HTC 2010 Annual Report Download - page 31

60 2 0 1 0 H T C A N N U A L R E P O R T 61
Corporate Governance
Item Implementation Status
Reasons for discrepancy with the
Corporate Social Responsibility
Best Practice Principles for
TWSE/GTSM-Listed Companies
Enhancing information disclosure
1. The Company's method of disclosure of relevant and reliable
information relating to CSR.
> HTC collects and compiles information on its CSR activities through the general
aairs unit. An outside professional institution, the AFNOR Group, assists to ensure
the accuracy and reliability of the information disclosed.
None
2. The status of the Company's production of corporate social
responsibility reports disclosing the implementation of CSR
matters.
> As of 2010, HTC has not yet prepared a separate CSR report. It currently discloses
information on CSR-related activities and performance through its annual report.
HTC does not produce a
corporate social responsibility
report.
If the Company has formulated a set of its own corporate social responsibility best practice principles in accordance with the Corporate Social Responsibility Best Practice Principles for TWSE/
GTSM-Listed Companies, please describe any discrepancies between their operation and the principles as adopted
HTC has not yet adopted its own corporate social responsibility best practice principles; please refer to p. 67-71 of this annual report for a description of HTC's CSR-related activities.
Any other important information helpful to understanding the Company's CSR-related operations (such as the status of its systems, measures, or performance in CSR activities relating to the
environment, community, contributions to society, social service, public interest, consumer rights and interests, human rights, health and safety, and other CSR-related activities:
Please refer to p. 67-71 of this year's annual report for a description of HTC's CSR-related operations.
If the Company's products or its corporate social responsibility report have met the standards of a relevant certification institution, please indicate:
HTC has obtained ISO 14001 environmental management systems certification and OHSAS 18001 occupational health and safety management systems certification.
(6) The status of the Company's exercise of good faith in management and adoption of
related measures:
HTC has always upheld the five major ideals of honesty, humility, simplicity, vitality, and innovation as its highest criteria for
operations. Everyone within the Company, from the highest levels to the lowest, is asked to strictly uphold the spirit of these
five ideals, as well as abide by all laws, regulations, and rules. HTC has also formulated internal rules to ensure the exercise of
good faith in management and the observance of laws and regulations.
(7) For information on HTC's Guidelines for Corporate Governance and other codes of
practice, please refer to the HTC website at www.htc.com.
(8) Other important information helpful to understanding HTC's corporate governance:
Due to a number of factors, including the shift in HTC's principal business operations in recent years to own-brand
manufacturing, the growing scale of its operations, and the continued expansion of overseas subsidiaries, HTC has continued
to examine and revise or adopt new rules and procedures which will enhance the eciency of its operations and strengthen
risk management and corporate governance. Over the recent years, in line with the formulation or amendment of relevant
securities laws and regulations, and in consideration of operational needs, HTC has adopted or revised its "Procedures
for Board of Directors Meetings", "Procedures for the Acquisition or Disposal of Assets", "Procedures for the Handling of
Derivatives Trading", "Guidelines for Corporate Governance", "Procedures for Shareholders' Meetings", and "Bylaws for the
Election of Directors and Supervisors". In addition, it has also adopted the "Detailed Guidelines for the Handling of Derivatives
Transactions", "Credit Policy and Operation Procedures", and "Rules for Assignment of Directors and Supervisors at Investee
Companies", and revise implementation rules that guide its internal operations, such as the "Transaction Operating Procedures
for Specific Companies, Enterprise Groups and Related Parties", "Budget Management Procedures", "Corporate Bylaws for
Subsidiaries" and "Operational Procedures for Handling Material Inside Information, and Prevention of Insider Trading". Latest
drafts and amendments of the "Operating Procedures for the Handling of Material Inside Information and Prevention of Insider
Trading" are sent to all HTC employees via e-mail and posted on the internal website. The most updated version is posted on
both the corporate website and internal website. New employees are also trained on the prevention of insider trading.
(9) The state of implementation of HTC's internal control system:
1. Statement on Internal Control
HTC Corporation
Statement on Internal Control
Date: 1/21/2011
The Company states the following with regard to its internal control system for 2010, based on the findings of a self-
evaluation:
1. The Company is fully aware that establishing, operating, and maintaining an internal control system is the
responsibility of its Board of Directors and management. The Company has established such a system aimed at
providing reasonable assurance to the achievement of objectives in the eectiveness and eciency of operations
(including profits, performance, and safeguard of assets), reliability of financial reporting, and compliance with
applicable laws and regulations.
2. An internal control system has inherent limitations. No matter how perfectly designed, an eective internal control
system can only provide reasonable assurance of accomplishing the three goals mentioned above. Furthermore,
the eectiveness of an internal control system may change along with changes in environment or circumstances.
The internal control system of the Company contains self-monitoring mechanisms which allow the Company to
take corrective actions as soon as a deficiency is identified.
3. The Company judges the design and eectiveness of its internal control system based on the criteria provided in
the Regulations Governing the Establishment of Internal Control Systems by Public Companies promulgated by
the Financial Supervisory Commission, Executive Yuan (the "Regulations"). The criteria adopted by the Regulations
divide internal control into five elements based on the process of management control: 1. control environment 2.
risk assessment and feedback 3. control activities 4. information and communication 5. monitoring. Each element
further contains several items. Please refer to the Regulations for details.
4. The Company has evaluated the design and eectiveness of its internal control system according to the aforesaid
criteria.
5. Based on the findings of the evaluation, it is concluded by the Company's internal control system (including
its supervision of subsidiaries), encompassing transparency of operational performance, reliability of financial
reporting, and compliance with applicable laws, was eectively designed and implemented and can provide
reasonable assurance to the achievement of the above-stated objectives.
6. This Statement will become a major part of the content of the Company's Annual Report and Prospectus, and will
be made public. Any falsehood, concealment, or other illegality in its content will entail legal liability under Articles
20, 32, 171, and 174 of the Securities and Exchange Law.
7. This statement has been passed by the Board Meeting held on 1/21/2011, where all of the six attending Directors
armed the content of this Statement.
HTC Corporation Chairman: Cher Wang President: Peter Chou
2. External auditors' opinion on HTC's internal control: Not applicable