I、In order to achieve the objectives stated in the Corporate Social Responsibility Best Practice Principles, the following practical operations have been set:

1. Supplier screening, management, evaluation and selection.
2. Environmental impact assessment.
3. Green building promotion.
4. Pro-active measures of construction site management to reduce environmental pollution.
5. Building water saving, waste recycling and reduction and construction site environmental protection.
6. OSH policy and management.
7. In supplier contracts, request suppliers to comply with examples of relevant regulations for issues of environmental protection, safety or health, etc. For example: Contracts of paint, bonding agent waterproofing, wooden construction, etc.

II、Operating procedures are as follows:

　（1）Supplier screening, management, evaluation and selection: Construction industry is a highly complicated industry, and it requires an operating team with a highly professional work allocation and high integration. During the operating process, the interface integration and work allocation discussion from each team are required. Increase of efficiency, stable quality, transparent policy and establishment of cooperative relationship with suppliers to create win-win and mutual benefit situations are the principles adopted by the Huaku Development Co., Ltd. to maintain high standard of construction quality.。

• According to the ISO Procedure established by the "Huaku Development Co., Ltd.," "Supplier Control Procedure" (Document No: BG04).
• According to the ISO Operational Regulations established by "Huaku Development Co., Ltd.," "Regulations Governing Project Engineering Supplier Management" (Document No: CK64)
• According to the ISO Operational Regulations established by "Huaku Development Co., Ltd.," "Regulations for Project Engineering Annual Outstanding Supplier Incentives" (Document No:CK63)
• According to the ISO Procedure established by the "Huaku Development Co., Ltd.," "Project Engineering Procurement and Outsourcing Control Procedure" (Document No: BK02)

1. Selection of qualified suppliers: qualified suppliers shall be carefully chosen by means of “collection of vendor data” and “new supplier assessment.” Screening criteria include: Construction quality, capacity to deploy workers, labor safety and health performance, financial soundness, degree of collaboration and past records as contractors.
2. Evaluation of suppliers: after project completion/inspection/sales or IQC, the Engineering Office shall assess the supplier in accordance with the “Project Engineering Supplier Assessment Form” and submit the results to the relevant divisions for countersigning and competent supervisor for approval before it is archived for future reference.

3. Request sub-contractors to implement regulations for the environmental and social responsibility: the sub-contractor management adopted by Huaku Development includes several aspects, including requirements for the quality, environment, green products and social responsibilities, etc. Accordingly, we request all qualified sub-contractors to abide by the following rules for the materials or products and services produced or performed：
   • Sub-contractors must comply with or be more strict than local government labor-related regulations.
   • We will cooperate with our suppliers not to employ child labor, and to prevent underage (16-18 years old) employees from physical punishment, sex discrimination, forced labor and other forms of improper discipline.
   • Sub-contractors should ensure that all work and overtime done by the employees are voluntary.
   • The salary of employees is subject to all applicable payroll-related laws, including: minimum wage, overtime pay and statutory benefits.
   • Sub-contractors shall ensure that there is no deduction of wages for the month caused by disciplinary action imposed on employees.
   • The Company is committed to preventing harassment and unlawful discrimination in the recruitment and employment processes.
   • The Company recruits and hires employees fairly and openly. All employees have equal opportunities for promotion and training, regardless of race, gender, age, political affiliation or religious beliefs.
   • We are committed to extending the spirit of our CSR policy to our suppliers.
   • Sub-contractors shall comply with the Waste Disposal Act and relevant government regulations to improve environmental hygiene and safeguard the health of the people.
   • Sub-contractors should develop or use eco-friendly products and implement energy, environmental, safety and health management activities as far as possible, with an emphasis on preventive measures to protect the environment.

　（2）Environmental impact assessment: Based on the long-term development interests of Taiwan, both environmental protection and economic development should be taken into consideration and project development should be regulated in accordance with the provisions of the Environmental Impact Assessment Act, and environmental factors should be taken into account during the planning stage in order to achieve the sustainable development goal.

　（3）Green building promotion

1. The environmental impact brought by today's industrial activities is increasing, generating pollutants and waste that affect the environment and causing potential health hazards to human beings. Therefore, we realize that it is the future trend for the construction industry to move towards "green building" design, which can achieve the most favorable balance for the environment, economy, and health in the process of construction or building operation, in order to cherish and preserve the precious natural ecology and minimize
   the global warming phenomenon to save the earth. We have been promoting the GO Green concept in recent years, with the goal of building the most suitable environment for human beings with green thinking.
2. To link up with the international construction trend and to create a humanized living space that is safe, healthy, convenient, comfortable, energy saving and environmentally friendly, in recent years, we have gradually incorporated the green building concept in construction projects. Form the overall design to an environment with increased green planting, green building materials qualifying the standards are used. In addition, during the construction process, the factors of the "greenery," "water resource," "daily energy savings," "carbon dioxide reduction," "waste reduction" and "sewage and waste improvement" are emphasized in light of satisfying the requirements for Ecology, Energy Saving, Waste Reduction and Health demanded by the domestic construction projects, thereby obtaining the green building logo for the construction projects.
3. In light of efforts from the Architecture and Building Research Institute (Ministry of Interior) to encourage the construction of energy-saving, waste-reducing and low-pollution green buildings that will in turn create residential environments that are comfortable, healthy and environmentally friendly, the Company has outlined three primary design philosophies of "comfort," "health and coordination of nature" and "environmental protection" in addition to applying the "green building 7-indicator assessment" for all individual construction projects. The indicators include: greenery indicator, soil water retention indicator, water resource indicator, daily energy saving indicator, CO2 emission indicator, waste reduction indicator and sewage and waste indicator. The Green Building Committee will evaluate projects based on these indicators before awarding the label and recognizing the project as a green building.

　（4）Pro-active measures of construction site management to reduce environmental pollution:

1. Air pollution control (dust particles):Pursuant to Air Pollution Control (Construction Dust) Regulation (Cap. 311R), construction firms shall be responsible for adopting effective measures to control and minimize the quantity of dust particles generated from relevant construction works. Actual implementation methods at construction sites:
   • The roads at the internal and external of the construction site are cleaned in order to prevent dust from scattering, causing pollution of the neighborhood roads.
   • Waste soil transportation vehicles are covered with canvas and vehicle driving speed is controlled.
   • The tires of the vehicle accessing the construction site and the site entrances/exits are properly cleaned.
   • Structure exterior wall scaffolds are covered by dust screen in order to effectively suppress dust.
   • Construction site surroundings are installed with full-blocking fences.
   • Spill water on the pavement before and during the process of demolishment and concrete digging.
   • Dust screens are installed for works that could generate dust particles.
   • Non-permeating dust sheeting is used to cover up stored materials that are prone to dust particle build-up.
   • Demolition of houses: spray water or dust suppressant chemicals throughout the demolition operation to keep the work area moist.
   • When demolishing the external walls of a house, the following additional measures should be provided if the work is close to a public area: - Use dust-proof mesh or plastic sheets to cover the entire external wall to be demolished and it should be at least 1 meter above the height of the wall.
   • Fence around the site and the entrance
     • Provide high-pressure water jet vehicle washing facility.
     • Vehicle washing water shall be recycled and re-used.
     • The wastewater should be treated before being discharged.
     • The roads between the vehicle washing facilities and the site exit should be paved with concrete, asphalt or other solid materials.
     • Construction fence above the height of 3.0m shall be constructed (including 60cm of high anti-overflow pier). In addition, a drainage trench shall be provided in order to prevent waste water from flowing out of the construction site.
   • Road excavation/resurfacing：
     • Spraying water or dust suppressant chemicals on the working surface for mechanical crushing operations.
     • Use dust partition boards to properly isolate the workplace in order to prevent uncontrolled dust from scattering and spreading to the nearby public areas.
2. Air pollution control (smoke): Pursuant to Air Pollution Control (Smoke) Regulations, emission of fumes from fixed sources of combustion shall be duly controlled. Actual implementation methods at construction sites:
   • Exhaust from machinery shall be directed and discharged far away from pedestrian sidewalk.
   • Modify the exhaust discharge so that it is directed far away from public areas.
   • Install dust screens around facilities for pit excavation.
3. Water pollution control: pursuant to the Water Pollution Control Ordinance (Cap. 359), sewage shall not be discharged into the storm water channel. Wastewater reduction plan shall be formulated to ensure that effluents from construction operations to be discharged via sewage or other channels shall be compliant with the terms and conditions promulgated by the EPA. Prior to discharge, effluents shall be treated
   by the sewage treatment facilities at the construction site to ensure compliance with pertinent effluent discharge permit.
4. Noise pollution control: pursuant to the Noise Control Ordinance (Cap. 400), no powered mechanical equipment for the purpose of carrying out any construction work may be used between the hours of 7 P.M. and 7 A.M. or at any time on a public holidays (including Sunday). Actual implementation methods at construction sites：
   • Use noise barriers to mitigate the impact of noise from specific operations in areas that might be sensitive to said noises.
   • Deploy sound-proof shielding for fixed devices.
   • For the control of noise and vibration during the construction period, different responsive strategies are adopted due to different construction scale and selection of machineries:
     • Use low-noise type of machines and use soundproof equipment machineries during the construction, use electrical or hydraulic motors instead of old diesel engines. 
     • For the construction time, select the time slot having the minimum impact on the neighborhood, communicate with residents and police frequently to increase the local understanding and cooperation. 
     • Perform periodic noise monitoring.
5. Improvement Measures
   • Enhance the promotion of environmental protection awareness of all construction site and working personnel and manage the subcontractors to handle pollution control works properly and also plan and adopt low-pollution construction techniques according to each project’s characteristics and purchase low-pollution construction machineries. 
   • Organize periodic or regular construction site field environmental protection evaluation and provide rewards and impose punishments in order to increase the environmental protection performance of each construction site. 
   • Before each construction operation, risk assessment shall be implemented according to the Company’s ISO 14001 management system requirements and control shall be adopted on personnel requiring hierarchy control in advance to implement various environmental protection regulatory requirements, in light of reducing the risk of environmental impact. 
   • During the project construction period, environmental monitoring company is commissioned according to the contract to perform relevant environmental monitoring including water, land ecology and cultural heritage site monitoring) works. 
   • During the project construction, it is necessary to rigorously monitor the building sediment status. A construction explanatory meeting is held depending upon the needs of each construction section before the construction. In the meeting, various explanation documents are distributed and two-way communication on the construction’s general status with the general public is performed on a face-to-face manner. In addition, if the general public has any doubts about each project construction, they can also feed back to the Engineering Office directly.
   • To reduce the air pollution at the construction site, the sub-contractors are requested to additionally install filters or exhausts on the construction machineries entering the site in order to reduce the generation of moving pollution sources and to reduce the generation of noise sources, thereby creating an excellent operating environment.
   • For operations performed adjacent to residential areas, construction canvas and screens are installed in order to prevent splashing dirt that may affect the environmental cleanliness.
   • During the hole drilling period for continuous wall construction, the constructor shall self-perform vibration monitoring in order to understand the level of vibration impact on the nearby sensitive points. 
   • The headquarter of the Company implements the 6S environmental organization and sorting evaluations on each Engineering Office. To allow engineers of each Engineering Office to understand, manage and maintain the environmental cleanness of the workplace for their neighborhood environment and under the challenge of increasing toughness of operational environment faced by the Company, we are committed to the improvement of the current operating status and bottleneck with the efforts of all employees in the future and to provide an excellent operating environment in order to create a working environment with high efficiency, to strengthen the competitiveness, to increase personnel operating safety and to increase work quality and efficiency.

　（5）Building water saving, waste recycling and reduction and construction site environmental protection

1. Water Management
   • In terms of water management, water for office is directly supplied by Taiwan Water Corporation. Since an engineering office at the construction site is constructed mostly for temporary use and it typically uses light materials of iron sheets to facilitate the construction, the high interior temperature of such assembled houses can be unbearable to the people inside. Consequently, the use of water spray circulation energy-saving system is used. Through the cooling water at the spray nozzle and the circulation between the convergence system, the heat outside the building can be carried away and the indoor temperature can be effectively reduced, such that the usage rate and power of the air conditioner can be mitigated, which is beneficial to the economic effect and environmental protection. We also made water-saving slogans to remind colleagues to save water.
   • The entire building uses sanitary equipment with a water-saving logo, and the building raft foundation is installed with a rain water collection tank facility with a tap water replacement rate of above 10%. Through the use of the rainwater filtering treatment equipment and the water tank, it is able to provide water for the building's sanitary toilets and urinal flushing, thereby increasing the rainwater recovery and energy-saving rate. In addition, the outdoor plants irrigation also uses automatic wetness detection and water-saving irrigation facility in order to achieve the objective of tap water replacement and reduction of use.
   • Environmental Protection, Water Saving, Education on Water Resource Re-use - Water Saving Tank
     • Under extreme climate conditions, drought, water shortage and heavy rains are serious subjects faced by Taiwan. In addition, due to significant reduction of rainfall and the emerging water shortage issue, starting from 2016, “water saving tank" facilities have been installed at construction sites consecutively such that during rain time, the rain water is able to pass through the existing drainage facility and to be guided into the rainwater saving tank for storage in order to prevent water accumulation on the ground, and the rainwater storage can also be used to irrigate plants and flowers during the drought season.
     • The “water saving tank” is for the purpose of temporary storing rain under the ground in order to be used whenever necessary. During a rain, water can infiltrate into the ground through the slits without accumulating on the ground surface. When the sun comes out, such water is evaporated to reduce the temperature of the entire environment and the ground water can also be preserved. Consequently, it is able to achieve the effective of “storing water on a rainy day, cooling on a sunny day.”
2. Waste reduction and removal from construction sites：
   • Upon the completion of work at different stages, the sub-contractor shall be responsible for cleaning up the construction site and dispose of relevant wastes from the operations in a legitimate manner.
   • Various types of wastes are packaged properly according to combustible, non-combustible and recyclable wastes, followed by placing them into various wastes disposal bins. In addition, the number of waste disposal bins is increased according to the number of attending staff. Personnel training is enhanced and the environmental protection concept of waste reduction and resource recycling with proper packaging are also promoted periodically. Construction wastes are handled according to the relevant regulations of the legal cleaning company commissioned to perform the waste disposal properly.
   • Countermeasures:
     • Waste slurry or mud is properly treated before transporting away from the construction site without arbitrary drainage or discharge. Reduce the production of waste soil as much as possible and re-use such waste soil.
     • Wastes shall be stored separately from the waste soil in order to prevent any mixing of materials, thereby increasing the re-use value of waste soil.
     • Living waste disposal control: Trash cans with covers are installed, garbage classification is implemented and recycling buckets are installed at designated locations and resource recycling and garbage reduction promotional education is implemented properly.
     • For garbage storage areas, education on the prohibition of storage of any substances with odor or toxic substances is implemented and insect hazard is prevented. Cleaning and transportation is performed on regular working days according to the regulations.
     • Garbage classification and recycling buckets are provided for each level of the building, and the basement 1st floor is provided with a parking lot specially designated for the garbage truck and a garbage collection field with green landscaping. Complete garbage and resource recycling and classification system is established in order to properly execute the recycling and reduction measures, thereby achieving the objective of waste reduction and protection of the natural ecological environment.
3. Construction site environmental protection: For the waste reduction technique adopted during the building construction process, steel structure and dry light partition are used to reduce the pollution of destruction wastes. The engineering project adopts construction pollution control measures to install vehicle cleaning facility, waste water drainage equipped with the installation of sludge sedimentation, filtering, sludge removal and discharge facilities. Furthermore, the vehicle traveling road surfaces are covered with dust screen and the waste soil storage site is covered with canvas, the structure is installed with a dust screen and the construction site is provided with the dust screen fence facilities, etc. thereby effectively reducing the air and environmental pollutions.

　（6）Occupational Safety and Health Policy and Management:

1. Due to the sophistication of construction projects and the significant number of experts and personnel from collaborating partners involved in the operation, coupled with the high turnover rate of workers, the absence of an effective safety and health management procedure at the construction site will no doubt increase the chances of occupational hazards. The Occupational Safety and Health Act stipulates that proprietors are required to formulate the corresponding safety and health management plan in accordance with the scale and nature of the business while establishing relevant safety and health organization and personnel to implement safety and health management and autonomous inspections.
2. In an effort to improve the Company’s capacity for autonomous occupational safety management, steps shall be taken to improve the frequency and quality of occupational safety selfaudits at construction sites to reduce the incidence of occupational hazards at the construction sites. This will in turn improve the Company’s overall capacity for safety and health audits. The Company has joined the “Construction Site Autonomous Management Strategic Alliance” established by the Taipei City Labor Inspection Office to learn more about various safety protective gear and measures through the construction site demonstrations as a way to improve the Company’s overall standards of occupational safety and health. The Company has been the recipient of the “Taipei City Outstanding Autonomous Construction Site Management Award” for many projects. The Company has joined the “Construction Site Autonomous Management Strategic Alliance” established by the Taipei City Labor Inspection Office to learn more about various safety protective gear and measures through the construction site demonstrations as a way to improve the Company’s overall standards of occupational safety and health. The Company has been the recipient of the “Taipei City Outstanding Autonomous Construction Site Management Award” for many projects.
3. Prior to the commencement of construction, suppliers are required to report to the municipal labor inspection office and submit their “Labor Safety and Health Code of Practice.” All dangerous machinery to be operated by the supplier shall be inspected by the local inspection agency beforehand and may only be operated by personnel with the required qualifications and lifting personnel with required training onsite. All suppliers are required to comply with the pertinent regulations, including the Occupational Safety and Health Act, Rules Governing Occupational Safety and Health Facilities, Construction Safety and Health Facility Standards, Labor Inspection Act, Environmental Law, etc. by installing the required safety and health equipment and relevant measures on the premises.
4. Promotion of occupational safety and health card training program. For the “Taipei City Occupational Safety and Health Card” and “Taiwan Occupational Safety and Health Card”, training and re-training are organized in the Company and the construction site in sessions.
5. A weekly safety and health activity implementation plan is organized in cooperation with the Occupational Safety and Health Administration, Ministry of Labor.
6. To promote workplace disaster control and disaster prevention, to implement the identification, assessment and risk control of potential workplace hazards and to establish a safe and healthy workplace, the Company implements various disaster control education, guidance, promotion and educational training in order to expand the participation by all personnel and to improve the workplace disaster control knowledge and skills of employees at workplace and students. In addition, to ensure the safety and health of employees, the Company implements employee health examination periodically and continuously improves and establishes healthy working environment. Consequently, the physical and mental health of all employees are managed and promoted while preventing occupational injuries at the same time.

　（7）The Company requires its suppliers to follow relevant regulations in environmental protection, safety or hygiene issues in supplier contracts.

1. Use large amounts of green building materials.
2. Healthy green building materials refer to “building materials having low toxicity and low health hazard risks according to the characteristic of the building materials.” The purpose of promoting this category of the building materials logo is to improve the indoor air environment quality and to reduce the level of hazard of building materials to human health. Currently, for the assessment on the “human body hazardous level” conducted on interior building materials and interior decoration materials, the emission rate of “low formaldehyde” and “total volatile organic compounds (hereinafter referred to as TVOC”) is used as the assessment indicator. In the future, to cope with the requirements of relevant domestic regulations, health impact factors caused by building materials will be assessed continuously in order to ensure the proper use of healthy building materials by the citizens and to maintain the indoor environment quality.

    

   Healthy green building material assessment items
   1	Floor	Wooden floor, carpet, elevated floor, wood plastic composite materials, etc.
   2	Walls	Plywood, fiberboard, gypsum board, wallpaper, soundproofing material, particle board, wood wool cement board, wood chip cement board, wood cement board, fiber cement board, calcium silicate board, wood plastic composite materials, etc.
   3	Ceiling boards	Plywood, gypsum board, rock wool decorative sound-absorbing board, glass wool ceiling board, etc.
   4	Sealants and putties	Silicon, epoxy resin, waterproof coating film materials, etc.
   5	Coating materials	Paints, etc. and various water-based and oil-based painting materials.
   6	Adhesive (bonding) agents	Linoleum, synthetic fiber, tile adhesive, white glue (polyvinyl acetate resin), etc.
   7	Doors and windows	Wooden doors and windows (single homogenous material).

    

   • Painting contract: It shall always require the use of “Dulux green building material emulsion paint” or “Dulux green building material cement paint.”
   • Waterproof” contract: It shall always require the use of “VAE resin mortar” and “Hot-melt seamless asphalt plus SBS waterproof blanket of a thickness of 3mm.”
   • “Light partition wall and mineral fiber ceiling board” contract: It shall require the use of “Cape-Goldsun green building material calcium silicate board” and “UCC green building material gypsum board.”
   • “See island type joint wooden floor” contract: For plywood, the formaldehyde emission (content in water) shall comply with the requirements for Level F3 of CNS 11342 standard.
   • “Silicon” contract: It shall always require the use of “Dow Corning 791.”
   • “Epoxy resin floor” contract: For the primer, middle coating and surface coating, it shall always require the use of “Nan Ya green building material epoxy resin.”
   • “Bonding agent” contract: “5rainbow green building materials tile bonding agent” shall be used.
   • “Interior wood work and metal decoration work” contract: The wood work of the entire are shall use low formaldehyde plywood complying with Level F3 of CNS 11342 standard. Primer paint coating: It shall always use “Dulux green building material coating material” or “Chinye green building material coating material.” Silicon work: For bathroom area, Tagore 3KB, DOW798, Leybold or Silstone mold-proofing silicon sealant shall be used, and for other exterior areas, DOW991 or GE SCS9000 shall be used; for interior, DOW791 or equivalent products shall be used. For metal materials, if stainless steel is used, it shall be SUS#304.
3. Article 17 Occupational Safety and Health Equipment and Management in the construction contract: Paragraphs 1 to 11 have been stipulated in detail that the supplier or third party should comply with the Occupational Safety and Health Act, the Rules for Occupational Safety and Health Facilities, the Standards for the Construction of Safety and Health Facilities, the Labor Inspection Act and the Environmental Protection Act and other relevant laws and regulations, and set up the necessary safety and health equipment and measures in the workplace in accordance with the regulations.
4. Other matters related to occupational safety and health should follow the "Construction Site Safety and Health Penalty" and "Supplementary Instructions on Safety and Health".