Encourage Suppliers’ Green Management and Green ServicesCPT is accountable to international legislations and client requests on green products. CPT needs to work with its suppliers to secure orders from clients. CPT needs to provide considerable product certification information to clients for confirmation, and therefore the Green Product Management system was introduced in 2010, which accelerates the green material confirmation process. Suppliers have been highly supportive and appreciative of CPT’s controls over restricted materials, as their materials all fulfill relevant requirements. CPT hopes to create a complete green supply chain system.

42 2011 Corporate Social Responsibility Report

Green Product PolicyCPT Green policy: compliance with legislation and client

requirements, provide products with no harmful substances, and strive towards developments of green designs. The RoHS and WEEE of the European Union require that products be free from restricted environmentally harmful substances. CPT also fulfills client requests of recycling rates of Waste Electronics and Electrical Equipment, avoiding excessive electronic and electrical waste from end products going into landfills and increasing resource reuse ratios in order to reduce environmental impacts from products.

CPT abides by the spirit of RoHS, including environmental designs, compatibility assessments, self declarations, and appropriate disclosure of information for consumers. CPT provides products free from harmful substances, actively monitors information on environmentally restricted substances, and takes priority in identifying requirements from international green legislations and NGOs. CPT continues to consolidate its green supply chain, promote systematic controls, and provide clients with products free from harmful substances.

Supplier Rating and ImplementationCPT ensures that the quality and delivery date of and

substances used to manufacture products supplied by our suppliers meet the required specifications and facilitate smooth manufacturing processes through careful selection and affirmation of materials, management of suppliers and control of materials and supplies. We purchase our materials at reasonable prices to maximise the company’s profitability.

To ensure that a new supplier meet CPT’s requirements, we rate each new supplier on the basis of a written assessment of its qualification to evaluate as to whether it meets our procurement requirements; and we also send the company’s representatives to conduct an on-site assessment at the new supplier’s premise to evaluate as to whether it has established sound systems and maintains sound financial conditions and business reputation by examining its control of hazardous substance, quality system management, process management and production plant.

Sources of raw materials, size of production facility, technology and supply capability/reliability must also satisfy our assessment criteria. Facing the intense competition and volatile market conditions of the TFT industry, we are thankful for all of our partnered suppliers in persevere at these challenges with CPT.

Promot ion of Greenhouse Gas Reduction for Suppliers

In 2011, a total of 11 suppliers participated in the organizational audit and response for greenhouse gases. A total of 2.1 million tons of CO2 equivalents of greenhouse gases were emitted that year.

In terms of configuring greenhouse gas emission reduction targets, CPT requests its first tier suppliers to conduct greenhouse gas audits and studies over greenhouse gas reduction activities. The 27 suppliers who responded to our survey are all implementing greenhouse gas reduction action plans. 6 such suppliers have set greenhouse gas emission reduction targets, and 2 such suppliers are asking their first tier suppliers to conduct greenhouse gas audits.

Scoring, Auditing and Assistance on

Meeting Green Product Requirements

CPT is monitoring global environmental trends and actively ensuring that its products meet green product requirements. Through the “supplier end procurement compatibility mechanism” and IECQ QC080000 harmful substance procedural management system, we can lower harmful substances used in our products and integrate plant control and identify harmful substances, thus complete controlling the compatibility of material used.

2011 Supplier GHG Survey

Yes No

Has your company established targets to reduce your greenhouse gas emissions? 6 21

Is your company requesting direct cooperation from your suppliers in your greenhouse audits? 2 25

Implementation of energy efficiency and carbon reduction projects 27

Supplier: Li-Wen Wang, Headof Technical Integration, Kenmos Technology Co., Ltd.

Starting from 2008,CPT actively promotes green w o r k p l a c e s , i n f u s i n g energy efficiency concepts into daily life, and gradually promotes carbon reduction concep ts to a l l o f i t s suppliers. We are fortunate to be undertaking social responsibilities with CPT to fulfill CPT’s emphasis on environmental protection. Through CPT’s patience, supervision, and guidance,

we were able to assist CPT pass the carbon footprint certification from SGS during the carbon footprint certification event in 2011, becoming a certified member of the supplier carbon footprint certification program. We hope to continue receiving guidance from CPT to create win-win solutions and grow together.

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Promoting Supplier CSRFrom 2011, CPT has broadened the coverage of green

issues to include not only product related issues but also others to foster sustainable management. We extended the scope of the annual supplier conference and renamed it the Green Issues and Sustainability Forum, of which the objectives included continuous promotion of supplier CSR and passing on CPT’s “Green Life, Green World” spirit to suppliers, implementing the low-carbon action plan (“Green Actions”)

In 2011, CPT was awarded with Taiwan’s first Green Classics Award, and completed dual carbon and water footprint certifications for its 6.9 inch vehicular LCD product. This is the shared fruition between CPT and its suppliers. Due to the support we received from our green partners in terms of products, CPT was able to achieve breakthrough and growth on mobile communication, vehicular, flat screen, and touch activation markets. To thank and recognize the diligence and cooperation of all of our outstanding suppliers, CPT nominated its ten top suppliers who scored best on our indicator-based evaluations to present the outstanding suppliers awards of 2011.

Starting from 2012, CPT’s supplier conference and environmental quality and sustainability forum will further incorporate requirements over supplier product quality and promotion of carbon reduction actions. Suppliers will also be asked to abide by corporate social responsibilities and the EICC.

Supplier: Jing-Lin Yang, GP Personnel, Nippon Electric Glass Taiwan Co.

L e g a l c o m p l i a n c e i s a f u n d a m e n t a l q u a l i f i c a t i o n . C P T a l w a y s p e r f o r m s above fundamenta l requirements when it comes to sustainable business operations, and had always taken l e a d e r s h i p a m o n g Taiwanese corporations o n p l e d g e s a n d p e r f o r m a n c e o v e r issues related to EICC and the environment. In recent years, CPT had promoted many green act ions, f rom

carbon footprint certifications in 2009 to issues such as the completion of green packaging designs and carbon footprint certifications for LCD pads, we can observe CPT’s passion to protect Earth and its attention to detail over environmental protection.Taiwan Nippon Electric Glass received the ISO9001, ISO14001, and OHSAS18001 certifications between 2005~2007. In recent years, considerable investments were made over product quality, the environment, and safety management. Execution of project management has facilitated the achievement of management system objectives. At the same time, we are also conducting relevant actions such as carbon footprint audits, energy conservation, carbon reduction, water conservation, and introduction of green products to prove Taiwan Nippon Electric Glass’ commitment and management over planetary protection and environmental protection. CPT continues to support environmental issues and continues to enforce carbon footprint management and water resource management to fulfill the management objective of energy efficiency and carbon reduction. Taiwan Nippon Electric Glass hopes to work with CPT to jointly undertake corporate social responsibilities appropriate for corporate citizens and collectively care for our home planet Earth.

Supplier: Allen Tsai, Manager, Sitronix Technology Corporation

As a supplier for CPT Group, Sitronix recently established close cooperative relationships with CPT to jointly grow in an intensively competitive market. During this period, we have observed CPT Group’s business principles of environmental management. As a supplier of CPY, we cooperate with their implementation of EICC for suppliers, and enforce management policies pertinent to environmental and labor safety.As a pioneer in advanced management concepts, CPT had already enacted corporate social responsibility and environmental responsibility plans in 2008, formulating and disclosing corporate social responsibility reports. As a supplier to CPT, we are also well aware of CPT’s diligence in these endeavors, and provide our active support.

44 2011 Corporate Social Responsibility Report

Implementation of the EICC

CPT values human rights and has serious regard for environmental, safety, hygiene and ethical management requirements. Therefore, we continue to systematically promote the Electronic Industry Code of Conduct (EICC) system, and expand the system towards our suppliers. We also ask our suppliers to promote EICC to higher levels to demonstrate their commitment to fulfil their corporate social responsibilities.

Management of Conflict MineralsTo prevent inappropriate actions incurred from production

and transaction of conflict minerals from African countries, the US has officially passed legislation on July 21, 2011, that empowers American stock exchanges to require disclosure reports of metal production sites of all products sold to the US in the future to track the source of minerals so as to prevent importing products with conflict minerals. To comply with such legislation, our clients have requested CPT to audit the mineral smelting contractors of its suppliers. CPT will work with client requests and initiate special investigations. This investigation was completed on December 9, 2011, by dedicated departments in the Green Product Planning Department according to the “Conflict Free Smelter Contractor and Responsibility Investigation Form.” Investigation results indicate that no supplier is using metal from conflict minerals.

Revision and Reassessment of E-TASCAt the request of our clients, CPT continued to sign up to

the Electronics - Tool for Accountable Supply Chains (E-TASC) System (website: www.e-tasc.achilles.com) during the period from 2008 to 2011. On August 11th 2011, the E-TASC platform maintenance center notified that version 1.7 will be updated to version 2.0. CPT had completed the EICC questionnaire and assessment for version 2.0. Since 2008, CPT had been working with client requests to gradually complete EICC requirements and improvements. Therefore, the results of this assessment speak for CPT’s EICC implementation results, which are more compatible with EICC requirements. In the future, CPT will continue participating in this platform. Clients or stakeholders of CPT may learn about CPT’s efforts in adopting and adhering to the EICC through this platform.

Conflict MineralsConflict minerals currently include:1. Coltan, which is refined into titanium: approximately

17% of global supplies come from the Democratic Republic of Congo.

2. Cassiterite, which is refined into tin: approximately 4% of global supplies come from the Democratic Republic of Congo.

3. Wolframite, which is refined into tungsten: Congo is the world’s 5th largest producer, accounting for approximately 3% of global production.

4. Gold: approximately 2% of global supplies come from the Demcratic Republic of Congo.

Note: Data based on the USGS estimates (2008)

In-Region sourcing Conflict Free Smelter Program Company Due Diligence

MINE SMELTER OEMS

Finished Product

CPT Declaration of Non-Use of Conflict Minerals

CPT respects global human rights, and wil l undertake social and environmental protection responsibilities. CPT abides by EICC regulations to not accept illegally mined titanium, tin, tungsten, or gold from Congo and nearby regions of conflict. CPT will also inform and require its suppliers to adhere to the aforementioned declaration.

E-TASC website: http://e-tasc.achilles.com/

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Results and OutlookStarting from the third quarter of 2009, CPT initiated

multi-stage plans to require suppliers to cooperate with EICC compliance, greenhouse gas audits, product carbon footprint audits, proposal of carbon reduction target plans, etc. Between 2010~2012, CPT conducted promotion and sharing of CPT’s related executive experience and relevant education and training through the supplier conference, with hopes that suppliers can work with CPT so that the CPT supply chain system can create a positive image that addresses labor, human rights, safety, and environmental sustainability, and increase client confidence.

1. 45 suppliers were audited on site (68 were audited in 2010). Audit results did not uncover major violations against EICC. Primary incidents of incompatibility include: work hours not allowing for 1 day of rest for every 7 days of work, which is not compatible with EICC standards, partial fines paid by deductions, lack of standards related to non-discrimination in place, lack of identity confidentially and complaint procedures in place, etc.

●Taiwan region: 2 suppliers qualified● China region: 43 suppliers were audited. 33 qualified,

while 10 had qualifying conditions.● CPT TPV Optical (Fujian) Co., Ltd. and CPT Display

Technology (Shenzheng) Ltd.: they have no suppliers due to being strictly processors. Therefore, no audits are necessary.

2. 144 responses to sustainability policy declaration (62 responses in 2010):

●Taiwan region: 25 responses.● 14 suppliers responded to CPT Display Technology

(Fujian) Ltd.● 35 suppliers responded to CPTF Visual Display (Fuzhou)

Ltd.●70 suppliers responded to CPTF Optronics CO.,Ltd.● Responses were completed to Chunghwa Picture Tubes

(Wujiang) Ltd. in 2010. CPT TPV Optical (Fujian) Co., Ltd. and CPT Display Technology (Shenzheng) Ltd.: they have no suppliers due to being strictly processors. Therefore, no audits are necessary.

3.CPT-Supplier Actions in 2012●Support for CPT’ s enforcement of EICC management– Cooperation with on-site audits of corporate social responsibility (EICC)

– Response to corporate social responsibility (EICC) questionnaires

– Labor policy of the supplier EICC behavioral doctrine, EICC corporate social responsibility documentation system establishment and formulation of EICC execution plan schedule

–Establishment of blood (conflict) metal policy– Compatibility with transparent supply chain requirements in California, US

– Formulation of corporate social responsibility report schedule

– Establishment of occupational health and safety and environmentally related international standard systems

– Promoting corporate social responsibilities (EICC) for subordinate suppliers

● Supporting CPT’s Enforcement of Energy Efficiency and Low Carbon Management

– Implementation of ISO500001 energy management system

– Water resource management: open reporting of water resource consumption statistics, open reporting of water resource consumption reduction targets and schedules

– Solid waste management for suppliers: open reporting of solid waste production statistics and solid waste reduction targets and schedules

– Climate effects: greenhouse gas emission reduction targets for 2012, reduction statistics in 2011 (with 2010 as the base year), and greenhouse emission audit calculations for 2011 Outstanding

Outstanding suppliers are commended as they jointly fulfil EICC and corporate responsibilities with CPT

46 2011 Corporate Social Responsibility Report

Green & Local Procurement

Units responsible for green products within CPT had established green management procedures for materials from suppliers. All plants can share all restricted material reports of suppliers from the Green Product Management (GPM) system to accurately monitor the quality of materials from suppliers and request compliance with CPT’s green product requirements.

Green ProcurementThe complete compatibility procedure for supplier end

procurement works as follows: when procurement orders are made, personnel from the Green Product Planning Department evaluate the procured materials according to the restriction substance management procedures for suppliers from the GPM system. If procured materials meet CPT’s requirements, orders can be made for specific materials. If procedure materials do not meet CPT’s green regulations, procurement cannot proceed. However, to avoid concerns of material shortage, immediate procurement mechanisms exist, which also require evaluations from personnel of the Green Product Planning Department so as to enable CPT to effectively control requirements over restricted substances.

To enhance the restricted substance management system of CPT and its suppliers, CPT’s GPM system is being optimized after its implementation to Taiwanese plants in 2008. Starting from the fourth quarter of 2010, GPM is introduced to Chinese plants, and fully implemented in 2011.Chinese plants can share all restricted substance reports of suppliers from the GPM system. Through the GPM system’s supplier information, tracking and management can be tailored to specific categories, fully maximizing the efficiency of restricted substance management of suppliers through the GPM system.

Starting from the third quarter of 2011, the GPM system was adjusted to account for implementation of the SAP ERP system in CPT. SAP is used to replace the original AS400 system, and the transition is completed on July 1, 2011. Manual maintenance and inquiry of the SAP GPM was optimized in the first quarter of 2012, shortening system inquiry time for users.

EICC Declaration Requirements for Procurements

CPT had incorporated EICC requirements to its written orders, EC platform web page, and basic procurement requirement contracts in 2010 to address client requests. Through this method, CPT requests its suppliers or affiliates to agree to comply with the EICC to jointly enhance our corporate social responsibilities. Therefore, in 2011, all suppliers or affiliates who supply procurement to CPT agreed to comply with the EICC to ensure that suppliers or affiliates provide safe working conditions, respect and dignity for workers, and environmentally accountable production processes. All activities conducted need to comply with government legislations to fulfil corporate social responsibilities.

1. Written orders include the following stipulations: “First tier suppliers shall acknowledge and implement the Electronic Industry Code Conduct.”

2. Addition of EICC declaration requirement page to the EC platform: suppliers or affiliates of CPT shall agree to abide by the working conditions and human rights of labor, health and safety, environmental responsibility, management system, and eth ica l regulat ions in their provision of products, services, and raw materials to CPT. They shall also agree to allow CPT representatives to assist with and inspect compatibility situations to ensure that working conditions provided are safe, employees are respected and dignified, production procedures are environmentally responsible, and all activities conducted comply with government legislat ions, in order to ful f i l l corporate social responsibilities.

3. The aforementioned text is added to basic procurement requirements contracts.

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Use of Local MaterialsTo effectively lower procurement costs, CPT is actively

developing and introducing competitive domestic contractors. Therefore, the ratio of local suppliers increased by 5% compared to 2010. Also, due to the production of module plants of IT and CEBU departments transferred mostly to China, the trend of local procurement resulted in direct supply from local Chinese contractors. Only small procurements for testing purposes are made in Taiwan. Therefore, Taiwanese suppliers occupy lower shares of primary material procurement value. CPT is actively introducing local suppliers, and requesting suppliers to establish production plants locally and supply locally, in order to reduce energy and resource waste from transportation processes. We are proud to announce that in 2011, 29.56% and 87% of our major procurements by our production plants in China and Taiwan, respectively were sourced from local suppliers.

Green Transportation ManagementCPT is also intent on reducing environmental pollution

and reducing resource exhaustion by using advanced transportation technologies to plan and execute actions such as personnel and cargo transportation, warehousing, loading and unloading, and packaging.

In terms of energy conservation and carbon reduction related activities for CPT personnel, the company provides free shuttle busses to reduce pollution from our colleagues driving to and from work, which not only reduces resource cost, but also reduces commuting costs for our colleagues. Also, company shuttle buses are required to be turned off when waiting inside plants to reduce carbon emission, while usage time limits also exist for shuttle busses. A ride sharing media platform service is also provide to CPT colleagues to encourage ride sharing among colleagues and achieve employee participation in the mission for energy conservation and carbon reduction.

CPT’s vehicle and personnel dispatch plans call for materials of the same routes to be concentrated in the same vehicles to reduce the number of vehicles and trips required, as well as reduce expenditures, increase transportation efficiency, reduce material damage and material transportation rate, and thus effectively resolve repeated transportation and traffic congestion issues. Also, drivers are asked to maintain good driving habits. When driving on highways, sudden acceleration or sudden brakes should be avoided to ensure driving safety and reduce fuel consumption and carbon emissions.

CPT’s primary storage facil it ies are warehouses. Through reasonable categorization and placement, the number of ineffective transportations from loading and unloading materials and retention and retrieval routes can be reduced to increase the flexibility of transportation and ensure stability and functionality in material transportation.

Green packaging is closely related to transportation, storage, and loading and unloading in mater ial f low management. Excessive packaging results in resource waste and large packages that are difficult to transport. Therefore, recycled packaging is becoming more widely used due to the ease of recycling. CPT continues to promote green packaging design principles that “conserve resources,” “enable easy recycling,” and “reduce pollution.” In 2011, 14.91% in packaging weight reductions was achieved for small and medium size packages, while 24.31% in packaging weight reductions was achieved for large size packages. Sufficient utilization of the characteristics of different types of materials can reduce overall package weight reduction, size reduction, increase in cargo loading rate, and address both environmental protection and business costs.

Note: Ratios of procurement from local suppliers = (amount of local procurement+ amount of local processing of materials procured from non-local sources) / (amount of local procurement + amount of local processing of materials procured offshore + amount of materials processed & procured from nonlocal sources)

Ratios of Local Procurement from All Units of Taiwanese Plants in 2011

Ratio of procurement from local suppliers

2011China2010 Taiwan

Procurement Dept. 1

Procurement Dept. 2

Engineering Facility Dept.

Small/Medium-Sized Business Group

VD BusinessGroup

Procurement from Non-local Suppliers

Procurement from Local Suppliers

Procurement from China

Procurement from Taiwan

94%

100%

97%

65%

40%

100%

80%

60%

40%

20%

0%

87%82%

23% 29.56%