Ethical Management

1. Establishment of ethical corporate management policies and programs

(1) Does the company have a clear ethical corporate management policy approved by its Board of Directors, and bylaws and publicly available documents addressing its corporate conduct and ethics policy and measures, and commitment regarding implementation of such policy from the Board of Directors and the top management team?

(1) LITEON has stated in the LITEON Ethical Corporate Management Best Practice Principles approved by the board of directors (the "Ethics Code") that it abides by the operational philosophy of honesty, transparency and responsibility, bases policies on the principle of good faith and establishes good corporate governance and risk management mechanisms so to create a business environment for sustainable development. LITEON has also stated in the same document the commitment of the board of directors and the management team to thorough implementation of the above policies and to carrying out the policies in internal management and in business activities.

Compliant with the Ethical Corporate Management Best Practice Principles.

(2) Whether the company has established an assessment mechanism for the risk of unethical conduct; regularly analyzes and evaluates within a business context, the business activities with a higher risk of unethical conduct; has formulated a program to prevent unethical conduct with a scope no less than the activities prescribed in paragraph 2, Article 7 of the Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies?

(2) The Company set up the Corporate Sustainability Committee under the board of directors, and set up the "Ethical Operation Subcommittee" under the following. The Subcommittee regularly holds annual review meetings each year. Each team reports on the implementation plan and the improvement results thereof as well as analyzes and assesses the business activities at risk from unethical conduct. Preventive measures are separately established in accordance with the subparagraphs under Article 7, Paragraph 2 of the Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies and other operating activities that are within the scope of operations that entail rather higher risk from unethical conduct.

Compliant with the Ethical Corporate Management Best Practice Principles.

(3) Does the company clearly set out the operating procedures, behavior guidelines, punishment and appeal system for violationsin the plan to prevent unethical conduct, implement it, and regularly review and revise the plan?

(3) LITEON has detailed ethical management practices and measures to prevent unethical behaviors in the Ethics Code, the Employee Handbook, and Code of Ethics for Practitioners. These practices and measures include operating procedures, code of conduct, education and training, whistleblowing procedures, and grievance and disciplinary procedures as well as their implementation. Meanwhile, regulations are regularly reviewed and amended through the integrity management team operating mechanism.

Compliant with the Ethical Corporate Management Best Practice Principles.

2. Ethic Management Practice

(1) Does the company assess the ethics records of whom it has business relationship with and include business conduct and ethics related clauses in the business contracts?

(1) Other than the “Ethical Corporate Management Best Practice Principles”, LITEON has announced the “Supplier Code of Conduct” and require all business activities of suppliers shall comply with such code of conduct. The suppliers are forbidden to offer or accept any improper benefits and to violate any laws, regulations and ethical rules. Meanwhile, we have put the relevant ethical clauses in the contracts as applicable or have signed a Code of Conduct with the counterparty.

Compliant with the Ethical Corporate Management Best Practice Principles.

(2) Does the company set up a dedicated unit to promote ethical corporate management under the board of directors, and regularly (at least once a year) report to the board of directors on its ethical corporate management policy and plans to prevent unethical conduct and monitor implementation?

(2) The Company set up the Corporate Sustainability Committee under the board of directors, and set up the "Ethical Operation Subcommittee" under the following. The Subcommittee regularly holds annual review meetings each year. Each team reports on the implementation plan and the improvement results as well as analyzes and assesses the business activities at risk from unethical conduct. Preventive measures are separately established in accordance with the subparagraphs under Article 7, Paragraph 2 of the Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies and other operating activities that are within the scope of operations that entail rather higher risk from unethical conduct.

Compliant with the Ethical Corporate Management Best Practice Principles.

(3) Does the company establish policies to prevent conflict of interests, provide appropriate communication and complaint channels and implement such policies properly?

(3) LITEON has detailed ethical management practices and measures to prevent unethical behaviors in the Ethics Code, the Employee Handbook, and Code of Ethics for Practitioners. These practices and measures include operating procedures, code of conduct, education and training, whistleblowing procedures, and grievance and disciplinary procedures as well as their implementation.

Meanwhile, regulations are regularly reviewed and amended through the Ethical Operation Subcommittee operating mechanism.

Compliant with the Ethical Corporate Management Best Practice Principles.

(4) Does the company have effective accounting and internal control systems in place to enforce ethical corporate management? Does the internal audit unit follow the results of unethical conduct risk assessments and devise audit plans to audit the systems accordingly to prevent unethical conduct or hire outside accountants to perform the audits?

(4) To ensure effective ethical management practices, LITEON has implemented a sound accounting system and internal controls. The Corporate Internal Audit follows the results of risk assessments to devise audit plans, and regularly reviews compliance with the procedures above to fulfill the ethical corporate management policy. In addition, accountants audit the performance of LITEON's internal controls every year.

Compliant with the Ethical Corporate Management Best Practice Principles.

(5) Does the company provide internal and external ethical corporate management training programs on a regular basis?

(5) To ensure the practices are exactly followed, the company's orientation training has included the Ethics Code in the compulsory course content and frequently mentioned in meetings. It is included in the annual compulsory course content for all employees from Year 2019. For the complete course information, please refer to ”5.5 Labor Relations”, which provides information on “Training implementation”.

Compliant with the Ethical Corporate Management Best Practice Principles.

3. Implementation of Complaint Procedures

(1) Does the company establish specific complaint and reward procedures, set up conveniently accessible complaint channels, and designate responsible individuals to handle the complaint received?

(1) To establish an honest and transparent corporate culture, promote sound management, and safeguard the rights of whistleblowers, the Company's board of directors has formulated the "Whistleblower Guidelines." LITEON have established and publicly announced channels for reporting, including a dedicated hotline, a whistleblowing email address, and a mailing address on Company's website and internal network. There channels are available for both internal and external personnel to report incidents related to crimes, fraud, or violations.

The chief audit officer serves as the point of contact for handling whistleblower cases. After consultation with the chairman of the audit Committee, the chief audit officer, considering the level of the reported individual, forms an appropriate investigation team to conduct inquiries. If necessary, external experts may be invited to participate in the investigation. 

Contact information:

Mailbox: PO Box 156-21, Jiangnan Post Office, Neihu District, Taipei City 114956 Office of Chairman Reporting Mailbox

By email: ethic.hotline@liteon.com

Telephone: +886-2-8793 6833

The Chief audit officer serves as the point of contact for handling whistleblower cases.

Compliant with the Ethical Corporate Management Best Practice Principles.

(2) Does the company establish standard operation procedures for investigating the complaints received, follow-up measures taken after investigating and ensuring such complaints are handled in a confidential manner?

(2)

1. LITEON has established guidelines for whistleblowing, including principles for processing, investigation procedures, accountability, improvement measures, and protection for whistleblowers, as outlined in the “Whistleblowing Guidelines.” 

Processing principles, 

• Real-name tip-off: When acting on a tip-off, the whistleblowers should provide their true identity, the name of the whistleblowers, their organization, position, details of the incident, and the amount involved. This information facilitates subsequent investigations. 
• Anonymous tip-off: If an anonymous tip-off includes the specific details mentioned above, the internal investigation team may conduct a preliminary inquiry. However, if evidence is lacking or legal requirements are not met, the anonymous whistleblower may need to provide additional explanations or information. Failure to respond may result in the case being closed. 
• Insufficiently tip-off: If a tip-off lacks detailed or specific information, including relevant details about people, events, time, and location, the internal audit supervisor will still seek to understand the whistleblower’s content. They will respond within two weeks, aiming to achieve completeness in the whistleblower’s content. 

Investigation procedures, 

• If the whistleblowing content pertains to internal management or other suggestions for improving corporate governance, it should be forwarded to the relevant department’s (highest) supervisor or submitted to the Chairman, CEO, Audit Committee Chairman, and Corporate Governance Officer for reference. 
• If the tip-off content involves whistleblowing, illegal activities, or discoveries made through internal audits, the chief audit officer, after discussing with the Audit Committee Chairman, should form an appropriate investigation team to conduct an inquiry. If necessary, external experts may be invited to participate in the investigation. 
• The Legal, HR, Finance, IT, and Internal audit should provide necessary assistance to the investigation team. 
• If the tip-off subject involves Vice Presidents (or higher), business unit heads, or corporate headquarters functional heads, the Audit Committee should be notified. 
• The chief audit officer should report on the status of investigation cases to the Audit Committee by quarterly. 

Accountability, improvement measures 

• Any behavior that violates these guidelines will be thoroughly investigated and promptly addressed by the Company. 
• If illegal activities are discovered after an initial internal investigation, the audit supervisor should discuss with the audit committee chair and take disciplinary actions according to relevant internal regulations. If necessary, legal action may be taken by reporting to law enforcement agencies. 
• If a tip-off case involves a vice president or higher, business unit manager, or corporate headquarters functional manager, the investigation results should be reported to the audit committee. 
• Disposition Based on Investigation Results: 

1. Handle according to internal regulations (e.g., reward and violation management procedures).
2. Pursue legal responsibility (e.g., violation of Article 342 of the Criminal Code or Article 171, Paragraph 3 of the Securities and Exchange Act).
3. Strengthen internal control systems (including SOP implementation). 

• If an investigation confirms the validity of a tip-off incident and it significantly contributes to economic benefits, appropriate rewards may be given to encourage reporting of any improper behavior according to internal company regulations or through negotiation. 

Protection for whistleblowers, 

• LITEON handles whistleblower cases confidentially and approaches them with promptness, fairness, and objectivity. Personal information and reported data provided by whistleblowers will be kept confidential in accordance with the law, and appropriate protective measures will be taken. Investigation reports issued by the investigative team should follow the Company’s “Internal Control and Audit Implementation Regulations.” 
• LITEON takes appropriate protective measures for whistleblowers and investigators, including but not limited to: unless consented by the whistleblowers, their name or any identifying information must not be recorded in public documents. Strict confidentiality must be maintained regarding the whistleblower’s name, workplace, address, and phone number. When verifying facts with the whistleblowers, this should be done without revealing their identity. 

Compliant with the Ethical Corporate Management Best Practice Principles.

(3) Does the company adopt proper measures to prevent a complainant from retaliation for his/her filing a complaint?

(3) LITEON has established the “Whistleblower Guidelines,” which apply to both the Company and its subsidiaries. This system aims to protect whistleblowers. If a whistleblower believes he has faced adverse consequences due to reporting an incident, he can file an appeal through our designated reporting channels. The chief audit officer provides quarterly reports to the audit committee on the handling status of investigation cases. 

In 2023, a total of 12 whistleblower reports were received across the Company and its subsidiaries (compared to 23 in 2022). Out of these, 4 cases were substantiated through investigations (compared to 5 in 2022). For cases where evidence was lacking, feedback was provided to the whistleblowers. All other cases resulted in disciplinary actions based on internal regulations or strengthened colleague education, training, and control activities.

Compliant with the Ethical Corporate Management Best Practice Principles.

4. Strengthening Information Disclosure Does the company disclose its ethical corporate management policies as well as the results of its implementation on its website and Market Observation Post System (“MOPS”)?

Information regarding business activities, organizational structures, and financial standing and performance is disclosed according to the applicable regulations and generally accepted industry conventions. LITEON follows the ethical management principles and discloses the measures it adopts and their performance on the company website and in the annual reports and prospectuses. The ethical management principles are also disclosed on the company website.

Compliant with the Ethical Corporate Management Best Practice Principles.

5. If the company has established the ethical corporate management policies based on the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies, please describe any discrepancy between the policies and their implementation: No deviations

6. Other important information to facilitate a better understanding of the company’s ethical corporate management policies (e.g., review and amend its policies):

(1) LITEON builds its ethical management practices on compliance with the Company Act, the Securities and Exchange Act, the Business Entity Accounting Act, and regulations governing TWSE listed companies or other business activities.

(2) LITEON has implemented the Material Insider Information Procedures. The procedures require explicitly that directors, managers and employees not disclose material insider information in their knowledge to other people; inquire or collect from persons with material insider information any undisclosed information unrelated to their duties; and not disclose to other people any undisclosed material insider information acquired not through performance of their duties.