Acer 2005 Annual Report Download - page 86

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- 81 -
Investment in Mainland China－
Mainland China market still offers many business opportunities, but considerable risks
still exists. The Company follows the government’s Mainland China policy and
complies with competent laws and regulations whenever it invests in Mainland China in
order to reduce the risk and protect shareholders’ interests. To be in line with the
Company’s investment strategy, its investment in Mainland China is mainly for working
capital rather than purchasing assets.
Corporate Governance－
The corporate scandals happened in past few years all over the world have had serious
impact on the financial markets and investors as well. The government has required
companies in Taiwan to facilitate the corporate governance in order to protect the
shareholders’ rights or interests and sound developments in the securities market. The
Company has fulfilled related regulations in order to strengthen the powers of directors
and protect investor’s rights or interests.
5.2.5 What are the financial impact and action plans when the Company faces
technology innovation and industry development?
The Company has transformed from a manufacturer to a branding company now. Our
main mission is to empower technology. Our products are developed to be in line with
the mainstream technology and high added value.
Due to the Company’s strategy to outsource manufacturing sector, our competitiveness is
improving because the purchasing power increases. The sales and profits also increase
due to cooperation with first tier channels.
5.2.6 How corporate image change affects the Company’s risk management mechanism?
What are the Company’s action plans?
The Company had split off its manufacturing division at the end of year 2000 in order to
focus on the design and marketing of IT products and services. The potential crises
within manufacturing and marketing companies are very different, and the Company’s
crisis management now focuses on our global supply-chain and logistics. By outsourcing
our manufacturing sector to multiple vendors and suppliers, the Company gained greater
flexibility in inventory control and lowered risks compared to a single-vendor policy.
With the ever-changing global economy, it is essential to be prepared for risks and
challenges at all times. The Company’s risk management team has a clear sense of crisis
management and has taken the precautions when necessary. We have set up a crisis
mechanism that will minimize potential damages when running into crises and ensure the
Company’s sustainable management.