HTC 2013 Annual Report Download - page 46

CORPORATE GOVERNANCE CORPORATE GOVERNANCE
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9. The state of implementation of HTC's internal control system:
(1) Statement on Internal Control
HTC Corporation
Internal Control System Statement
Date: 02/28/2014
The Company states the following with regard to its internal control system for 2013, based on the findings of a self-
evaluation:
1. The Company is fully aware that establishing, operating, and maintaining an internal control system are the
responsibility of its Board of Directors and management. The Company has established such a system aimed at
providing reasonable assurance of the achievement of objectives in the effectiveness and efficiency of operations
(including profits, performance, and safeguarding of asset security), 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 effective internal control
system can provide only reasonable assurance of accomplishing the three goals mentioned above. Furthermore, the
effectiveness 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, however, and the Company takes
corrective actions as soon as a deficiency is identified.
3. The Company judges the design and operating effectiveness of its internal control system based on the criteria
provided in the “Regulations Governing Establishment of Internal Control Systems by Public Companies＂
promulgated by the Financial Supervisory Commission, Executive Yuan (hereafter, the “Regulations＂). The internal
control system judgment criteria adopted by the Regulations divide internal control into five elements based on the
process of management control: 1. control environment 2. risk assessment 3. control activities 4. information and
communications 5. monitoring. Each element further contains several items. Please refer to the Regulations for details.
4. The Company has evaluated the design and operating effectiveness of its internal control system according to the
forementioned criteria.
5. Based on the findings of the evaluation mentioned as of 12/31/2013, the Company believes that during the stated
time period its internal control system (including its supervision of subsidiaries), encompassing internal controls
for knowledge of the degree of achievement of operational effectiveness and efficiency objectives, reliability of
financial reporting, and compliance with applicable laws and regulations, was effectively designed and operating, and
reasonably assured 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 the content made public will entail legal liability under
Articles 20, 32, 171, and 174 of the Securities and Exchange Act.
7. This statement has been passed by the Board of Directors Meeting of the Company held on 02/28/2014, in which all
of the 6 attending directors affirmed the content of this Statement.
HTC Corporation Chairman： President：
(2) External auditors' opinion on HTC's internal control: Not applicable.
10. For the most recent fiscal year and during the current fiscal year up
to the date of printing of this annual report, there were no sanctions
imposed upon the Company or its internal personnel.
11. Material resolutions of the 2013 Shareholders Meeting and Board of
Directors Meetings during the most recent fiscal year and the current
fiscal year up to the date of printing of this annual report.
Item Date Material resolutions Note
Year 2013
Board of directors
meeting 2013.02.19 1. Adopted resolution for the date, time and venue for the Company's 2013 Annual General
Shareholders' Meeting, and the submission period and address for shareholders' proposals.
Board of directors
meeting 2013.05.01 1. Adopted resolution for fiscal 2012 earnings distribution proposal.
Shareholders
meeting 2013.06.21
1. Adoption of the Fiscal 2012 Business Report and Financial Statement.
2. Adoption of the Fiscal 2012 Earnings Distribution Proposal.
3. Adopted resolution for the proposal to amend the Articles of Incorporation.
4. Adopted resolution for the proposal to amend the Company's Operational Procedures for Lending
Funds to Others.
5. Adopted resolution for proposal to amend the Company's Rules for Endorsements and Guarantees.
6. Company's re-election of Directors and Supervisors according to the Article 13 of the amended
Articles of Incorporation.
7. Adopted resolution to release the newly-elected Directors from non-competition restrictions.
Please refer to
the note for
an execution
summary of
the material
resolutions of
the shareholders
meeting
Board of directors
meeting 2013.07.05 1. Adopted resolution to adopt a date of record for the distribution of cash dividends, the closing period
for the share transfer and the delivery date for the cash dividends.
Board of directors
meeting 2013.08.02 1. Adopted resolution for the repurchase of the Company's shares and cancellation of such shares.
Board of directors
meeting 2013.08.22 1. Adopted resolution for the proposal to issue employee stock option.
Board of directors
meeting 2013.09.27
1. Adopted resolution on the appointment of the Company's Compensation Committee members.
2. Adopted resolution for registering a change of share status to write-off 1,912,632 shares of the
Company's treasury stocks and setting the record date for the reduction of paid-up capital.
3. Adopted resolution on the disposal of 24.84% of shares in Beats Electronics, LLC by the Company's
subsidiary, HTC Europe Co., Ltd., to Beats.
Board of directors
meeting 2013.11.05
1. Adopted resolution for registering a change of share status to write-off 7,789,000 shares of the
Company's treasury stocks and setting the record date for the reduction of paid-up capital.
2. Adopted resolution for Company's 2013 fourth quarter summary financial forecast.
Year 2014
Board of directors
meeting 2014.02.10
1. Adopted resolution for registering a change of share status to write-off 1,998,413 shares of the
Company's treasury stocks and setting the record date for the reduction of paid-up capital.
2. Adopted resolution for Company's 2014 first quarter summary financial forecast.
Board of directors
meeting 2014.02.28 1. Adopted resolution for the date, time and venue for the Company's 2014 Annual General
Shareholders' Meeting, and the submission period and address for shareholders' proposals.
Board of directors
meeting 2014.05.06
1. Adopted resolution for Company's 2014 second quarter summary financial forecast.
2. Adopted resolution for fiscal 2013 Deficit Compensation Proposal.
3. Adopted resolution on the issuance of 5,000,000 New Restricted Employee Shares.
4. Adopted resolution to amend the agenda for convening the 2014 Annual General Shareholders'
Meeting of the Company.
5. Adopted resolution on the disposal of Primavera Capital (Cayman) Fund I L.P. by Company's
subsidiary, HTC Investment One (BVI).
6. Adopted resolution on the capital injection from Company's subsidiary HTC America Holding Inc. to
its subsidiary HTC America Inc.
7. Adopted resolution on the capital injection from Company's subsidiary High Tech Computer Asia
Pacific Pte. Ltd. to its subsidiary HTC Communication Co. Ltd.
Note: Acting pursuant to resolutions adopted at the 2013 regular shareholders meeting regarding the earnings distribution proposal, HTC completed the
distributions of cash dividends in 2013. For the employee cash bonuses distribution, HTC prepared the employee cash bonuses distribution list per the
employee incentive and retention plan and executed accordingly.