Letter To Shareholders - Mitac

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7.4 Major reasons for profits or losses caused by the reinvestment policy in the most recent year and rectifications: 1. Major reasons for profits or losses caused by the reinvestment policy in the most recent year. Item Investment amount Reinvestment policy MiTAC and SSDL and its subsidiaries The acquisition transaction amounted to USD33,352 thousand <strong>To</strong> complement the company's competitive advantage in GPS products and to increase market share in the global market, the company acquired, jointly with overseas subsidiary Silver Star Developments Ltd. and its subsidiaries on 12 Jan 2009, all assets and liabilities owned by the Consumer GPS Department of Magellan Navigation, Inc. and its subsidiaries. The acquisition included net tangible assets, and intangible assets such as patents, technologies, trademarks, customers relationships, and non-competing agreements etc. Major reasons for causing profits or losses SSDL incurred losses in 2009 due to the downturn of the global economy, which made the US market unprofitable in 2009. Improvement plan Increase revenues and market share through product innovation, market exploration, and more intense competition for new supply contracts. 2. Investment plan within the year: We will follow the company’s operating strategies and perform global investment plan. 7.5 Risk management 7.5.1 Organization structure Responsible units Tasks and missions Is responsible for business decision planning, mid-term and long-term investment assessment, financial coordination and operation, risk avoidance mechanism, Finance Center making reliable financial statements, business performance, efficiency, and obedience of law in order to minimize financial, taxable, and strategic risks. Is responsible for planning, constructing, and maintaining the Internet safety and MIS Center information software and hardware equipment or systems; in the meantime, measure the Internet and system quality to minimize risks. Is responsible for regulatory risk control, obeying governmental supervision Legal Affairs Center policies and handling contracts and litigation disputes to minimize legal risks. Resources Development Center Is responsible for personnel and real estate risk management; also, it is to obey governmental regulations in order to secure ongoing concerns and property safety. ~164~
7.5.2 Influences of the interest rates, the exchange rate fluctuations and the inflation on the company’s profits or losses in 2009 & 2010, and countermeasures for the future: 1. Influences from factors above during Jan 1, 2009 and Mar 31, 2010 Unit: NT$ Thousand 2009 2010/3/31 (Reviewed by CPA) (Note 1) Amount Percentage Amount Percentage to to the sales the sales Items (NT$ Thousand) revenue (%) (NT$ Thousand) revenue (%) Interest expense 44,483 0.08 6,426 0.05 Exchange gain/loss 16,174 0.03 30,964 0.25 Losses (Gains) on evaluation of financial assets 97,289 0.17 (1,582) (0.01) Note 1: <strong>To</strong> the end of the quarter prior to the publication date of this annual report. Note 2: Inflation was negligible. 2. MiTAC’s substantial measures to respond to the variation of the interest, exchange rate and inflation are: (1) All accounts receivable and payable are received and paid in USD so minimize the effects on overall profits from variable currency exchange. (2) At present, the trading of derivative products is to avoid risks of the actual foreign currency assets and the liabilities; also, to undertake financial instruments through banks and periodically evaluate gains and losses per the “Procedure for Derivative Trading”. (3) The team of foreign currency specialists collects exchange rate, interest rate, and market information on a daily basis, and conducts regular discussions on how best to react to market movements. In the event of extraordinary market movements, the top management is informed immediately to take actions accordingly. (4) We evaluate announced interest rates and work closely with banks in order to obtain preferred interest on loans, so that we can minimize the impact of rate fluctuations on the company. (5) As oil and commodity prices continue to rise, protection against inflation is becoming a critical issue. In anticipation to future market 於 movements, the company undertakes long futures positions in advance to hedge against increases to the prices of its purchases, in addition to its proactive procurement management and searches for substitute materials. Since the time to delivery had lengthened for every stage along the commodity supply chain, the management of unpredictable threats such as long supply cycles, labor shortage. and the control of inventory levels and the costs of non-production related materials has become crucial. Commodity supply agents can respond to this threat by increasing their inventory on hand, thereby minimizing adverse impacts to the company’s earnings due to uncertain material supply or unstable costs. 7.5.3 Policies regarding participation in high-risk, highly leveraged investments, loans to other parties, endorsements, guarantees, and derivatives; major reasons for gains or losses in the recent year, and countermeasures for the future 1. MiTAC did not pursue high-risk, highly leveraged investments. 2. All loans to others follow the “Procedures Governing Lending Capital to others”. The ~165~
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009 ANNUAL REPORT StockNo:2315 2009
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Contents 1. 7. Assessment Letter To
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competitiveness Letter in the marke
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2007 2009 2008 2005 2006 2007 Compa
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2007 2009 2008 2005 2006 2007 Compa
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3.1.2 Responsibilities of major dep
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Names Chairman Mathew Miau Director
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Titles Names Dates took position Sh
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Titles Vice president Vice presiden
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Below 2,000,000 Remuneration Rankin
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Titles Names MiTAC Salaries (A) In
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Managers Receiving Employee Bonuses
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3.3.2 Supervisors’ participation
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Items Status Differentiation with o
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3.3.4 Social contribution to enviro
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3.3.6 Important resolutions reached
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3.4. CPA’s dues Range of Audit Re
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3.7 Relationships between the top t
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3.8 Aggregate shareholding percenta
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2. Preferred stock: None 4.1.4 Majo
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latest financial year after taking
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MiTAC International Corp. Regulatio
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converting price is to be adjusted
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total issuance value, the Company m
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4.3 Employees’ stock options 4.3.
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April 30, 2010 Type of employees’
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April 30, 2010 Units:NT$ Thousand/
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April 30, 2010 Units:NT$ Thousand/S
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‧Personal computers with wire or
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(6) Since many worldly famous compa
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communication technologies mature i
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manufactured for the mainstream mar
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state-of-the-art hardware with navi
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devices, establishes connection wit
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downstream technologies to develop
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2009, and 1.3 million units sold in
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customer satisfaction for a greater
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5.2.2 Important applications and pr
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Volume/value Year 2008 2009 Major p
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5.4.2 MiTAC’s environmental healt
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consumption. To comply with the REA
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and the integration of all our comp
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6. Financial Statement 6.1. Most re
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6.2. Financial analysis in most rec
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6.3. Supervisors’ Report of the m
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MITAC INTERNATIONAL CORP. AND SUBSI
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2.Research, development, manufactur
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4) Classification of current and no
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11) Allowance for doubtful accounts
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18) Convertible bonds For convertib
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C. When a company’s treasury stoc
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B. The Company's investee, G. Marso
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D. Lian Jie Investment Co., Ltd. ma
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Page 119 and 120: 14) Long-term loans December 31, Ba
Page 121 and 122: 17) Capital reserve The R.O.C. Secu
Page 123 and 124: 19) Share-based payment ─ employe
Page 125 and 126: (b) As of December 31, 2009, the su
Page 127 and 128: G. (a) A summary of the movements u
Page 129 and 130: (c) The Company assumed the employe
Page 131 and 132: exceed the sum of retained earnings
Page 133 and 134: C. Components of deferred income ta
Page 135 and 136: 21) Earnings per share Income befor
Page 137 and 138: treasury stock. 23) Personnel, depr
Page 139 and 140: E. Accounts payable As of December
Page 141 and 142: 10. OTHER INFORMATION 1) The fair v
Page 143 and 144: (c) Short-term financial instrument
Page 145 and 146: 11.SUPPLEMENTARY DISCLOSURES A. Inf
Page 147 and 148: Note 2: 47,500,000 shares were pled
Page 149 and 150: (8) Receivables from related partie
Page 151 and 152: B. Information of Subsidiaries: (1)
Page 153 and 154: Note 3: Equal to 50% of the net wor
Page 155 and 156: (5) Marketable securities for which
Page 157 and 158: (10) Information on derivative tran
Page 159 and 160: ) Major transactions with the subsi
Page 161 and 162: D) The relation of business and imp
Page 163 and 164: 12. SEGMENT INFORMATION 1) Operatio
Page 165 and 166: 7 Assessment of financial condition
Page 167: 7.3 Cash flow analysis Unit: NT$ Th
Page 171 and 172: (4) Enterprise and channel servers/
Page 173 and 174: 8.1. Information of affiliates 8.1.
Page 175 and 176: 2. Affiliated companies - basic dat
Page 177 and 178: Company Name Date established Addre
Page 179 and 180: MiTAC (U.K.) Ltd. Sales of MiTAC’
Page 181 and 182: Company name Title Name or Rep. Sha
Page 183: 8.2. MiTAC’s stocks held or dispo
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Letter To Shareholders - Mitac

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