotifiedasrequiredbylaw.

• Fairperformanceassessment LITE-ONdesignsperformancemanagementwith theaimto improveperformanceof

individualemployeesandtheorganizationasawhole.Thecompanyhasinstitutedtwo-waycommunicationand implementedanemployeedevelopmentplan.Performanceassessmentsarefairandreasonable,sothatassessmentresultscanprovideabasis forpromotion,salary increments,remuneration,andemployeetraining. Ifanemployee isnotcompetenttoperformhisorherwork,LITE-ONwillprovidecounselingortransfertheemployeetoasuitablepositionoraffiliatedenterprise.Iftheemployeestillfailstofulfillthetermsoftheemployer-employeerelationship,thecompanywillgivetheappropriatenoticeandterminatetheemployee'scontractwithseverancepayinaccordancewithrelevantlawsandregulations.Thecompanywillalsoproviderelevantproofanddocumentsrequiredbylawinordertofacilitatetheapplicationforunemploymentbenefitsorprofessionaltraininggrantsfortheemployeeandtoprotecttheemployee'semploymentrights.

LITE-ON'sperformanceappraisalcycleforindirectlabor(excludingnewhiredemployee)

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PerformancereviewofdirectlaborThereisadirectlinkbetweenperformanceofdirectlaborandthecompany'sproductionperformance.Therefore, forthose indirect labor, theplants followamonthlybonussystembasedonproduct characteristics. Employeesare rewardedaccording toperformance.Employees'overallperformancewillbescoredintheannualperformancereviewattheendofeachyear.

NewhirereviewWhenanewemployeereachestheendofhis/hertrialperiod,themanagershouldconductan interviewandassessmentregardingtheemployee'sperformanceduringthetrialperiod.Forthosewhofailtopassthereview,thecompanymayterminatetheemploymentcontractaspermittedbylawor,bymutualconsent,extendthetrialperiod.Theextensionshouldnotexceedtheoriginaltrialperiod.

5.4.2 Guaranteed SalaryStartingsalariesofferedtodirectlabornotonlyhavetocomplywithlocalregulations,butarealsocompetitivewhencomparedtoindustrypeers.Currently,LITE-ON'sstartingsalaryfordirectlaborisapproximately1.08timestheminimumwageinTaiwan,1timeinChina,and1timesinThailand.

LITE-ONplacesparticularemphasisonhowemployeesarecompensatedfortheirservices.Regardlessofwherethecompanyoperates,itofferscompetitivecompensationpackagesandconductssalarysurveyseachyeartoalignsalarylevelswiththecurrentmarketandwiththevariouseconomicindicatorsusedintheanalysis.Asameansofattractingtoptalents,LITE-ONofferssomeofthebeststartingsalarypackagesfornewhires.Employees'salariesandcompensationaredeterminedbytheireducation,knowledge,skills,seniority,andindividualperformance.Innowaydoesgenderplayapartinthesedecisions.Newemployeesarenotgivendifferentstartingsalariesonthebasisoftheirrace,religion,politicalviews,gender,maritalstatus,orunionassociation.Thecompany'scompensationpolicyhasbeendraftedonthebasisofthefollowingprinciples:

• LITE-ONisawareofandcomplieswithrelevantlocallawsandregulations,strivestoestablishharmoniousemployer-employeerelationswithinthescopeofthelaw,andtherebypromotessustainablemanagement.

• Inordertomaintaincompetitivenessintheemploymentmarket,payissetandadjustedinreflectionofmanpowersupplyanddemandandtheprofitabilityofproductlines.

• Inorderto incentivizeemployees,thecompanystrivestopayappropriatesalariesreflectingthemarketvalueofprofessionalfunctions,thecontributionsofemployee,andtheresultsoftheperformancemanagementsystem.

• Startingsalariesofferedtodirectlabornotonlyhavetocomplywithlocalregulations,butarealsocompetitivewhencomparedtoindustrypeers.Currently,LITE-ON'sstartingsalaryfordirectlaborisapproximately1.08timestheminimumwageinTaiwan,1timeinChina,and1timesinThailand.

• Periodicallyreviewsalarylevelsrelatedsystemstohavebettersalariesinthemarket• Asanaddedincentivetoemployees,LITE-ONpaysaperformancebonuseachyear

dependingonhoweachindividualandthecompanyhasperformed.Theamountofbonusgrantedtoemployeesisdeterminedbytheirresponsibilities,contributions,andperformance.

GenderSalaryDifferencesbyJobNature(Taiwan):

Title Male Female

Technician/assistant(JG06-08) 1.06 1

Engineer/officer(JG10-14) 1.03 1

Manager(JG16-20) 1.08 1

Departmenthead(JG21andabove) 1.56 1

Note:Thedefinitionofannualsalaryincludesbasesalaryandallbonusesintheyear

AccordingtoTaiwanregulations,allemployeesneedtobe insuredunder theLaborInsuranceandNationalHealthInsuranceschemesfromtheironboarddate,andhavecontributionsmadetopensionfunds.Inadditiontomandatorycoverage,thecompanyprovidesgroupinsurancepoliciesthatofferbettermedicalprotectionandcover: life,accidentaldeath,hospitalization,cancer,andemergencymedicaltreatment.Employeesmaychoosetoincludetheirspouse/children/parentsinthecoverageatadditionalcost.Furthermore,thecompanyoffersevenbroadergroupinsurancecoverageforout-stationedemployees,givingthemthepeaceofmindwhenworkingoverseas.Compensationforoverseasemployeeshasbeensetatreasonableandcompetitivelevelsdependingonlocalmarketconditions.Meanwhile,long-termandshort-termbonusesarealsoofferedasadded incentivesaccordingto local regulationsand industrypractices.Overseasemployeesarecoveredbysocialinsuranceschemesasrequiredbylocalregulations

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5.4.3 Pension SchemeLITE-ONmakescontributionstoemployees'pensionfundsaccordingtolocalregulations,regardlessofwhereitoperatesintheworld.Today,100%ofitsemployeeshavejoinedapensionplan.InTaiwan,thepensionpolicycomplieswiththeLaborStandardsActwherecontributionsaremaderegularlytoemployees'pensionaccounts; inChina,employeesareinsuredaccordingtolocalregulationsinordertosecureacomfortablelifestyleafterretirement.

InTaiwan,employees'pensionschemesaregovernedeitherbytheLaborStandardsAct(theoldscheme)ortheLaborPensionAct(thenewscheme)oftheRepublicofChina.EmployeeswhocameonboardonorbeforeJune30,2005,areentitledtocarryforwardtheiryearsofservicefromtheoldschemetothenewscheme.Undertheoldscheme,thecompanycontributes2%ofemployees'monthlysalariesintoapensionaccountheldwiththeCentralTrustofChina.ThisreservehasaccumulatedtoNT$1.03billiontodate,andisfullyfundedtoprovideforemployees'retirementneeds.

Underthenewscheme,thecompanycontributes6%ofemployees'monthlysalariesintotheirpersonalpensionaccounts.Inadditiontothemonthly6%contributionsmadebytheemployer,employeesmayalsochoosetocontributeanother0%~6%oftheirsalariesintotheirpensionaccounts.

Tofacilitatecordiallabormanagementrelations,LITE-ONtakesanactiveapproachtolisteningtoitsemployeesandmakingarangeoftwo-waycommunicationchannelsavailable.Regulardepartmentmeetingsandastrictlyconfidentialcomplaintchannelformacomprehensivecommunicationplatformthatensuresinstant,transparent,andundisruptedcommunicationbetweenthecompanyanditsemployeesandprotectstherightsofeachandeveryemployee.

Communicationchannels

IntranetsToensureallemployeeshaveinstantaccesstoandknowledgeofthecompanyandtheEmployeeWelfareCommittee,LITE-ONhascreatedthe"HRPortal"andthe"LITE-ONHomestead".The"HRPortal"providescompletedetailsonthecompany'srulesandregulationsaswellasimportantannouncementsinordertoenableemployeestoreceiveimportantinformationfromthecompanyinatimelymanner.Meanwhile,theLITE-ONHomesteadprovidesinformationonthebenefitsandsubsidiesofferedbytheEmployeeWelfareCommittee inthecurrentyearaswellastherulesandotherspecialoffers.Theplatforminformsemployeesoftherightsandbenefitstowhichtheyareentitled.Inaddition,theLITE-ONHomesteadcontainsan"OpinionMailbox"thatacceptssuggestionsandquestionsfromemployeesandprovidesthenecessaryassistanceandanswers.

5.5 Employee Relations

Internalwebsites(HRPortal/LITE-ONHomestead)Internalbulletins("ERTeam","HRDTeam",and"LiteonVolunteer")Internalpublications(real/virtualpublications)Businessmeetings(Regulardepartmentmeetings,managementmeetings,businessmeetings,andemployee/employermeetings)Reportingchannels(employeecomplaintmailbox/hotlineandsexualharassmentcomplaintmailbox/hotline)Satisfactionsurveys(paper/electronic/WeChat)Face-to-facecommunication(HRrepresentativesanddepartmentheads)

LITE-ON employees Senior ManagementMultiple communication channels

LITE-ONHomestead

LITE-ONHRPortal

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2017 Employee Grievances Analysis

10% Others

Work Environment22%

Management communication28%

Living area(dorms/canteen)20%

Salary / benefit19%

InternalannouncementsDependingonthenatureofannouncementsmade,LITE-ONdistributesnewsletterssuchas"ERTeam"(benefitsandevents),"HRDTeam"(continuingeducationdailyEnglishlessonsandpublications),"HRMTeam"(salariesandleaves),and"LiteOnVolunteer"(LITE-ONVolunteerevents)toprovideemployeeswithinformationonthecompany'slatestactivities.Thecompanyalsoissuesquestionnairesaftereacheventtocollectsuggestionsthatcanbeadoptedforfurtherimprovements.Inaddition,thecompanymakesimportantnewsclippingsinasharedfolderundertheIntranetOutlookaccountavailabletoallemployeesinordertoenableemployeestoquicklycatchuptolatestdevelopmentsinthecompanyandintheindustry.

InternalpublicationsToencourageinteractionbetweenthecompanyanditsemployees,LITE-ONinvitesemployeestowritearticlesforitsinternalperiodicalpublications,andprovidesaspacewhereemployeescanshareideas.Thecompanyalsousesthesepublicationstoannounceeventsandreportoncorporateperformancetogivetheemployeesanunderstandingofthecompany'sposition.In2017,atotalof8internalpublicationsareissuedbetweenTaiwaneseandoverseasplants.ThesepublicationshavealsobeenmadeavailableinelectronicformintheLearningCentersothatallemployeesareabletoaccessinstantlythelatestcontentsandinformationprovidedbytheplantsanddifferentdepartments.Distributingthisinformationelectronicallyinsteadofashardcopyisalsothemostpracticalwayofprotectingourplanetandthenaturalenvironment.

Two-waycommunicationmeetingEverybusinessunitatLITE-ONisrequiredtoconductmonthlymanagementmeetingsandorganizetwo-waycommunicationmeetingswithemployeesonaregularbasis.Atotalof44sessionswereheldin2016.Inadditiontofacilitatingannouncementsofimportantnewsandbusinesstargetsfromthebusinessunits,thesemeetingsenablemanagementtocommunicatedirectlywithemployeesregardingthecompany'svisionandcultureandhencedevelopcommongoals.Employeesmayalsousethisopportunitytoprovidefeedbackandsuggestions,andhencemaintaingoodemployeerelations.

LaborUnionsEachLITE-ONplantinTaiwanoroverseasisequippedwithaunion.66.9%oftheworkersatkeyofficesaroundtheworldareunionmembers.Unionrepresentativesareelectedbyemployees,andrepresenttheemployeesinregularengagementwiththemanagement.Meanwhile, theunionsgather information,call regularmeetings,discusscountermeasures,anddirectunionactivities,suchasgrouptravelandemployeecareprograms.Theunionsalsoworktoprotecttherightsofemployeesandmaintainastableemployer-employeerelationship.

Magazine(quarterly)CORP

LITE-ONImageIMG(Guangzhou)

NewsletterPower(Changan)

LITE-ONImageIMG(Guangzhou)

AssemblyPower(Guangzhou)

PIDHomePID(Guangzhou)

ChangzhouNewsletterHuadongOperationsCenter

LITE-ONPeople~ICM(Changzhou)~

GrievancechannelsforemployeesThecompanyhasgrievancehotlines,e-mailmailboxes,opinionboxesandcounselingstationsavailableatplantsitestoreceiveemployees'opinionsandsuggestions.OneemployeegrievancewasreceivedinTaiwanin2017,whichisstill inprogress. In2017,794caseswerereceivedoverseas,ofwhichtwocasesarestill inprogress,and99%ofthecaseswere resolved.EverybusinessunithasanexclusiveHR representativeassignedtorespondtoemployees'opinionsandneeds.Therewerenocomplaintsofdiscriminationduetorace,religion,color,nationality,gender,etc.

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SexualharassmentpreventioninworkplaceLITE-ONtakesanactiveapproachtobuildingagenderfriendlyenvironmentandupholdinggenderequality intheworkplace.Thecompanyprohibitsallkindsofsexualharassmentanddiscriminationwithintheworkplace. Ithasestablishedrelatedguidelinesandpolicies,suchastheRegulationsforEstablishingMeasuresofPrevention,Correction, Complaint and Punishment of SexualHarassmentandtheEmployeeMoralGuidelines.LITE-ONhasalsosetupe-mailmailboxesandhotlines.Toprotectthecomplainant'sidentity,LITE-ONalsohascreatedakindandreassuringworkenvironment.Nocomplaintofsexualharassmentwasreportedin2017.

Furthermore,toensureallemployeeshaveanunderstandingofsexualharassmentintheworkplaceandknowhowtorespondandseekhelp,thecompanyprovidesinformationaboutthehotlinesduringorientation.Inaddition,thecomplianceandhumanresourcesdepartmentscollaboratedtocreatethecasestudy,"SayNotoSexualHarassmentandCreateaBetterWorkplace".ThecasestudyismadeavailablethroughtheLeaningCentertoallemployees. It isdesignedto raiseawarenessofsexualharassmentandteachemployeesabouttheirrights.

SatisfactionsurveyLITE-ONconductsemployeesatisfactionsurveys intheformofanonlinesurveyoradedicatedprintedsurveyeveryyear.Thesurveyscoverareas including"income","managementandcommunication","livingconditions",and"workenvironment",or"careerdevelopment." InTaiwan,forexample,asurveyisameansforthecompanytogathercommentsandfeedbackonalargeeventfromitsemployees.Resultsof thesurveyprovideabasis forimprovementofeventsandservices.The industryandgeographicconditionsat theplants inChinavary fromplanttoplant.Therefore,employeesatisfactionsurveysarerefinedandimprovementimplementedbyindividualplantsaccordingtoindependentanalysisresults.NosatisfactionsurveyhastakenplaceattheThailandplant,butplansaregoingtobemadetoincludeit inthesurveyin2018.

2017 Employee Gatherings Satisfaction Survey Results

QuestionsVery

good Good Subtotal Fair Poor Very poor

1.Eventorganization 32% 49% 81% 17% 1% 1%

2.Employeeperformance 28% 43% 71% 24% 4% 2%

3.Entertainerperformance 55% 36% 91% 7% 1% 1%

4.Foodanddrink 21% 45% 66% 26% 6% 2%

5.Promotionalliterature 23% 51% 74% 24% 2% 1%

6.Venue 22% 52% 74% 24% 1% 1%

7.Facilities 29% 49% 78% 18% 2% 2%

Overallrating 30% 46% 76% 21% 2% 1%

The 2017 Satisfaction Survey at a certain plant in Mainland China returned an overall score of 86.4 on living areas.

SayNotoSexualHarassmentandCreateBetterWorkplace–e-learning

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EmployeesareLITE-ON'sbestpartnersonthepathtosustainability.LITE-ONhasalwaysbeencommittedtobuildingacomprehensiveemployeewelfaresystemandremainsdedicatedtotheneedsof itsemployees. Inadditiontoenhancingemployeewelfareandsecuringthebasicwelfarebenefitsofallemployees,thecompanyhasmadeitpartof itsmissiontoofferemployeesa"passionate,motivating, innovative,andgrowing"environmenttoworkin,makingtheirserviceatLITE-ONanenjoyableexperience.

5.6.1 Diverse Welfare SystemsAnnualmedicalcheck-upLITE-ONorganizesregularphysicalexaminationsforfactoryemployees inTaiwanandoverseas.Additionaltestsareprovidedtoworkersincertainpositions.LITE-ONprovidesannualcheckupsaboveregulatorystandardsforemployeesinTaiwan.Thecompanyalsoarrangesforhospitalstafftoprovideonsiteservicesintheplantssoemployeesdonothavetovisitthehospitalsandcansavetime.Employeeswillbedividedintothreeclasses,low,medium,andhighrisk,dependingonthedegreeofdeviationfromthestandardvalues.Thehospitalswillperformthefirst follow-uponhighriskemployees inthreemonths,andtheplantnurseswillperformthesecondfollow-upafterward.Anemployeemaydirectanyquestionregardinghis/hercheckuptothefamilydoctorstationedatthesameplantsotogetabetterunderstandingofhis/herownphysicalconditions.

EstablishmentofhealthcentersLITE-ONhasopenedahealthcenterinTaiwan.Inadditiontohealthprofessionalsavailabledailytoprovideassistance,doctorsvisitthehealthcentermonthlytoprovideface-to-facemedicalconsultationsforemployees.Thecenterisalsoequippedwithfirst-aidsuppliesandequipmentforvariousemergencies.

EstablishmentoffitnesscenterInTaiwan,it isequippedwithafitnesscenterthatcontainsavarietyofweighttrainingequipmentandtreadmills.Thecompanyhashiredanexternalsportsconsultanttosupplypersonaltrainerswhoprovideservicesandinstructions.Inadditiontoprofessionalfitnessadvice,thepersonaltrainersofferregularsportscourses(e.g.combataerobics,Pilates)thatwillhelpemployeesrelievestressandgetfit.SomeplantsinChinaarealsoequippedwithsportsfacilities,suchastabletennis,snooker,andbasketballcourts,availabletoemployees.

Employeeassistanceprograms(EAPs)Since2013,LITE-ONinTaiwanhasbeenintroducingEmployeeAssistancePrograms(EAPs)thatprovidedeveryemployeewithfree,24-hourprofessional,multi-lateralandhighlyconfidentialconsultationservicesonfourmainareas:mentalhealth,businessadministration,legalaffairs,andhealthcare.EAPsarecurrentlyrunbyoutsourcedconsultantcompanies.In2017,atotalof73LITE-ONemployeesinTaiwanusedtheservice.16ofwhomusedthe0800hotlinethroughlandlines,and57usedthepersonalconsultationservice(togainaccesstoone-on-oneprofessionalconsultingservicesprovidedbyexternalprofessionals).Satisfactionsurveysshowthatmorethan90%oftheusersaresatisfiedwiththeservices.Inaddition,eachemployeeatLITE-ONhasanEAPcardthatcontainsEAPcontactinformationthroughwhichemployeesmayobtainthemosttimelyandprofessionalassistanceinanemergencysituation.LITE-ONreleasesmonthlyEAPsnewslettersthatutilizecasestudiestooffersuggestionsandreflection.Itisthecompany'swishtohelpitsemployeesresolveproblemsbymakingEAPsandtheirprofessionalservicesavailabletotheemployees.

5.6 LOHAS LITE-ON

ZhongheAnnualphysicalexaminations

FitnessCenters-Neihu

HealthCenter

ChangzhouAnnualphysicalexaminations

Snookerandtabletennisfacilities-Changzhou

Best Breast feeding Faci l i tyCertificate

QingxiAnnualphysicalexaminations

Footballfield–Changzhou

ThailandAnnualphysicalexaminations

Basketballcourts-Shijie

Thereisabreastfeedingroominthehealthcenter.Itprovidesacomfortable,well-lit,andenclosedspacewheremotherscanhavetheprivacytheyneed.ThebreastfeedingroominthehealthcenterwasawardedaBestBreastfeedingFacilityCertificatebytheDepartmentofHealthofTaipeiCityGovernmentforprovidingagoodbreastfeedingenvironment.

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HappinessSeminarsandfocusedonexercisesin2017.Aseriesofexerciserelatedseminarsandcompetitionswereorganizedtoraiseawarenessamongemployees.ThecompanyalsoinvitedOlympiccoaches,experiencedrunners,andprofessionalextremerunnerstohelpLITE-ONemployeesunderstandandlearnmoreaboutthecorrectwaysofexercisingandrunning.LITE-ONalsoorganizesmarathontrainingtoexposeemployeestodifferentwaysofexercising.The2018StandardCharteredMarathonandtheLITE-ONGamesareexpectedtoprovidethevenueswhereLITE-ONemployeeswillbeabletoshowofftheirenergyandresults.

Thetopicsthisyearincluded"physicalfitnessandpersonalexerciseandhealthmanagement","Runwithme!",and"aimingfortheimpossible".Atotalof16sessionstookplace.Thesessionswereattendedby959participants.Theseminars,onaverage,scoredabove95%onemployeesatisfaction.

MarathontrainingsessionsToeducateemployeesoncorrectwaysofexercisingandencouragethemtotakeonregularexercising,LITE-ONinTaiwanorganizedseminarstoteachcorrectwaysofexercising,andworkedwithprofessionalmarathongroupstodesignmarathontrainingeventscustomizedspecificallyforLITE-ONemployees.Thetrainingthemewas"HappyandFun",andtheprogramlastedsixmonthswith12marathontrainingsessions.Employeesweretaughthowtoexerciseinahealthyandrelaxedmanneranddeveloptheirownroutines.Atotalof401individualsparticipatedintheevents.LITE-ONlooksforwardtoshowingoffhealthy,energeticemployeesandtheirtrainingresultsbyenteringthe10kmgroupmarathonatthe2018StandardCharteredMarathon.

Healthandcharitycampaign-weightlosscourseLITE-ONinTaiwanstartedtheHealthandCharitycampaignin2015.Byworkingwiththirdpartymedicalinstitutions,LITE-ONprovidesweightmanagementassistanceintermsof"dietcontrol"and"healthyexercises"foremployeesinordertohelpparticipantsimprovetheirphysiqueandphysicalconditions.

82employeesparticipatedintheeventin2017.75%ofthemlost3%ormoreoftheirrespectiveweights.Inaddition,LITE-ONlinkedtheweightlossresultstoacharitablecausesotoconverttheemployees'resultstoactualsupport.ThedonationsweregiventochildreninShuangxi,Jinhe,PingdengandotherelementaryschoolsforwhomLITE-ONhasbeenalongtermsupporter.DonationswerealsomadetotheChildWelfareLeagueFoundationtoprovidemealallowancesforschoolchildreninruralareas.

Q1EDM

Q1Picture

Q2EDM

Q2Picture

LITE-ONmarathontraining LITE-ONmarathontraining

HealthandCharitycampaignhighlights

Q3EDM

Q3Picture

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EmployeewelfareandbenefitsTocreateafriendlyworkplacewithhappiness,LITE-ONoffersemployeesdiversifiedwelfareinitiatives.Partofwelfareprogramswillbeadjustedduetothedifferencesinthefactories,butallthebenefitsprovidedareinlinewithorbetterthanthelocallawsandregulations.TakingthesitesinTaiwanasanexample,thebenefitsinclude:stationedphysicians,commendationforlong-timeservice,commendationforexcellence,groupinsurance,weddingsubsidy,childsubsidy,educationsubsidy,hospitalizationsubsidy,funeralsubsidy,birthday,andfestivegiftsetc.Thecompanyalsoprovidesemployeeswithpersonaltravelsubsidiesthattheycanusetoplantripsforthefamily.

CareforemployeesLITE-ON'shumanresourcedepartmenthaspersonneldedicatedtocareforemployeesonmatterssuchasworkaccidents,trafficaccidents,andmajorillnesses,andtoprovidehelpfulinformationwhereneeded(e.g.,groupinsurance,hospitalization).TakingthesitesinTaiwanasanexample,LITE-ONofferspromptfinancialaidofNT$30,000toNT$100,000toemployeeswhofallvictimtounfortunateeventstohelpthemthroughsuchdifficulttimes.

BenefitsandSubsidiespostedonintranet

5.6.2 Diverse Recreational ActivitiesEachyear,LITE-ONorganizesabroadvarietyofmotivationalevents ranging fromcelebrations,familydays,competitions,hikingactivities,grouptrips,andfestivedinners.Recreationalfacilitiessuchaslibraries,fitnesscenters,andaudiovisualequipmenthavealsobeenmadeavailableforemployeestosharetheirexperiences,learntogether,andrelievestress.

Tohelpemployeesbondandraiseworkmorale,LITE-ONsponsors&subsidizesemployeestoindependentlyandspontaneouslyestablishsocialclubsintheformoffundsoreventvenuessothattheymayenjoyabalanced,healthyandjoyfulworklife.

LITE-ONhostsregularrecreationalandsportsevents,suchassportsgamesandhiking.Theobjectivesarealwaystoencourageemployeestoexerciseregularlyandtodevelopafitnessculture.Aspartofitsefforttoprovideawidervarietyofresourcesforitsemployees,thecompanyworkedwiththeSportsAdministrationof theMinistryofEducation inofferingCertifiedSportsCompanyseminarsin2017.

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總執行長

5.6.3 Occupational Safety and Health Management (OSHM)LITE-ONplacesemphasisonitsEHSperformancemanagement.Thecompanyisdedicatedtoprovidingsafe,comfortable,environmentallyfriendly,andeffectiveproductionsitesforthebenefitofouremployees,customers,partners,andthecommunity.EHSmanagementisconsideredpartof thecompany'scompetitiveadvantage,and ishardwired intothecorporateDNA.LITE-ONhascreatedanMOEDepartment. Inadditiontosettingstrategicbusinesstargets,thedepartmentmonitorspotential impactonthebusinessactivities,suchasenvironmentalconservationandoccupationalhealthandsafetyissues.Furthermore,thedepartmentensurestheEHStargetsaremettothesatisfactionofthemanagement,andreportsregularlytotheCEOresults inareasincludingoverallplantconditionsandoccupationalhealthandsafety.

Thelaborhealth,hygieneandsafetyobligations,rightsandinterestsareclearlyindicatedinLITE-ON'slaborcontractaswellashealthandsafetycodesofpractice.EveryproductionsitehasanEHSteamheadedbythehighestrankingofficerandacommitteefoundedinaccordancewiththelawwhosemissionsinvolveattainingISO14001andOHSAS18001certification,andapplyingPDCAcycles. Inanattempttominimizeintensityofenergyconsumptionandgreenhousegasemissions,LITE-ON'sNeihuheadquartersrecentlyintroducedanISO50001energymanagementsystemin2011.Italsocontinuouslyimplementsenergymanagementinordertoenhanceitsoperationperformanceandvalue.Thecompanypaysparticularattentiontostakeholders'needs,andthroughmanagementefforts,aworkplaceisbuiltthatisassafeandhealthyasitiscomfortableandenvironmentallyfriendly.

LITE-ONEnvironment,Health&Safety(EHS)OrganizationStructure

LITE-ON's production sites aremainly located in Taiwan, China andThailand.AccordingtothelawsofTaiwan,everycompanyisrequiredtoestablishacommitteededicated to promoting worker health and safety affairs . Though no suchrequirementexists inChinaorThailand,LITE-ONhasneverthelesscreatedsimilarorganizations to involve employees in the company's health and safety affairs.

Below isa summaryofworkers'participation inhealthandsafetyorganizationsthroughoutLITE-ON'sgloballocations,andthekeyissuesdiscussedin2017:

Region Taiwan China Thailand Percentageofemployeerepresentativesintheworkerhealthandsafetycommittee

81% Notapplicable 50%

Keyissuesdiscussed

1. Occupationalhealthandsafetytraining

2. ImplementationofEHSmanagementsystem

3. Maternalhealthprotectionassessment

1. Machinerysafetyandprotectivemeasures

2. Chemicalprotectivemeasures

3. Safetylabelidentification

1. Occupationalhealthandsafetytraining

2. Compliance3. Customer

requirement

Note Thecommitteehas37members;30ofwhomareemployeerepresentatives.

Thoughnocommitteehasbeenestablished,employeerepresentativesarestillabletobeinvolvedinworkerhealthandsafetyaffairsthroughunions.

Thecommitteehas10members;5ofwhomareemployeerepresentatives.

ComfortableworkingenvironmentLITE-ONprovidesemployeeswithfacilitiessuchasfitnesscentersandlibrariesthathelpthemstayhealthyandrelievestress.A"CulturalCorridor"inTaiwanheadquartershasalsobeenmaintainedtodevelopemployees'culturalawareness.Eachplantsitefeaturesaspaciousandcomfortablecafeteriawhereemployeescandinewithout foodsafetyconcerns,fullyfurnishedwithserviceprovidersincludingtravelagencies,cafes,grocerystoresetc.

Group CEO

CSER committee

Business Groups / Units

EHS Groups in Each Site

SitesinEasternChina

Environment

GuangzhouSites

Health

DongguanSites

Safety

OtherSites

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HealthpromotionandasafeworkingenvironmentLITE-ONactivelycomplieswiththerequirementsoftheLaborSafetyandHealthLawanditsenforcementrules,LaborHealthandSafetyFacilitiesRegulations,LaborInspectionLawand itsenforcementrules,HazardousWorkPlaceReviewand InspectionRules,StrengthenedLaborHealthandSafetyManagementGuidelines,LaborStandardsLawanditsenforcementrules,andHealthandSafetyFacilitiesStandards.LITE-ONprovidespre-servicehealthcheckupsandhealthandsafetytrainingtonewemployees.Italsoprovidesregularhealthcheckupsfor in-serviceemployeeswhoperformparticularlyhazardouswork,whomustalsouseappropriatesafetygear.LITE-ONfurther implementshealthexaminationsfocusingonspecific items,performshealthmanagement,andregularlyholdshealthandsafetytrainingclasses,includingclassesonsuchsubjectsaselectricalsafety,useandmanagementofhazardousarticlesandsubstances,andhowtoavoidunsafeactionswhileworking,aswellasconductingregularfiredrills.

In2017,LITE-ONperformed29,432healthcheck-ups foremployeesandtherewere152,323participationsinfireprevention,healthandsafetytrainings.

Inordertoeffectivelypreventtheoccurrenceofoccupationaldiseasesandoccupationalhazards,eachfactoryhasanEnvironment,HealthandSafety(EHS)implementationteamcooperatingwithinternalaudit,headquartersaudittoconductannualEHSandfiresafetyactivities.MeanwhiletheEHSteamsupervisetheimprovementofenvironmentalsafetyandhygienetoachievetheworkplacezerodisasterasthecompany'skeyindicatorofoperationalmanagement.

InInaccordancewithEHSregulationsanditsmanagementsystems,thecompanyhascontinuedtotrackstatisticsonoccupationalinjuries(excludingtrafficaccidents)in2016.Thenumberofoccupationalinjurieswashighercomparedtothepreviousyear,buttherewasnooccupationalinjurydeath.Analysishasshownthattheseinjuriesoccurredmostlytoemployeesduetoalackofcarewhileoperatingmachinery.LITE-ONwillcontinuetoinvestigatetherootcausesoftheseinjuriesandpreventrecurrencesthroughcorrectivemeasures, improvedprocedures,training,andeliminatingofbehaviorsandworkplacearrangementsthatareunsafetoworkers.

Disabling Injuries Statistics

RegionFrequency of disabling

injuries (FR)Severity of disabling injuries

(SR)Gender Male Female Total Male Female Total

Taiwan 0.15 0.88 0.40 3 3 3

MainlandChina 0.52 0.34 0.44 9 6 8

Thailand 2.14 0.37 0.71 34 4 9

Global 0.52 0.36 0.45 9 6 8

Absentee rates (including sick leaves, personal leaves, and occupational injury leaves)Region Male Female Total

Taiwan 0.46% 1.14% 0.69%

MainlandChina 1.71% 1.74% 1.72%

Thailand 2.34% 0.88% 1.15%

Global 1.63% 1.62% 1.62%

Formula1.Frequencyrateofdisablinginjuries(FR)=numberofdisablinginjuries×1,000,000/totalworkhourselapsed[forstatisticspresentedper

millionworkhours]2.Severityrateofdisablinginjuries(SR)=totalworkdayslost×1,000,000/totalworkhourselapsed[forstatisticspresentedpermillionworkhours]3.Absentrate=Totallosshours/Totalhoursofwork

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a total of NT$65.01 million

expended in social inclusion

“2017 Mercury Lamp Sunset

Project” created 2.85 times of

Social Return on Investment

About 16,200 community

volunteers were trained

The Xinyi Community College was

ranked Excellence by Department of Education, Taipei City Government

A total of 128 internship jobs

offered to colleague students

A total of 1,162 works

participated in competition for LITE-ON Award

6.1 Social Inclusion Policy

Amulticultural,caring,creative,andsustainablesocietyissetasLITE-ON'svisionofsocialinclusion.LITE-ONhaslongcommittedtosocialinclusionwiththegoalof"givingbackwhatistakenfromsociety,"especiallygivenescalatingproblemsinsociety.Theseproblemsincludenewimmigrantinvolvingintothesociety,upbringingofyoungergeneration,shortageoflife-longeducationalresources,lackofcreativetalent,andincreasinglyseriousenvironmentalandecologicalissues.LITE-ON'seffortshavefocusedonbuildingasocietyfullofmulti-culture,education,creativity,andenvironmentalsustainability.Inordertoachievethissocialvision,thecompanyhasidentifiedfourcriticalmissions:advancingculturaldiversityinqualityofhumanism,promotingcareofyouthandchildreneducationandlife-longlearning,nurturingcreativeandprofessionaltalent,anddevelopingsustainableproductandenvironmentallyfriendlyeducation.Accomplishmentoftheabovemissionsdependsonhowweexecuteourconcretestrategy.Someoftheprojectsundertakenhaveincluded:acommunityassistanceprogram,communitycollege,LITE-ONAward,educationalsupport,acorporatevolunteersystem,andsustainableproductdesigns.Theabovestrategieswereexecutedmainlythroughthefollowingactions:• Volunteertraining(formulti-cultureandcommunityvolunteerprograms)• Careservicesforyouthandchildren• Englishandafter-schoolteachingatremoteelementaryschools;after-schoolcounseling

fordisadvantagedstudents;counselingforthephysically/mentallydisabled;environmentalprotectionactivities

• Adulteducation(includingdisabledanddisadvantagedpeople);provisionoflife-longlearningplatformandgreencourses

• Encouragingcreativetechnicaldesignersandintegratingintotechnologyincubationprograms• Industry-academiacollaboration—combiningtheoryandpractice• Developmentofclean,energy-saving,andsmarthealthcareequipment

2017 Results2017 Targets Progress

Communityassistance

Morethan15,000participantsreceivedenhancedcommunityvolunteertraining

Approximately16,200people

Morethan7,000disadvantagedschoolchildrenreceivedsmallgroupandone-on-onevolunteercounselingservices

Approximately7,600people

XinyiCommunityCollege

Numberofcoursesandnumberofstudentscontinuedtoincreasein2017

386courses,7,502students,anda2.6%YOYgrowth

ConsistentlynamedanexcellentcommunitycollegebytheEducationDepartmenteveryyear

Excellent

Learningplatform

Offeringmorethan100collegeinternships 128interns

LITE-ONAward

Promotingsustainabletrainingintechnologyinnovation:Morethan2,000contestants

2,375contestants

RaisingawarenessandparticipationoftrainingintechnologyinnovationPartners:Morethanone

1supplychainpartnerparticipatedinjointpromotionoftechnologyinnovation

Future strategies and goals Future goals CompletionXinyiCommunityCollegetobeconsistentlynamedanexcellentcommunitycollegebytheEducationDepartmenteveryyear

Annual

Continuedofferingofmorethan100collegeinternships 2018

ContinuingLITE-ONAwardtopromotesustainabletrainingintechnologyinnovationMorethan2,000contestantswithmorethan1,000submissions

2018

2017 LITE-ON's Social Involvement ExpensesItem NTD millionCharityexpensesanddonations* 1,113

Educationcampaignexpensesanddonations 5,391

Total 6,504Note:*TheexpenditurecalculationofLITE-ONCulturalFoundationjustincludesthedonationprovidedfromthecompany

Advancing cultural diversity and quality of humanism, promoting care of youth and children education and life-long learning, nurturing creative and professional talent, and developing sustainable product and environmentally friendly education

Community Assistance, community college, LITE-ON Award, educational support, corporate volunteer system, and sustainable product designs

Action Plan Strategy Mission Vision

A society full of multi-culture, education, creativity, and environmental sustainability.

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GRIStandards Index | Contents。LITE-ONandSociety 1 2 3 4 5 6

6.2 Measuring Social Impact of Products: Social Return on Investment (SROI)

LITE-ON,armedwiththesuccessofLeotekintakingthelargestmarketshareinLEDstreetlights inNorthAmerica, returns toTaiwanto expand its street lightbusiness.Giventhestrengthaffordedbyadiverse rangeofproducts,LITE-ONestablishes itselfas theleader in road lighting solutions throughverticalsupplychain integration.LITE-ON'spositionalsocontributestoimprovedqualityandenergyefficiencyofstreet lightsacrossTaiwan.LITE-ONuseshighperformanceLEDcrystals,LEDcomponents,heatsink,powersupply,andrelatedhardwarepartsproducedbylocalmanufacturers,andworkswithlocalcontractors topromotegrowthof the localsupplychain.Completesmartstreetlightsolutionsarealsoofferedatthesametime.Therangeincludeslightingdesign,energyconservationplanning,technicalsupport,andprojectmanagement.Quality ismaintainedbyrealtimemonitoringandautomaticerrorreports.Asaresult, targetssuchasinfrastructureupgrade,energyconservation,andjobcreationareachieved,andthecompanyistakenonestepclosertorealizingthevisionofbeingthebestpartnerin"optic,electricsandenergysaving"and"smarttechnology".

LITE-ONiscurrentlythelargestLEDstreetlightsupplier inTaiwan.Atotalofcloseto400,000LeotekstreetlightsilluminatethestreetsacrossTaiwanandhelp local residentsandpedestriansstaysafeontheroad.LITE-ONworkswithmunicipalgovernments,clients,suppliers,contractorsandotherstakeholders inmakingcontributions tosustainabledevelopmentandsupportingglobalsustainabilityissuesinacampaignforasustainablefuture.

LITE-ONtookLeotekstreetlightinthe2017MercuryLampSunsetProjectandperformedTaiwan'sfirstsocialimpactassessmentonaproduct.Theanalysismeasuredthesocialreturnonmorethan20,000street lightsreplacedinClass4andClass5ruralareasinTaiwan.TheresultwascertifiedbySocialValueInternational.Asocialreturnoninvestment(SROI)analysisshowedthattheNT$403millioninvestmenthadproducedactualenvironmentalandsocialbenefitsthroughstakeholderparticipationanditsripplingeffects.ThereturnwasestimatedatNT$1.15billionandthemultiplierat2.85foreachNT$1invested.LITE-ONworkscloselywithmunicipalgovernments,clients,suppliers,contractorsandotherstakeholdersinachievingsustainabilityandinitiatingachainofpositivechangesinthesociety.

Jeremy NichollsChief Executive OfficerSocial Value International

ASSURED REPORT

V

V

Statement ofReport Assurance

Social Value International certifies that the report "LITE-ON Technology Corp. 2017 Mercury Vapor Street Lamp Replacement Project SROI Analysis Report", by KPMG Sustainability Consulting Co., Ltd, published in April 2018, satisfies the requirements of our report assurance process.

The assurance process seeks to assess whether or not a report demonstrates a satisfactory understanding of, and is consistent with, the Seven Principles of Social Value. Reports are independently reviewed by qualified assessors and must demonstrate compliance with the Social Value assessment criteria in order to be certified. The Social Value assessment criteria document can be downloaded from the website socialvalueuk.org.

Assurance here is against the Social Value principles only and does not include verification of stakeholder engagement, report data and calculations.

Awarded 5 June 2018

Social Value UK carries out the assurance service on behalf of Social Value International. Social Value International is the global network focused on social impact and social value. We are the global network for those with a professional interest in social impact and social value. We work with our members to increase the accounting, measuring and managing of social value from the perspective of those affected by an organisation’s activities, through our Social Value Principles. We believe in a world where a broader definition of value will change decision making and ultimately decrease inequality and environmental degradation.

Disclaimer: Social Value International will not be responsible for any actions that an organisation takes based upon a report that has been submitted for assurance. An assured report does not grant Accredited Practitioner status to the author/authors of the report unless it is part of a full application for Accredited Practitioner status.

Project SROI distribution

SROI result SROI = = 2.85

Sense of security

Energy saving and carbon reduction

Fewer accidents

Chances for community engagement

More jobs

A safer community

Less disruption of routines

Better understanding of demand for product

Improved corporate image

Increased job satisfaction

Easier to identify with company

Improved professional skills

59.97%

59.97%

17.49%

9.37%

9.20%

2.59%

1.11%

0.19%

0.05%

0.02%

0.01%

0.00%

0.00%

0.00%

Result NPV NT$1.15 billion

Investment NPV NT$403 million

Sense of security

Energy saving and carbon reduction

Fewer accidents

Chances for community engagement

A safer community

Disruption of routines

Better understanding of demand for product

Improved corporate image

Increased job satisfaction among participants

Easier to identify with company

Improved professional skills

More jobs

Government + resident (97.33%)

LITE-ON + Leotek employees

(0.09%)

LED street light contractors

(2.59%)

61.61%

99.99%

62.48%

22.49%

10.27%

2.75%

2.01%

17.97%

9.63%

9.45%

1.14%

0.20%

0.20%

More positive relationship (government and community)

More positive relationship(government and community)

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6.3 Supporting Internships: Offering students workplace experience and creating a training platform to connect theory and practice

LITE-ONcooperateswithandsupportstheDepartmentofTechnologicalandVocationalEducationoftheMinistryofEducationandits industry-academiaprograms.Throughworkingwithcollegesanduniversitiestocreateatrainingplatformthatbridgesthegapbetweentheoryandpractice,thecompanyselectsstudentsfromvariousfieldseveryyearandprovidethemwithinternships,scholarshipsandotherresources.Itisanexcellentwayforbringingtogetherthecompanyandcandidatesandenablesstudentstodeveloptheirskillsandexperiencethedynamicsoftheworkplace.Intheprocess,thecompanyisalsoprovidedwiththeopportunitytoidentifysuitablefutureemployees.Inaddition,schoolsareprovidedwithaccesstohumanresourcegapsbetweenindustryandacademiaandmayadjusttheircurriculumaccordingly.Therefore,itisaall-winsituationamonggeneralsociety,schools,corporations,andstudents.

Toeffectivelyencouragestudentstoapplytheirknowledgeandexperiencetheworkplace,LITE-ONmakesplansforinternshipsandadvertisesinternshipopportunitieseveryyear.Opportunities includegeneralsummerinternships,overseassummerinternships,andsemesterinternships.Basedonthenatureofeachinternshipposition,LITE-ONwillassignoneadvisortoeachstudent.Studentswillberequiredtocompleteareport,andasalarywillbeprovidedfortheperiodofinternship.Toensurethatthestudentsintheoverseassummer internshipprogramwillbe fullydedicatedto theirstudies,eachstudent isprovidedasalaryaswellasaccommodationandtravelallowancesduringtheirinternship.Studentswithoutstandingperformanceduringtheirinternshipwillbeofferedpriorityinapplyingforpositionsinthecompany.

Results in 2017 are as follows

Internship type

General summer internship

Overseas summer internship

Semester internship/technology development program

Industry-academia collaboration

LITE-ON Cultural Foundation internship project Total

Numberofinterns 42 44 23 9 10 128

GuangzhouPlant-Internship ChangzhouPlant-Interimreport Neihu-Finalpresentationandprofessionalfeedback PhotowithCEOandPresident

Students'end-of-programpartingwordstoLITE-ON

• Iwould like to thankLITE-ON foroffering summer internships yearafter yearand for itscommitmenttogivingstudentsanopportunitytogainfirsthandindustryexperience.

• Treesplantedtodaymakeshadeforgenerationstocome. IamgratefultoLITE-ONforgivingstudentstheopportunity.

• IwouldliketothankLITE-ONforgivingmetheopportunityandallowingmeagreatfirstimpressionoftheindustry.TheexperiencealsomakesmestartviewingChinafromadifferentperspective.IwouldliketocomebackandworkatLITE-ONifgivenachance.

• IwouldliketothankLITE-ONforgivingmetheopportunityandallowingmeagreatfirstimpressionoftheindustry.TheexperiencealsomakesmestartviewingChinafromadifferentperspective.IwouldliketocomebackandworkatLITE-ONifgivenachance.

• Thelasttwomonthshavebeenveryfulfilling.ThisisanexperiencetobecherishedandIamverygratefulfortheoverseasinternship.

• IwouldliketothankLITE-ONfortheinternship.Ihavelearnedsomuchfrommysupervisorsandcolleaguesandfromotherinternstoo.IthankLITE-ONforcreatingopportunitiesforuniversitystudentsinTaiwan.

• Iamgladtohavehadtheopportunitytotakeanoverseasinternship.Itmademeseethehardworkbehindperfection,andopeneduptherangeofpossibilitiesIcanseeinmyfuture.

• Iamverygrateful forLITE-ON'sdedication to the internshipprogram. Iwasnotaware thecontributionIcouldmakebyapplyingmyskillsintheworkplace.LITE-ONhasgivenmethebestgift intheformofajourneyfromknowingnothingandfearingnothingtobeingabletoachievesomethingandmakeadifference.

-Zeng, National Taiwan University of Science and Technology

-Shi, National Tsing Hua University

-Huang, National Taipei University of Technology

-Wang, Tunghai University

-Huang, National Cheng Kung University

-Zhuang, National Taipei University of Technology

-Zheng, Chung Yuan Christian University

-Fan, National Tsing Hua University

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6.4 2017 LITE-ON Award: Rewarding transition from innovation to startup and encouraging tech talent

The"LITE-ONAward"wasfoundedin2001aspartofthecompany'scorporatesocialresponsibilitytonurturetechnologicaltalentintheChinese-speakingworldandencourageyounginnovatorsandindustrialdesignerstomakemarketvalueandentrepreneurshipfeasibilitytwoessentialfactorsintheirassessmentsandtodeveloptechnologiesortechniquesintheareasoflight,electricity,energyconservationandsmarttechnology.For17years,theawardhasattractedChinese-speakingindustrialdesignersandtechinnovatorsfrommorethan20countriestoparticipateincapturingtheindustry'slatestvisionsandtrends.The2016LITE-ONAwardreceivedcloseto1,200entriesfromaroundtheworld.

LITE-ONAwardwebsiteWWW.LITEONAWARD.COM

Results in 2017Strategy Goal Result/(Completion)

1 Promotingsustainabletrainingintechnologyinnovation

• Morethan2,000contestants• Morethan1,000entries• Morethan1,000peopletoattend

campusinnovationseminars• 1innovativestartupteamtobe

recommended

• 2,375contestantsthisyear;1,163entries

• 19TaiwanCampusInnovationSeminarsand1,338attendees

• Recommended1teamtoFromIPtoIPOProgrambytheMinistryofScienceandTechnologythisyear;makingatotalof3teamsin2years

2 Raisingawarenessandparticipationoftrainingintechnologyinnovation

• Partners:Morethanone• Partnerparticipationininnovation

seminarsat50%orhigher• Numberofattendeesin

internationalforums:250ormore

• 1supplychainpartnerparticipatesinjointpromotionoftechnologyinnovation

• Partnersinjointpromotiontoparticipatein50%ofcampusinnovationseminars

• TheLITE-ONAwardForumisopentothepublic.Thenumberofattendeesreached250.

• Firstlivestreaminghad16,876views.

《TechnicalDesignCollection》

GoldAward-NovelPorousTiO2Composite

MeritAward-RecyclablePhotocatalyst

MeritAward-UVNICEUVLaundryBall

MeritAward-Ultra-HighPowerDen s i t y VHF M i n i a t u r i z edIntegratedPowerConverters

MeritAward-SustainableAdipicAc id P roduct ion Chemica lProcess

MeritAward-ANovelTourniquetwith Mult i -Pressure SensorFunctions

Merit Award-VehicleDistanceEstimationBasedonDeepLearningUsingMonocularCamera

MeritAward-Sunlight-styleOrganicLight-EmittingDiodes

S i lver Award-Ref lect ive Detect ion o fLimbs'BloodOxygenSaturationBasedOnPhotoplethysmography

BrownzeAward-BCI-TeamingSolider

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WWW.LITEONAWARD.COM

《InnovationDesignCollection》

GoldAward-FutureToothbrushforArmlessPeople

MeritAward-CircleLife

MeritAward-Color-DistinguishingBracelet

MeritAward-WaterPurificationHub

MeritAward-RightDistance MeritAward-It'sU

MeritAward-LuggagePassport MeritAward-FishScalesGatheringMachine

SilverAward-PowerGo BrownzeAward-UVWaterlessFaucet

2018 TargetsStrategy Goal1 Promotionof

sustainabletrainingintechnologyinnovationonanongoingbasis

•Morethan2,000contestants•Morethan1,000entries•Morethan1,000peopletoattendcampusinnovationseminars•1innovativestartupteamtoberecommended•Expandthescopeoftrainingintechnologyinnovationinat

leastonefieldofstudy

2 Raisingawarenessandparticipationoftrainingintechnologyinnovationonanongoingbasis

•Partners:Morethanone•Partnerparticipationininnovationseminarsat50%orhigher•Numberofattendeesininternationalforums:250ormore•Livestreamingparticipation:5,000ormore

TechinnovationsandimplementationviaMOSTFITIandtrainingTohelpwinnerscommercializetheirdesignsandturninnovationsintoentrepreneurialventures,theLITE-ONAwardagainteamsupwithFromIPtoIPO(FITI)bytheMinistryofScienceandTechnology.ThetopthreeteamsareautomaticallyacceptedintoFITItoparticipateinthesix-monthstartupcoursesandadvisoryserviceswithouthavingtopassthroughthefirstroundselection.ThepartnershipallowswinnersoftheLITE-ONAwardtofinishvalidationoftheirprototypeproductsorservicesanddeveloptheirstartupbusinessplans.CandidatesareassessedatvariousstagesoftheprogramandthosewhopassallofthemwillhaveachancetowinaNT$1millionstartupcapitalaward.TheGoldAwardwinner,thenewporoustitaniumdioxidesyntacticfoamfromtheNationalTaipeiUniversityofTechnology,hasbeenacceptedintoFITI.TheSilverAwardwinnerhasbeenrecruitedtojoinLITE-ON.

CreatinginnovationexchangeplatformforsharedlearningandinnovationEveryyear,theLITE-ONAwardinvitesinnovativeinternationallyrenowneddesignerstoserveasthejudgesandspeakersoftheLITE-ONAwardForum.Thisyear,thejudgesincludedHanWu,designandmanagementexpertandDesignDirectorof2018TaichungWorldFloralExposition;AnaArriola,skilledinHuman.Simple.Authentic.andDirectorofProductDesignforFacebook;andDr.DeanaMcDonagh,dedicatedfollowerofhuman-centeredandemotion-drivendesignandProfessorofIndustrialDesignintheSchoolofArt+DesignattheUniversityofIllinois(Urbana-Champaign).Thespeakerssharedtheirviewson"Humancentereddesigns"anddiscussedhowinnovationscouldbeusedtoreachoutandcreatevalue.TheLITE-ONAwardForumwaslivestreamedforthefirsttime.Itattracted16,876viewsontheday.

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LITE-ONJianleCupBasketballTournament

NewTaipeiCityJinheafter-schoolEnglishtuition

Sponsorship for "AGeneration Freed: AJourneyof35"publicscreening

AngelGardenActivity

LITE-ONnaturaltourguidingactivities

LITE-ON"SaveaLife"BloodDonationcampaign

FirstSocialWelfareFoundationChristmasParty

NewTaipeiCityShuangxiafter-schoolEnglishtuition

HealthandCharitycampaign

6.5 LITE-ON Volunteers

CorporatevolunteeringinthecompanyispartofLITE-ON'ssocialinclusionpolicy.LITE-ONstartedorganizingcorporatevolunteers in2013.TheLITE-ONvolunteerplatformissupportedby training,communitycare,charitysponsorship,andenvironmentalsustainability.Thecompanyusesthevolunteerplatformtocombineresources inandoutsidethecompany,andencourageallLITE-ONemployeesandtheir familiesto jointherankofcorporatevolunteers.Theplatformmakesalongtermcommitmenttoawiderangeofcharities,suchasEnglishclassesforchildren,after-schoolstudies,environmentalconservationandsupportforthedisadvantaged.

LITE-ONvolunteersinTaiwanCommunity service

Talent development

Charity & sponsorship

Environmental sustainabilitySocial Inclusion

Community Service

TalentDevelopment

Charity & Sponsorship

Environmental Sustainability

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Volunteers fromChanganPlant visitingQingchengSocialWelfareInstitutionSupportfordisadvantagedorphans

LandfillcleanupoutsideChangzhouPlant

HuadongOperationsCenter12thblooddrive

Volunteers fromBeihaiPlantvisitingFuyinElementarySchoolSchoolvisitsandsupport

TreeplantingeventatTianjinPlant

HuadongOperationsCenter "Walking forMilk"HikingforCharityfundraiser

Volunteers fromGuangzhouPlantvisitingHuangpuseniorcitizenhomeCarevisitstothoseinneed

ParkcleanupatShijiePlant

ChanganPlantclothingdrive

LITE-ONVolunteersoverseasCommunity Service

Environmental Sustainability

Charity & Sponsorship

6.6 LITE-ON Cultural Foundation

TheLITE-ONCulturalFoundationwasfoundedin1993andinitially fundedbyprivatedonationsfromfoundersofthreeaffiliatedcompaniesin1993.Itsmaintaskistopromote"CommunityAssistance"and"XinyiCommunityCollege".

PurposeLITE-ONfollowstheprincipleofgivingbacktothecommunitywhatittakesinfulfillmentofitscorporatesocialresponsibility.Thepurposeofthefoundationistonurtureculturalcharacter,supportchildren'sgrowth,careforcorporateculture,andpromotecharitableworks.Thefoundationalsoformsstrategicallianceswiththirdpartyinstitutionstocreategreaterbenefitsforthoseitsupports,whichinturncontributetotheprogresstowardsustainabilityforthesocietyasawhole.

LITE-ONCULTUREFOUNDATIONWEBSITEWWW.LITEONCF.ORG.TW

6.6.1 Community Assistance and Holistic Services

CommitmentsThecommunityvolunteerscreatedCommunityAssistance in1998 toprovideTotalSolutions.Themodelproceedsalongaspecificpath, family-school-community,andprovidesholisticservicesthatsystematicallysolveproblemsanderadicatethecausesat thesame time.Theprogramencouragesvolunteers tospread"lovewithin thecommunity"andhelpteachersreachouttohighriskchildrenwhoneedextraattentionandtheirfamilies.Childrenaretaughthowtodevelopselfconfidenceinahealthylearningenvironmentforbodyandmind.Furthermore,theprogramfacilitatesachievementofanidealsociety,buildsstrongtiesinthecommunity,andpromotesciviceducationinordertoapplythecommunityassistancemodelandcreateholisticservicesonafriendlycampusandbringstabilitytosociety.

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www.liteoncf.org.tw

ActionsandresultsAtotalof200,000participantshavejoinedtheLITE-ONCommunityAssistancefamilyforholisticservicesoverthelast20years,makingtheprogramoneofthebestpointsofentryforbusinessestobeinvolvedinthecommunity.

Strategy Business targets in 2017 Actions in 2017 Progress

Nurturingculturalcharacter

• Communityvolunteerempowerment• Publicationof"EmotionalSupportSeries-

EQCard"• Mutuallybeneficialstrategicalliances

• Continuedtotrainingcloseto700communityvolunteerstobecomeefficientholisticserviceproviders.

• Publicationof2,000setsofEQassistanceteachingmaterials• Continuedtoworkwithstrategicalliancepartners,including

LITE-ONHappinessSeminarsandspecialgovernmentprojects.

• Understandingemotionsviabrainscience.Atotalof33schoolsand16,200volunteersparticipatedintheevent.

• Thecross-regionallargevolunteerseminarwasheldseventimesandreceived830attendees.

• Governmentdepartmentcoursesattendedby2,500 intotal.

Supportingchildren'sgrowth

• Small groupandone-on-one volunteercounselingservices

• On-campuscounselingandmentalhealtheducation

• Charitydonations

• Scopeofservice:smallgroupand individualcounselingservices,other (varybyschoolasneeded, including lifeeducation,sexeducation,diversityeducation, remedialeducation,respitecareforspecialeducationstudents,andfoodeducation)

• ContinuedtopromoteCommunityAssistance.

• 7,600disadvantagedschoolchildrenreceivedservices.• 98,000attendedmentalhealtheducationevents.• 40 students benefited fromCommunity Assistance

Scholarships.

Caringforcorporateculture

• LITE-ONHappyFamily-SummerCampforChildrenofLITE-ONEmployees

• ContinuedtoorganizeBrainSciencesummercampsforchildrenofLITE-ONemployeesattheNeihuheadquartersandZhongheplant.ThecampwasofferedalsoinHsinchuforthefirsttime.

• Atotalof89participantssignedupinNeihu,ZhongheandHsinchu,whichwasthehighestparticipationever.

Promotingcharitableworks

• "ABeautifulBrain"brainscienceexhibit• Promoting sponsorship for educational

publications

• July17-28,2017-HostedabrainscienceexhibitintheLITE-ONGalleryonthefirstfloorofLITE-ONBuilding.

• June20, 2017 -SupportedCommonWealthParentingMagazineinpromotingreadingandgivingawaybookstoschoolsinthe"HelpingEveryChildSucceed"campaign.

• SponsoredCommonWealth's releaseof "AGenerationFreed:AJourneyof35"

• Morethan700visited"ABeautifulBrain"brainscienceexhibit

• Hostedthe"HelpingEveryChildSucceed"bookdiscussionandgaveaway400copies.Morethan200volunteersandschoolprincipalsattendedtheevent.

• "AGenerationFreed:AJourneyof35"followedfivehighschoolstudentsfor20yearstoshowthelastingeffectofeducationreformonageneration.

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Highlightsof2017Publicationof2,000setsof"EmotionalSupportSeries-EQCard"teachingmaterialsforgroupsincluding33schoolsaswellastheFamilyEducationCenterofNewTaipeiCity,theDepartmentofEducationofKinmenCityGovernment,andtheFamilyEducationCenterofHsinchu.

LITE-ONHappyFamily-2017FunTogethersummercampsforchildrenofLITE-ONemployeestookplaceagainattheNeihuheadquartersandZhongheplant.ThecampthisyearwasdesignedtobeBrainSciencecamp,andwasofferedinHsinchuforthefirsttime.Atotalof89participantssignedup,whichwasthehighestparticipationever.Tofindoutmore：WWW.LITEONCF.ORG.TW/DM/128/128.HTML

LITE-ONsponsoredCommonWealth'sreleaseof"AGenerationFreed:AJourneyof35".Thedocumentaryfollowedfivehighschoolstudentsfor20years,andshowedtheirlifestoriestodemonstratethelastingeffectofeducationreformonageneration.Thefilmadvocatededucationforthenextgeneration,andrepresentedoneofthefoundation'smanydifferentwaysofgivingbacktothecommunity.Tofindoutmore：WWW.CW.COM.TW/ARTICLE/ARTICLE.ACTION?ID=5085283

Promotedempowerment inthe16-session"EmotionManagement-EQseries". Inthefirstsemester,4,840from29schoolsattended;andinthesecondsemester,4,856from27schoolsattended.DownloadsweremadeavailableviatheCommunityAssistanceBiweeklyNewsletter.Tofindoutmore：WWW.LITEONCF.ORG.TW/BOOK_P4.HTML

LinkouElementarySchool,LinkouDistrict,NewTaipeiCity:ForeverYoung-Thebrain'swayofstressreliefandcare

EQCardswereusedtocategorizeemotionallanguagestohelpchildrenunderstandtheirownemotionsbetter.

CEOWarrenCheninaninterviewRongfu Elementary School, XinzhuangDistrict,NewTaipeiCity:PathtoHappiness-Understandingtheimportanceofcaringforyourbrainandcorrectmethods

"Emotional chameleon"helped childrenexpresstheiremotionsthroughfivecolors.

ThefilmwasshownintheLITE-ONInternationalConventionCenteronDecember21,2017.ZhongzhengElementarySchool, XindianDistrict,NewTaipeiCity:usingexpressiveartmediaandgamestoteachnerveconductionthroughhands-onexperience

Smallgroupworkedtogetheronemotionsdollpuzzles.

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http://www.liteoncf.org.tw/dm/128/128.html

https://www.cw.com.tw/article/article.action?id=5085283

www.liteoncf.org.tw/book_p4.html

160participatedintheMOEChungshanHallPressFieldTrip-supportprogramforsummercampsfordisadvantagedchildren

July17-28,2017-Detailsof"ABeautifulBrain"brainscienceexhibitintheLITE-ONGalleryonthefirstfloorofLITE-ONBuildingTofindoutmore：WWW.LITEONCF.ORG.TW/RECORD_P9.HTML

LITE-ONformedastrategicalliancewithCommonWealthParentingMagazine inthe"HelpingEveryChildSucceed"readingcampaign.Thecampaignheldbookdiscussionsandgaveaway400booksonJune20.Morethan200volunteersandschoolprincipalsattendedtheevent.Inaddition,copiesoftheCommonWealthParentingMagazineweredonatedtoruralschoolsaspartofanongoingefforttoencouragereadingandbuildatwo-wayeducationplatform.

Simplemeditationexercisesweretaughttohelpstudentsquicklyadjusttheirbrainwavesandturnonlearningswitches.

CommonWealthParentingCEOChi-YuHoandMr.Heng-ChangLiu ledthe"HelpingEveryChildSucceed"bookdiscussion.

Seeingtheworldthroughthebrain-Mentalpowers101:Howourbrainshelpusobservetheworld

CEOWarrenChenpresented"HelpingEveryChildSucceed"toteachersofthecommunityvolunteers.

LearningtousetheTenGoldenRulestotakecareofthebrainandpassonmentalhealthtips.

Groupphotoduringcommunityvolunteermeet.

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http://www.liteoncf.org.tw/record_p9.html

FuturestrategiesandgoalsLovingandbeinglovedcanbeequallymoving.Bothfaithandhopearerootedinlove.Fortwentyyears,CommunityAssistancehasseenmanyissuesappearasthesocietychanges,suchaslowbirthrate,agingsociety,andextremeweather.Hence,itproposesthatthemostbeautifulandmostuniquevalueintheageofartificialintelligencewillbetheabilitytoappreciateart.Foodeducation,ecologicalpsychology,andartandcultureservicesprovidethemeanstoencouragemorepeopletopracticethephilosophyandregaintheirmentalbalance.Thefoundationwilltrytofindmeaningandwaysforhumanstocoexistwithnature,andkeepitspromisetoleadthewaytoprotectingboththeplanetandmankind'speaceofmind.

Strategy Future goals (2018- )

Nurturingculturalcharacter

•Communityvolunteerempowerment:expectedtobeofferedin35schoolsandexpandedtoincludeHsinchuin2018with15,000participantsintotal.

•Promotionof"EmotionalSupport-EQCard"workshop:expectedtohave4sessionswith100participantsintotal.

•Scheduledpublicationof"Raisingachildwhothinksforhimself-EQSupport"andreleaseofdownloadabledatabase

Supportingchildren'sgrowth

•Continuingsupportfordisadvantagedchildrenin35schools.

•PromotionoftheBrainScienceonCampuslifeeducationcampaign.

•ContinuingpromotionofCommunityAssistanceScholarshipsfordisadvantagedstudents.

Caringforcorporateculture

•ContinuingLITE-ONHappyFamily-SummerCampforChildrenofLITE-ONEmployees

•Organizationofone"EmotionalSupport-EQCard"workshopforLITE-ONemployees

•Organizationof2CreativityandLivingArtseminars.

Promotingcharitableworks

•Organizationof8CommunityAssistanceLivingArtSeminarsforParents.

•Promotionofe-Learning:Thecampaigntofullyadoptelectronicmediastartedin2010.Trainingmaterialsandupdatesonlatestdevelopmentsareplacedontheplatform

andavailablefordownloadtothepublic.

•ContinuinginvestmentinwebsiteadministrationandpublicationoftheCommunityAssistanceBiweeklyNewsletter.

•ContinuingpartnershipwithSeniorCitizensCenterofYeliouElementarySchoolinWanliDistrict,NewTaipeiCityindevelopingcoursesforseniorcitizensinruralareas,and

makingproposalsavailableforplannertrainingpurposeatthecenter.

•ParticipationandpublicationsatNPOacademicconferences(ConferenceonMentalHealthPromotionPolicies:Fromoutsidertomainstream-casestudiesonmentalhealth

promotiononcampus,cross-straitcommunitylearningconference-LITE-ONCommunityAssistanceasacasestudy)

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Caring for the disadvantaged, diverse education

Public engagement, training and empowerment

Environmental sustainability, a green lifestyle

Arts, history & community aesthetics

Vision：Tobeanexcellentcommunitycollegeandthebestpartnerinlifelong

learningforresidentsintheXinyiDistrict

CorePhilosophy：Buildingalifelonglearningplatformwithpeopleatitscenterthatservestoencourageculturaldevelopment,helpthedisadvantaged,andsupportculturaleducationinthecommunity.

ActionsandresultsXinyiCommunityCollegeoffered386coursesin2017andaccepted7502studentsin total,whichwasa2.6%YOYgrowth.ThecollegewasnamedanexcellentcommunitycollegebytheDepartmentofEducationofTaipeiCityGovernment.

XinyiCommunityCollegewebsiteWWW.XYCC.ORG.TW

6.6.2 Taipei Xinyi Community College

FourThemes

BuildinganeducationplatformforthedisadvantagedlivinginXinyiDistrict

Tocombinelocalresourcesandapplygrouplearningmethodstobuildaninclusivelearningenvironmentforthedisadvantaged

MotivatinggreenlearningwithinXinyiDistrict

Torebuildandprotectagreenenvironmentthroughlearning

Torebuildandprotectagreenenvironmentthroughlearning

Totrainaesthetictalentandguidesthroughartsstudiesandhistoryworkshops

Buildingupcivilcompetenceandtalentforthegrowthofthecommunity

Topromotecivilawarenessbyengagingresidentsinpublic,voluntaryservices

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http://www.xycc.org.tw

ActionsandresultsResults of Xinyi Community College's 2017 action plan

Strategy Targets in 2017 Actions in 2017 Progress

Environmentalsustainability,agreenlifestyle

•ContinuingGreenLifestyleOrganicFarmingConference

•Promotingorganicfarmingtourandexperiencecoursesinthecommunity-TCHSongdeBranch,FutaiVillage

•Organizinggreencommunitycoursesandworkshops

•MakingplansforenvironmentaleducationandtrainingonecosystemsalongoldtrailsinXinyi

•Continuingthegreenrooftopproject,whichdonatesorganicvegetablestocancerpatients

•ExploringHistoricalXinyi

•Greenrooftopproject-thevanillacommunity•Managingthegreenrooftopproject -urbanfarmingatXinyiJuniorHigh

School•Friendlyfarming:TCHSongdeBranch,FutaiHappyFarm,childwelfarecenter,

andEternalLoveFarmforthosewithmentaldisorders•UsedcoffeegroundsasfertilizerforgreenrooftopatXinyiJuniorHighSchool•8thGreenLifestyleConference-GreenLight-Urbanfarmingandrecreation•TCHSongdeGarden•XinyiGreenLifestyle"Community Image" identificationsystem-Crested

serpenteagledesign•Greenlifestylelearningcommunityforteachersandstudents-focusgroup

interviews•Workingwithlocalschools-CommunitycoursesatXinyiJuniorHighSchool-

Friendlyfarming•WorldCleanupDay-ElephantMountaincleanupcampaign•Teachers-Greenlifestylesupportgroup

•360people•Approximately213kg(highestever)•1225people/198hours•60people/12hours•91people•826squaremetersofinclusive

communitygarden•Connecting15ormorecommunity

organizations•20people,3newcourses,and2

combinedgroups•100juniorhighschoolteachersand

staff•107people•5teachers

Caringforthedisadvantaged,diverseeducation

•Continuingcareforlow-incomeelderlylivingalone•Designingcoursesforthosewithmentalorphysical

disabilities•Supportingsporteventsforthedisabledandresult

presentations•Trainingvolunteerstojoincareforthe

disadvantaged•Promotingfreehaircutforlow-incomehouseholds•Organizingforgroupstoparticipateincareforthe

disadvantaged•Introducingcoursestodeliverknowledgeincare

forthedisadvantaged

•Servicesforthevisuallyimpaired:HomefortheElderlyBlind(comprehensiveChinesemedicalcare,hiking,andwalkingtours),Multiplevisualdisabilities(Mandalagroup)

•Chorusofvisuallyimpaired-performanceattheUniversiadeVillage•Earlyintervention-respitecareforparentsandsmallchildrenplayworkshops•Freehaircutforthedisadvantagedinthecommunity•Coursesforimmigrants:Flamenco,vocalmusicandsinging,haircuttraining,

andhappybookkeepingforimmigrantmothers•LianVillagecommunitycompanions:Comeththesummer,comeththewinter•DragonBoatFestivalvisitstoelderlylivingalone-BadouDayTripforelderly

livingaloneinXinyiDistrict•EternalLoveFarmforthosewithmentaldisorders•LITE-ONJianleCupBasketballTournament

•93visuallyimpairedseniorsandadults•Approximately1,000people•60parentsand30children•333people•180people•168people•13(elderly)and16(volunteers)/session•23people/108hours•50people

102


Strategy Targets in 2017 Actions in 2017 Progress

Arts,history&communityaesthetics

•Continuingpresentationsofartsinthecommunity•OrganizingXinyiRoamingFestival-ArtandHistory

Tours•Promotingartandcultureeventsbylocal

performers•Continuingartandhistorycourses

•XinyiArtandHistoryLectures•Returningtoschool-Sanzhangli,Liuzhangli•XinyiRoamingFestival-localtours+pressconferences•Gettinglost-AwalkinXinyiexhibit3/22-4/30•ExploringHistoricalXinyi-FourBeastMountainstour•Memoriesofmilitarydependentvillages-Paintingmyhometown+press

conference5/11-6/6•Courses/Exhibitsandperformance•Artgallery•ArtexhibitsatXinyiDistrictHouseholdRegistrationOffice

•323people/10sessions•71people/2sessions•345people/8sessions•Approximately10,000people•Approximately380people•Approximately4,600people•66sessions•16sessions•4sessions

Publicengagement,trainingandempowerment

•Organizingmealswithvillageheadandgardenworkersandartandhistorytoursandseminars

•Organizingpublicforumsandonlineseminars-cultureandhistorystudyatTaipeiCityArchives,smartecocities

•OrganizingtrainingandempowermentcoursesforHistoricalXinyiandTaipeiRailwayWorkshoptours

•Promotingcivilawarenessandcivilcompetenceseminars

•BuildingawebsiteforHistoricalXinyi

•Participatorybudgeting-rediscoveringoldriver•CultureandhistorystudyandpromotioninXinyi-committee•Cultureandhistorystudy:surveyingoldhousesandstores,andmilitary

facilities•Smartecocommunitycampaign-localworkshops:XinyiDistrict,Liuzhangli

RedevelopmentZone•OldXinyi-Xinyicultureandhistorystudio•Localbusinessowners:localstartupempowermentworkshop•TaipeiRailwayWorkshopcivilempowerment-warmupproject•Localempowerment:LiugongJuniorHighSchool- leadingstudentsinthe

giftededucationprogram,teacherempowerment(twosessions)•Blendinglocalknowledgeandcoursematerials•Teacherempowerment-livingart,courses,andclassmanagement•Teacherpeergroups:ArtofArts,ArtAlliance•Promotingseniorcareinthecommunity:Sili,Songyou

•Firstamongrejected•Proposeddirectionsforcultureand

historystudy•Interviewed40people/Explained10

attractions•68people/9setsofideas•17people•322people•15peopleinStage1•Approximately66people•7courses•30people•10teachers•200people/8sessions

103


Highlightsof2017|BuildingagoodlifelonglearningplatformGreenlifestylecourses:offered15to20coursesinfarming,environmentalconservation,gardening,andhouseholdtips.ThecoursesweredesignedtomotivategreenlearningwithinXinyiDistrictaswasoneoftheschool'sgoals.Thenumberofstudentscontinuedtoincreaseandhadreached16%ofthetotalnumberofstudents.

Coursesforthevisuallyimpaired:ThefoundationcontinuedtoworkwiththeEdenSocialWelfareFoundationandstartedofferingadditionalcourses,suchascomprehensiveChinesemedicalcare,walkingtoursalongoldtrails,positivepsychology-Mandala,andhiking,togivethevisuallyimpairedadifferentlearningexperience.

Jianlecampcoursesforthementallychallenged:Tohelpthosewithmentalorintellectualdisabilitiestoattendcoursesatthecommunitycollege,theschoolstartedofferingTaiwan'sfirstJianlecampcourses.Thelistofcourseswasbeingconstantlyexpandedtoincludedancing,basketball,rockbands,photography,broadcasting,andangel'sgarden.100to150studentsparticipatedinthecoursestoexercisetheirrighttolifelonglearningandrealizetheirdreams.

Chorusofparentsofmentallychallengedchildren:ThefoundationworkedwiththeFirstSocialWelfareFoundationandcreatedthefirsttrainingcoursesforthechorusofparentsofmentallychallengedchildrensotoallowparentswithmentallychallengedchildrenanoutlettoexpressthemselvesandfindasenseofachievement.

Teacherandstudentsworking together toovercomeemotionalchallenges

AclassatTCHSongdeBranch

Providing assistance in development ofphysicalmovementssuchasvisualmovementcontrolandflexibilityandineffectivelearningintermsofattentionspanandmemory

Groupphoto

Bringingoutemotions througha sensoryexperience

Allattentiononthedemonstration

Using lightmusictohelpstudentsexerciseandcontroltheirbodies

Allattentiononthespeaker

SharingteaandmoreOvernightatFutaiHappyFarm

Enhancingbasicstaminaandendurance Learningwithjoy

104


Trail guidecourses:Coursesweredivided intobeginner, interim,andadvanced levelssoto letstudentsstartwith localhiking trailsandbuildthemselves up to tacklingmore challengingruraltrails inGreaterTaipei.Theobjective isnotonlytoexerciseandimprovehealth,buttolearnmore about the local ecosystemandwaysofconservation.

Fuyangtrip WalkinginNewBeitou WalkinginZhishanYan

Strategy Future goals (2018- )

Environmentalsustainability,agreenlifestyle

•TostrengthenXinyiGreenLifestyle-Urbanfriendlyfarming,andtrain4teachingassistants•TopromoteXinyiGreenLifestylebasesanddevelop4communitybases•TobringtogetherLITE-ONvolunteersanddevelopHistoricalXinyi-Ruralmountaineducationwith12volunteersandbenefiting360people•SupportingmaintenanceofgreenrooftopatXinyiJuniorHighSchoolandcreating1self-governedgroup

Caringforthedisadvantaged,diverseeducation

•Supportinglearningneedsofdifferentdisadvantagedgroups,supplyinginnovativelearningresources,creatingastrategicalliancewith2institutions,andstartingtooffer1to2newcourses

•Designing1volunteercareeventforthedisadvantaged•Pushingfor6LITE-ONvolunteereventstojoincareforthedisadvantaged•Workingwiththecommunitytoorganize1eventtosupportthedisadvantaged

Arts,history&communityaesthetics

•Offeringartcoursestopromotecommunityaesthetics,andparticipatingin5communityartexhibits/performances•Organizing10XinyiArtandHistoryLecturesevents•Training10XinyiRoamingguides•BuildingupfieldresearchcapabilitiesinXinyiDistrictandcreatingafieldresearchteam•Expandingarthistoryandculturecoursesandengagingin1interdisciplinarypartnership

Publicengagement,trainingandempowerment

•Gettingmoreinvolvedinissuesonlocalculturalassets,andrespondingtocurrentdevelopmentasneeded•Holding50communityforums•Takinginventoryof10publicinterestgroups•Organizing3XinyiVisionsworkshops

Xinyi Community College's medium-term goals and expected benefits

105


GRI Standard & Disclosure Related Report Sections Page Omissions

General Disclosures

GRI 102 General Disclosures 2016

1.OrganizationProfile

102-1 Nameoftheorganization 2.1CompanyOverview 25 　

102-2 Activities,brands,products,andservices 2.1CompanyOverview 25 NotapplicablefortherearenobannedordisputedproductsproducedinLITE-ON

102-3 Locationofheadquarters 2.1CompanyOverview 25

102-4 Locationofoperations 2.1CompanyOverview 25

102-5 Ownershipandlegalform 2.1CompanyOverview 25

102-6 Marketsserved 2.1CompanyOverview 25 　

102-7 Scaleoftheorganization 2.1CompanyOverview1.2.3TheScopeandBoundaryofMaterialTopicsintheReport

2519

102-8 Informationonemployeesandotherworkers 5.2.1EmployeeStructureandDistribution 69

102-9 Supplychain 3.4SupplyChainManagement1.2.3TheScopeandBoundaryofMaterialTopicsintheReport

4719

102-10 Significantchangetotheorganizationandsupplychain AboutThisReport2.2OrganizationStructureofCorporateGovernance3.4.2SupplyChainRiskManagement

22848

102-11 Precautionaryprincipleapproach 2.3CorporateRiskManagement 32

102-12 Externalinitiatives 1.2.1.2StakeholderEngagementPerformanceHighlights4.2ResponsestoClimateChangeandGlobalWarmingPolicy

1656

102-13 Membershipsofassociations 2.1.3MembershipinGroupsandAssociations 27

2.Strategy 102-14 Statementfromseniordecision-maker LetterfromtheChairmanandGroupCEO 5

102-15 Keyimpacts,risks,andopportunities LetterfromtheChairmanandGroupCEO 5

GRI Standards Content Index

106



3.EthicsandIntegrity

102-16 Values,principles,standardsandnormsofbehavior 1.1CorporateCommitmentandCSRVision2.2OrganizationStructureofCorporateGovernance2.4Compliance,EthicsandAnti-Corruption4.1CommitmenttoEnvironmentalSustainabilityandPolicy

8283854

102-17 Mechanismsforadviceandconcernsaboutethics 2.4Compliance,EthicsandAnti-Corruption 38

4.Governance 102-18 Governancestructure 2.2OrganizationStructureofCorporateGovernance 28

102-19 Delegatingauthority 1.1CorporateCommitmentandCSRVision2.2OrganizationStructureofCorporateGovernance

828

102-20 Execut ive - leve l respons ib i l i t y fo r economic ,environmental,andsocialtopics

1.1CorporateCommitmentandCSRVision2.2OrganizationStructureofCorporateGovernance

828

102-21 Consultingstakeholdersoneconomic,environmentalandsocialtopics


828

102-22 Compositionofthehighestgovernancebodyanditscommittees.

2.2.1BoardofDirectors 29

102-23 Chairofthehighestgovernancebody 2.2.1BoardofDirectors 29

102-24 Nominatingandselectingthehighestgovernancebody 2.2.1BoardofDirectors 29

102-25 Conflictsofinterest 2.2.2AuditCommittee2.2.3CompensationCommittee2.2.4GrowthStrategyCommittee

303031

102-26 Rolesofhighestgovernancebodyinsettingpurposevalues,andstrategy


828

102-27 Collectiveknowledgeofhighestgovernancebody 2.2OrganizationStructureofCorporateGovernance 28

102-28 Evaluatingthehighestgovernancebody'sperformance 2.2OrganizationStructureofCorporateGovernance 28

107


4.Governance 102-29 Identifyingandmanagingofeconomic,environmentalandsocialimpacts

LetterfromtheChairmanandGroupCEO1.2.3TheScopeandBoundaryofMaterialTopicsintheReport

519

102-30 Effectivenessofriskmanagementprocesses 2.2OrganizationStructureofCorporateGovernance2.3CorporateRiskManagement

2832

102-31 Reviewofeconomic,environmentalandsocialTopics 2.2OrganizationStructureofCorporateGovernance2.3CorporateRiskManagement

2832

102-32 Highest governancebody's role in sustainabilityreporting

1.1CorporateCommitmentandCSRVision 8

102-33 Communicatingcriticalconcerns 1.1CorporateCommitmentandCSRVision2.2OrganizationStructureofCorporateGovernance

828

102-34 Natureandtotalnumberofcriticalconcerns 1.1CorporateCommitmentandCSRVision 8

102-35 Remunerationpolicies 2.2.1BoardofDirectors2.2.3CompensationCommittee

2930

102-36 Processfordeterminingremuneration 2.2.3CompensationCommittee 30

102-37 Stakeholdersinvolvementinremuneration 2.2.3CompensationCommittee 30

102-38 Annualtotalcompensationratio 2.2.3CompensationCommittee 30

102-39 Percentageincreaseinannualtotalcompensation 2.2.3CompensationCommittee 30

5.StakeholderEngagement

102-40 Alistofstakeholdergroups 1.2StakeholdersandMaterialIssues 13

102-41 Collectivebargainingagreements 5.5EmployeeRelationsNote:TherearenocollectivebargainingagreementsinLITE-ONyet.

81


108


5.StakeholderEngagement

102-42 Identifyingandselectingstakeholders 1.2StakeholdersandMaterialIssues 13

102-43 Approachtostakeholderengagement 1.2StakeholdersandMaterialIssues 13

102-44 Keytopicsandconcernsraised 1.2StakeholdersandMaterialIssues 13

6.ReportingPractice

102-45 Entities included in the consolidated f inancialstatements

AboutThisReport2.2OrganizationStructureofCorporateGovernance

228

102-46 DefiningreportcontentandtopicBoundaries AboutThisReport1.2StakeholdersandMaterialIssues

213

102-47 Listallmaterialtopics 1.2StakeholdersandMaterialIssues 13

102-48 Restatementofinformation 2.1CompanyOverview 25

102-49 Changesinreporting Note:None

102-50 Reportingperiod AboutThisReport 2

102-51 Dateofmostrecentreport AboutThisReport 2

102-52 Reportingcycle AboutThisReport 2

102-53 Contactpointforquestionsregardingthereport AboutThisReport 2

102-54 Claims of reporting in accordancewith the GRIStandards

AboutThisReport 2

102-55 GRIcontentindex GRIStandardIndex 106

102-56 Externalassurance ThirdPartyAssuranceStatement 122


109



Material Topics

GRI103ManagementApproach2016

103-1 ExplanationofthematerialtopicanditsBoundary

1.2.1StakeholderIdentificationandCommunication1.2.3TheScopeandBoundaryofMaterialTopicsintheReport

1319

GRI201EconomicPerformance

ManagementApproach103-2,103-3

Themanagementapproach&itscomponentsEvaluationofthemanagementapproach

LetterfromChairmanandGroupCEO2.1CompanyOverview

525

201-1 Directeconomicvaluegeneratedanddistributed.

2.1CompanyOverview5.4ProtectionofInterest5.6LOHASLITE-ON6.1SocialInclusionPolicy

25798490

201-2 Financialimplicationsandotherrisksandopportunitiesfortheorganization'sactivitiesduetoclimatechange.

LetterfromtheChairmanandGroupCEO4.2ResponsetoClimateChangeandGlobalWarmingPolicy4.3ReducingGreenhouseGases

55657

201-3 Definedbenefitplanobligationsandotherretirementplans

5.4.3PensionPolicy 81

201-4 Financialassistancereceivedfromgovernment. 2.1.2ListofMajorShareholdersNote:In2017,LITE-ONreceivedNTD28,342thousandasinvestmenttaxcreditof2015operationincometaxapprovedbyNationalTaxationBureau.

27

GRI202MarketPresence2016



5.1EmployeePolicy 68

202-1 Ratiosofstandardentrylevelwagebygendercomparedtolocalminimumwage


202-2 Proportionofseniormanagementhiredfromthelocalcommunity

5.2.1EmployeeStructureandDistribution 69

GRI204ProcurementPractices2016


Proportionofseniormanagementhiredfromthelocalcommunity

3.1GoalsandStrategiesforReducingImpactofProductsandSupplyChain3.4SupplyChainManagement

43

47

204-1 Proportionofspendingonlocalsuppliers 3.4.2SupplyChainRiskManagement 48

110



GRI205Anti-Corruption2016



2.CorporateGovernance2.4Compliance,EthicsandAnti-Corruption

2438

205-1 Operationsassessedforrisksrelatedtocorruption

2.4Compliance,EthicsandAnti-Corruption5.2.4RBACodeofConductCommittee

3876

205-2 Communicationandtrainingaboutanti-corruptionpoliciesandprocedures

2.4Compliance,EthicsandAnti-Corruption3.4.1.3SupplierSustainabilityGuidelines

3847

205-3 Confirmedincidentsofcorruptionandactionstaken


GRI206Anti-CompetitiveBehavior2016




206-1 Legalactionsforanti-competitivebehavior,anti-trust,andmonopolypractices

Note:None

GRI301Materials2016



3.1GoalsandStrategiesforReducingImpactofProductsandSupplyChain

43

301-1 Materialsusedbyweightorvolume. 4.5MainRawMaterials 64

301-2 Recycledinputmaterialsused Note：LITE-ONisacomponentsandODMvendor,anduseofrawmaterialsandpartsdependsoncustomers'needsandspecifications;whetherrecycledmaterialscanbeusedlikewisedependsoncustomers'productspecifications.

301-3 Reclaimedproductsandtheirpackagingmaterials

AsanODMsupplier,LITE-ON'sreclaimofproductpackagingmaterialsarearrangedaccordingtocustomer'srequests.

111



GRI302Energy2016



4.1CommitmenttoEnvironmentalSustainabilityandPolicy4.2ResponsestoClimateChangeandGlobalWarmingPolicy

5456

302-1 Energyconsumptionwithintheorganization. 4.3.3DirectandIndirectEnergyConsumption 60

302-2 Energyconsumptionoutsideoftheorganization. Currently,thereisnostatisticalinformationaboutEnergyconsumptionoutsideoftheorganization.

302-3 Energyintensity 4.3.3DirectandIndirectEnergyConsumption 60

302-4 Reductionofenergyconsumption 4.3.2Energy-savingMeasures4.3.3DirectandIndirectEnergyConsumption4.3.5GreenLogistics

596061

302-5 Reductionsinenergyrequirementsofproductsandservices


GRI303Water2016




5456

303-1 Waterwithdrawalbysource 4.4WaterResourceManagement 63

303-2 Watersourcessignificantlyaffectedbywithdrawalofwater

Note:Nosourceaffected.

303-3 Waterrecycledandreused 4.4WaterResourceManagement 63 WaterrecycledandreuseddatawerenotmaterializedtoLITE-ON'sindustrialnature.

GRI307Emissions2016




5456

112



305-1 Direct(Scope1)greenhousegas(GHG)emissions

4.3.1GreenhouseGasInventory 57

GRI307Emissions2016

305-2 Energyindirect(Scope2)greenhousegas(GHG)emissions

4.3.1GreenhouseGasInventory 57

305-3 Otherindirect(Scope3)greenhousegas(GHG)emissions

4.3.1GreenhouseGasInventory4.3.5GreenLogistics

5761

305-4 Greenhousegas(GHG)emissionsintensity 4.3.1GreenhouseGasInventory 57

305-5 Reductionofgreenhousegas(GHG)emissions 4.1EnvironmentalManagementGoals4.3.1GreenhouseGasInventory

5457

305-6 Emissionsofozone-depletingsubstances(ODS) Note：LITE-ONdoesnotuseanysubstancesdetrimentaltoozonelayerinitsproductionprocesses.

305-7 Nitrogenoxides(NOx),sulfuroxides(SOx),andothersignificantairemissions

4.3.4AirPollutionControl 61

GRI307EnvironmentalCompliance2016




5456

307-1 Non-compliancewithenvironmentallawandregulations

Note:None

GRI308SupplierEnvironmentAssessment2016



3.4.1SupplyChainSustainabilityManagement 47

308-1 Newsuppliersthatwerescreenedusingenvironmentalcriteria

3.4.1.3SupplierSustainability 47

308-2 Negativeenvironmentalimpactsinthesupplychainandactionstaken

3.4.2SupplyChainRiskManagement3.4.3SupplierManagementMechanisms

4850

GRI401Employment2016




113



401-1 Newemployeehiresandemployeeturnover 5.2.2EmployeeRetention 73

GRI401Employment2016

401-2 Benefitsprovidedtofull-timeemployeesthatarenotprovidedtotemporaryorpart-timeemployees

5.4ProtectionofInterest5.6LOHASLITE-ON

7984

401-3 Parentalleave 5.2.2EmployeeRetention 73 TherearenoparentalleaveregulationsinChinaandThailand

GRI402Labor/ManagementRelations2016




402-1 Minimumnoticeperiodsregardingoperationalchanges


GRI403OccupationalHealthandSafety2016




403-1 Workersrepresentationinformaljointmanagement–workerhealthandsafetycommittees

5.6.3OccupationalSafetyandHealthManagement 87

403-2 Typeofinjuryandratesofinjury,occupationaldiseases,lostdays,andabsenteeism,andtotalnumberofwork-relatedfatalities


403-3 Workerswithhighincidenceorhighriskofdiseasesrelatedtotheiroccupation


403-4 Healthandsafetytopicscoveredinformalagreementswithtradeunions


GRI404TraininganEducation2016




404-1 Averagehoursoftrainingperyearperemployee 5.3EmployeeDevelopmentandTraining 77

404-2 Programsforupgradingemployeeskillsandtransactionassistanceprograms


114



404-3 Percentageofemployeesreceivingregularperformanceandcareerdevelopmentreviews


GRI405DiversityandEqualOpportunity2016




405-1 Diversityofgovernancebodiesandemployees 2.2.1BoardofDirectors5.2.1EmployeeStructureandDistribution

3169

405-2 Ratioofbasicsalaryandremunerationofwomentomenbyemployeecategory,bysignificantlocationsofoperation


GRI406Non-Discrimination2016


"Themanagementapproach&itscomponentsEvaluationofthemanagementapproach"Incidentsofdiscriminationandcorrectiveactionstaken


406-1 Incidentsofdiscriminationandcorrectiveactionstaken

5.5EmployeeRelations 79

GRI407FreedomofAssociationandCollectiveBargaining2016



3.4.1SupplyChainSustainabilityManagement5.1EmployeePolicy

4768

407-1 Operationsandsupplierswhichtherighttofreedomofassociationandcollectivebargainingmaybeatrisk

3.4.3SupplierManagementMechanisms5.5EmployeeRelations5.6.2DiverseRecreationalActivities

508186

GRI408ChildLabor2016




408-1 Operationsandsuppliersatsignificantriskforincidentsofchildlabor

3.4.3SupplierManagementMechanisms5.1EmployeePolicy5.2.4RBACodeofConductCommittee

507576

115



GRI409CompulsoryLabor2016




409-1 Operationsandsuppliersatsignificantriskforincidentsofforcedorcompulsorylabor

3.4.3SupplierManagementMechanisms5.2.4RBACodeofConductCommittee

5076

GRI410SecurityPractices2016




410-1 Securitypersonneltrainedinhumanrightspoliciesorprocedures

Note：LITE-ON'sallsecurityguardsaresubcontracted,anddemandsallrelevanttrainingandmanagementtomeetEICCstandardswhensourcing,andLITE-ON'ssecuritypersonnelare100%training.

GRI412HumanRightsAssessments2016




412-1 Operationsthathavebeensubjecttohumanrightsreviewsorimpactassessments

5.2.4RBACodeofConductCommittee 76

412-2 Employeetrainingonhumanrightspoliciesorprocedures

5.3EmployeeDevelopmentandTraining 77

412-3 Significantinvestmentagreementsandcontractsthatincludehumanrightsclausesorthatunderwenthumanrightsscreening

LITE-ONprescribesCorporateSocialandEnvironmentalResponsibility(CSER)codeofconductandCorporateSocialResponsibilitycodeofpractice,andalloftherelevantinvestmentagreementsandcontractsareevaluatedbyLegaldepartmentforcompliance.

GRI414SupplierSocialAssessment2016



3.4.3SupplierManagementMechanisms 47

414-1 Newsuppliersthatwerescreenedusingsocialcriteria

3.4.1.3SupplierSustainabilityGuidelines 47

116



GRI414SupplierSocialAssessment2016

414-2 Negativesocialimpactsinthesupplychainandactionstaken

3.4.3SupplierManagementMechanisms 48

GRI416CustomerHealthandSafety2016



3.1GoalsandStrategiesforReducingImpactofProductsandSupplyChain

43

416-1 Assessmentofthehealthandsafetyimpactsproductsandservicecategories

3.5.3ProductHealthandSafety 52

416-2 Incidentsofnon-complianceconcerningthehealthandsafetyimpactsofproductsandservices

3.5.3ProductHealthandSafety 52

GRI417MarketingandLabeling2016




417-1 Requirementofproductandserviceinformationandlabeling


417-2 Incidentsofnon-complianceconcerningproductandserviceinformationandlabeling


417-3 Incidentsofnon-complianceconcerningmarketingcommunications

3.5.1CustomerService 50

GRI418CustomerPrivacy2016




418-1 Substantiatedcomplaintsconcerningbreachesofcustomerprivacyandlossesofcustomerdata


GRI409SocioeconomicCompliance2016




419-1 Non-compliancewithlawsandregulationsinsocialeconomicarea

2.4.1ViolationofLaborStandardsAct 39

117

PECIFIC STANDARD DISCLOSURES OVERVIEW - OTHERS

Material Topics Disclosure Related Report Sections Page

ConflictMineral(Metal)-FreeProcurement

LOT-EN1 Supplierscreeningandgreenprocurement 3.4.1.3SupplierSustainabilityGuidelines3.4.2SupplyChainRiskManagement

4748

Research&Development(Products)

LOT-EN2 Energyefficiencyimprovement 3.22017GreenDesignsandAchievements4.6.2AdvancedManufacturingandGreenProduction

4366

LOT-EN3 Materialresourcessaving 3.22017GreenDesignsandAchievements 43

LOT-EN4 Reductionuseofhazardoussubstance 3.22017GreenDesignsandAchievements 43

SupplierTraining LOT-LA1 Improvementofsupplychainmanagementquality 3.4.3SupplierManagementMechanisms 50

CareerDevelopmentOpportunitiesEnhancementofBasicEmployees

LOT-LA2 Introductionofexternalresourcesforenhancementofoccupationalsafetyandhealth

1.2.1.2StakeholderEngagementPerformanceHighlights

18

CharityCare LOT-SO1 Promotionofmulticulturalhumanitiesandyoutheducationcare 6.6.1CommunityAssistanceandHolisticServices 96

LOT-SO2 Creatinglearningenvironmentsforlifelonglearninganddisadvantagegroups

6.6.1CommunityAssistanceandHolisticServices6.6.2TaipeiXinyiCommunityCollege

96101

LOT-SO3 Linkingthecompany'ssustainableproductswithSROI 6.2MeasuringSocialImpactofProducts:SROI 91

LOT-SO4 Thepromotionofenvironmentaleducationandimplementationofenvironmentalprotection

6.6.2TaipeiXinyiCommunityCollege 101

LOT-SO5 Talenteducationbyprovidingthelearningenvironmentforstudentstoapplytheirknowledge

6.3SupportingInternships 92

LOT-SO6 Encouragingtechnologicalinnovationanddesigntalent 6.52017LITE-ONAward 93

118

Guidance on Social Responsibility ISO 26000

Core Subjects and Issues Related CSR Report Section Page(s) Explanatory Notes

OrganizationalGovernance

Decision-makingprocessesandstructures 1.2StakeholdersandMaterialIssues2.CorporateGovernance

1325

HumanRights Duediligence 3.4SupplyChainManagement5.2.4.RBACodeofConductCommittee

4776

Humanrightsrisksituation 3.4SupplyChainManagement5.2.4.RBACodeofConductCommittee

4776

Avoidanceofcomplicity 2.CorporateGovernance 25

Resolvinggrievances 2.4Compliance,EthicsandAnti-Corruption5.5EmployeeRelations

3881

Discriminationandvulnerablegroups 1.1CorporateCommitmentandCSRVision5.4ProtectionofInterests5.5EmployeeRelations

87981

Civilandpoliticalrights 3.4SupplyChainManagement5.6LOHASatLITE-ON

4784

Economic,socialandculturalrights 5.4ProtectionofInterests5.6LOHASatLITE-ON

7984

Fundamentalprinciplesandrightsatwork 5.4ProtectionofInterests 79

LaborPractices Employmentandemploymentrelationships 5.4ProtectionofInterests 79

Conditionsofworkandsocialprotection 5.6LOHASatLITE-ON 84

Socialdialogue 1.2StakeholdersandMaterialIssues 13

Healthandsafetyatwork 1.2.1.2StakeholderEngagementPerformanceHighlights

5.6.3OccupationalSafetyandHealthManagement

16

87

Humandevelopmentandtrainingintheworkplace 5.3EmployeeDevelopmentandTraining 77

119



TheEnvironment Preventionofpollution 3.3RestrictionontheUseofHazardousSubstances4.3.4AirPollutionControl4.5.4WasteManagementandRecovery

466165

Sustainableresourceuse 3.22017GreenDesignsandAchievements4.3.5GreenLogistics4.6GreenFactories

436166

Climatechangemitigationandadaptation 4.2ResponsetoClimateChange&GlobalWarming4.3ReducingGreenhouseGases

5657

Protectionoftheenvironment,biodiversityandrestorationofnaturalhabitats

AllofLITE-ON'sfactorieshavepassedenvironmentalimpactassessmentbeforetheyweredeveloped.Therefore,thefactorydevelopmenthasnosignificantimpactonbiodiversity.Wearestillstrivingtocreateecologicalindustrialparkscharacterizedbythethreeattributesofproduction,ecologyandlife.

FairOperatingPractices

Anti-corruption 2.4Compliance,EthicsandAnti-Corruption 38

Responsiblepoliticalinvolvement 5.6LOHASatLITE-ON 84 LITE-ONdonotinvolveinanypoliticalactivities

Faircompetition 2.4Compliance,EthicsandAnti-Corruption 38

Promotingsocialresponsibilityinthevaluechain 3.4SupplyChainManagement 47

Respectforpropertyrights 2.4Compliance,EthicsandAnti-Corruption 38

ConsumerIssues Fairmarketing,factualandunbiasedinformationandfaircontractualpractices


Protectingconsumers'Healthandsafety 3.22017GreenDesignsandAchievements 43

Sustainableconsumption 3.4SupplyChainManagement 47

120



ConsumerIssues Consumerservice,support,andcomplaintanddisputeresolution 3.5CustomerServiceandSatisfaction 50

Consumerdataprotectionandprivacy 2.5InformationSecurityandPrivacyManagement 40

Accesstoessentialservices 3.5CustomerServiceandSatisfaction 50

Educationandawareness 3.5CustomerServiceandSatisfaction 50

CommunityInvolvementandDevelopment

Communityinvolvement 6.1SocialInclusionPolicy 90

Educationandculture 6.42017LITE-ONAward6.5LITE-ONVolunteers6.6.1CommunityAssistanceandHolisticServices6.6.2TaipeiXinyiCommunityCollege

961019593

Employmentcreationandskillsdevelopment 5.2.1EmployeeStructureandDistribution5.3EmployeeDevelopmentandTraining

6977

Technologydevelopmentandaccess 2.1CompanyOverview6.2MeasuringSocialImpactofProducts:SROI6.42017LITE-ONAward

279391

Wealthandincomecreation 2.1CompanyOverview2.2.3CompensationCommittee5.4ProtectionofInterests

273279

Health 5.6LOHASatLITE-ON6.5LITE-ONVolunteers

9584

Socialinvestment 6.1SocialInclusionPolicy6.6LITE-ONCulturalFoundation

9096

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Third Party Assurance Statement

GP5008 Issue 5

SGS TAIWAN LTD.’S REPORT ON SUSTAINABILITY ACTIVITIES IN THE LITE-ON TECHNOLOGY CORPORATION’S CORPORATE SOCIAL RESPONSIBILITY REPORT FOR 2017 NATURE AND SCOPE OF THE ASSURANCE/VERIFICATION SGS Taiwan Ltd. (hereinafter referred to as SGS) was commissioned by LITE-ON TECHNOLOGY CORPORATION. (hereinafter referred to as LITE-ON) to conduct an independent assurance of the Corporate Social Responsibility Report for 2017 (hereinafter referred to as CSR Report). The scope of the assurance, based on the SGS Sustainability Report Assurance methodology, included the text, and data in accompanying tables, contained in this report. The information in the LITE-ON’s CSR Report of 2017 and its presentation are the responsibility of the management of LITE-ON. SGS has not been involved in the preparation of any of the material included in LITE-ON’s CSR Report of 2017. Our responsibility is to express an opinion on the text, data, graphs and statements within the scope of verification with the intention to inform all LITE-ON’s stakeholders. The SGS protocols are based upon internationally recognized guidance, including the Principles contained within the Global Reporting Initiative Sustainability Reporting Standards (GRI Standards) 101: Foundation 2016 for accuracy and reliability and the guidance on levels of assurance contained within the AA1000 series of standards and guidance for Assurance Providers. This report has been assured using our protocols for:

• evaluation of content veracity at a high level of scrutiny for LITE-ON and applicable aspect boundaries outside of the organization covered by this report;

• AA1000 Assurance Standard (2008) Type 2 evaluation of the report content and supporting management systems against the AA1000 Accountability Principles (2008); and

• evaluation of the report against the Global Reporting Initiative Sustainability Reporting Standards (2016)

The assurance comprised a combination of pre-assurance research, interviews with relevant employees, superintendents, CSER committee members and the senior management in Taiwan; documentation and record review and validation with external bodies and/or stakeholders where relevant. Financial data drawn directly from independently audited financial accounts has not been checked back to source as part of this assurance process. STATEMENT OF INDEPENDENCE AND COMPETENCE The SGS Group of companies is the world leader in inspection, testing and verification, operating in more than 140 countries and providing services including management systems and service certification; quality, environmental, social and ethical auditing and training; environmental, social and sustainability report assurance. SGS affirm our independence from LITE-ON, being free from bias and conflicts of interest with the organisation, its subsidiaries and stakeholders. The assurance team was assembled based on their knowledge, experience and qualifications for this

ASSURANCE STATEMENT

GP5008 Issue 5

assignment, and comprised auditors registered with ISO 26000, ISO 20121, ISO 50001, SA8000, EICC, QMS, EMS, SMS, GPMS, CFP, WFP, GHG Verification and GHG Validation Lead Auditors and experience on the SRA Assurance service provisions. VERIFICATION/ ASSURANCE OPINION On the basis of the methodology described and the verification work performed, we are satisfied that the information and data contained within LITE-ON’s CSR Report of 2017 verified is accurate, reliable and provides a fair and balanced representation of LITE-ON sustainability activities in 01/01/2017 to 12/31/2017. The assurance team is of the opinion that the Report can be used by the Reporting Organisation’s Stakeholders. We believe that the organisation has chosen an appropriate level of assurance for this stage in their reporting. In our opinion, the contents of the report meet the requirements of GRI Standards in accordance with Comprehensive Option and AA1000 Assurance Standard (2008) Type 2, High level assurance. AA1000 ACCOUNTABILITY PRINCIPLES (2008) CONCLUSIONS, FINDINGS AND RECOMMENDATIONS Inclusivity LITE-ON has demonstrated a good commitment to stakeholder inclusivity and stakeholder engagement. A variety of engagement efforts such as survey and communication to investors, customers, suppliers, employees, government, and other stakeholders are implemented to underpin the organization's understanding of stakeholder concerns. For future reporting, LITE-ON may proactively consider establishing ways for stakeholders to be involved in decisions that will maximize sustainability performance. Materiality LITE-ON has established effective processes for determining issues that are material to the business. Formal review has identified stakeholders and those issues that are material to each group and the report addresses these at an appropriate level to reflect their importance and priority to these stakeholders. Responsiveness The report includes coverage given to stakeholder engagement and channels for stakeholder feedback. GLOBAL REPORTING INITIATIVE REPORTING STANDARDS (2016) CONCLUSIONS, FINDINGS AND RECOMMENDATIONS The report, LITE-ON’s CSR Report of 2017, is adequately in line with the GRI Standards in accordance with Comprehensive Option. The material aspects and their boundaries within and outside of the organization are properly defined in accordance with GRI’s Reporting Principles for Defining Report Content. Disclosures of identified material aspects and boundaries, and stakeholder engagement, GRI 102-40 to GRI 102-47, are correctly located in content index and report. LITE-ON has demonstrated a good practice of governance body’s participation in ESG management and has committed to respond to UN SDGs. For future reporting, it is recommended to have more descriptions of LITE-ON’s evaluation of the effectiveness of the management approach (103-2 & 103-3) and to show the progress of goals and targets’ achievement. Signed: For and on behalf of SGS Taiwan Ltd. David Huang, Director Taipei, Taiwan 21 May, 2018 WWW.SGS.COM

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Documents

LITE-ON CSR Report...for its customers around the world. In 2017, LITE-ON continued to focus on IoT applications in cloud computing, LED lighting, auto electronics, industrial automation,