Tianma Microelectronics Co., Ltd.

Address: 7/F, 64th Building, Majialong Industrial City, Nanshan District, Shenzhen

Tel: (86) 755 - 8622 5886

Fax: (86) 755 - 8622 5772

Website: csr_office@tianma.cn

This report has online version and printed version two kinds, online version available

in the company's web site (http://www.tianma.cn/) to read.

Copyright ©Tianma Microelectronics Co., Ltd.

DISCLAIMER

This document may contain predictive information, including but not limited to such

information related to finance, operation, product series and new technique. Since the

uncertainties in practice may cause the great differences between the actual results and the

predictive information, this document is for reference only, and does not constitute any offers

or commitments. The Company is entitled to revise the above information without notice.Scan to follow us at WeChat

2016 CORPO

RATE SOCIAL RESPO

NSIBILITY REPO

RTTianm

a Microelectronics Co., Ltd.

TO CREATE COLORFUL LIFE

CORPORATE SOCIALRESPONSIBILITY REPORT2016

ShenTianma A 000050

Tianma Microelectronics Co., Ltd.

MARCH 2017

CORPORATE SOCIAL

RESPONSIBILITY REPORT

Tianma Microelectronics Co., Ltd.

▎ About this Report

Reporting Period:

January 1 to December 31, 2016

Reporting Cycle:

Once a year

Content definitionThis report is based on the principles of the substantiality, stakeholder

participation as well as sustainable development under Global Reporting Initiative (Global Reporting Initiative, "GRI" in short) guideline. We have identified the key stakeholders following a comprehensive analysis and evaluation of the business operating environment. We have communicated and conducted dialogues with stakeholders through a questionnaire to collect and prioritize their concerns and needs. After evaluation, we have confirmed the topics, contents and indicators for disclosure in this report. During this reporting period, the Company hasn't made any revision to the previous report.

ScopeOrganization scope for this report incorporates all entities with control or

major influence over the financial and operating policies/measures. The report also specifies all entities in the consolidated financial statements of the Company.

Even though introduction is made in the report to the trustee, Xiamen Tianma Microelectronics Co., Ltd.(hereinafter referred to as Xiamen Tianma), and the associated company, Shanghai Tianma AM-OLED Co., Ltd.(hereinafter referred to as Shanghai AM-OLED), all statistics contained herein are identical with that in the Company's annual report(Some indexes may have different boundaries. See note of specific chapter of this report for details), excluding those of the trustee and associated company.

Preparation BasisBased on the Company's actuality, this report is prepared as a "Core" plan by

adopting 38 general standard disclosure items and 48 specific standard disclosure items from the Sustainable Development Guidance Version 4.0 (hereinafter referred to as G4) by the Global Reporting Initiative (GRI). By means of site investigation, employee interview and material consultation, it confirms the statistical scope of information reported and completes the collection means and computing methods.

Report statementThe Board of the Directors and all directors of the Company undertake that

there is no false record, misleading statement or major omission in this report, and undertake to assume joint and several liabilities for the truthfulness, accuracy and completeness of the contents herein.

Expression StatementTianma Microelectronics Co., Ltd.(hereinafter referred to as Tianma, the Company or We; and the Shenzhen Production Line as the "Company Headquarter");Shanghai Tianma Microelectronics Co., Ltd. ("Shanghai Tianma" or "Shanghai G4.5 " in short);Chengdu Tianma Microelectronics Co., Ltd. ("Chengdu Tianma" or "Chengdu G4.5 " in short);Wuhan Tianma Microelectronics Co., Ltd. ("Wuhan Tianma" , including "Wuhan G4.5 "and "Wuhan G6 " in short);Shanghai AVIC Optoelectronics Co., Ltd. ("AVIC Optoelectronics" or "Shanghai G5 " in short);NLT Technologies, Ltd. ("NLT" in short).

Remarks: "Four locations and five companies in the country" in this report stands for:

Tianma Microelectronics Co., Ltd., Chengdu Tianma Microelectronics Co., Ltd., Shanghai

Tianma Microelectronics Co., Ltd., Shanghai AVIC Optoelectronics Co., Ltd. and Wuhan

Tianma Microelectronics Co., Ltd.02

GRI Instruction IndexTerminology DefinitionAssociation and Organization MembershipReader's Feedback

Company OverviewSustainable Development

Remarks from theManagement

About Us

Appendix

Contents

Social Responsibility

·Compliant Operation·Commercial Ethic Management

04

06

30

82

08

24

32

40

74

44

66

56

33

41

45

67

58

36

42

50

70

59

82

60

86

61

87

62

88

For the Government

·Financial Performance·Capital Market Responsibility

For the Shareholders

·Employee’s Human Rights Guarantee·Health and Safety First·Employee Training·Salary and Welfare·Employee Care Activity

For the Employees

·Environmental Protection·Green Operation

For the Environment

·Supplier Management·Customer Relationship

For the Partners

For the Community

0302/

Our world undergoes subversion and reform every day. In face of the continuous growth in the demand of displays and the gradual expansion of new applications, Tianma personnel have registered an outstanding achievement in the previous year in terms of the insight into opportunities and the quick occupancy of favorable market, interpreted the development philosophy of"Innovation, Harmony, Greening, Opening and Sharing"by action, and staged a perfect start of the"13th Five-year Plan".

2016 was a busy year for Tianma. The G6 LTPS production line of Xiamen Tianma was premiered in Mainland, China on Feb. 4, marking an industrial record. In September, it pioneered again in mass production and delivery for mainstream cellphone producers of the world. It's estimated to reach full production in 2017, making Xiamen Tianma the largest LTPS single factory in the world. In Wuhan, Tianma braved the rainstorm, flood and continuous high temperature. On Aug. 26, the G6 AM-OLED production line was completed earlier than scheduled, creating another miracle in the industry. The construction and availability for production of the G6 AM-OLED of Wuhan Tianma and the G6 LTPS of Xiamen Tianma have laid solid foundation for Tianma to take a leading position in the global arena.

In 2016, Tianma dared to be the first. Speaking of the technological innovation, our TED technology pioneered in mass production in the world, ForceTouch technology filled the blank in domestic display industry, flexibility project development platform was established, and the 5.46-inch flexible AM-OLED screen was awarded the CITE 2016 Innovative Product and Application Prize by the organizing committee of the China Information Technology Expo (CITE)…. Regarding the market expansion, we continued to focus on the overall layout in the mobile intelligent terminal market represented by smartphones, tablets and smart wearable devices, and the professional display market exampled by vehicle-mounted, medical, POS and HMI segments, and proactively entered emerging market of smart home, charging piles, UAVs and AR/VR devices, making considerable achievement in all key fields.

As culture is the soul of an excellent enterprise, we conducted the featured seminar on quality and culture in 2016 to further root the core values of "Passion, Effectiveness and Win-Win" in the employees' minds. Through repetitive discussion by core intermediate-senior management and communication by certified lecturer in the entire company level by level, high consensus has been reached for the core quality and culture philosophy to be "led by value, aware of the right thing to do, zero fault, compliant with rules and accountability". We released specific cases via our official WeChat platform, which aroused fierce discussion among the employees on the corporate culture, and invited senior management to communicate with the employee in person in sincerity. The corporate culture not only is rooted in the employees' minds, but transforms into value criterion and behavior code in routine work. Prominent culture of Tianma is inspiring our employee to do their best in each link with flawless belief and methodology, and devote to technological innovation and value creation with full passion.

While our strategic theme in 2016 was to "seize the market, strengthen the capacity and optimize the cost", rapid improvement of the employee's capacity is an important component to "strengthen the capacity". We have constantly promoted the talent strategy, sorted out the organization and position system, improved the talent review program and procedure, further improved the promotion mechanism and fully implemented the promotion in the middle of the year. Tianma Academy has staged multi-level trainings dedicated for different employees involved in management, technology and profession, constantly strengthened the training for the management on leadership skills, and refined

Remarksfrom theManagement

04

General ManagerLiu Jingyu

Board ChairChen Hongliang

the leadership criterion and test method, thus offering talent guarantee for continuous enhancement of the company's organization and profitability capacity and setting up channels for occupational development of the employees to bring them "happy work and life".

In terms of the green manufacturing, we promote the cleaning, production and operation in a green manner, thus constantly enhancing the green competitiveness of our products and propel development of green products among the industry. We performed evaluation on environment impact and environmental monitoring for new projects, handled dangerous wastes in strict line with laws and regulations, and constantly upgraded our equipment and technologies. We practically put EHS in the company's strategies, production operation and engineering construction, and ensured the effective operation of the EHS system through promotion of the construction of safety standards for the squads and implementation of the ISO14001&OHSAS18001 Management System, ISO50001 Energy Management System, ISO14064 Greenhouse Gas Management System. Taking into account the economic, environmental and social effect during our development, we will contribute to the harmonious coexistence between humans and nature.

Tianma has always highlighted shouldering of the social responsibility. In 2016, we cast continuing concern on the occupational health and labor protection of the employee, performed diversified forms of employee care activities, and made proactive participation in the charity sponsoring and joint construction of the community. We fulfilled our due social accountability, and disclosed our practice and achievement in the economic, social and environmental aspects by public publication of our annual report on social responsibility. In the Evaluation Report on Corporate Social Responsibility in Shenzhen in 2015 as issued in July 2016, the social responsibility implementation by Tianma in 2015 was compiled as an independent chapter. As the first blue paper dealing with social responsibility in Shenzhen, it has been listed into the literature collection in Shenzhen.

Tianma has been devoted to the display field since its introduction of the first LCD production line in 1983. To fulfill the dream with passion and boost the industry with commitment, we will continue to make achievement and lead the display industry with innovation.

0504/

ABOUT US

Company name (Chinese)

天马微电子股份有限公司

Company name (English)TIANMA MICROELECTRONICS CO.,LTD.

Legal representativeChen Hongliang

Registered addressSouth Section, 22/F, Hangdu Building, CATIC,Middle Shennan Road, Shenzhen

Main office address7/F, 64th Building, Majialong Industrial City,Nanshan District, Shenzhen

Date of registrationNovember 8, 1983

Business areaMainland China, Hong Kong, Japan, U.S., Korea,Germany and so on

Ownership natureGovernment-owned corporation

Stock exchangeShenzhen Stock Exchange(ShenTianma A; Stock Code:000050)

Company profileTianma Micro-electronics Co., Ltd. (Tianma) specializes in providing display solutions and efficient support services worldwide. We were originally established in 1983 and publically listed on the Shenzhen Stock Exchange in 1995.

Industry involvedElectronic parts and components industry

Business scopeIT service, consultation service; LCD and relevant materials agency and sales; rental of mechanical equipment and self-owned properties(excluding financial rental); and import/export business(except items banned by the laws, administrative regulations and the State Council. Limited projects must be operated upon receiving the permission). Design, manufacturing and sales of LCD and relevant materials, equipment and products; relevant technical development, technical consultation, technical service and technical transfer; IT service; and common freight transport.

Product typesLCDs and LCMs.

Main productsFocusing on the smart mobile terminal and professional display markets, the Company is a manufacturer of products widely used in smartphones, tablet PCs, smart wearable devices, vehicle-mounted devices, medical equipment, industrial instruments, aviation equipment and smart furnishings. Also building presence in the market of future new displays like flexible display and virtual reality.

▎Company Overview

Companybasic information

Total market value

billion26

08

NLT Technologies,

Ltd.

Shanghai AVIC Optoelectronics

Co., Ltd.

ShanghaiTianma

Microelectronics Co., Ltd.

ChengduTianma

Microelectronics Co., Ltd.

Beijing Tuopu Hanhua Equity Investment Fund

Partnership(Limited Partnership)

Aviation Industry Corporation of China

AVIC Jianyin Aviation Industry Equity

Investment(Tianjin) Co., Ltd.

Ownership and Control Relation between the Company and Actual Holders

State-owned Assets Supervision and Administration

Commission of the State Council

National Council for Social Security Fund

AVIC International Holding Corporation

AVIC International Shenzhen Co., Ltd.

AVIC International Holdings Limited

Tianma Microelectronics Co.,

Ltd .

Shenzhen AVIC Display

TechnologyCo., Ltd.

Domestic Companies

Tianma Microelectronics

(Hong Kong) Limited

Xiamen Tianma Microelectronics

Co., Ltd.

Tianma NLT Europe GmbH

TianmaMicroelectronicsKorea Co., Ltd.

Trustee Companies

Associated Companies

Overseas Companies

Tianma NLT USA,Inc.

Shanghai Tianma OLED Technology Co., Ltd.

14.31% 14.31% 62.52%

100%

100% 100% 100% 100% 100%

100%

10.8%

21.9%40%

100% 100% 100%

5.56%

16.2%

51.1%Hosted

37.5%

20.81%

33.93%

5.79%

100%

8.86%

(The shareholding ratios of AVIC companies to the Company are shareholding ratios after the new issuance of non-public offering.)

WuhanTianma

Microelectronics Co., Ltd.

0908/

About Us

CompanyGovernance Structure

As required by relevant laws and regulations, the company has

established regularized governance structure and rules of procedure,

and gradually completed the shareholders' meeting, board of directors,

board of supervisors and independent director systems.Through

constant refinement of the company's legal person governance structure,

reinforced construction of modern corporate system, the company's

normative operation level has been improved and a mechanism to

clearly define respective duties, normalize the operation, and mutually

coordinate and contain the power organ, decision-making organ,

supervision organ and management, thus protecting the legal interests of

shareholders, especially medium and small shareholders.

is of the supreme power, which

legally executes the decision rights for major events such as foreign

guarantee, profit distribution, associated transaction and selection of

board of directors/supervisors. Totally 5 shareholders' meetings were

held in 2016, with 1 annual meeting and 4 temporary meetings.

is the watchdog of the company to take

charge of the Board of Directors. In June 2016, the term change election

was held for the Board of Supervisors to establish the 8th administration

of Board of Supervisors, which is made up of 5 supervisors, 2 from

employee representatives and 3 from external persons. Totally 7

meetings were held by the Board of Supervisors in 2016. The Board of

Supervisors carefully implement the supervision duties in line with the

laws and company regulations, and practically maintain interests of the

company and shareholders.

corresponds to the GM Office as the decision maker. GM Office is made up of the general manager, vice general manager, financial director and secretary of the Board of Directors, to take responsibility of the company’s management over production and operation, report to the Board of Directors and implement the resolutions of the Board of Directors.

Board of Directors takes charge of four special committees

respectively concerning the strategy, audit, nomination and salary, and

risk management. Through careful audit of major events of the company

in the economic, environmental and social aspects, each committee offers

preference for the Board of Directors to make correct, proper decisions.

The Strategy Special Committee is made up of 5 member directors to be

responsible for review of the company’s long-term development strategy

and major investment decision and proposal of suggestions. The Audit

Special Committee consists of 5 member directors to take charge of

communication, supervision and check of internal/external auditors.

Constituting 5 member directors, the Nomination and Salary Special

Committee is in charge of the review of the candidates for the directors

and senior management, and the salary standards and procedures,

and of the proposal of suggestions. Incorporating 5 member directors

and senior management, the Risk Management Special Committee

takes responsibility for review and evaluation of the company’s risk

management status, and proposal of suggestions concerning the risk

management and internal control.

is the power executor of the company,

which holds meetings in compliance with prescribed procedure, and

executes the power in strict line with laws, regulations and the Articles

of Association. All directors are elected on the Shareholders' Meeting

upon full consideration of the company's status, its own business mode

and specific work needs, as well as age, cultural/educational background

or professional experience of the nominees. Upon termination of the

tenure of the 7th administration of board of directors in June 2016, the

company elected members of the 8th administration, which is made up

of 9 members, with 3 independent ones, accounting for 1/3. Totally 12

Shareholders' Meetings were held in 2016 upon the regular report, profit

distribution, appointment of the audit, foreign guarantee, associated

transaction and election for the term change, thus fully guaranteeing

strategic decision making for major events of the company and long-

term planning of the development objective of the company, and radically

maintaining the overall interest of the company, especially legal interests

of the minority shareholders.

Shareholders' Meeting

Board of Directors

Board of Supervisors

Senior Management

Shareholders' Meeting

senior management

Board of Directors

Board of Supervisors

Strategy Committee

Audit Committee

Nomination & Compensation

Committee

Risk Control Committee

10

VISION

VALU

ES

MISSIO

N

Corporate Cultureand Strategic Development

I. Corporate Culture

Tianma's Vision:

Being the World's Well-Respected Leading Display Company

Tianma's Values:

Passion, Effectiveness and Win-Win

Tianma's Mission:

To CreateColorful Life

11/10

About Us

II. Strategic Development

(I) Strategic Planning

Comprehensive Strength in Medium/

Small Size Display Fields

Strategic Initiative

Strategic Objective:

Mobile Intelligent Terminal BusinessLeader of the Medium/Small Size Mobile Intelligent Terminal MarketKeyword: Leader for mass production and technology

Ensure the excellent quality, keep the relationship with clients and suppliers, and establish the brand image of Tianma through core competitiveness and leading technology. Overall advancement is achieved through upgrading of the client.

Emerging BusinessSmart Home, Intelligent Domestic Appliance, VR/AR, etc.Keyword: Leading the Industry

Professional Display BusinessLeader of the professional display marketKeyword: Quality, Rapid Improvement of Market Occupancy

GlobalLeading Position

Four Supporting Strategies

Leading Product & Technology Strategy

Brand Strategy

Culture and Talent Strategy

Q u a l i t y Strategy

Achieve OverallSurpassing and Advancement

Create CoreCompetitiveness

Cutting-edgeTechnology

GuaranteedExcellent Quality

Benefit Clients

Benefit Suppliers

Erect the BrandImage of Tianma

Advanced Comprehensive

Feeling of the Client

12

(II) Market Planning

Focusing on the medium/high end segments of mobile intelligent terminal market, the

Company is determined to improve its occupancy of the high-end and differential market, pay

attention to new technologies and emerging markets, and identify and develop new market, thus

securing a leading position in the industry.

(III) Technical Planning

Proactively lay out cutting-edge display technology to realize rapid mass production of such

technologies as TED, photo alignment, AMOLED and Force Touch; research and develop flexible,

folding display technology and integrated input scheme; and configure the front-projected

holographic display technology and the human-machine interaction integrated solution.

Identify and Develop New Markets and Secure a Leading Position

Production LinePositioning Customer Positioning Technical Demand(DOE)

Proactively Lay out Cutting-Edge Display Technology

To be Bigger and Stronger

Enhance the Occupancy of High-end Differentiated Market

Market Scale

Industrial Attraction

High

Medium

Low Medium High

Recent Projects:

• TED(Touch Embedded Display)

• Photo alignment technology• AMOLED technology• Force Touch

Medium-term Projects:

• Flexible display technology• Foldabledisplay technology• Integrated input program

Long-term Projects:

• Front-projected holographic display technology

• Human-machine interaction integrated solution

New Technologies and NewMarket

Professional DisplayMarket

Smart Mobile Terminal

13/12

About Us

The Company sets up production lines in Shenzhen,

Shanghai, Chengdu, Wuhan and Japan, as well as marketing

network in the US, Germany, South Korea, Japan, Mainland

of China, Taiwan and Hong Kong.

USA

▏ Global Technological Support Platform

1983 20082006

Shenzhen

Shanghai G4.5

Chengdu G4.5

Wuhan G4.5

14

Europe

Japan

Taiwan

Hong Kong

Shenzhen

ShanghaiChengdu Wuhan

South Korea

2009 2015

Shanghai G5

Japan NLT

Wuhan G6 LTPS AM-OLED2011

1514/

About Us

Persistently putting technologic-

al innovation as the key of strategic

d e v e l o p m e n t , t h e c o m p a n y

proactively lays out cutting-edge

d isplay technologies such as

TED, flexible display, AM-OLED,

narrow bezel, photo alignment

and negative liquid crystal. As of

the end of 2016, the Company

has applied for 6848 patents and

obtained3834 in total, ranking top

inthe world in terms of both the

quality and quantity of patents.

Meanwhile, the Company has made

constant breakthroughs in mobile

intelligent terminal, professional

display and emerging technology

sectors , helping to make i t a

leading technology-innovation-

based company in the world.

In-Cell Technology

While our small-sized In-cell products have been put into mass

production, medium/large-sized 8-inch a-Si TED In-Cell samples have been

successfully initiated(TED is a technology which realizes simultaneous

driving of the display and touch technologies by an IC and an FPC upon

putting the common electrodes of the display into several unit arrays.

This technology makes available the ultra-narrow bezel, super thin

thickness, high report rate and ultra-sensitive touch effect of the display.),

and the 9.7/10.1-inch products are under development and estimated to

be able to be put into mass production in 2017.

TED Force TouchTechnologyTianma is China's first panel producer that offers in-built touch

solution and has realizedthe mass production. Besides integrated

display and touch functions, TED Force Touch technology also makes

available the forced induction solely on the chip, thus allowing the device

to differentiate the gentle from the heavy pressure to call different

functions. Tianma 5.0-inch TED Force Touch sample was debuted on SID

2016 and widely appraised on the show.

Flexible AM-OLED TechnologyFlexible AM-OLED features the flexibility, ultra-thin thickness,

resistance against screen breakdown and excellent display effect.

Tianma’s 5.46-inch HD flexible AM-OLED reaches 20mm in the curvature

radius, a leading level in the industry as awarded the CITE 2016 Innovative

Product and Application Prize.

Oxide TFT Technology(Metal Oxide TFT Technology)Tianma develops and masters the Oxide TFT Design and Process

Technology. Up to date, it has presented 10.1-inch FHD and 5.0-inch HD

LCD products. OLED technology as driven by oxide has been successfully

developed, with relevant samples put in place.

Technological Innovationand Leadership

▏ Technical Strength

16

Naked-eye 3D TechnologyThe 23-inch FHD naked-eye 3D prototype developed by Tianma

adopts the fixed lens optical unit and TR3I eye tracking technology

to effectively improve the 3D viewing range and reduce the shadow

phenomenon in the crosstalk area. Our naked-eye 3D technology has

taken a leading position in domestic industry.

AM-OLED Display

Outputted from Tianma’s G5.5 AM-OLED production line, the 5.5-inch

HD AM-OLED display has been delivered to branded mobile intelligent

terminal clients, embodying the company’s leading strength in domestic

OLED field.

Global Record of the Highest PPIOur 10.4-inch 8k4k LTPS tablet screen features a physical resolution

of 7680×4320 and the 847 PPI, the highest standard in tablet display

sector, which has been awarded the Excellent Product Prize 2016 by

SEMI and SID, and the CCITE 2016 Gold Prize for Innovative Product and

Application by China Information Technology Expo.

Large Size, Curved Surface, Touch, Multi-screen Linkage and High PPI Vehicle-mounted Display

Tianma debuted the first 12.3-inch fully curved touch screen in the

globe, which integrates many an advantage such as large size and touch

function. It makes available full curved surface technology, used for the

TFT-LCD, backlight, touch screen and the fully fitting process. Besides full-

view, high contrast, wide color range and high reliability, this product also

features ultra-sensitive full finger, waterproof and glove touch technology.

Furthermore, with the 1.3-inch+12.3-inch vehicle-mounted display, the

user can shift the content displayed on multiple screens by touching the

round button, thus bringing a more advanced and convenient interaction

experience.

Counting upon innovative technologies and leading strengths,

T ianma is making rapid development and comprehensive

breakthroughs, and reinforcing its status in the medium/small size

display field. Alongside the further improvement of the technical

strength, the company will achieve better competitiveness and larger

market occupancy in the high-end display field, thus accelerating its

realization of the strategic objective to take a leading role in the globe.

Flexible AM-OLED Technology

AM-OLED Technology

Large Size, Curved Surface, Touch, Multi-screen

Linkage and High PPI Vehicle-mounted Display

Global Record of the Highest PPI TED Force Touch Technology

1716/

About Us

In 2016, the company focused on the display market segment for intelligent

terminals represented by smartphone and tablet, and that for professional devices

of the vehicle-mounted, medical, POS and HMI sectors, and proactively entered such

emerging markets as smart home, charging piles, UAVs and AR/VR, striding towards the

strategic objective to build itself into an innovative, technological enterprise to provide

display solution and rapid service support in the globe.

With display module as the main product, the company insists on the strategy to

present middle/high end products, concentrate on clients of value, maintain and expand

existing market occupancy, and proactively enter the emerging market. On one hand,

the company makes greater investment in markets of rapid growth such as the vehicle-

mounted device, rail transportation, aviation and maritime, and proactive expansion of

emerging markets such as smart home, charging piles, UAVs and AR/VR. On the other,

we continue to strengthen our in-depth cooperation with existing big accounts both

at home and abroad, present high-end product lines for the client and bolster many

clients to present global premiere of new product. In 2016, the Company achieved

rapid growth in the vehicle-mounted device market, constantly took lead of the aviation

and maritime fields and successfully expanded the emerging market. Currently, it has

basically covered all mainstream clients around the globe and become core suppliers of

many clients.

BusinessDevelopment in 2016

18

On Feb. 4, 2016, the G6 LTPS production line of Xiamen Tianma was put into service, with the first 5.5-inch FHD LTPS product successfully brought into being to make it the first success in mainland China. In September 2016, this production line realizes mass production ahead of counterparts of identical size in the industry, heavily promoting the domestication of middle/high end display panels of medium/small size.

Flagship Events in 2016

On Aug. 26, 2016, Wuhan Tianma G6 LTPS AM-OLED production

lines took merely 123 days to finish from earthwork excavation to

capping of the major structure, keeping the rapidest record in the

industry. Upon completion of this project, the company will further

reinforce its leading position in the middle/small size display field,

break down the competition pattern of the AM-OLED segment, propel

the upper-stream demand of the industrial chain, further improve

the new display industrial chain, and refine the supporting level of

key materials and equipment, thus making contribution to successful

completion of the Innovative Development Action Plan for New

Display Industry in 2014 to 2016.

1918/

About Us

▏ Brand Promotion in 2016

In 2016, Tianma launched brand promotion campaigns by means of exhibition, seminar and roadshow to constantly improve the brand reputation.

Feb. 22, 2016Barcelona, Spain | Mobile World Congress(MWC) 2016 |

Tianma's AM-OLED flexible display, 4k notebook/super display, 10.4-inch 8k and 5.2-inch 4k LTPS made breathtaking debut on the congress.

Jan. 6, 2016Las Vegas, USA | CES (International Consumer Electronics

Show) | Tianma premiered on the largest consumption e-product exhibition fair in the globe.

Feb. 23, 2016Nuremberg, Germany | Embedded World, the world’s

largest embedded electronic and industrial computer application exhibition | Tianma made an impressive appearance.

Apr. 8, 2016Shenzhen, China | 4th China Information Technology

Expo(CITE 2016) | Tianma exhibited dozens of its products.

20

May. 24, 2016Los Angeles, USA | SID Display Week | Tianma made

the global debut of its TED Force Touch technology, 1.3inch + 12.3inch curved, touch-control, vehicle-mounted display, and 14.1inch 2k vehicle-mounted display.

May. 31, 2016Taipei, China | Taipei Computex Exhibition, the largest

in Asia | Tianma staged en eye-catching appearance in Taipei International Meeting Center.

Apr. 17, 2016Shanghai, China | 75th China International Medical

Equipment Fair(CMEF2016) | Tianma embodied a perfect show of medical display products in three fields.

Nov. 8, 2016Munich, Germany | World-renowned electronics exhibition

in Munich, Germany | Tianma made an all-round demonstration of new technologies and products leading the industry.

2120/

About Us

▏ Honor in 2016

Awards Unit Year/Month

Top 10 Annual Contribution Prize Shenzhen Tablet Display Industrial Association Jan 2016

Golden Display Awards 2016 “Excellent Product Prize”

SEMI and SID March 2016

CITE 2016 Innovative Product and Application Prize(5.46-inch flexible AMOLED screen)

CITE innovative product and application prize judging panel

April 2016

CITE 2016 Innovative Product and Application Golden Prize(10.4-inch 8k4k tablet display)

CITE innovative product and application prize judging panel

April 2016

Quality Technology Prize 6-Sigma Excellent Project by China Association for Quality in 2015

The National Quality Technology Awarding Meeting and 13th National 6-sigma Meeting

May 2016

Excellent Enterprise Prize China International OLED Industry Meeting June 2016

22

2322/

About Us

▎ Sustainable Development

CSR Vision

CSR Strategy

People first. Green operation.Harmonious and sustainable development of economy, society and environment.

Construct sustainable CSR system, Being the World's Well-Respected Leading Display Company

Develop the values of employees, build a harmonious business environment, achieve the winwin with partners, and maximize the enterprise values.

CSR Mission

24

Improvement of CSR Management SystemThe company casts emphasis on the training, publicity

and guidance of the CSR management system. In 2016, totally 12157 persons attended the orientation training program for CSR management system. By joint effort of CSR self-assessment and CSR site evaluation, the review team made up of the Risk Management Department and the Environmental Safety Department will perform the CSR internal evaluation for 2016 and update the CSR risk database, thus constantly promoting the enhancement of CSR nonconformities, propelling the implementation of the employee care program, green operation program and service community program, and proactively conducting the CSR consultation and CSR archiving services. Counting upon CSR management suggestions by stakeholders, the CSR agreement for suppliers is thus modified with the supplier CSR commitment proposal added and put into effect.

CSR Report ManagementEver since 2012, the company has disclosed its proposals

and performances in the win-win development with its client, employee, shareholder, supplier, community and government by means of the Social Accountability Report of the Company. In 2015, Tianma’s practice of social accountability was listed as an excellent example into the Evaluation Report for Social Accountability in Shenzhen as published in July 2016. As the first blue paper for social accountability in Shenzhen, it has been incorporated into the literature collection of Shenzhen. During the report period, no revision to previous reports is made. Disclosure of information of overseas companies is added to this report with reference to G4 index and the Standard for Disclosure of Social Accountability Information of Chinese Listed Companies and in accordance with the company’s actuality.

The company’s CSR Project Team is made up of personnel from various departments such as the HR,

Environmental Safety, Procurement, Security, Marketing, Finance, Administration and Labor Union, which is committed to using the CSR management system in all links of the company’s operation. Based on the requirements of EICC5.0, ISO26000, SA8000 and relevant laws and regulations, the company formulates and enforces such materials related to the CSR system as the CSR Management Manual, Commercial Ethics Management System, Dialogue System for Stakeholders, Management System for Conflicting Mines and CSR Evaluation Procedure to constantly improve the CSR management system, and discloses CSR performance of relevant disclosing company to stakeholders via CSR report management.

▏ CSR Management

2524/

About Us

Communication With And Feedback From Our Stakeholders

Identification of major stakeholders

Communication and Interaction with Main Stakeholders

Different stakeholders affect or are affected by the Company differently. In pursuance of the latest AA1000 Stakeholder Participation Standard, the Company has preliminary identified and sequenced its stakeholders, and finally selected six stakeholders including suppliers, governments, customers, employees, communities, and shareholders.

Based on:

(A) The possible economic, social and environmental effects that the stakeholders have exerted on the Company;

(B) The possible economic, social and environmental effects that the stakeholders will exert on theCompany;

(C) The possible economic, social and environmental effects that the Company exerts on the stakeholders;

(D) The Company has made the priority sequencing of the stakeholders.

The Company has built diverse and unobstructed communication with the stakeholders of different classifications, so as to make sure that their demands can be timely, accurately and comprehensively understood and responded by the Company.

As a responsible listed company,

T i a n m a n o t o n l y f o c u s e s o n

achieving the performance and

balance of economic, environmental

and social development, but also

pays close attention to the concerns

of stakeholders and actively give

feedback and improves.

26

Government Shareholder

Employee Supplier

Client Community

inspection and self-examination

meeting seminar

information disclosure

correspondence

shareholders’ meeting

onsite reception

investors’ column on the official website

the “Easy Interaction” Platform of Shenzhen Stock Exchange

employee satisfaction investigation

employee symposium

labor union activity

employee mailbox

official WeChat public account

suppliers' meeting

supplier training

supplier review

customer satisfaction investigation

routine communication with customer

customer investigation and review

industrial exhibition

onsite visit

olunteer activity

public good program

2726/

About Us

In 2016, in accordance with the validated document Dialogue System for Stakeholders, the CSR committee office of the company started the investigation on stakeholders such as the government, shareholder, employee, supplier, client and community. Through investigations online, by phone, on site and by e-mail, and interviews, we sequence the topics by two dimensions of their significance to the company and concern by the stakeholder. Thus, results from investigation of material topics are shown in the quadrant figure below and 20 topics significant to stakeholders and the company are figured out.

Remarks:

1. In the figure above, ● refers to the economic aspect, while ● to the environmental aspect and ● to the social aspect.

2. In this report, the topic of “Energy Consumption and Climate Change” is added, and the two topics “Friendship with

Local Community” and “Volunteer Activity” in Tianma's Social Accountability Report 2015 are mingled into the “Community

Public Good and Charity Activity”.

3. See specific chapter of this report for responses of the company to 20 material topics highly concerned by stakeholders

and of major influence on the company.

▏ Results from Investigation for Material Topics

Key Stakeholder ConcernH

ighLow

HighThe importance of the company

Sustainable Growth

Financial Performance

Company Governance

Legal Payment of Taxation

Environment Protection

Energy Consumption and Climate Change

Green Product and Service

Customer SatisfactionManagement

Corporate Culture

Sustainable Development of Supply Chain

Employee Care

Community Public Welfare and Charity Activity

Technical Innovation andAdvancement

CompliantOperation

Employee Training andDevelopment

Strategic Management

Commercial Ethics Management

Social Accountability Management

Health and Safety

Respect of Intellectual Property Right

28

The important topics with material impacts on the Company and external organizations, as well as the specific impacts are listed below.

▏ Affecting boundary of topics with material impacts

aspect of consideration\Boundary

Internal boundary External boundary

Notes " ● " means "important, with material impacts and data"; "—" means important, without material impacts.

CategoryImportant topics

TianmaHeadqu-arters

ShanghaiTianma

WuhanTianma

ChengduTianma

ShanghaiAVICOptoelec-tronics

JapanNLT

Govern-ment

Share-holder Customer Supplier Employee Comm-

unity

Economy

Sustainable Growth ● ● ● ● ● ● ● ● ● ● ● ●

Financial Performance ● ● ● ● ● ● ● ● 一 一 一 一

Company Governance ● ● ● ● ● ● ● ● 一 一 一 一

LegalPayment of Taxation ● ● ● ● ● ● ● ● 一 一 一 一

Environment

EnvironmentProtection ● ● ● ● ● ● ● ● ● 一 一 ●

Energy Consumptionand Climate Change

● ● ● ● ● ● ● ● ● 一 一 ●

Green Productand Service ● ● ● ● ● ● ● 一 ● 一 一 一

Society

Employee Care ● ● ● ● ● ● ● ● ● 一 ● 一

Customer SatisfactionManagement

● ● ● ● ● ● 一 一 ● 一 一 一

Sustainable Developmentof Supply Chain

● ● ● ● ● ● 一 一 ● ● 一 一

Technical Innovation and Advancement

● ● ● ● ● ● ● ● ● 一 一 一

Corporate Culture ● ● ● ● ● ● 一 ● ● ● ● 一

Compliant Operation ● ● ● ● ● ● ● ● ● 一 一 一

Employee Training and Development

● ● ● ● ● ● 一 一 一 一 ● 一

Community Public Welfare and CharityActivity

● ● ● ● ● ● ● 一 一 一 一 ●

Strategic Management ● ● ● ● ● ● ● ● 一 一 一 一

Commercial EthicsManagement

● ● ● ● ● ● ● ● ● ● ● 一

Health and Safety ● ● ● ● ● ● ● 一 ● 一 ● 一

Respect of IntellectualProperty Right

● ● ● ● ● ● ● 一 ● ● 一 一

Social Accountability Management

● ● ● ● ● ● ● ● ● ● ● ●

2928/

About Us

SOCIALACCOUNTABILITY

FOR THEGOVERNMENT

Honest and Legal

Operation

32

Common Compliance EvaluationThe company organizes for the common compliance evaluation every half a year, which covers

the environment and occupational health, the logistics and transportation, labor relationship, quality management and company equity and governance structure. For the newly added or revised laws, regulations and customer standards, the company organizes special sessions to learn and conform to such stipulations item by item, and promotes the rectification of nonconformities. In 2016, totally 14529 laws, regulations and customer standards were evaluated and 41 nonconformities were rectified.

▎ Compliant Operation

In-depth Evaluation on ComplianceBesides regular common compliance evaluation, the company also conducted in-depth risk

investigation and assessment on key departments selected in 2016. Also, the company sorted out risks of actual/potential possibility of occurrence, proposed risk tips, urged relevant departments to timely adopt specific rectification measures, formulated and implemented phased control measures, performed promotion and guidance training for relevant personnel, gradually improved the company’s operation mode, and fully put in place the zero risk operation, thus making legal compliance a rule, habit and culture.

3332/

For theG

overnment

Social Accountability

Construction of Legal Risk System

To deeply promote the legal and compliant governance of the company, the company conducted the construction of legal risk system in 2016. Through efforts in such stages as the legal risk identification, risk quantification test, risk analysis, formulation and implementation of control plan, and monitoring and inspection, it comprehensively sorted out and troubleshot the company’s legal risks, worked out a list of legal risks of the company, drew the legal risk map for the company, confirmed behaviors of high risks, formulated and implemented according risk control measures, and effectively improved the company’s risk control level. During the report period, the company suffered from no serious fine due to violation against laws and regulations.

34

Law Popularizationof the Company in 2016

• Prepared and posted 4 wall newspapers for law popularization;

• Prepared and issued 4 issues of Tianma Legal Vision by the Legal Department.

• Updated the law popularization column in the group's WeChat public account.

• Conducted annual activity for law popularization,and organized for online and onsite legal knowledge competition.

A.From Nov. 22 to 27 of 2016 when the online answering system was opened, totally 879 valid questionnaires were received to finally elect 9 outstanding prize winners, 35 first prize winners, 78 second prize winners, 156 third prize winners and 601 excellent prize winners.

B.From Dec. 12 to 15 of 2016, site law popularization activity was carried out in all industrial bases.

3534/

For theG

overnment

Social Accountability

The company has constantly promoted the construction of the commercial ethics management system in line with the Commercial Ethics Management System.

Business ethics management policy

▎ Commercial Ethics Management

Incorruptible operation

Legal compliance, integrity, anti-corruption and selfdiscipline.

Information disclosure

Disclose real and accurate information completely and timely, without any false records, misrepresentations, or major omissions.

Intellectual property (IP) protection

Compliance to IP laws and regulations, respect to thirdparty IP, active innovation, and effective application

Commercial Secret

Abide by relevant laws and the confidentiality regulations of the Company; protect the trade secrets of the Company and all clients; enhance confidentiality education; improve the awareness of confidentiality of the staff; further develop the trade secret protection measures; and prevent the occurrence of information safety accidents.

Fair dealing

Insist on the principle of fair dealing, and put an end to deception, concealing, threat and other improper means.

Whistle-blowing

Abide by the principle of "fairness, justice, objectiveness and facts-based judgment", call for real-name whistleblowing and keep relevant personal information strictly confidential.

Privacy protection

Fully respect privacy, and do not collect and spread private information through any illegal channels.

Conflict minerals

Peaceful development, keep away from the conflict36

Work Summary for 2016

Work Plan for 2017

1.Further strengthen the construction of the clean-fingered practice system in accordance with relevant requirements.

2.Continuously abide by the construction of an ethical Party and government policy, safeguarding the clean-fingered

operation and compliant management of the company.

3.Organize for signing of the Responsibility Letter for Construction of an Ethical Party and Government and the Responsibility

Letter for Construction of an Ethical Party and Government during One’s Tenure, and practice the responsibility system by

signing of the responsibility letter level by level. Management at all levels and personnel from key posts of the company totally

signed 2479 responsibility letters and commitment letters of all sorts.

4.Conducted the “Should Do” and "Should Know” tests for uncorrupted operation of the company’s leaders, with 8 tests

completed in total. Carefully completed the uncorrupted practice examination for Tianma’s leaders.

5.Conducted the disciplinary education promotion month activity as required, deeply learned about major serial speeches

delivered by general secretary Xi Jinping and relevant study materials, and organized for watching the anti-corruption

promotion films for 8 times.

6.Conducted collective talk for uncorrupted practice for mid-level management newly recruited.

7.Paid special attention to supervision of work plants newly built for the G6 LTPS production line, purchased large equipment,

and conducted other bidding activities for project construction.

8.Organized the company’s leaders to conduct self-inspection, self-correction and monitoring inspection on the performance

of part-time responsible persons, salary, business and expense.

9.The company clearly stipulates that it’s forbidden to offer any individual or organization, including government officials,

political associations, clients, distributors, agents or individuals, bribery, kickback or other improper payment. Also, the

company’s employees are never allowed to accept bribery, kickback or other improper payment.

1.Continue to further promote the uncorrupted business activities.

2.Organize for fulfillment of the responsibility for construction of an ethical Party and government in 2017.

3.Besides normal performance of routine businesses, embark on extending the work for the disciplinary education

promotion month in 2017 in an innovative manner.

4.Pay special attention to the improvement and optimization of the supporting hardware facilities for the routine

transaction.

Incorruptibleoperation

3736/

For theG

overnment

Social Accountability

Feature on Intellectual Property Right Protection

Work Summary for 2016

Work Plan for 2017

1. As of the end of December 2016, totally 6848 patents have been acquired, with 1328 from overseas, up 54% and 160% respectively as compared with that in 2015 and 2014. Totally 3834 patents have been authorized, up 25.1% than 2015.

2. Against the strategy of "adverse management for patent", cooperation was carried out with the R&D Department on the flexible display, touch technology, OLED and LTPS. Also, we summarized hotspot technologies and development trend from the patent analysis, led the R&D Department to conduct relevant patent exploration and output, organized for several brainstorms and laid out over 400 offensive/defensive patents.

3. Conducted IP right systematic training for the R&D Department, and 5 training for basic courses for IP right. Furthermore, we invited patent lawyers both at home and abroad to give regular seminars and training on IP right, and improve the comprehensive handling capacity of the IP right team.

4. Established the two-level review system for the group's inventions, the primary CPO review meeting and senior CPO review meeting. Set up particular technology expert review meeting for special case in key technology field, with alignment of the patent proposal with the review committee reaching 90%, improving the review efficiency by nearly 40%. By December 2016, totally 4434 cases have been transacted.

5. Updated and completed the patent application writing and evaluating system in China, and improved the quality monitoring for cases written by the agent, shortening the case writing cycle by nearly 60% and improving the patent quality score by around 20%.

6. As of December 2016, 342 out of 2155 suppliers checked must sign the IP right guarantee agreement, with 172 already signing the procurement framework agreement and 157 signing the IP right guarantee agreement at the same time, registering 91.2% of signing rate.

7. As a pilot company for IP right in Shanghai, Shanghai AVIC Optoelectronics Co., Ltd. passed the acceptance. Shanghai Tianma Microelectronics was rated as the demonstrative IP right enterprise in Shanghai and the advantageous IP right enterprise in China.

8. Further refined the CPO two-level review system for the group inventions, and enhance the review efficiency and technical alignment of the review. Established the CPO review team awarding system, and selected the best review expert of the year, Top 10 inventors and best IPR author.

1. Maintain 20% growth of domestic application and 30% of overseas application. Manage and control the application process management to improve the patent authorization rate.

2. Further deepen the strategy of "adverse management of patent", make cooperation for key technological sectors of the company, lay out the application of offensive/defensive patent, and reinforce the monitoring and analysis of the patents and products of our competitors. Moreover, strengthen the proper use of the company's intangible assets, promote the IP right cooperation with industrial counterparts, and increase the application and transformation of the company's patent permission and technical achievement.

3. Make available gradient growth of the IP right team by various ways of trainings(internal or external), particularly conducted senior course training for IP right business of the R&D Department, and enhance the key personnel's ability to deal with IP right businesses.

4. Establish the treatment and review mechanism for Chinese and overseas intermediate documents, enhance the transaction efficiency for patent application, and improve the authorization rate for patent application.

5. Urge the supply chain to accelerate the signing of procurement agreement by suppliers who must sign the IP right guarantee agreement. If the supplier has signed the procurement framework agreement, track and ask the supplier to sign also the IP right guarantee agreement, to continue to improve the signing rate of IP right guarantee agreement by suppliers who have signed the procurement framework agreement.

6. Join the selection and awarding of the patent prize in China.38

Commercial Secret Management

Q1 of 2016: The Legal Department invited all system responsible persons of the company, assigned the commercial secret management personnel of all first-tier departments, and publicized and implemented the commercial secret management system among the department responsible persons and the commercial secret management personnel in March, with particular emphasis laid on the features of commercial secret, grading of the secret and the judging criterion and relevant working methods and requirements for identifying the list of commercial secrets of all departments at the coming stage.

Q2 of 2016: Identified the list of commercial secrets to be protected of all first-tier departments of the company. The Legal Department primarily communicated with liaison personnel of all departments on the list of commercial secrets, and guided relevant personnel to set the grade of different information, the confidentiality period and disclosure scope in accordance with the definition of commercial secret and the actuality of the business. Upon sorting out, the classification form for each department’s commercial secrets was shaped. It’s worth mentioning that this identification covers a wider scope than legally prescribed. We believe as long as the working efficiency is hardly affected, strict management of the commercial secrets inside the company has great significance in protecting the company’s information safety.

Q3 of 2016: Recollected the previous confidentiality stamp, printed and handed out new ones matching the existing internal systems, and announced the rules for stamping of the physical/e-stamps. Currently, all confidentiality stamps within the company have been updated and can be used normally. Meanwhile, for actual issues discovered during the work process, the sample for non-competition agreement was revised to establish a stricter protection mechanism for the company’s business secret.

Q4 of 2016: Conduct investigation on the execution of the confidentiality measures, and confirmed to select key risk departments for audit of the business secret management in 2017.

3938/

For theG

overnment

Social Accountability

FOR THE STOCKHOLDER

Stabilize

Operation and

Create Values

40

▎ Financial PerformanceIn 2016, coupled with features of various costs, the company staged a series of initiatives to lower the cost and enhance

the efficiency in view of the efficiency improvement, expenditure necessity, and building and integration of the management

platform.

▪ Built a uniform procurement platform to collectively purchase materials, and lowered the cost and improved the

efficiency through standardized design, standardized material, domesticated material and collaborative manufacturing.

▪ Uniformly managed the production loss, established the review mechanism, constantly optimized aiming at the highest

standard, and lowered the production loss through recycling of liquid crystal, reuse of the rubber material and decrease in defect

rate of glass cracks.

▪ Collectively managed various expenses and enhanced the investment/output efficiency of resources. Collectively

planned 13 universal spare parts and consumables, compared the theoretical usage and actual usage of different locations,

set up standard for actual usage of different locations and established the warehouse standardized management platform for

forewarning of lifetime. Promoted the domestic uniform repair of CVD and vacuum pump. Unified spare parts management

specification of different locations. Sorted out the unit price of accessories of the panel plant and the unit consumption objective,

organized for the formulation of the “Bidding” mechanism for accessories, with access only allowed for those with two suppliers in

hand, and prevented existing business arising in price. As to the logistics expense, built a uniform logistics management platform,

specified universal transportation rules, and dynamically monitored the transportation data.

▪ Constantly promoted the Costdown Program for all costs. For the expense in environmental protection, drying equipment

was provided, and the weight or discharge amount of dangerous wastes was lowered. For test of new items and module opening,

conducted special management and control, budget management and control, and analysis monitoring. Set the yield in a scientific

way, improved the design success rate and test yield, and set up and approved the project in a scientific way. For power expense,

optimized the production schedule and conducted special projects for energy saving.

1. Constantly optimize the business procedure of the integrated procurement platform, lower the procurement cost and effectively improve the efficiency.2. Adopt series of initiatives to constantly lower the production loss, continually improve the yield and give rise to the profitability.3. Constantly promote the Costdown Program for all expenses, save expenses for existing businesses and improve the expenditure efficiency.4. Set the OA expense reimbursement interface according to different nature of the expense and management demand of the expense, and optimize the expense management procedure.

Remarks: the data below was rounded off in the unit of "CNY 10,000".

56,918 1,073,676Net Profit Turnover

167,631848,179 26,690Employee Salaryand Welfare

Operation Cost Payment Made tothe Government

14,779Payment Made tothe Sponsor

109,797 13.51ReservedEconomic Value

Community Investment(Excluding Physical Donation)

Financial Performance Planning for 2017

4140/

For theStockholder

Social Accountability

Capital MarketResponsibility

Well Guarantee the Information Disclosure

The company established and completes the information disclosure management system and constantly regularizes and fulfills the obligation of information disclosure in strict line with laws, regulations and relevant rules. In 2016, the company totally issued 88 notices on specified information disclosure media about major events such as the regular report, dispatch of rights and interests, use of the capital collected, related transaction and foreign guarantee. In 2016, the company established the “Information Disclosure Committee” and formulated the Discussion Rules for the Information Disclosure Committee in accordance with relevant guidance to constantly strengthen the management on information disclosure and enhance transparency of the company. The company effectively implemented the reporting process for inside information, matters and insiders. No cases that insiders used the inside information to buy/sell shares or that the company was requested for rectification upon inspection of the watchdog department occurred.

88company totally issued onspecified informationdisclosure media

notices

42

Management of Investor RelationshipsThe company constantly and actively communicated with

investors, persistently improved the favorable interaction, listened to, respected and understood the investors’ opinions and suggestions, facilitated in various way the investors in exercising their rights, and boosted the investors’ understanding and recognition of the company.

The company made full use of the investor hotline(0755-86

225886), the Easy Interaction platform of Shenzhen Stock Exchange, onsite investigation, investor open day activity, investor e-mail box(sztmzq@tianma.cn), WeChat public account(tianma-1983), and participation in the strategy report meeting and investment bank and broker meetings both at home and abroad to proactively communicate with the investors, extensively listened to the investors’ opinions, bridged the distance between the investor and the company, boosted the investors’ understanding and recognition of the company, strengthened their confidence to the company, and timely notified the management of the reasonable opinions and suggestions of the investors. In addition, the company set a column for investor protection on the official website, issued public good promotion commercial for the investors, record of the company’s activity to boost the relationship with investors and manuals to disseminate the relationship with investors. The company arranged for special personnel to maintain the said channels and platforms, thus ensuring availability of the service channel and timely/effective communication to set up a bridge for communication between investors and the company.

In 2016, the company kept in close touch with investors, 100% answering the 530 questions proposed by investors through the Easy Interaction Platform of Shenzhen Stock Exchange, receiving 192 visiting investors from 162 institutes of 25 batches, and timely reporting to Shenzhen Stock Exchange for archiving, thus ensuring the fair disclosure of information.

For the Stockholder management on relationship with investors and constantly improve the professional quality of the department personnel. In addition, the company will make continued exploration and innovation to work out new forms and content for investor protection and to constantly and effectively conduct the investor protection. In addition to continual growth of performance, the company will complete the long-term return mechanism for the investor to create enduring values for the shareholders.

25

192

162

100%

receive

receive

receive

530 questions proposed by investors

batches

investors

institutes

answering

4342/

Social AccountabilityFor theStockholder

FOR THEENVIRONMENT

Green,

Environmental and

Clean Production

44

▎ Protect the Environment

Attaching great importance to EHS, the company puts EHS work

into each specific link of the operation, such as the corporate strategy,

commercial plan, business development, engineering construction,

production operation, energy saving and emission reduction, safety

management and social welfare, and completes and develops the

management mode integrating environmental protection, occupational

health, safety and risk management all in one to devote to the EHS

management. The company pays high attention to energy saving and

environmental protection, and offers the customer green solutions to

help them practice energy saving and emission reduction, thus making

contribution to creating a green world.

The company has established the Safety Committee to take

charge of the EHS management work. By the end of 2016, the Safety

Committee consists of 207 members, with 89 employee representatives,

accounting for 43%. The company has always put it as the EHS principle

to "obey laws and regulations, put people first, save energy and reduce

consumption, prevent pollution, promote green production and

sustainable development, involve all employees, and prioritize health

and safety", to list the EHS work into the performance examination of all

departments and responsible persons to implement level by level.

4544/

Social AccountabilityFor theEnvironm

ent

Environmental Protection

Environmental protection facilities of the company are in normal and stable service, with discharge/emission of all pollutants such as wastewater, exhaust and noise complying with relevant requirements. Upon classified collection, hazard wastes are disposed by entrusted qualified outsourcer, with all waste discharge indexes in line with the control standard for environmental aggregate. No environmental accidents occurred in the company in 2016.

In 2016, Tianma successfully passed the re-examination by ISO14001 to constantly improve the company’s performance in environmental management. Wuhan Tianma passed the review of clean production and acquired the certificate of radiation safety. Shanghai Tianma passed the technical transformation for the TFT-LCD project, reduced waste discharge and passed the acceptance by the environmental protection authority. Through the reduced drainage program, Shanghai AVIC Microelectronics succeeded in lowering the total drainage by 10% and was accepted by the site review.

In Oct. 2016, Chengdu Tianma

was awarded the “Honest Enterpr-

ise for Environment Protection in

2015” by Sichuan Environmental

Protection Office.

46

The company continues to increase the investment in environmental protection, spending CNY75.68 mln in this regard in 2016.

Environmental Support Comparison from2012 to 2016

Headquarters in 2016

CNY5.61

mln

Shanghai Tianma in 2016

CNY5.06mln

Chengdu Tianma in 2016

CNY38.72mln

Wuhan Tianma in 2016

CNY8.94mln

Shanghai AVIC Optoelectronics in 2016

CNY13.02mln

Japan NLT in 2016

CNY4.34mln

CNY52.83 mln

CNY61.11 mln

CNY66.97 mln

CNY81.25 mln

CNY75.68 mln

2016

2012

2013

2014

2015

4746/

Social AccountabilityFor theEnvironm

ent

Energy Saving and Emission Reduction

In 2016, the company continued to promote the construction of the GB/T23331 and

ISO14064 systems. While the headquarters, Wuhan Tianma, Shanghai Tianma and Shanghai AVIC

Optoelectronics successfully passed the review of the GB/T23331 and ISO14064systems, Chengdu

Tianma passed the GB/T23331 and ISO14064 systems for the first time. The company adopted the

philosophy and universal tools for the energy and greenhouse gas management system to plan

and track the energy saving and emission reduction program, and utilized the energy metering

data for systematic management to constantly improve the energy utility, lower the company’s

production cost and achieve the energy saving and emission reducing objective.

Through a better energy management, the company fulfilled the annual objective for energy

saving in scheduled time. The headquarters completed carbon trading as scheduled in 2016,

with air compressor and air conditioning system adopted to save energy. Wuhan Tianma utilized

the maglev ice machine and air compressor fleet control to totally save power of 3.38mln KWH.

Chengdu Tianma passed the acceptance for our clean production programs by Environmental

Protection Bureau at the Chengdu municipal level and the Hi-tech Industrial Development Zone

level.

Data about Energy Saving and Emission Reduction of the Company in 2016:

Total industrial energy consumption/ton standard coal Down 1.63% year on year

Total water consumption/m3 Down 8.72 %year on year

Emission of greenhouse gas/t Down 6.81% year on year

Direct emission of greenhouse gas/t Down 40.68% year on year

Intensity of greenhouse gas emission(CO2 t/m3) Down 5.03% year on year

Total wastewater drainage/m3 Down 1.17% year on year

Power saved/10,000 kwh 439.06

Remarks: The data below only cover the “four offices and five subsidiaries in China”

48

Case for Energy Savingand Emission Reduction

Transformation of Intelligent Electromagnetic Electrically-controlled Kitchen

Steam Project Substituted by Thermal Recovery

To respond to the national call of energy saving and emission reduction and practice the philosophy of sustainable development, the company entrusted Shenzhen Lankun Energy Saving Environmental Protection Co., Ltd. to perform intelligent transformation of Tianma’s existing kitchen into an electromagnetic electrically-controlled one. Upon completion of the pilot project in Shanghai, CNY84,100 is saved each month compared with previously.

For the program to substitute steam with thermal recovery by Shanghai AVIC Optoelectronics, heat from frozen water and cooling water of existing cold machine is collected and heated up by the water source heat pump to supply to OAC for preheating by new wind and pure water and original water. This program saves CNY6.808 mln each year.

4948/

Social AccountabilityFor theEnvironm

ent

Green DesignUpholding the principle to put product quality first, the company keeps in strict compliance with the procedure for

development of new products and project management during release of any new product, and organizes personnel

involved in technology, process and supply chain to conduct full evaluation. Upon production, DQV will conduct full

reliability test, with only accepted products released to the market. With the QC080000 Certificate in hand, the company

constantly enhances the green competitiveness of our own products, ensuring only materials compliant with relevant

laws, regulations and GP requirements of the customer are selected at the project establishment and material selection

phase.The company formulates the plan for reduction of harmful objects in the material. By the end of 2016, totally 168

SVHC materials have been reduced within 1000ppm as an effort to constantly promote the harmless use of material.

Harmless Development

Halogen-free Development

materials limited in 201269 classes

materials limited in 201370 classes

materials limited in 201471classes

materials limited in 2015-201680classes

Halogen-free design accounting for51.4 % in 2013

Halogen-free design accounting for51.6 % in 2014

Halogen-free design accounting for62.9 % in 2015

Halogen-free design accounting for63.4 %in 2016

▎ Green Operation

▏ Green Products and Services

50

Green InformationUnder the HSF platform management of the company, professional teams are organized upon

the green product management platform to pay persistent attention to changes in relevant laws and

regulations and the customer’s dynamics, as well as any identification and transformation in time.

The company identified 8 regulations and 52 customer requirements in total in 2016, which have all

been turned to the internal requirements of the company. Also, internal periodical Green Information

was published regularly. In September 2016, the company revised and took into effect the Basis for

Management of Environmental Materials 1.5 Version according to the RoHS Directive and RoHS 2.0

requirement of EU.

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Social AccountabilityFor theEnvironm

ent

Green ProductionU p h o l d i n g t h e p r i n c i p l e o f “ G r e e n

Production and Sustainable Development”,

the company attaches great importance to

management and control of harmful substances

during the production process, highlights details

of the internal audit, organizes for uniform

risk identification of the management process

for existing harmful substances, and makes

paralleled improvement and optimization.

It fully monitors harmful substances during

all production links such as the raw material,

product ion , semi-product and product .

Throughout 2016, IQC has intercepted 8 excess

accidents for raw materials and 0 for the client.

Management of Green Supply Chain

The company signs the Environmental Protection Agreement with the supplier, requires the raw materials provided by the supplier to conform to the Benchmark for Management of Environmental Substances, and gets to know if there's harmful substance found in raw materials provided by the supplier through the Harmful Substance Investigation Form and the REACH Invest igat ion Form. To strengthen the suppliers'awareness and capacity of harmful substance management, and lower the company's HSF risk from the beginning, the company held the 2016 Supplier Dissemination and Guidance Meeting in Nov. 2016, with 178 persons from 135 major material suppliers attending this meeting, the attendance rate and average scores greatly higher than past years. 2014 2015 2016

Average Score :

71.57

Average Score :

85.00

Average Score :

89.41

Attendance Rate :

65.3 %Attendance Rate :

70.0 %Attendance Rate :

57.8 %52

Green ClassTo synchronously improve the management on harmful substance, the company

makes uniform plan to conduct diversified HSF training, such as the HSF Basics

for employees at the front line of the operation sequence, the HSF Professional

Knowledge Training and Training on Identification of Process Risk of Harmful

Substance for improvement of management of crucial process, the XRF Professional

Knowledge Training for enhancement of environmental test capacity, and the

Harmful Substance Risk Library and Tianma Management Procedure for Harmful

Substance for bettering of the professionalism of the HSF management team.

Green ServiceThe green product management system as eagerly promoted by the company

has been widely recognized among the customers. In Oct. 2016, the company passed

the GP review of SONY and acquired the GP Certificate, and passed the certification

by other big accounts such as Huawei, LG and FIH. In 2016, the company made

active participation in dissemination and guidance meeting held by such clients as

the Quanta, Lenovo, LG, OPPO and Biel to master clients’ latest requirements on

management of harmful substance, and timely shared through the monthly meeting

of the platform’s management team to better serve the client and improve customer

satisfaction.

Total of HSF Training Courses:

2013 3

2014 8

2015 112016 12

2013

2014

2015

2016

Customer Satisfaction(Environmental Protection Management Chapter) Score:

97.0093

8779.75

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Social AccountabilityFor theEnvironm

ent

As the company’s large glass substrate, large and thin, might be destroyed during the takeoff, landing and loading/unloading during the

air transportation, the company adopted improvement measures in 2016. For bulk cargo transportation, the company continues to adopt

the method to “Quote by Vehicle and Cubic Meter” to properly design the logistics scheme, effectively improve the vehicle’s loading capacity,

save transportation cost and lower the company’s carbon emission amount. As to the transportation mode, for reduction of greenhouse gas

emission, the company constantly optimizes the air transportation mode to integrate the operation modes for air transportation and land

transportation. As revealed by statistics, domestic air transportation accounted for 6.1% of the entire logistics expense in 2015, and declined

to 4.4% in 2016. All production linkages at early stage are primarily promoted to reserve proper time for logistics.

By repeated use of packaging materials and change in the mode of transaction and loading, the company lowers the use of consumables.

Packaging materials delivered by the supplier, such as the tray, blister tray and paper angle bead, shall be reused as much as possible through

recollection and selection. W company adopts an packaging way mixing plastic tray and PPBOX to facilitate repeated use and daily tracking

and management and control, thus lowering the consumption, loss and packaging cost.

With regard to the CSR management for logistics suppliers, the company requires all transportation and logistics providers to sign the

CSR agreement to jointly shoulder the social responsibility. By the end of 2016, the company has required all the 10 logistics suppliers to sign

the agreement to promote the philosophy of social responsibility among logistics suppliers, thus achieving a win-win situation.

▏ Green Logistics

Work Plan for 2017

1. Strength the CSR management of the transportation and logistics supplier, complete the CSR review standard, and formulate the access and elimination mechanism.

2. For packaging material, such methods as repeated use of packaging material and change of loading mode are used to lower the use of consumables.

3. Ask all transportation and logistics suppliers to sign the CSR agreement and complete the annual CSR review for the supplier.

4. Further expand the scope for review of transportation and logistics supplier to cover even the warehousing and project suppliers.

54

▏ Green ITIn 2016, through process integration and optimization, and promotion of paperless working, the company

increased the number of online business to 202. OA application reached 435,495 times, up 9.8% compared to the

previous statistical phase. RMB349,063.5 was saved for paper use and printing, exceeding the objective to save

CNY320,000.

The company fulfilled the goal of energy saving and emission reduction through desktop virtualization project,

with power consumption by thin client declining from 1565784 KWH to 782892 KWH, 50% lower than traditional

PC, saving CNY79318.24 for power fare. In this project, the company enables a single server to be shared by

multiple environments through virtualization technology, enhancing the server utility by 66% and lowering the

power consumption from 1379458.08KWH to 829068.24 KWH, saving CNY418,296.28 for power fare. Besides, since

additional power is needed for cooling the heat generated by the operation of multiple servers, the company greatly

lowers the emission of carbon dioxide by integrating multiple servers into one via the virtualization technology.

Remarks: The above green product and service chapter only reveals the content about the "Four Offices and Five Subsidiaries in Mainland China".

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Social AccountabilityFor theEnvironm

ent

FOR THEEMPLOYEES

People First,

and Joint Growth

Preferred

56

We establish fair and just mechanisms, and create an inspiring and open environment for joint growth, happy work and delightful living.

The number of employees are primarily decided by the business expansion and change in capacity.

By the end of 2016, there have totally been 17495 employees employed by the Four Offices and Five Subsidiaries in Mainland China and the Japan NLT.

17495Totally 11358 males, accounting for

Totally 6137 females, accounting for

35.08 % 64.92 %

employees are aged above 50:

employees are aged below 30:

employees are from ethnic minorities:

employees are aged between 30 and 50:

Total of employeeswith fixed term:

Total of employeeswithout fixed term:

(persons)

(persons) (persons)

(persons)

(persons) (persons)

234

13222 945

4039

15009 2486

accounting for:

accounting for:

accounting for:

accounting for:

males: males:

females: females:

1.34 % 23.09 %

75.57 % 5.65 %

9726 16325283 854

Remarks: The number of employees mentioned above refer to the total of full-time employees, interns and dispatched workers.

(persons)

5756/

For theEm

ployeesSocial Accountability

Human RightsGuarantee

The company establishes various channels for communication to collect opinions and suggestions of the employee. The company also makes available the hotline and mailbox for whistle-blowing to deal with complaints and reports from the employee. Employees' Opinion Box is set up at eye-catching position in the canteen, dormitory and office areas, and assigns special persons to collect and respond in a regular basis. Also, the company organizes for employee communication meeting every month and employee representative meeting regularly to allow the employee to express their opinions. The company also timely answers questions concerned by the employee through the WeChat platform.

During the recruitment and employment, the company radically implements the social responsibility, pays attention to management and development of local talents, and prefers to employ people from local community, thus enhancing the local operation efficiency, increasing employment and taxation, and contributing to the development of local society.

As stipulated by the company regulations, no bias is allowed in the recruitment, promotion and salary setting process in terms of the race, sex, nationality, age, pregnancy or disability. No events or complaints concerning the said form of bias have been received since establishment of the company. It's clearly forbidden for the company to employ forced, debt-offset or contracted labors, and detailed and proper stipulations are made in major links such as the recruitment, employment and demission to prevent employment of forced labor. No labor forcing ever occurred during the operation of the company.

It's strictly forbidden to employ child laborers. We have formulated relevant policies and completed preventive measures in all major links during the recruitment and employment to prevent employment of child laborers. Meanwhile, we notify suppliers of this requirement and conduct regular monitoring and review to ensure no child laborer is employed. No case of child employment has ever been reported since the company was founded.

The company respects the employee's rights to freely form associations and carry out collective negotiation. Also, the Labor Union has been established to be in charge of collective negotiation and consultation. The collective contract for the Four Offices and Five Subsidiaries in Mainland China covers 100% of the employees. Representatives of the Labor Union are elected from the employees in a democratic way, who would express opinions on behalf of the employee to negotiate with the company as subject to no revenge. The company's Labor Union participates in the formulation or revision of all management systems related to the employees'interests and makes effective discussion on how to better guarantee the employees' rights.

58

Healthand Safety First

Safe ProductionIn 2016, the company maintains a constant trend of safe production and

fulfills the objective of safe production, without any accidents concerning safe production rated general or above occurring. The company was awarded the “Pioneering Organization for Safe Production” by AVIC in 2016. Wuhan Tianma was awarded the “Excellent Organization for Safe Production in 2015” by Wuhan Municipal Government and the “Demonstrative Organization for Construction of Safety Culture in Wuhan” by Wuhan Safe Production Supervision and Administration Bureau. Wuhan Tianma, Chengdu Tianma and Shanghai AVIC Optoelectronics respectively passed the class II review for safety standardization and acquired relevant certificates. The headquarters completed the archiving for preplans for safe production related accidents. Shanghai AVIC Optoelectronics was awarded the “Pilot Organization for Safe Production in Shanghai Zizhuang Industrial Zone in 2015” by the Safe Production Committee of Shanghai Zizhuang Industrial Zone and the Excellent Performer of the Ankang Cup National Competition(Shanghai Competition Area).

Fire SafetyUpholding the principle of “Prevention Prioritized, and Prevention and

Treatment Combined”, the company implements the fire safety accountability, actively coordinates with the competing fire-fighting department in the monitoring and inspection, and establishes micro fire-fighting station to realize automatic alarming for fire and linked control and implement the routine fire-fighting inspection, maintenance/servicing inspection of the fire-fighting system and fire safety training of the employee.

According to new regulations, key attention was paid to promoting personnel on duty in the Fire Control Room to attend the career training for fire-fighting for buildings and structures. For the emergency management and control, contingency team has been established and regularly organized to attend the initial and repeated training for instrument operation and emergency rehearsal, thus ensuring abnormal events in the plant can be handled in time. Meanwhile, employees were irregularly organized for emergency trainings and rehearsals such as emergency evacuation, self-rescue escape and fire-fighting, to enhance their emergency treatment ability. With no fire accidents occurring in 2016, the company fulfilled the objective of safe operation of that year.

Occupational HealthPersistently taking “Prevention Prioritized, and Prevention and Treatment

Combined” as the principle, the company put the prevention, control and elimination of occupational diseases and harms first. For the prevention and treatment of occupational diseases in 2016, key efforts were put in the basic level posts and the front line of the production line. The company proactively established and completed the management system for occupational hygiene, put in place detailed monitoring archives for occupational health, completed the information for occupational health management, and set specific archive for each employee. Furthermore, the company proactively conducted trainings and promotion for occupational hygiene, performed occupational hygiene monitoring, arranged the analysis form for safety of the occupational control posts, and promoted the fulfillment of monitoring of hazardous factors for occupational diseases and the preplans for emergency treatment for occupational hygiene events.

Wuhan Tianma and Chengdu Tianma rearranged the posts exposed to radiation, handed out radiation dosage test cards to specific person for regular inspection, and conducted regular monitoring of the machine unit and environment for radiation and occupational hygiene.

In 2016, no occupational disease events ever occurred in the company, and no death occurredin service. In 2016, 188 persons were involved in jobs related to occupational disease control, with 215 arranged for physical inspection, 120 inspected before taking the post, 81 inspected while in service and 14 inspected after leaving the post. All those employees 100% passed the inspection.

Remarks: The above chapter for Health and Safety First only reveals the condition in the Four Offices and Five Subsidiaries in Mainland China.

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Social AccountabilityFor theEm

ployees

To facilitate the company’s strategic development and promote the realization of the strategy for talent development, the company formulated and performed the talent development plan based on the demand of development of the employees’ capacity, thus enhancing the employees’professional skills and common capacities and strengthening the core competitiveness of the employee and enterprise.

Employee Training

Person-Time Person/Time/Qty.

Headquarters 1852 37040

Chengdu Tianma 901 21624

Shanghai Tianma 2914 82194

Wuhan Tianma 7041 128185Shanghai AVIC Optoelectronics 1553 23498

Japan NLT 771 7726

The company established the Tianma Academy to take charge

of the organization and implementation of employee training. With

considerable attention cast to the construction of training system, the

company has constantly staged multi-skill technician/all-skill technician

training, training for the company strategy and corporate culture, new

employee orientation training(including CSR training), and fresh graduate

training program(T-PLAN). In 2016, the Four Offices and Five Subsidiaries

in Mainland China collectively staged the training for improvement of

leadership and management skills(Falcon Plan 1, LAMP 1 and Roc Plan),

training for improvement of technical and guidance capacity(TAMP 1 –

Premiere Class/IE Class, Green Belt/Black Belt of 6 Sigma and TAMP 2 –

Lean Production Class), improvement of professionalism of key groups,

“232” training program(Taking Post to the Operational Sequence) and

Tianma’s academic education; and Japan NLT organized and staged the

PL training, SPC training, technician leader lecture, backbone technician

lecture and IP rules lecture.

The company wil l continue to pay major attention to the

improvement of management capacity of middle-class management

and make exquisite selection of training programs at all levels to

better allocate the training resources, design specific scheme for rapid

development of technicians(including newly employed graduates), further

strengthen the management system for internal trainers, including

the selection, certification, development and incentives for the trainer,

embark on building the overseas training mechanism to specify the

preliminary procedures for orientation and cultural training upon the

new employment, strengthen employee's understanding of CSR through

e-learning, and reinforce the training of English and Chinese. In 2017,

the Four Offices and Five Subsidiaries in Mainland China plan to perform

the Falcon Plan 2 and LAMP 2, while the Japan NLT proposes to present

such programs as the training for future operation leaders, management

training, seminars for newly elected directors/managers/heads, and

seminars and business renovation for fresh graduates.

Remarks:

Person-Timeinthetablemeansthetotalnumberofemployeeswhounderwenttrainingsin2016;Person/Time/Qty.referstototalhoursoftrainingtheemployeestookin2016.

60

The salary and welfare for the company’s employees are primarily decided by such factors as the status quo of the labor market, job value, work performance and capacity development. The salary and welfare levels are formulated based on features of different posts and positions to inspire the employees to the largest extent possible. The minimum wages offered by the company are not lower than the local standard. No difference in salary and welfare is resulted from the sex. The A+ABC performance management mode and occupational development examination scheme are adopted by the company for employee management and promotion examination. In 2016, 100% employees underwent the performance examination of the company.

▎ Salary and Welfare

In 2016, the welfare offered by the company covered 100% employees. The company paid the pension insurance, medical insurance, labor injury insurance, birth insurance, unemployment insurance and housing fund as required by the laws and regulations. Also, the company offered labor protection items, maternity leave and paternity leave, breastfeeding leave, marital leave and paid annual leave in accordance to specific post and sex of the employees. Throughout the year, the company handed activity expenses for the team building and holiday gift packs on occasion of any holidays.

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Social AccountabilityFor theEm

ployees

Traditional Festivals

Employee Care Activity

62

Sports Season

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Social AccountabilityFor theEm

ployees

Activity for Employees’ Relatives

Employee Birthday Party

64

Activity for Overseas Employees

America Tianma

Europe Tianma

Taiwan Tianma

Japan NLT

South Korea Tianma

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Social AccountabilityFor theEm

ployees

FOR THEPARTNER

Joint Development

for Win-win

Situation

66

The company is primarily replenished by hi-tech and labor intensive suppliers(respectively for forepart material of LCD and material

for customized pieces), as supported by equipment manufacturers, spare parts agents, culture and education agents and e-commerce

practitioners. Through better automation, the labor intensive suppliers gradually lower our dependence upon laborers. During the report

period, the company introduced 216 new suppliers and eliminated 98 existing ones. As of the end of 2016, the company had 2038 suppliers

in hand in total, with 1625 for transaction by Renminbi and 413 for transaction by foreign currency. Throughout the report period, no

major changes took place in the suppliers’ location and the structure of supply chain. By the material characteristics, the company’s

suppliers are divided into four classes, with Class I – III suppliers responsible for production matters and Class IV suppliers accountable

for non-production matters. There are 528 production suppliers in charge of direct materials used for LCD & LCM and chemicals and

gases used for the production. 1510 non-production suppliers are in charge of supplying equipment and relevant spare parts, and fixed

resources. Showing great intention to use and develop local suppliers, the company established the index for coverage by domestic

material/equipment and according action plan. In 2016, the company spent RMB7 bln in procurement, with RMB4.1 bln spared to domestic

suppliers, accounting for 59% in the total amount.

The company established the management procedures for procurement business in 2011 to specify clear requirements on strategy

formulation, resource development, supplier introduction and supplier management. To promote the supplier to jointly shoulder the social

responsibility, the company required all suppliers to sign the CSR agreements. Only upon signing the CSR agreement can new suppliers

be accepted for cooperation with Tianma. The CSR agreement specified requirements on human rights, laborer practice, environment,

occupational health and safety and business ethics, as well as articles for elimination due to violation. Resource procurement personnel are

responsible for the specific promotion of the signing of CSR agreement, while SQE personnel for the regular review of the supplier. No child

laborer or forced labor, nor suppliers of major actual/potential negative impact on environment, human rights, labor or society are found.

▎ Supplier Management

Work Summary for 2016 Work Plan for 2017

1. 87 suppliers signed the Commitment for Conflicting Metals;2. Investigation of 42 suppliers of conflicting mines was completed;3. Response rate of the client for conflicting mines reached 100%;4. The company’s Quality Management Department is responsible for training on conflicting mine management for the QS, Sourcing and suppliers.

1.100% of suppliers of conflicting mines signed the Commitment for Conflicting Metals;2. 100% of suppliers of conflicting mines investigated the conflicting mines;3. 100% of clients responded to the investigation of conflicting mines;4. Gradually optimized the stipulations on investigation and management of conflicting mines and continuously performed dissemination and guidance of conflicting mines management.

Management of Conflicting Mines

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Social AccountabilityFor thePartner

E-Sourcing E-Office E-CompetitionThe Procurement Center established the E-Sourcing

P lat form to incorporate such businesses as suppl ier

management, inquiry, bidding and price management.

Transforming the previous way of communication with suppliers

through mail and phone call to the current way online, it now

recorded the content of communication in real time. Through

such initiatives made for the fair competition among suppliers

and for the timing competition online, it allowed suppliers to

rank by the time-limited price competition, and urged suppliers

to rapidly quote to get a price lower than expected. By creating

a fair, just environment for online evaluation of projects, making

strict control over unfair quotation and risks, and visualizing the

information, it prevented the occurrence of black case operation,

improved the employee’s working efficiency and erected a

favorable image for Tianma.

In 2016, the company improved the procurement mode for

the sake of a better profit. In 2016, the procurement through the

e-platform covered 45% of production materials, solving 90% of

demands of general resources and 65% of competitive resources.

Global Supplier Meeting of Tianma in 2016

On March 10, 2016, the “Innovation and Leading” Global

Supplier Meeting of Tianma in 2016 was held in Xiamen, where

over 400 industrial elites from the US, Europe, Japan, South

Korea and Taiwan convened together to discuss on the new

blueprint together. On this meeting, senior management of

the company delivered remarkable keynote speeches on the

planning of consumables and professional display market, the

technical development trend, and the resources procured and

their quality, and shared with 194 suppliers of core materials,

equipment and technology from the world the promising

prospect of our cooperation. To appreciate the all-round support

by those cooperative partners, the company awarded honorary

trophies to outstanding suppliers to reward their support and

cooperation with Tianma. As led by Ms. Liu Jingyu, the senior

management of the company announced the Non-corruption

Commitment on site. Upholding the cooperation principle to be

fair, just and open, Tianma will join hands with all partners to

make constant innovation and active progress, create a powerful

display industrial chain and bring a brand new tomorrow for the

development of the display industry!

68

Outsourcer Management

Incorporating outsourcers in charge of the canteen, property

management and employee shuttle into the CSR management system,

the company establishes the database for management of outsourcers,

selects excellent outsourcers and regularly holds onsite/video meetings

to gradually realize the collective management of the entire company and

take into account management modes characteristic of specific locations. In

2016, to monitor food safety from the very beginning, the company greatly

promoted the regularized management for ingredient procurement channels

for food suppliers of the entire company, collecting candidate brands of

major ingredients and the supply channel information at the earlier stage,

and conducting site investigation in accordance with relevant national

requirements on safety and hygiene at the middle stage until the plan was

finalized. Also, the company made active efforts to lower the negative impact

brought to the environment by free vehicles and employee shuttles rented

outside. Throughout 2016, the company’s vehicles and employee shuttles

consumed 210,000l fuel oil. Although no security personnel were under

direct employment of the company in 2016, 266 security persons were

provided by third parties, who 100% attended the human rights training. In

2017, the company schedules to adopt the mode for uniform management

and evaluation of the logistics supplier, thus creating an excellent office

environment and prominent living quality for the employees.

6968/

Social AccountabilityFor thePartner

Focusing on the market of displays for consumption mobile terminals and the market of professional displays, the companychiefly serves customers in Mainland China, Taiwan, Europe, America, Japan and South Korea.

▎ Customer Relationship

Management on Customer SatisfactionFor the customer satisfaction investigation in 2016, the company upheld the principle to be chosen

by customer and be objective. For the principle of customer’s choice, full communication was conducted

with relevant departments, especially the Sales Team, through a transparent process, to listen to opinions

of targeted big account of the company. As to the principle of objectivity, different departments were

engaged for the cross-investigation to keep the objectivity and justice.

In 2016, the company totally investigated 10 clients from the mobile intelligent terminal sector with

100% reply rate, and sent 27 questionnaires for clients from the professional display sector with 100%

reply rate. From the investigation, clients generally show good satisfaction, basically the same with 2015.

While the client favors our quality, service and communication, improvement is still needed for the price

and delivery due to the fluctuation in the overall market in 2016.

70

2485 Principle(Principles for Dealing with Quality Issues of the Client):

Complaint TreatmentIn 2016, coupled with the strategic goals to “seize the market, strengthen

the capacity and optimize the cost”, the company established the graded

management mechanism for customer quality. To fulfill the client’s quality

requirement, all units of the company shall make due efforts. Thus, the Customer

Service Department and the Product Quality Department were integrated into

the Customer Quality Assurance Department, thus better guaranteeing the

quality.

Sales Principle Seminar of Japan NLTJapan NLT holds the Sales Principle Seminar for the agents

every year. It held two such seminars respectively in Kawasaki in

January 2016 and in Osaka in July 2016. With the two seminars,

it introduced to its 13 product agents the sales principle

and product planning of the company, thus reinforcing the

cooperation relationship between the company and its agents.

As stipulated in the company’s Client

Development and Management Procedure, the

production and R&D must be separated from

transaction execution during the transaction

to ensure all clients have fair opportunities for

transaction. Also, the company established

the Price Decision Committee to approve

the company’s quotation and transaction

price with the client to ensure fairness of the

transaction. No litigations associated with the

Anti-unfair Competition Law or Antitrust Law

were proposed in 2016. According to articulate

stipulations on protection of the client privacy

in the Management System for Commercial

Ethics, it’s never allowed to collect the client

information in an illegal way or disclose such

information. No complaints concerning the

infringement of client’s privacy or disclosure

of client’s materials were raised in 2016. For

the legal operation, the company never sold

forbidden items in forbidden market, nor

products doubted by stakeholders or the public.

No fines or warnings due to violation against

laws and regulations for market promotion,

health and safety of the product/service, and

information and identification of the product/

service, or events of violation against relevant

voluntary principle were incurred in 2016.

Emergency measures shallbe taken and secondary response be made

24Hwithin

First response shall be made

2Hwithin

Cause analysis, countermeasureformulation and third responseshall be made

48Hwithin

Countermeasure implem-entation, countermeasure’s effectiveness verification and the fourth response shall be made

5Dwithin

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Social AccountabilityFor thePartner

Excellent Cooperative Partner by Gionee GroupOn Jan. 26, 2016, Tianma was awarded the Excellent Cooperative Partner Prize by Gionee Group.

Best Supplier Prize by Continental WHOn the suppliers meeting held by Continental Automotive WH on Jan. 28, 2016, Tianma was awarded the Best Supplier Prize by ContinentalWH in view of our outstanding products and services as the only LCD supplier winner. This was the first prize of this sort Tianma had ever acquired from a vehicle-mounted device client.

Excellent Supplier and Project Development Prize by VisteonKnown as a leading automotive parts manufacturer in the world for its prominent product quality and first-tier performance, Visteon has always kept high standards and strict requirements for its suppliers. Winning of the two prizes fully embodies the reliability and stability of the vehicle-mounted products of Tianma. It’s worth mentioning that Tianma is the only LCD supplier winner of this prize by Shanghai Visteon.

Supplier of Best Quality Control by ASUSWinning the Supplier of Best Quality Control Prize of ASUS for the first time, Tianma became the largest LCD supplier for ASUS.

Part of the Prizes Awardedby Clients in 2016

Excellent Supplier by Shenzhen KaifaTianma was awarded the Excellent Supplier Prize by Shenzhen Kaifa technology co., LTD., on behalf of clients to tianma affirmation, fully embody the customer of tianma high recognition of product quality and service.

72

Excellent Quality Prize by HuaweiTianma was awarded the Excellent Quality Prize on the Customized Piece Material Supplier Quality Meeting by Huawei.

Best Quality Partner by HuaweiOn the Core Partner Convention held by Huawei on Nov. 15, 2016, Tianma was awarded the Best Quality Partner in 2016 for its excellent performance in quality and delivery. Among the four winners selected from hundreds of suppliers for Huawei, Tianma was the only winner in the field of LCD&TP and Camera.

Diamond Prize for Supplier by LenovoOn the core suppliers meeting held by Lenovo on May 17, 2016, Tianma stood out as the representative of excellent supplier of mobile business from hundreds of suppliers from across the globe to win the highest prize by the Lenovo Group, the Diamond Prize for Supplier, following winning of the Diamond Prize for Mobile Business the previous year.

Best Key Account by SiemensOn the suppliers meeting held by Siemens in Erlangen, Germany on May 3, 2016, Tianma was awarded the Key Account prize. This prize was presented to excellent supplier doing well in customer management, communication, response and product. Tianma was the only LCD supplier winning this prize.

Excellent Cooperative Partner by MindrayOn the suppliers meeting held by Mindray on Apr. 16, 2016, Tianma was awarded the Excellent Cooperative Partner. This award was prepared for suppliers of outstanding performance in product, quality and service. Tianma became the only LCD supplier winning this award.

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Social AccountabilityFor thePartner

FOR THECOMMUNITY

Joint Development

for Win-win

Situation

74

Fund Impoverished Students in Wuxue High School

The Party Committee of Wuhan Tianma has reached an agreement with Hubei Loving Heart Society to fund three impoverished students in a one-to-one sponsoring method until their graduation from high school since 2014. In the third year upon start of this project in 2016, the Party Committee of Wuhan Tianma continued to fulfill their commitment to finance three impoverished students in Wuxue High School until their graduation.

Pass down the Love – Clothes Donation

In Sep. 2016, Wuhan Tianma donated 200 pieces of T-shirts to the Enshi Branch, Hubei Charity Association.

Enrich the Life with Love – Charitable Donation

In June 2016, the Party Committee of Wuhan Tianma assisted the module plant to call upon the entire employees to donate for the colleague suffering from leukemia. With all employees making their respective contribution, all branches collected over RMB10,000 donation to help the sufferer to complete the treatment.

7574/

For theCom

munity

Social Accountability

Visit of Buddha Hill Nursing Home

It’s an ever-lasting topic to “Care the Senior Citizens and the Society”. As scheduled by the Party Committee of Wuhan Tianma, Party member volunteers visited the Buddha Hill Nursing Home on the morning of Dec. 24, 2016 to serve the nursing home and spend the Christmas in advance together with the senior citizens. Dressing up as the Santa Claus wearing the Christmas hat and antler, the volunteers brought a sense of delight to the nursing home. Upon communication with the nursing home staffs, the volunteers were divided into two groups, one in charge of sending the apple to the 181 senior citizens in the nursing home and the other responsible for hanging the cleaned curtain in each room. In this visit, the volunteers fully embodied the pursuit of passion, efficiency and win-win situation of Tianma staffs to have collective praise by all the senior citizens.

In a hope to pass down the precious tradition to respect the senior citizens among those twentysomethings and thirtysomethings, Wuhan Tianma organized this visit to allow young Party members to know more about the daily life of the senior citizens living in the nursing home, thus infilling them with the spirit to respect and honor the senior citizens.

Jointly Build a Beautiful Home Environmental Action

On June 23, 2016, the Party Committee of Wuhan Tianma and the Environmental Safety Department organized over 50 volunteers from the Party members and department staffs to spend 2h after work clearing out wastes along the bank of Tangxun Lake in the Jiangxia Dragon-hidden Island Wetland Park of Wuhan.

76

Visit the Nursing Home on Double Ninth Festival

To carry forth the Chinese tradition to respect the senior citizens and execute the initiative to “Warm the Senior Citizens with Our Joint Efforts”, Party Committee of the Shanghai AVIC Optoelectronics visited Zizhuang Industrial Zone Nursing Home to express greetings and blessings to the senior citizens.

Lei Feng Activity

To commemorate the 95th anniversary for establishment of CPC, in according to the arrangement of the Party Construction Project in Zizhuang Industrial Zone, the Party Committee of Shanghai AVIC Optoelectronics organized Party members to offer various voluntary services to local residents simply on the park square as hair cutting, shoe polishing, domestic appliances repair and knife sharpening.

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Community Cleaning Activity

On April 11, 2016, 110 employees of Japan NLT volunteered for cleaning roads around the factory.

Open Access to the Plant

On Sep. 15, 2016, Japan NLT opened access to its plant to 17 senior students of the Nursing Department of Akita University of Nursing and Welfare under the Japanese Red Cross to help them practice their internship of industrial nursing. On Sep. 29, 2016, Japan NLT opened access to its plant to 47 junior students of the Science and Engineering Department of Akita University to strengthen their occupational education and awareness.

Open Access to the Plant Facilities

From April to November each year, Japan NLT opened the access to its in-plant tennis court to the residents of local communities and members of the Tennis Association of neighboring junior and senior high schools.

78

Participation in Akita Kanto Festival

In Aug. 2016, Japan NLT dispatched 8 employees upon sponsorship to participate in the Akita Kanto Festival, a major national intangible cultural heritage in Japan. This participation played an important role not only in passing down the national intangible cultural heritage of Japan but in promoting the company image.

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Fund the Children's School

On Aug. 12, 2016, the American Office of Tianma NLT donated USD5000 to the charitable organization C/O Schwab, which further distributed this donation to a Children’s School in Nairobi, Kenya. For this school of students from families with AIDS sufferers, this donation would help them admit more children for study and build necessary buildings on the campus.

80

Fund the Charitable Institutes

On Aug. 26, 2016, the American Office of Tianma NLT donated USD1000 to the charitable institute SacredHeart Community Service, a San Jose-based organization devoted to helping those starving and homeless people by offering individuals and families in need the basic provisions of food and clothes.

Fund the Sports Events of Middle Schools

Throughout 2016, the American Office of Tianma NLT donated USD1951.35 to the charitable institute Community Al l -Stars to maintain and improve the sports events in the two schools sited near the office, the Chino High School and the Ruben S. Ayala High School.

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Appendix

GRI Reference Table

Standard disclosure (Part I) General Standard Disclosure Note：" ● ": full disclosure; " ○ ": Undisclosed

G4 indicators Index Disclosure degree

1. Strategy & analysis

G4-1 Statement from the most senior decision maker of the organization about the relevance of sustainability to the organization and its strategy.

P4、P5、P12、P13、P18、P19 、 P28

●

G4-2 Description of key impacts, risks, and opportunities. P4、P5 ○

2. Organizational Profile

G4-3 Name of the organization P8 ●

G4-4 Primary brands, products, and/or services. P8 ●

G4-5 Location of organization's headquarters. P8 ●

G4-6 Number of countries where the organization operates, and names of countries with either major operations or that are specifically relevant to the sustainability topics covered in the report.

P14、P15 ●

G4-7 Nature of ownership and legal form. P8 ●

G4-8 Markets served (including geographic breakdown, sectors served, and types of customers/beneficiaries). P8、 P70 ●

G4-9 Scale of the reporting organization.P8、P9、P14、 P15、P41、P57

●

G4-10 Total number of employees by employment contract and gender P57 ●

G4-11 Report the percentage of total employees covered by collective bargaining agreements. P58 ●

G4-12 Describe the organization's supply chain. P67 ●

G4-13 Significant changes during the reporting period regarding size, structure, or ownership P8、P9、P67 ●

G4-14 Explanation of whether and how the precautionary approach or principle is addressed by the organization. P10、 P25、P50 ●

G4-15 Externally developed economic, environmental, and social charters, principles, or other initiatives to which the organization subscribes or endorses. P87 ●

G4-16

Memberships in associations (such as industry associations) and/or national/international advocacy organizations in which the organization: ·Has positions in governance bodies;· Participates in projects or committees;· Provides substantive funding beyond routine membership dues; or·Views membership as strategic. Mainly memberships kept in the name of the organization.

P87 ●

3. Identified Material Aspects and Boundaries

G4-17 All entities included in the organization's consolidated financial statements and if any of these are not covered in the report.

P2、 P8、P9P14、P15

●

G4-18 Process for defining report content and aspect boundaries and how the organization implemented the Reporting Principles for Defining Report Content. P2 ●

G4-19 List all the material aspects identified in the process for Defining Report Content. P28 ●

G4-20 For each material aspect report the boundary within the organization P29 ●

G4-21 For each material aspect report aspect boundary outside the organization P29 ●

G4-22 Report the effect of any restatements of information provided in previous reports, and the reasons for such restatements. P25 ●

G4-23 Report significant changes from previous reporting periods in the Scope and Aspect Boundaries. P28 ●

4. Stakeholder Engagement

G4-24 Provide a list of stakeholder groups engaged by the organization. P27 ●

G4-25 Basis for identification and selection of stakeholders with whom to engage. P26 ●

G4-26 Approaches to stakeholder engagement, including frequency of engagement by type and by stakeholder group. P27 ●

G4-27 Key topics and concerns that have been raised through stakeholder engagement, and how the organization has responded to those key topics and concerns, including through its reporting.

P28 ●

5. Report Profile

G4-28 Reporting period (e.g., fiscal/calendar year) for information provided. P2 ●

G4-29 Date of most recent previous report (if any). P25 ●

G4-30 Reporting cycle (such as annual, biennial, etc.) P2 ●

G4-31 Contact point for questions regarding the report or its contents. Back cover ●

G4-32 Table identifying the location of the Standard Disclosures (core or overall) in the report. P2 ●

G4-33 Policy and current practice with regard to seeking external assurance for the report P2 ●

82

G4 indicators Index Disclosure degree

6. Governance

G4-34 Governance structure of the organization, including committees under the highest governance body responsible for specific tasks, such as setting strategy or organizational oversight.

P10 ●

G4-35 State the process that the highest governance body authorizes the senior management and other employment to manage economic, environmental and social topics. P10 ○

G4-36 Whether the organization has appointed an executive level position(s) with responsibility for economic, environmental, and social topics and whether post holders report directly to highest governance body.

P10 ○

G4-37 Process for consultation between stakeholders and the highest governance body on economic, environmental, and social topics. If consultation is delegated, describe to whom and any feedback processes to the highest governing body.

一 ○

G4-38 Composition of the highest governance body and its committees. P10 ○

G4-39 Indicate whether the Chair of the highest governance body is also an executive officer. (If yes, indicate his/her duties and the reason of the arrangement.) 一 ○

G4-40 Report nomination and selection process for highest governance body and its committees and criteria used for nominating and selecting highest governance body members.

一 ○

G4-41 Processes in place for the highest governance body to ensure conflicts of interest are avoided and managed. 一 ○

G4-42 Roles for development, approval, and updating of organization's purpose, value or mission statements, strategies, policies, and goals related to economic, environmental and social impacts.

一 ○

G4-43 Measures taken to develop and enhance highest governance body's collective knowledge of economic, environmental and social topics. 一 ○

G4-44

Processes for evaluating highest governance body's own performance. Whether the evaluation is conducted independently, and what's the frequency thereof. Whether the evaluation is self-evaluation; The measures for evaluating the performance of the highest governance body in economic, environmental and social issue management shall at least contain the changes in membership and organizational management.

一 ○

G4-45

Highest governance body's role in the identification and management of economic, environmental and social impacts, risks, and opportunities, including due diligence and stakeholder consultation;Whether the consultation of the stakeholders are adopted to support the identification and management of the highest governance body of economic, environmental and social impacts, risks and opportunities.

一 ○

G4-46 Highest governance body's role in reviewing effectiveness of organization's risk management processes for economic, environmental and social topics. 一 ○

G4-47 Frequency of highest governance body's review of economic, environmental and social impacts, risks, and opportunities. 一 ○

G4-48 Highest committee or position that formally reviews and approves organization's sustainability report and ensures all material aspects are covered. 一 ○

G4-49 Process for communicating critical concerns to highest governance body. 一 ○

G4-50 The property and total number of the issues concerned the most by the highest governance body, and the solutions it takes. 一 ○

G4-51 The remuneration policies of the organization and the senior management; the linkage between compensation for members of highest governance body, senior managers, and executives, and organization's performance.

一 ○

G4-52 Process for determining remuneration 一 ○

G4-53 Stakeholders' views regarding remuneration including the results of votes on remuneration policies and proposals, if applicable. 一 ○

G4-54Ratio of the annual total compensation for the organization's highest-paid individual to the median annual total compensation for all employees (not including the highest-paid individual).

一 ○

G4-55Ratio of percentage increase in annual total compensation for organization's highest-paid individual to the median percentage increase in annual total compensation for all employees (not including the highest-paid individual).

一 ○

7. Business Ethics and Integrity

G4-56 The organization's values, principles, standards and norms of behavior such as codes of conduct and codes of ethics. P11 、P36、P37 ●

G4-57 An internal and external mechanism to seek suggestions on ethics and lawful behaviors and affairs related to the organization's integrity such as help hotlines or suggestions hotlines.

一 ○

G4-58 An internal and external mechanism to report unethical or unlawful behaviors and affairs related to the organization's integrity such as report through director managers or whistle blowing mechanism or hotlines.

一 ○

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Appendix

Standard Disclosure (Part II): Specific Standard Disclosure

Category Management method and index Page

Economic

G4-DMA State why this aspect is material, the impact of making this aspect material, how the organization manages the material aspect and its impact, and the evaluation on management method

P26、P28、P41

G4-EC1 Direct economic value generated and distributed by the organization P41、See annual report

G4-EC2 Risks and opportunities posed by climate change P44-P55

G4-EC3 Coverage of the organization's defined benefit plan obligations P61

G4-EC4 Financial assistance received from government 一

G4-EC5 Ratios of standard entry level wage by gender compared to local minimum wage at significant locations of operation

P61

G4-EC6 Proportion of senior management hired from the local community at significant locations of operation 一

G4-EC7 Development and impact of infrastructure investments and services supported 一

G4-EC8 Significant indirect economic impacts, including the extent of impacts 一

G4-EC9 Proportion of spending on local suppliers at significant locations of operation P67

Environmental

G4-DMA State why this aspect is material, the impact of making this aspect material, how the organization manages the material aspect and its impact, and the evaluation on management method

P26 、P28、P44

G4-EN1 Materials used by weight or volume 一

G4-EN2 Percentage of materials used that are recycled input materials 一

G4-EN3 Energy consumption within the organization 一

G4-EN4 Energy consumption outside of the organization 一

G4-EN5 Energy intensity 一

G4-EN6 Reduction of energy consumption P48

G4-EN7 Reductions in energy requirements of products and services 一

G4-EN8 Total water withdrawal by source P48

G4-EN9 Water sources significantly affected by withdrawal of water 一

G4-EN10 Percentage and total volume of water recycled and reused 一

G4-EN11 Operational sites owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas

一

G4-EN12 Description of significant impacts of activities, products, and services on biodiversity in protected areas and areas of high biodiversity value outside protected areas

一

G4-EN13 Habitats protected or restored 一

G4-EN14 Number of IUCN Red List species and national conservation list species with habitats in areas affected by operations, by level of extinction risk

一

G4-EN15 Direct greenhouse gas (GHG) emissions (Scope 1) 一

G4-EN16 Energy indirect greenhouse gas (GHG) emissions (Scope 2) 一

G4-EN17 Other indirect greenhouse gas (GHG) emissions (Scope 3) 一

G4-EN18 Greenhouse gas (GHG) emissions intensity 一

G4-EN19 Reduction of greenhouse gas (GHG) emissions P48

G4-EN20 Emissions of ozone-depleting substances (ODS) 一

G4-EN21 NOX, SOX, and other significant air emissions 一

G4-EN22 Total water discharge by quality and destination P48

G4-EN23 Total weight of waste by type and disposal method 一

G4-EN24 Total number and volume of significant spills P46

G4-EN25 Weight of transported, imported, exported, or treated waste deemed hazardous under the terms of the Basel Convention Annex I, II, III, and VIII, and percentage of transported waste shipped internationally

一

G4-EN26 Identity, size, protected status, and biodiversity value of water bodies and related habitats significantly affected by the organization's discharges of water and runoff

一

G4-EN27 Extent of impact mitigation of environmental impacts of products and services 一

G4-EN28 Percentage of products sold and their packaging materials that are reclaimed by category 一

G4-EN29 Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with environmental laws and regulations

P34

G4-EN30 Significant environmental impacts of transporting products and other goods and materials for the organization's operations, and transporting members of the workforce

P69

G4-EN31 Total environmental protection expenditures and investments by type P47

G4-EN32 Percentage of new suppliers that were screened using environmental criteria P67

G4-EN33 Significant actual and potential negative environmental impacts in the supply chain and actions taken P67

G4-EN34 Number of grievances about environmental impacts filed, addressed, and resolved through formal grievance mechanisms

一

84

Category Management method and index Page

Social Performance

-Labor

Practices and Decent Work

G4-DMA State why this aspect is material, the impact of making this aspect material, how the organization manages the material aspect and its impact, and the evaluation on management method

P26、 P28、P56- P65

G4-LA1 Total number and rates of new employee hires and employee turnover by age group, gender and region 一

G4-LA2 Benefits provided to full-time employees that are not provided to temporary or part-time employees, by significant location of operation P61

G4-LA3 Return to work and retention rates after parental leave, by gender P61

G4-LA4 Minimum notice periods regarding operational changes, including whether these are specified in collective agreements 一

G4-LA5 Percentage of total workforce represented in formal joint management-worker health and safety committees that help monitor and advise on occupational health and safety programs P45

G4-LA6 Type of injury and rates of injury, occupational diseases, lost days, and absenteeism, and total number of work-related fatalities, by region and by gender P59

G4-LA7 Workers with high incidence or high risk of diseases related to their occupation P59

G4-LA8 Health and safety topics covered in formal agreements with trade unions 一

G4-LA9 Average hours of training per year per employee by gender, and by employee category P60

G4-LA10 Programs for skills management and lifelong learning that support the continued employability of employees and assist them in managing career endings P60

G4-LA11 Percentage of employees receiving regular performance and career development reviews, by gender and by employee category P61

G4-LA12 Composition of governance bodies and breakdown of employees per employee category according to gender, age group, minority group membership, and other indicators of diversity P57

G4-LA13 Ratio of basic salary and remuneration of women to men by employee category, by significant locations of operation P61

G4-LA14 Percentage of new suppliers that were screened using labor practices criteria P67

G4-LA15 Significant actual and potential negative impacts for labor practices in the supply chain and actions taken P67

G4-LA16 Number of grievances about labor practices filed, addressed, and resolved through formal grievance mechanisms 一

Social Performance

-Human Rights

G4-DMA State why this aspect is material, the impact of making this aspect material, how the organization manages the material aspect and its impact, and the evaluation on management method P26、P28、P58

G4-HR1 Total number and percentage of significant investment agreements and contracts that include human rights clauses or that underwent human rights screening 一

G4-HR2 Total hours of employee training on human rights policies or procedures concerning aspects of human rights that are relevant to operations, including the percentage of employees trained 一

G4-HR3 Total number of incidents of discrimination and corrective actions taken P58

G4-HR4 Total number of incidents of discrimination and corrective actions taken P58

G4-HR5 Operations and suppliers identified as having significant risk for incidents of child labor, and measures taken to contribute to the effective abolition of child labor P58、 P67

G4-HR6 Operations and suppliers identified as having significant risk for incidents of forced or compulsory labor, and measures to contribute to the elimination of all forms of forced or compulsory labor P58、 P67

G4-HR7 Percentage of security personnel trained in the organization's human rights policies or procedures that are relevant to operations P69

G4-HR8 Total number of incidents of violations involving rights of indigenous peoples and actions taken 一

G4-HR9 Total number and percentage of operations that have been subject to human rights reviews or impact assessments P25

G4-HR10 Percentage and total number of operations that have been subject to human rights reviews and/or impact assessments. P67

G4-HR11 The significant and practical, as well as potential negative effects of the supply chain on human rights. P67

G4-HR12 Number of grievances about human rights impacts filed, addressed, and resolved through formal grievance mechanisms 一

Social Performance

-Society

G4-DMA State why this aspect is material, the impact of making this aspect material, how the organization manages the material aspect and its impact, and the evaluation on management method

P26、 P28、 P74- P81

G4-SO1 Percentage of operations with implemented local community engagement, impact assessments, and development programs 一

G4-SO2 Operations with significant actual and potential negative impacts on local communities 一

G4-SO3 Total number and percentage of operations assessed for risks related to corruption and the significant risks identified P37

G4-SO4 Communication and training on anti-corruption policies and procedures P37

G4-SO5 Confirmed incidents of corruption and actions taken 一

G4-SO6 Total value of political contributions by country and recipient/beneficiary 一

G4-SO7 Total number of legal actions for anti-competitive behavior, anti-trust, and monopoly practices and their outcomes P71

G4-SO8 Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with laws and regulations P35

G4-SO9 Percentage of new suppliers that were screened using criteria for impacts on society P67

G4-SO10 Significant actual and potential negative impacts on society in the supply chain and actions taken P67

G4-SO11 Number of grievances about impacts on society filed, addressed, and resolved through formal grievance mechanisms 一

Social Performance

-Product

Responsibility

G4-DMA State why this aspect is material, the impact of making this aspect material, how the organization manages the material aspect and its impact, and the evaluation on management method

P26、P28、 P50-P53、 P71

G4-PR1 Percentage of significant product and service categories for which health and safety impacts are assessed for improvement 一

G4-PR2 Total number of incidents of non-compliance with regulations and voluntary codes concerning the health and safety impacts of products and services during their life cycle, by type of outcomes P71

G4-PR3 Type of product and service information required by the organization's procedures for product and service information and labeling, and percentage of significant product and service categories subject to such information requirements

一

G4-PR4 Total number of incidents of non-compliance with regulations and voluntary codes concerning product and service information and labeling, by type of outcomes P71

G4-PR5 Results of surveys measuring customer satisfaction P71

G4-PR6 Sale of banned or disputed products P71

G4-PR7 Total number of incidents of non-compliance with regulations and voluntary codes concerning marketing communications, including advertising, promotion, and sponsorship, by type of outcomes P71

G4-PR8 Total number of substantiated complaints regarding breaches of customer privacy and losses of customer data P71

G4-PR9 Monetary value of significant fines for non-compliance with laws and regulations concerning the provision and use of products and services P71

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Appendix

Terminology Note

GRI Global Reporting Initiative About the report

LTPS Production Line Low Temperature Poly-silicon

Remarks from the Management

AM-OLED Active Matrix/Organic Light Emitting Diode

POS point of sale

HMI Human Machine Interface

In-Cell Technology The touch integration technology to embed the touch panel function into the LCD pixels

Technical Innovation and Advancement

TED Force TouchTechnology Embedded pressure sensing touch display technology

Flexible AM-OLEDTechnology Flexible AMOLEDtechnology

Oxide TFT Technology Metal oxide TFT technology

Naked Eye 3D Technology Naked eye 3D display technology

AM-OLED display Active Matrix/Organic Light Emitting Diode

PPI Resolution

VR Virtual Reality Business Development in 2016AR Augmented Reality

CSR Corporate-Social-Responsibility CSR Management

CPO Experts of the Committee for Patent Review, generally referring to the Committee for Patent Review

F e a t u r e o n I n t e l l e c t u a l Property Right Protection

EHS Environment, safety and health

Environmental ProtectionKWH Kilowatt hour

OAC Fresh air treatment unit

DQV Design Quality Verification

Green Product and Service

GP Green product

SVHC Substance of very high concern

REACH Regulation concerning the Registration, Evaluation，Authorization and Restriction of Chemicals

HSF Hazardous substances free

XRF X Ray Fluorescence

LAMP Leadership And Management Program Employee Training

LCD Liquid crystal displaySupplier Management

LCM Liquid crystal module

Terminology

86

Associations and Organizations Membership Based upon the company’s business strategic objectives and coupled with the concern by stakeholders, the company supports the following associations and organizations to initiate treaties, principles or proposals concerning the economy, environment and society.

National Flat Panel Display Technology Standardization Committee

Federation of Shenzhen Industries

Shenzhen Enterprise Confederation and Shenzhen Entrepreneur Association

Shenzhen Flat Panel Display Industry Association

Shenzhen High-tech Industry Association

Shenzhen Optoelectronic Display Industry Patent Alliance

Virtual Reality Industrial Association

China Electronic Chemical Materials Alliance

China Optics and Optoelectronics Manufacturers Association LCB

China Association for Public Companies

Shenzhen Association for Public Companies

Shanghai Optoelectronics Industrial Association

Sichuan Flat Panel Industrial Association

Chengdu Electronic Information Industrial Association

SID Display Industry Award Committee

SID Program Committee

SID Asia Committee

IDW (International Display Workshops)

ITC(International Thin-film transistor Conference)

The Laser Society of Japan

Vice Chairman

Vice Chairman

Vice Chairman

Vice Chairman

Common Member

Common Member

Member

Managing Director

Vice Chairman

Member

Member

Vice Chairman

Vice Chairman

Vice Chairman

Member

Member

Member

Member

Vice Chairman

Program Member

Member

Program Member

AM-FPD(Workshop on Active-Matrix FlatPanel Displays and Devices) Execution Committee

Electrical Association Volume II Next Generation Interactive Display Collaborative Research Committee

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Appendix

Reader's Feedback Dear readers,

Thanks for reading the 2016 CSR Report of Tianma. Your opinions and suggestions are valued and welcomed by us. Thanks for your participation.

Tianma Microelectronics Co., Ltd. March 2017

Note: each index is scored within a scale of 1~5.

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