HTC 2014 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: 03/06/2015
The Company states the following with regard to its internal control system for 2014, 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 12/31/2014, 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 03/06/2015, in which all of the 6
attending directors affirmed the content of this Statement.
HTC Corporation. Chairwoman: 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 2014 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 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.
Board of directors
meeting 2014.06.17 1. Company's appointment of one member to the Compensation Committee.
Shareholders meeting 2014.06.18
1. Adoption of the Fiscal 2013 Business Report and Financial Statements.
2. Adoption of the Fiscal 2013 Deficit Compensation Proposal.
3. Approved of the proposal to partially amend the Articles of Incorporation.
4. Approved of the proposal to issue 5,000,000 new restricted employee shares.
Please refer
to the note for
an execution
summary of
the material
resolutions of
the shareholders
meeting
Board of directors
meeting 2014.07.31 1. Adopted resolution for Company's 2014 third quarter summary financial forecast.
2. Adopted resolution for the proposal to issue employee stock option.
Board of directors
meeting 2014.10.31
1. Adopted resolution for Company's 2014 fourth quarter summary financial forecast.
2. Adopted resolution for registering a change of share status to write-off 1,000,000 shares of the Company's
treasury stocks and setting the record date for the reduction of paid-up capital.
Year 2015
Board of directors
meeting 2015.02.06 1. Adopted resolution for Company's 2015 first quarter summary financial forecast.
Board of directors
meeting 2015.03.06 1. Adopted resolution for the date, time and venue for the Company's 2015 Annual General Shareholders'
Meeting, and the submission period and address for shareholders' proposals.
Board of directors
meeting 2015.03.20 1. Adopted on appointment of Company's Chief Executive Officer and President.
Board of directors
meeting 2015.04.15
1. Adopted resolution for fiscal 2014 Earnings Distribution Proposal.
2. Approved of the proposal to issue 7,500,000 new restricted employee shares.
3. Adopted resolution to amend the agenda for convening the 2015 Annual General Shareholders' Meeting of the
Company.
Board of directors
meeting 2015.04.28
1. Adopted resolution for Company's 2015 second quarter summary financial forecast.
2. Adopted resolution for registering a change of share status to write-off 49,200 shares of the Company's
restricted employee shares and setting the record date for the reduction of paid-up capital.
Note: Acting pursuant to resolutions adopted at the 2014 regular shareholders meeting regarding the deficit compensation proposal, HTC completed the compensation in 2014.