Letter To Shareholders - Mitac

with its upstream and downstream manufacturers, and how a company integrates
advanced technologies into its products are the keys to success in the server market.
For these reasons, the company not only strengthens its relationship with hardware
suppliers such as Intel, AMD, and NVIDIA etc, but also maintains close interaction
with software providers to secure market share through collaborated product
authentication, integrated high-performance yet low-cost solutions, and sustained
product competitiveness. Meanwhile, the company co-operates closely with cloud
computing providers to offer hardware server platforms that are optimal for the cloud
computing structure. Whether the customer is a Software as a Service (SaaS) provider,
Platform as a Service (PaaS) provider, or an Infrastructure as a Service (IaaS) provider,
the company supplies the right server/workstation to build the most robust hardware
platform, thereby providing corporate and client users with the most comprehensive
cloud computing services.
7.5.7 The impact of the company’s image change, of our crisis management capabilities,
and countermeasures in the most recent year: None.
7.5.8 Expected values, possible risks and countermeasures for recent merger: None.
7.5.9 Risks faced in centralized stocking and selling and their countermeasures:
About stocking:
The subsidiaries in China are our OEM factories, so we have to buy finished goods
back and pay for processing charges. But MiTAC owns 100% of the subsidiaries so there
is no risk for stock control. Also, our procurement policy for main materials is to have at
least two suppliers and spread out the sources for material supply; furthermore, MiTAC
has maintained a long-term relationship with all suppliers to ensure a stable source of
material supply.
About sales:
The company does not get most of its revenue from any single client, so there is no
obvious risk in this area. The sales ratio to each client has been kept under 20% in the
last two years. Based on our strong R&D and production capabilities, on one hand,
MiTAC has maintained a long-term relationship with the existing customers; on the
other hand, we have striven to develop new customers in order to expand the source of
business. Therefore, MiTAC expects no risk from a centralized practice.
7.5.10 Impact and risks associated with large transfers or conversions of equity by directors,
supervisors or major shareholders holding stake over 10%:
MiTAC is aware of the major shareholders and the final controller of the major
shareholders, so the holdings of the Directors, Supervisors, and the top ten shareholders
are reported according to the Stock Exchange Law.
7.5.11 Litigation and non-litigious disputes:
The company and its directors, supervisors, general manager, actual representative,
major shareholders with more than 10% ownership interest, and companies to whom the
company holds controlling interests were not involved in any major litigations,
non-contentious cases, or administrative litigations which may materially impact
shareholders’ equity or security prices in the latest year up until the publication date of
this annual report, listed under Section 20-6-12 of “Regulations Governing Information
to be Published in Annual Reports of Public Companies”.
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