Acer 2006 Annual Report Download - page 47

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7.2.4 Will the changes of domestic and international policies or legislation have an
impact on the Company’s finance or business, and how will the Company react to
such changes?
Investment in Mainland China：
The business opportunities exist in mainland Chinese market with high risk. The
Company follows the government’s policy whenever it considers investing in China in
order to reduce the risk and protect shareholders’ interests. To be in line with the
Company’s strategy, its investment in China is mainly for working capital.
Corporate Governance：
The financial scandals happened past few years have had serious impact to the
financial markets and investors as well. The Company has accordingly followed the
government’s requirements to facilitate the corporate governance in order to protect the
shareholders’ interests.
7.2.5 What are the financial impact and action plan of technology innovation and
industry development?
The Company is a branding company with a main mission to empower technology for
people. The products are developed to be in line with the mainstream technology and
high added value concept.
The Company has outsourced the manufacturing to other suppliers to focus on
branding/marketing, and its competitiveness is also improving due to the increasing
size of economic scale. The Company also cooperates with first tier distributors to
boost sales and profits.
7.2.6 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.