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Company Governance

Operation Overview

Everlight and its subsidiaries focus on the manufacture of photoelectric components which can be further divided into two categories: light-emitting and sensor components. In response to the use of LED lights in automotive lighting due to safety and reliability requirements, Everlight introduces a variety of LED components that comply with the automotive standards (AEC-Q101). Everlight is committed to improving its production efficiency. In 2018, the Company recorded a production value of NTD 19.265049 billion, with the output at 25,615,646 pieces. To provide high-quality products and efficient service to its large client base, Everlight has set up offices all over the world, including Asia, Europe, America and other regions.

For information on Everlight's sales channels, please refer to the webside: http://www.everlight.com/wheretobuy.aspx

Company Structure

The board of directors is the Company's highest management unit. To continue improving Everlight's management structure, operational performance and practice corporate social responsibility, the Company’s board of directors will establish an “Audit Committee” and a “Compensation Committee” to carry out supervision, auditing, and management functions of the board; increase the quality and effectiveness of decisions; improve the functions of the board; protect stakeholders' interests, and disclose company information in a fair and transparent manner.

Information disclosure is the basic condition for corporate governance. Everlight has spared no effort in the realization of making information transparent, so that investors can make correct judgments based on the situations they’re currently in. In addition to the regular board of directors’ meetings every year, the annual shareholders' meeting and the investor conferences explaining the company’s finances and operating situation, the company also set up an "investor relations area" on the website to immediately disclose information related to corporate governance, business announcements, financial statements, major news, and investor conferences, internal audits, corporate social responsibility area and stakeholders zone, etc. The contents of investor conferences session can also be viewed using the company website. Meanwhile, Everlight also published detailed information on the stock exchange "Market Observation Post System." Everlight does not disclose information in one direction. In addition, the company has a spokesperson. The spokesperson or deputy spokesperson directly deals customers, shareholders, and listens to shareholders' suggestions regarding the company's operations, and immediately handles various needs. If any stakeholders of Everlight have any questions, they can contact the company by phone, fax or email and the company will respond as soon as possible.

For detailed information of Everlight’s board members, please refer to “Everlight Electronics Co., Ltd. 2018 Annual Report.”http://www.everlight.com/investordetail.aspx?pcseq=15&cseq=22

Integrity Operations

The Company introduced the RBA (formerly EICC) code of conduct in 2016 and applied the related regulations in 2018 to review operations and management. The Responsible Business Alliance code of conduct covers human rights, ethics, environment, safety and health issues, and most are in the government regulations. The Company rigorously complies with government regulations and RBA requirements and formulates corresponding internal management processes and policies.

In order to ensure that the day-to-day operations are in line with corporate ethics, there are separate codes of conduct for directors, managers, general employees and procurement employees, including “The Practical Code of Corporate Governance,” “The Code of Integrity Management,” and “The Code of Ethics for Employees.”

Everlight has investigation teams and complaint hotlines for corruption and bribery incidents, and is always ready to take in reports from insiders and outsiders. The unit accepting and handling these reports is the Legal Affairs Department, which encourage employees to be named when they’re reporting legal violations and policies for employees. The company will do its utmost to maintain confidentiality and protect the identity of the individual from being threatened; if the colleagues fail to determine whether the act has been illegal, they can immediately express their opinions to the complaint hotline and send an email of an electronic “Employee Opinion Report,” or “Chairman's Mailbox” and the head of the Human Resources Department or the unit in question will directly reply to the questions raised by that colleague. In addition, the legal division established the “Dedicated Fair Trade Mailbox (legal@everlight.com )” in the Corporate Social Responsibility Area of Everlight’s official website," and will be opened to the public in 2018. If colleagues discover any improper conduct, any negative influences that will and are currently affecting the enterprise, behavior that is damaging the rights and interests of all colleagues, they can report them to the highest authority of the Legal Division.

Legal Compliance

Everlight is committed to conducting business in accordance with the principles of integrity and honesty, and complies with the legal and ethical standards of the countries in which it operates in. It also regards comprehensive legal compliance as an important policy of the company, and continuously strengthens legal compliance using sound management systems, implementation of identifying laws and regulations, and educational training as implementation guidelines.

Everlight’s Legal Department has established a comprehensive regulatory compliance system and formulated compliance policies. It regularly monitors any changes in domestic and foreign laws that may have a significant impact on the company's operations. The legal personnel at each location are responsible for the identification of laws and regulations to ensure that global operations comply with the laws and regulations of the respective country. Meanwhile, we follow the management organization structure by using a complete risk management framework to methodically identify and understand the risks worth nothing for business management. The company then uses its internal control management system to prevent and minimize the risks that may possibly arise from fraudulent and improper conduct. The company also checks with inter-departmental units or external units to ensure the compliance of the relevant implementation.

Anti-corruption

Integrity is one of our fundamental business philosophies and is deeply rooted in the corporate culture. Directors, audit committee, professional managers and employees follow the provisions of the "Integrity, honesty and intellectual property rights agreement" and strictly abide by the 8th article of the agreement, "Integrity and honesty", and they will not tolerate violations of business ethics and will use their professionalism and diligent management to create the best interests of shareholders. To maintain fair trade and prevent corruption and bribery, Everlight requires employees and related parties not to give preferential treatment when conducting transactions, and may not make requests, offerings, payments, accept things such as gifts, entertainment, kickbacks, bribes etc. for the benefit of themselves or others when performing their duties.

All board members and employees of Everlight have accepted the company's integrity and anti-corruption policy delivery, and have conducted anti-corruption policy education and training. The procurement department has also communicated anti-corruption delivery to all suppliers. Meanwhile, Everlight will be bound to fully cooperate with the client if they invite the company to sign an anti-corruption memorandum. The donation or sponsorship made by the company is conducted in accordance with the internal regulations of the company to prevent any offering or receiving bribes or illegal political contributions from happening.

Everlight pursues sustainable operations and protects the rights and interests of the Group's companies through comprehensive regulations. In 2018, there were no confirmed cases of corruption and bribery, infringements of customer privacy, losses of customer information, or legal violations regarding the company's business operations. The image of decent management has been repeatedly recognized and approved by the company’s partners.

Fair Trade

Everlight has possessed professionalism and integrity, and adheres to the principles of law-abiding and decent management to ensure fair trade, fair competition, and prevent of unfair competition and monopoly. Externally, the company has strived to use fairly and openly strive for business objectives, whether or not they are for project bids, executing contracts or procurement cases. In doing so, the company aims to improve the efficiency and quality of outsourcing and procurement while carefully complying with the spirit of fair trade. Internally, Everlight requires all employees to treat business dealings fairly, such as not making special offers when handling transactions of related parties in order to maintain fair trade and prevent corruption and bribery, When employees are performing their duties, they may not make requests, offerings, payments, accept things such as gifts, entertainment, kickbacks, bribes etc. for the benefit of themselves or a third party. If any violation of the regulations is discovered, anyone may report it in accordance with the instructions of the internal reporting operation instructions. Everlight will execute the investigation procedure and the subsequent punishments impartially. Everlight will maintain confidentiality of the prosecutor's identity and the contents of the report. The company will also actively investigate and handle the case. Those who violate the regulations of integrity management will be punished based to the seriousness of the circumstances.

After the fraudulent report and appeal case has been accepted by the responsible liaison, the case will be handed over and processed by the relevant unit based on the complaint handling or case handling mechanism. After verifying the authenticity of the complaint, a special committee will be set up by inter-department and professional members to review and adjudicate the complaint case.

The Company has established a "Code of Ethics for Employees" in accordance with the RBA code of conduct and requires all employees to abide by the integrity regulations and ethical behavior standards. Employees are prohibited from accepting any form of gift and when they join the company, they must sign the "Integrity, Honesty and Intellectual Property Rights Agreement." In 2018, employees received 1 hour of training related to anti-corruption. Every newly-hired employee receives 1 hour of training related to the regulations of the Trade Secrets Act during the new hire training sessions. In 2018, there were 13,959 people that attended internal and external education trainings related to the issue of integrity management for a total of 12,575 hours. Meanwhile, each employee must download the "Employee Ethics Code" and "Integrity Advertising and Fair Trade Antitrust Control Procedures" from the company's internal document management platform (DMP) to read and carry out the procedures. In addition, the company also constantly reminds employees, visiting suppliers or visitors about relevant integrity policies.

We request our suppliers to sign our "Suppliers' CSR Commitment", which requires them to adopt high standards of ethics. Proper management and monitoring can prevent activities that violate business integrity, including bribery, gifts and fraud. All new suppliers are required to sign an "Honesty Letter of Commitment."

In addition, Everlight requires directors and managers to be self-disciplined; treat business contacts and employees fairly; not obtain information through manipulation, concealment or abuse of their positions; offer misrepresentation of important matters or use other unfair trading methods to obtain improper benefits. Everlight is committed to maintaining a clean record of having no relevant violations. In 2018, Everlight did not have any legal actions involving anti-competitive behavior, antitrust and monopolistic conduct, Incidents involving products and services not complying with regulations on information and labeling, and incidents involving non-compliance with marketing-related regulations.

Information Security

Everlight’s protection of information security covers employees, customers, suppliers, shareholders, and operational-related information hardware and software equipment. All information security rules and regulations were established based on technical insurance, application and data security standards, and are incorporated into the management system to protect the privacy and information security of employees, suppliers and customers in business contacts. Looking at the company's information systems and technology, the servers and personal computers have had the software regularly updated and swept to prevent damage caused by viruses and malware, protect computer security. For internet connections, a hardware firewall was installed on the network connection line and various firewall rules regulate all internal and external communication. There are also mail filters that will filter all incoming mail, which can effectively reduce the risk of various types of mail attacks, such as junk mail/advertising mail, phishing mail, forged attack mail, emails containing viruses, emails with malicious attachments etc. To adhere to Everlight’s policies for strengthening information security, the use of personal computer USB flash drives was regulated starting in 2012, which reduced the opportunity of information being leaked out and hardware being attacked by viruses. For internal control, in addition to the continuous improvement of the security protection management system done by Everlight’s information security department, new Everlight employees immediately sign the “Integrity and Intellectual Property Rights Agreement” on the day of reporting to the company and received educational training on information security. Every year, the company also employs educational training related to information security to continuously train and enhance the awareness of Everlight’s employees towards information security and internalize it in various operations to have the most secure and strict information security protection.

We highly value the privacy of our clients. We adopt strict standards to protect client privacy and the confidentiality of personal data. In addition to complying with the Personal Information Protection Act, we established the “Personal Information Security and Management Measures” and regularly educate our employees with “Topics on personal information protection”. We properly record client-related information and prohibit people from manipulating, concealing, or abusing proprietary information, misrepresenting important facts or conducting other unfair transactions. Every year, we regularly take inventory of personal information and conduct risk assessments to obtain the “Data privacy protection mark (dp.mark)”. In 2018, there were no complaints against Everlight stating that the company infringes on customer privacy or loses customer information.