2013 Annual Report

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2013 Annual Report The company’s spokesman: I. Spokesman: Billy Ho / President Acting Spokesperson: Doris Huang / Vice President of Finance Center Tel: (03)328-9000 E-mail: [email protected] II. MiTAC Holdings Corporation. Headquarters Address:8th floor, Building B, No.209, Sec. 1, Nangang Rd., Nangang Dist., Taipei,Taiwan, R.O.C. Tel: (02)2652-5858 Branch and factory: none III. Stock Agency (the Company’s stock transfer agent) Name: China Trust Commercial Bank - Stock Agency Department Address: 5F., No.83, Sec. 1, Chongqing S. Rd., Zhongzheng Dist., Taipei, Taiwan, R.O.C. Website: www.chinatrust.com.tw Tel: (02)2181-1911 IV. CPAs for the most recent Independent Auditor’s Report CPA: Liu Yin-Fe, Wen Fang-Yu Name of CPA firm: Pricewaterhouse Coopers Address: 27F., No.333, Sec. 1, Keelung Rd., Xinyi Dist., Taipei Taipei, Taiwan, R.O.C. Website: www.pwc.tw/ Tel: (02)2729-6666 V. Foreign securities listing: None VI. Company Website: www.mic-holdings.com Contents Page One. Letter to Shareholders ..................................................................................................... 1 Two. Company profile ............................................................................................................... 3 I. Date of incorporation ............................................................................................................ 3 II. Company milestones .............................................................................................................. 3 Three. Corporate Governance ................................................................................................. 4 I. Organizational system ............................................................................................................ 4 II. Information on directors, supervisors, presidents, vice presidents, assistant presidents, and managers of each department and division ..................................................................... 5 III. Information on Corporate Governance ................................................................................. 16 IV. Information on the relationship of top 10 shareholders by proportion of shareholding, related parties, spouse, or kindred within the 2 nd tier .......................................................... 35 V. The shareholders of the company, the company’s directors, supervisors, managers, and the business entity directly or indirectly controlled by the company on the same invested company and also, the consolidated comprehensive shareholding ratio ............... 36 Four. Status of Capital ............................................................................................................ 37 I. Capital and Shares ................................................................................................................ 37 II. Employee Stock Options ...................................................................................................... 43 Five. Operation Overview ....................................................................................................... 47 I. Business Activities ............................................................................................................... 47 II. Market and an overview of production and sales ................................................................. 57 Six. Financial Position ........................................................................................................ 65 I. Condensed Balance Sheet and (comprehensive) Income Statement in the latest five years ..................................................................................................................................... 65 II. Financial analysis in the latest five years. ............................................................................ 69 III. Financial Statement in the latest year ................................................................................... 72 Seven. Important Notice ....................................................................................................... 149 I. Information on subsidiaries/affiliates ................................................................................. 149 One. Letter to Shareholders Dear shareholders, On behalf of MiTAC and staff, I would like to extend my appreciation to our shareholders for your continued support and encouragement. Impacts of external competition, regulatory environment and the overall business environment The technology industry has undergone rapid change over the year, from the PC era characterized by personal computers and notebook PC, to the post-PC era featured with smart phones and tablet PC. Smart phones and tablet PCs have just passed through the peak of positive growth, and they are now replaced by a much wider array of innovative applications and services. The competition among the giant technology firms has switched from the area of consumer products to the development of value-added services, like the integrated application of IOT (Internet of Things). In the advent of the high-speed era in the Internet, the speed of data transmission accelerated significantly and the demand for massive storage mushroomed. The application analysis of mass data helps to stimulate the continued innovation of the cloud computing technology. This development unleashed different business models and opportunities for transformation that no one could imagine in the past. MiTAC has got the grip of the trend of cloud computing and the SoLoMo (Social, Local, Mobile) smart internet living and spare no effort to transform the group in line with the next wave of growth. MiTAC International Corp. established MiTAC Holdings Corporation on September 12, 2013 through 100% share swap. According to the Business Mergers and Acquisitions Act, the Company Act, and Operating Rules of the Taiwan Stock Exchange Corporation, the new holding company shall hold at least two subsidiaries within one year. As such, the group plans to split up the business organization in the second half of 2014 to overhaul the organization for better performance and embrace the very next opportunity of growth. Operating results, budget execution, revenue and expenditure, and profitability analysis from year 2013 The overall business performance of the company in 2013 showed its achievement towards the goal of not chasing after high revenue in the short run but the pursuit of the corporate strategy of product portfolio adjustment and profit structure improvement. The first objective is to upgrade its profit position. MiTAC Holding had consolidated revenue amounting to NT$11.897 billion since its date of establishment, with earnings the net profit before tax, at NT$645 million and earnings per share at NT$0.78. Since our company did not its publicize financial forecasts in 2013, we could not report on the execution of the budget. Implementation of the operating results from year 2013 and the status of our research and development 1. The company launched the first high-density server equipped with 64-bits ARM processor and runs under the 4U structure featuring 18 computing note points. 2. Mass production of the new generation server with SPARC processor. 3. The IBM OpenPower Consortium organized by IBM, Google, Mellanox and nVIDIA to provide the next generation big database and cloud database center, invited the company. This 1 is an innovative system with more diverse and flexible platform. 4. MiTAC launched the high performance computing, database center, and parallel computing environment that can support standard servers using 1 to 8 brand new NVIDIA® TESLA® K40 GPU accelerator and solution for workstations. 5. Research and develop a series of industrial and commercial use tablets featuring payment and warehouse environmental management functions. 6. By integrating with cloud content service, social network, and local navigation information, Magellan SmartGPS Eco received the “2013 CES Innovations, Design and Engineering Award”. 7. The Mio MiVue R25 DVR won the “IT Month Top 100 Innovative Products – Gold Award”. The MiVue M300, the DVR exclusively designed for the motorcyclists, also won the “IT Month Top 100 Innovative Products ”. 8. Magellan Echo smart sports watch won the “Summer Retailer Exhibition of USA with two best products”. 9. MioCARE A100 professional tablet won the “2013 iF Product Design Award”. Corporate Development Strategies for 2014 Enterprise cloud computing business focused on the development of cloud data and computing equipment. MiTAC keeps the trend of cloud service and big data analysis under control. Motivated by the strong demand for back-end data center, MiTAC integrated its TYAN professional products in depth and scope, and its years of experience and technological-know-how in ODM products to provide the market and customers a new generation of solutions of public, private, and hybrid cloud. In the operation of smart portable device and cloud service, MiTAC based on the SoLoMo concept in the development of an ecological system featuring cloud service and smart portable device. By integrating the user experience in Mio, Magellan, and Navman, MiTAC integrates the cross-platform and cross-hardware smart portable devices that link IOT (Internet of Things) to different clouds and network information and transcend to the new era of integrative service of cloud hardware/software. In the CES of 2014, MiTAC announced the launch of the SmartGPS Eco, an integrated hardware and software service on cloud basis. This is a
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