HTC 2012 Annual Report Download - page 38

8. If the Company has a self corporate governance evaluation or has authorized any other professional organization to conduct
such an evaluation, the evaluation results, major deficiencies or suggestions, and improvements are stated as follows:
 ˙As of 2012, HTC has not yet issued any corporate governance self-assessment report or engaged any other professional
institute to perform a corporate governance assessment. It has become a member of the ROC's Corporate Governance
Association (CGA). Regular participation of its Directors, Supervisors, and management-level personnel in the CGA's
Directors and Supervisors Association provides opportunities for exchanges with government, business, and academia
on topics such as enterprise orientation, strategy development, operations and management, and financial,legal, and
corporate governance issues, thereby strengthening HTC's enterprise management and corporate governance.
(Concluded)
Appendix 1: Continuous Education/Training of Directors and Supervisors
Title Name Date of Training Organization Training Hours Notes
From To
Director Tan Ho-Chen 2012.08.28 2012.08.28
Taiwan Corporate
Governance Association
(TCGA)
Mastering Key Aspects of
the Laws and Negotiations
Applicable to International
Commercial Agreements
and Points to Consider
Before Execution
3
Independent
Director Chen-Kuo Lin 2012.12.13 2012.12.13
Taiwan Corporate
Governance Association
(TCGA)
Impact of Recent Changes
in Regulation to the
Responsibilities of Directors
and Supervisors
3
Appendix 2: Continuous Education/Training of Management Team
Title Name Date of
Training Organization Training Hours Notes
Associate Vice President,
Finance & Accounting James Chen 2012.05.17
Accounting Research
and Development
Foundation
Latest International Multilateral
Trade Accounting, Taxation and
Customs Practices
6
Associate Vice President,
Finance & Accounting James Chen 2012.11.09
Accounting Research
and Development
Foundation
Relationship by Appointment and
Respective Legal Responsibilities
of Companies and Accountants
with Case Study and Discussion
3
Appendix 3: Directors, Supervisors and Key Personnel Liability Insurance
No Insured Object Insurance Company Insured
Amount (NT$) Insurance period Notes
1All Directors
and Supervisors
Fubon Insurance Co., Ltd. (Insureds include HTC-
appointed juristic person directors' representatives
at investee companies and key personnel)
1,019,515,000 From：2011.03.15
To：2012.03.15
Insured Amount
US$: 35,000,000
2All Directors
and Supervisors
Fubon Insurance Co., Ltd. (Insureds include HTC-
appointed juristic person directors' representatives
at investee companies and key personnel)
1,019,515,000 From：2012.03.15
To：2013.03.15
Insured Amount
US$: 35,000,000
4. Formation, scope of duties and operation of the Compensation Committee
(2) Investor relations
  ˙HTC carries out its responsibility in the area of investor relations by endeavoring to enhance the transparency and
timeliness of information disclosure. In addition to immediate announcement of material information and information
disclosure, each quarter investor/press conferences are held, with an average of more than 100 institutional investors
from Taiwan and abroad participating. Information is also uploaded to the company website simultaneously.
  ˙In addition to the regularly scheduled information disclosures above, HTC also actively participates in investment
seminars held by local and overseas securities firms and investor/press conferences; it also arranges meetings with
domestic and foreign investors in order to further explain financial figures and operational results that have already
been publicly released. Also, more than ten international securities houses routinely publish analyst reports on HTC,
providing investors with independent, professional investment analyses.
  ˙HTC's investor relations activities in 2012, were as follows: Throughout the year, HTC frequently participated in investor
conferences in Taiwan, Hong Kong, Singapore, New York, and Beijing, and periodically visited main investors in the
European, American and Asia regions. At the same time, foreign and domestic institutional investors and analysts
frequently visit our investor relations department or contact it by phone. Going forward, HTC will continue to advance
its work in every aspect of investor relations in order to fulfill the responsibilities of a listed company toward its
investors and shareholders.
(3) Supplier relations and rights of interested parties
  ˙HTC has adopted Procedures for Transactions with Specific Companies, Group Enterprises, and Related Parties to
guarantee the rights and interests of HTC and interested parties. Purchasing contracts are also signed with suppliers to
govern to transactions and cooperative efforts to protect the lawful rights and interests of all parties.
(4) Professional development of Directors, Supervisors, and managerial officers:
  ˙HTC Directors and Supervisors voluntarily attend seminars held by professional training institutes as required by law and
regulation. In addition, to further strengthen implementation of corporate governance, regular courses are also planned
on finance, business, commerce, law, and accounting subjects that are related to corporate governance, as well as
courses on internal control and responsibility in connection with preparation of financial reports. Details of professional
development courses taken by Directors, Supervisors, and managerial officers for 2012 can be found in Appendixes 1 and 2.
(5) Status of implementation of risk management policies and standards for measurement of risk:
  ˙HTC has adopted relevant risk management policies and standards for measurement of risk, and has established
a dedicated unit to carry out risk management and risk measurement. With respect to implementation, HTC has
reassessed its business risks after transitioning into a brand company. Risk factors are also reflected in financial
statement items such as bad debts and warranty reserves which are reviewed by Supersivors and CPAs to ensure they
are reasonable and appropriate.
  ˙HTC's management of potential risk associated with promotion of its global brand is explained below:
1. Exchange rate risk: Foreign exchange movements are monitored and managed / hedged by dedicated personnel.
Reserves for on-book liabilities are valued at the exchange rate on the balance sheet date, reducing as much as
possible the effects of currency fluctuations on HTC’s business and finances.
2. Receivables risk: Receivables risk is managed effectively by the finance department to ensure receivables quality
and lower the risk of bad debt.
3. Management of idle inventory: In addition to enhancing supplier management and demand forecast, idle inventory
is attended to early and reserves for loss taken in an appropriate manner.
4. Global tax risk:To comply with global tax compliance, our company engaged with international tax advisory for
periodical review.
5. Product design quality: To ensure quality of design, HTC has established a department for design quality, which
is exclusively responsible for control and management of quality in hardware and software, product safety, and
conformance with environmental regulations around the world. The department provides a complete range of
product testing and certification.
(6) Status of customer-protection policy implementation:
  ˙HTC strictly abides by the contracts it signs with customers to protect consumer rights and interests. Regular
deliberation on and assessment of the Product Warranty Reserve for after-sales services ensures that allocations made
to such reserves are reasonably sufficient and warranty responsibilities of the Company are adequately expressed.
(7) Liability insurance provided by HTC to Directors and Supervisors:
  ˙Article 16 of the amended Articles of Incorporation provides that the company may acquire liability insurance for
all Directors and Supervisors throughout their term, within the scope of the indemnity liability they bear under the
law in connection with their business responsibilities. Currently, HTC has purchased Liability Insurance for Directors,
Supervisors, and key personnel (please see Appendix 3 for details),thereby transferring the risk arising from negligence
or erroneous or improper conduct by Directors, Supervisors, or key personnel and enhancing the soundness of
company management.
(Continued)
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