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CSR Overview Words from General Manager Stakeholders and Concerned Issues Corporate Governance Supply Chain Management Environmental Protection Employees' Rights Social Participation Report

In 2019, the world has faced various challenges, including the slow growth of the global semiconductor industry, China-US trade war and tech war, and a decline in 4G mobile phones, cloud servers, and industrial and automotive electronics markets. However, KYEC delivered the annual business performance that was significantly better than peers. Both revenue and earnings per share after tax showed a double-digit growth rate over the previous year. In terms of our non-financial performance, KYEC has been actively promoting business sustainability in the aspects of environmental sustainability, social participation, and corporate governance (ESG) with concrete action plans developed in line with our core values. Our ESG practices have been audited by professional accreditation bodies on a regular basis.

Environmental Sustainability

KYEC is committed to source management to improve the energy efficiency, thereby reducing raw materials and waste and their impacts on the environment. In addition to passing the ISO14064 Greenhouse Gas validation, KYEC entrusts SGS to check greenhouse gas emissions and implements energy saving and carbon reduction initiatives every year. All of our pollutant test results meet the statutory requirements. In 2016, the Chunan Factory passed the ISO50001 Energy Management System validation in addition to ISO14001 Environmental Management System and OHSAS18001 Occupational Health and Safety Management System. In 2017, the Tongluo Factory was included in the scope of ISO50001 validation. In 2019, we converted to ISO50001:2018, whose scope of validation included the packaging plant. Every year, we adopt roads around the factories for maintenance. In 2019, KYEC received the Outstanding Green Procurement Award from the Environmental Protection Bureau, Miaoli County Government. From 2017 to 2019, KYEC won an excellence award in the Hsinchu Science Park “Landscaping and Environmental Protection Competition” for three consecutive years.

Social Participation

With the Charity Club, KYEC is committed to taking care of the disadvantaged groups, caring for elderly living alone and participating in community activities. Every year, KYEC takes action to sponsor county/city activities by setting up booths in major company events and working with charities to organize quarterly charity bazaars and fundraisers. To take care of our employees’ health, we organize annual health examinations and health promotion activities each year and provide counseling and health education for employees with abnormal test results. As for employee training, a sound training system is in place to provide various training courses for employees at all levels. In 2019, the total training hours of employees and the average training hours per employee were both higher than those in 2018. KYEC has always regarded industry-academia collaboration as an important channel for fostering entry-level professionals. At present, we have cooperated with a number of national and private universities, with the total number of students participating in the industry-academia collaboration programs reaching 1,800.

Corporate Governance

KYEC has formulated the “Ethical Corporate Management Best Practice Principles” and the “Code of Ethics and Conducts” in accordance with corporate governance practice principles, and updates and disseminate relevant information on corporate governance from time to time. A dedicated unit under the Board of Directors is also in place to develop the ethical corporate management policy and prevention programs, supervise the implementation of the aforesaid policy and programs, and report the implementation results to the Board of Directors on a regular basis. To further strengthen corporate governance and the Board functions, a corporate governance officer was assigned in 2019. The corporate governance officer is responsible for helping the Board of Directors comply with the laws and regulations by coordinating relevant departments to provide the Board materials required to perform its duties in a timely manner. Grievance channels such as an employee message board, a dedicated e-mail, and a hotline, have also been set up to handle complaints lodged by employees. The Human Resources Division is responsible for investigating the complaints in secret. Information on the business operations is disclosed and updated on the website on a regular basis.

KYEC will continue investing in talent cultivation, engineering capabilities, equipment expansion and production management. In addition to making good use of business advantages and strengths, we will continue to introduce and establish CSR practices in response to the global trends in ESG. By integrating social, environmental and economic issues into corporate governance, corporate ethics and risk management, KYEC expects to implement strategic plans to create the value of business sustainability.

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