HTC 2010 Annual Report Download - page 44

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86 2 0 1 0 H T C A N N U A L R E P O R T 87
Financial Status, Operating Resul ts And Risk Management
customers to expand markets and strengthen strategic
partnerships, HTC continues to discuss potential
cooperative projects with leading IT and telecom
companies in order to remain at the fore of market
trends. HTC is also developing the HTC brand and
strengthening relationships with channel retailers in
order to reduce business and sales concentration risks.
10. Effect upon and risk to the company in the event a major
quantity of shares belonging to a director, supervisor, or
shareholder holding greater than a 10 percent stake in
the company has been transferred or otherwise changed
hands and mitigating measures being or to be taken:
As of the end of 2010, no transfer of significant portions of
HTC share rights has occurred with respect to any director,
supervisor, or major shareholder holding more than a 10
percent stake in the company.
11. Effect upon and risk to the company associated with any
change in governance personnel or top management and
mitigating measures being or to be taken:
There was no change in HTC managerial control in 2010.
12. Lawsuits and other non-litigation legal proceedings related
to the corporation; its directors, supervisors, president,
senior executives; major shareholders owning greater than
10% of outstanding shares; and corporate subsidiaries,
the results of which could significantly affect shareholder
rights and / or share prices.
(1) Major lawsuits, non-litigation legal proceedings or
administrative litigations currently involving HTC:
a. In April 2008, IPCom GMBH & CO., KG ("IPCom") filed
a multi-claim lawsuit against the Company with the
District Court of Mannheim in Germany, alleging that
HTC infringed IPCom's patents. In February 2009,
the court ruled on one of the patents and granted
IPCom's request for an injunction to prevent HTC
from importing devices into Germany. HTC appealed
this decision to the court of Appeal and won a
stay of the injunction pending the outcome of this
appeal. Thus, HTC has continued to ship products to
Germany.
b. In March 2010, Apple Inc. filed a lawsuit against
HTC concurrently with the U.S. International Trade
Commission ("ITC") and U.S. District Court in
Delaware ("Delaware court") alleging that HTC
infringed its patents. Subsequently, HTC filed on ITC
investigation and a counterclaim with the Delaware
court against Apple for patent infringements and
requested the ITC and Delaware court to prevent
Apple from selling devices in the United States and
order damage compensation.
(2) HTC had examined circumstances and related
information of the cases, including past experiences,
expert opinions, results of the evaluation of
contingencies and estimation of the degree of actual
occurrence, and concluded that the amounts of
contingent assets or liabilities were appropriately
accounted for.
13. Other important risks and mitigating measures being or to be taken
None
14. Risk Management Organization Structure
Responsible/Implementation Unit Control Item Implementation Tasks
Legal Department Contractual and Legal Risk Manage overall corporate contractual risk
Finance and Accounting Division Business Strategy and Financial Risks Responsible for capital allocation and management, investment
planning, customer credit control, operational analysis, and cost
analysis
Internal Audit Internal Control Risk Assess comprehensiveness and eectiveness of internal control
systems
Global Product Division Product Trend Risk Identify future product development trends and customer
demands
Design Quality & Engineering
Service Division
Product Design and Quality Risks Ensure design quality of HTC products with regard to hardware,
software and product safety
Manufacturing Operation Center Production Quality Risk Enhance production quality
Customer Service and Quality
Assurance Division
Product Quality Risk Provide after-sales service and enhance the quality of such
VII. OTHER IMPORTANT MATTERS
Relevant
certification of financial personnel as required by the competent authority
Division Name Relevant Training and Certification
Finance and
Accounting
Division
James Chen
Sally Wang
Eason Chou
Certified Public Accountant (CPA)
Mingyi Wu Chartered Financial Analyst (CFA), Financial Risk Manager (FRM)
Hsiu Lai US Certified Public Accountant, Chartered Financial Analyst
George Liu
Jill Chen
Jerry Chen
Internal auditor, Certified Public Accountant
Ally Liu Certified Public Accountant, US Certified Public Accountant
Internal Audit Irene Cheng Internal auditor
Anita Cheng Certified Public Accountant