HTC 2012 Annual Report Download - page 42

Item Implementation Status Reason for Non-
implementation
HTC has taken into account its overall operational
activities in designing and faithfully implementing its
internal control system. It regularly reviews the internal
control system to ensure the continued effectiveness
of its design and implementation in light of changes in
HTC's internal and external environment. The internal
auditors conduct scheduled or unscheduled site audits
of audited units according to internal audit plans,
and may require audited units to present documents,
account books, and evidence to conduct document
audits. When necessary, they also may conduct special
audits of specific matters, and compile their work
papers and related materials into reports and submit
them to the board of directors.
3. Status of HTC's establishment and
operation of channels for receiving
reports on unethical conduct, and
disciplinary and complaint system
for handling violations of the ethical
corporate management rules.
HTC's employee handbook specifically provides that
an employee who commits fraud, accepts bribes,
misappropriates funds, or violates employment-
period non-competition clauses will be sanctioned
by dismissal from employment. Complaints can be
channeled through HTC's internal division supervisors,
human resources division, and internal auditors.
Disciplinary measures are administered by the human
resources department. HTC also has established
channels for statements of opinions and reports
of violations, by which employees may report any
questionable conduct discovered.
None
4. Strengthening information disclosure
(1) Status of HTC's website building
and information disclosure related
to ethical corporate management.
(2) Other measures adopted by
HTC for information disclosure
(e.g. establishment of an English
website, appointment of dedicated
personnel with responsibility for
collecting information, disclosing
it, posting it on the HTC website,
and so forth).
HTC discloses its Code of Conduct on its investor's
website both in Chinese and English, the Corporate
Responsibility webpage also discloses Supplier Code
of Conduct. Supplier's business shall be ethical and be
audited by HTC's internal audit department.
None
5. HTC does not produce a Ethical Corporate Management Best Practice Principles per the Ethical Corporate Management Best
Practice Principles for TWSE/GTSM-Listed Companies. HTC adopted Code of Conduct to provide high ethical standards for all
employees in conducting HTC business activities. All employees of HTC Corp., including branches and subsidiary companies,
must follow these ethical standards regardless of the employees' position, grade level, and location. This Code includes three
major sections: the General Moral Imperative, Vendors/Suppliers and Customers Relationship, and Conflict of Interests.
6. Other important information helpful to understanding HTC's exercise of good faith in management:
HTC has always upheld the five major ideals of honesty, humble, simplicity, energy, 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 abiding 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.
(Concluded)
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 efficiency 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", "Bylaws for the Election of Directors and Supervisors", and "Compensation
Committee Charter". 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 " 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 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.
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