I. A Letter to the shareholders - Mitac

Contents 

Page 

I. A Letter to the shareholders................................................................................. 1 

II. Corporate Governance ......................................................................................... 3 

(1) Information on Directors, Supervisors, General Managers, Vice GMs, 

Assistant GMs, and managers of each department and division ................................ 3 

(2) Disclosure of Remuneration to CPAs ....................................................................... 19 

(3) Information on replacement of CPA ......................................................................... 21 

(4) Disclosure of any of The Company’s Chairman, General Manager, or 

managers involved in financial or accounting affairs being employed by the 

CPA firm or any of its affiliated company within the most recent year: none. ......... 21 

(5) Details of shareholding transfers and share collateralization within the latest 

year, up till the publication date of this annual report, initiated by directors, 

supervisors, managers and shareholders with more than 10% ownership 

interest. ...................................................................................................................... 22 

(6) Relation between the top ten shareholders ............................................................... 23 

(7) Proportion of shareholding in aggregate ................................................................... 27 

III. Capital and Shares .............................................................................................. 28 

(1) Capital and shares ..................................................................................................... 28 

(2) Disclosure of corporate bonds: none. ....................................................................... 34 

(3) Disclosure of preferred shares: none. ....................................................................... 34 

(4) Disclosure of ADR/GDR: none. ............................................................................... 34 

(5) Employee Stock Options........................................................................................... 35 

(6) Information on new shares from acquisition or assignment by a third party: 

none. .......................................................................................................................... 49 

(7) Progress on the use of funds: The Company did not have any planned use of 

capital that was incomplete, or whose expected yield had yet to materialize, 

up till the one quarter prior to the publication date of this annual report. ................ 49 

VI. Operation Overview ........................................................................................... 50 

(1) Business Activities .................................................................................................... 50 

(2) Market and Sales ....................................................................................................... 63 

V. Financial Position ................................................................................................ 72 

(1) Supervisors’ Report on Financial Statement of the most recent year ....................... 72 

(2) The latest financial statements and independent auditor’s report ............................. 73 

(3) Insolvency of the Company and subsidiaries in the last two years to the date 

this report was printed and the impact on the financial position of the 

Company: none. ...................................................................................................... 148 

VI. Important Notice ............................................................................................... 149 

(1) Information on subsidiaries/affiliates ..................................................................... 149

Ladies and gentlemen, dear shareholders, 

I. A Letter to the shareholders 

MiTAC has passed through a two-year long ordeal, from the end of the global financial crisis to the 

post-PC era. With the efforts of all, we have successfully achieved a soft landing. We fine-tuned the 

Cloud Computing operation and integrated Cloud Computing with local GPS services through an 

overall adjustment of our development strategy ranging from technology and products to marketing. 

Furthermore, we tried our hardest in “integration, innovation, and execution” to spark our 

innovation momentum. This will be the prime force driving MiTAC for further growth! 

Revenue, Profit, and R&D 

In 2011, MiTAC had consolidated revenue of NTD 46.3 billion, a decrease of 17.19% from the 

same period of 2010 after its adjustment of its business strategy. The earnings before taxation in the 

same year amounted to NTD 525 million, or an increase of NTD 1.04 billion from the same period 

of the previous year with earnings per share amounting to NTD 0.17. We have no budget attainment 

rate to report, as we did not disclose financial projections for the fiscal year 2011. 

For maintaining its momentum in R&D innovation, MiTAC has appropriated at least 5% of its 

revenue for R&D spending in order to buttress its capacity in technological-know-how and product 

development. MiTAC also sought a breakthrough in production applications. In consumer 

navigation products, MiTAC launched its GPS products featuring a community concept and outdoor 

professional surveying products under the Magellan brand. A series of new items carrying the Mio 

brand were also launched, including built-in GPS and gravity weight sensor drive recorders, GPS 

tracer products, and vehicle and medical use panels. In the domain of cloud computing products, 

MiTAC launched a series of server hardware platform high-performance computing items to assist 

customers in developing application tools in science, engineering R&D, and drive recorders. The 

brand new high-density energy efficient micro-server and storage devices that can satisfy the needs 

of customers in storage capacity and high-speed computing were also unveiled. 

Awards and corporate social responsibility 

MiTAC continued its efforts in running its own brands, with Mio winning the champion of “GPS 

Products” as the “Ideal Brand of Consumers” series for four consecutive years. In the domain of 

tablets and outdoor GPS products, MiTAC also won different awards from the iF design awards 

from Germany. MiTAC is the first firm that accomplished carbon footprint validation with its palm 

size GPS products. Nonetheless, MiTAC never ceases to collaborate with the group in holding Y.S. 

Education Foundation games and competitions on campus in order to develop good people in 

technology and design. MiTAC will continue its efforts in energy saving and carbon reduction in the 

office, organize green design product circuit shows, and will do its best with all in environmental 

protection. 

Business Prospects in 2012 

The vigorousness of the global financial situation and the uncertainty of the sovereign debt crisis of 

Europe has compelled us to streamline the organization for the efficient reduction of operating 

expenses. In addition, we proactively seek resource integration and focus on the growth of 

investment in our core business with a view to make a fresh start at the time of recovery. 

MiTAC International Corporation is now focused on two major business areas after strategic 

adjustment: 

I. Cloud Computing Business Group-Cloud: focus on servers, storage devices, database 

centers and high-performance computing systems, with private or public cloud computing 

systems. Client-end: proactively launch the development of smart end-user products, like 

slim computers, workstations, portable POS and personal user-end computing devices. 

-1-

II. Mobile communication products business group will focus on smart personal or professional 

products and services. Starting from the living experience and needs of the consumers, 

MiTAC will launch palm size mobile communication devices, including vehicle video GPS, 

drive recorders, and professional and sports GPS, GPS software and medical panels, and 

vehicle-use electronic products so that it can clearly position itself in the market for 

releasing business and brand energy into the market for deep penetration. 

In the year ahead, MiTAC will provide customers and consumers with optimal solutions through 

resource integration and continued development of MiTAC’s core values in the wake of cloud 

computing application services for creating reasonable profit and for the maximum return in favor 

of the shareholders, customers, and employees. 

May I wish you all good health and good luck. 

Mathew Miau, Chairman 

Billy Ho , 

General Manager 

-2-

II. Corporate Governance 

(1) Information on Directors, Supervisors, General Managers, Vice GMs, Assistant GMs, and managers of each department and division 

(I) Information on Directors and Supervisors 

Titles Names 

Date of 

office 

Date First 

Term 

Elected 

Shares held at time of 

election 

Shares 

currently held 

Quantity of shares held 

by spouse or 

dependents 

Shares held 

under other 

name 

Education and Experience 

Positions currently held at 

MiTAC or other companies 

04/14/2012 

Spouse or kin within two 

degrees of consanguinity 

serving as executive, 

director, or supervisor 

Quantity percentage quantity percentage Shares Stake Shares Stake Title Name Relationship 

Santa Clara University, CEO MiTAC International 

EMBA 

Corp. 

California Berkley Chairman, SYNNEX 

University, Bachelor, International Corp. 

Chairman Mathew Miau 06.18.2010 3-y 05.17.1986 21,805,999 1.42% 21,805,999 1.43% 0 0.00% 

Electrical Engineering 

0 0.00% 

Chairman, Lien Hwa Industrial 

None None 

Corp. 

Chairman, UPC Group 

Vice-President, MiTAC Inc. 

Getac Technology Corporation 

- Director 

None 

MIS in Computer Science, GM, MiTAC International 

Fairleigh-Dickinson Corp. 

University 

Director, Gemtek Technology 

Master UC San Diego Corp. 

Marketing Manager, Pao Director, Harbinger Venture 

Hwa 

Capital 

Director Billy Ho 06.18.2010 3-y 

05.18. 

2004 

4,823,727 0.31% 4,823,727 0.32% 0 0.00% 

Trading Co., Ltd. 

0 0.00% 

Linpus Technologies, Inc. 

Director, 3-Probe Technologies None None 

Co., Ltd. 

Director, Loyalty Founder 

Enterprise corp. 

Chairman, DLC Technology 

Corp. 

Chairman, MIO Technology 

Corp. 

None 

MiTAC Inc. 06.18.2010 3-y 

Director 

11.24.1982 

122,456,572 

(note 2) 

7.97% 122,456,572 8.01% 0 0.00% 0 0.00% None None None None None 

Graduated from the MiTAC Inc – Chairman None None None 

Industrial College of the SYNNEX International Corp. - 

Armed Forces 


Rep:Kuo Yun 06.18.2010 3-y 05.25.2001 0 0.00% 0 0.00% 11,342 0.00% 

Vice Chairman and CEO of MiTAC Information 

Institute for Information Technology Corp - Chairman 

0 0.00% 

Industry 

ARES International Corp. - 

Executive Secretary of the Director 

NII Committee, Executive Xinda Computers Co., Ltd. - 

Yuan 

Chairman 

Head of Military 

MiTAC Education Co. Ltd. - 

-3-

Titles Names 


UPC 

Technology 

Corp 

Rep.Yung-Do 

Way 

Rep. Simon 

Wu 

Date of 

office 

Term 

Date First 

Elected 


election 


Shares 


by spouse or 

dependents 

-4- 

Shares held 


name 









Procurement Council, 

Ministry of National 

Defense 

Head of Management 

College, National Defense 

University 

Deputy Commander of the 

Army Logistics Command 

Officer at the Defense 

Management Center, 

Ministry of National 

Defense 

Officer at the Air Force 

Logistics Center 

Chairman 

ONSYS Corporation - Director 

Lien-Shun-Tsan Venture 

Capital Co., Ltd. - Director 

Far Eastern Electronic Toll 

Collection Co., Ltd. - Director 

06.18.2010 3-y 02.29.1989 129,628,156 8.44% 129,628,156 8.47% 0 0.00% 0 0.00% None None None None None 

06.18.2010 3-y 07.02.2008 0 0.00% 0 0.00% 0 0.00% 0 0.00% 

06.18.2010 3-y 05.25.2001 0 0.00% 7,856 0.00% 0 0.00% 0 0.00% 

Supervisor Arthur Chiao 06.18.2010 3-y 05.18.2004 0 0.00% 0 0.00% 0 0.00% 0 0.00% 

Supervisor 

Lien Hwa 

Industrial 

Corp 

Rep: Hu-Shi, 

Charles Ching 

MBA of Georgia University 

BA of Accountancy, 

Soochow University 

Senior auditor, Deloitte & 

Sells, USA 

Director of DTT 

CEO of Deloitte 

MBA, University of Dallas 

CFO, Acer Group affiliated 

company 

Executive VP for Finance 

Best Power Technology 

(U.S.) 

MSEE and researcher in 

Business Administration, 

Washington University 

Chairman of Walsin Lihwa 

DelSolar Co., Ltd. - 

Independent Director 

Apex biotechnology corp - 

Independent Director 

Citibank Taiwan Ltd. - Director 

Semiconductor Corporation - 


SerComm Corp - Supervisor 

Vanguard International 

Chilisin Electronics Corp - 

Supervisor 

Assistant GM, UPC 

Technology 

Chairman of Wei Chen 

Investment Co. 

Chairman of Winbon 

Vice-Chairman of Walsin 

Lihwa 

None None None 



06.18.2010 3-y 06.17.1986 91,625,310 5.96% 91,625,310 5.99% 0 0.00% 0 0.00% None None None None None 

06.18.2010 3-y 07.14.2006 0 0.00% 1,166 0.00% 0 0.00% 0 0.00% 

Master of Engineering at 

National Tsing Hua 

University 

Council for Economic 

President and GM of Lien Hwa 

Industrial Corp. 

SYNNEX International Corp. - 


None None None

Titles Names 

Date of 

office 

Term 

Date First 

Elected 


election 


Note 1: Please refer to Table 1 below for information on the main shareholders of corporate shareholders 

Note 2: Did not serve as The Company’s director during 06.12.2007–06.24.2008 

Shares 


by spouse or 

dependents 

-5- 

Shares held 


name 









Planning and Development 

Adjunct Lecturer, Dept. of 

Chemical Engineering Feng 

Chia University 

Asst GM, UPC Technology 

Corp 

Pao long international co., 

ltd.-Director 

Supervisor, Getac Technology 

Corporation

Table 1: Dominant shareholders of institutional shareholders 

Name of institutional 

shareholders (Note 1) 

04/14/2012 

Major shareholders of institutional shareholders (Note 2) 

Percentage of 

Name of shareholder 

shareholding (%) 

Lien Hua Industrial Corp. 29.78% 

Synnex Technology International Corporation 5.28% 

Shin Kong Life Insurance Co., Ltd. 3.79% 

Ma Chang-Long 2.35% 

Liberty Stationery Corp. 1.85% 

UPC Technology Corp. Yi Yuan Investment Co., Ltd. 1.65% 

Tong Da Investment Corporation 1.26% 

MiTAC International Corp. 1.24% 

Hua Mao Trading Co., Ltd.泰商華貿有限公司 1.15% 

Investment Trust Account of UBS Taiwan held 

under the custody of HSBC Taiwan. 

1.13% 

UPC Technology Corp. 9.75% 

Yi Yuan Investment Co., Ltd. 8.71% 

Yi Feng Investment Co., Ltd. 4.69% 

Miao, Feng Sheng. 3.30% 

Lien Hua Industrial 

Corp. 

Matthew F.C. Miau 

Synnex Technology International Corporation 

Miao Feng-Chuan 

3.21% 

3.10% 

3.04% 

Y.S. Education Foundation 3.02% 

Employees’ Welfare Committee, Lien Hua Industrial 

Corp 

2.84% 

Nan Shan Life Insurance Co., Ltd. 2.58% 




Mei An Investment Co., Ltd. 8.18% 

MiTAC Inc. 

Mathew Miau 

Tsu Fung Investment Corp. 

5.42% 

4.38% 

Hua Cheng Construction Co., Ltd. 1.92% 

Omron Corporation, Japan 1.70% 

Bao Hsin International Investment Co., Ltd. 1.18% 


Note 1: If Directors and Supervisors serve as representatives of institutional shareholders, then the names of 

institutional shareholders must be provided. 

Note 2: Name the major shareholders (the top 10 owners) of corporate shareholders and their shareholding percentage. 

Table 2 below is applicable if any of the major shareholders is also a corporate entity. 

-6-

Table 2: Dominant shareholders of dominant institutional shareholders 

Name of institutional shareholder 

(note 1) 

04/14/2012 

Dominant shareholders of institutional shareholders(note 2) 

Percentage of 


shareholding 


Yi Yuan Investment Co., Ltd. 8.71% 


Miao Feng-Sheng 3.30% 

Mathew Miau 3.21% 

Lien Hua Industrial Corp. 


Miao Feng-Chuan 3.04% 

Y.S. Education Foundation 3.02% 

Employees’ Welfare Committee, Lien Hua 

Industrial Corp 

2.84% 


MiTAC Inc. 13.72% 

Oppenheimer Developing Markets Fund 

account held in trust by Chase Bank 

4.55% 

Cathay Life Insurance Co., Ltd. 3.73% 

Mathew International Fund investment account 

held in custody by HSBC Bank (Taiwan) 

Limited 

3.30% 

Synnex Technology International Saudi Arabian Monetary Agency investment 2.93% 

Corporation 

account held in trust by J.P. Morgan Chase 


Bureau of Labor /Insurance 2.41% 

Morgan Stanley & Co International PLC 

investment account held in custody by HSBC 

Bank (Taiwan) Limited 

2.40% 

Tu Shu-Wu 2.06% 


Shin Kong Life Insurance Co., Ltd. Shin Kong Financial Holding Co., Ltd. 100.00% 

Zhi-Jiang Investment Co., Ltd. 21.10% 

Masateru Kadota 10.40% 

Akira Kadota 8.90% 

Yayoi Kadota 8.90% 

Liberty Stationery Corp. 

Takanori Kadota 

Complete Connection Limited 

8.80% 

5.70% 

Yu Jing-Shen 5.10% 

Sun Li-Gang 5.30% 

Sun Jian-Chung 4.60% 

Chang Zheng 3.50% 

Yi Yuan Investment Co., Ltd. Shang Chuan Neng Ltd. (British Virgin Islands) 100.00% 

-7-

Name of institutional shareholder 

(note 1) 

Dominant shareholders of institutional shareholders(note 2) 

Percentage of 


shareholding 

Ho Li Investment Co., Ltd. 19.99% 

Chou Te-Chien 0.05% 


Tong Da Investment Corporation Hua Cheng Construction Co., Ltd. 19.99% 

Wei Cheng Investment Co., Ltd. 19.99% 

Tsu Fung Investment Corp. 19.99% 



MiTAC Inc. 8.00% 


Mei An Investment Co., Ltd. 1.98% 


MiTAC International Corp. 


次元新興市場酏評估基金 

Investment Account held under the custody of Citibank 

Taiwan. 

1.33% 

1.07% 


Getac Technology Corporation 0.87% 


Hua Mao Trading Co., Ltd. 

泰商華貿有限公司 

Foreign investment (n/a) - 

UPS Taiwan investment account 

held under the custody of HSBC 

Taiwan 

Non-corporate entity (n/a) - 



Shin Kong Life Insurance Co., Ltd. 3.79% 

Ma Chang-Long 2.35% 

Liberty Stationery Corp. 1.85% 

UPC Technology Corp. 

Yi Yuan Investment Co., Ltd. 

Tong Da Investment Corporation 

1.65% 

1.26% 


Hua Mao Trading Co., Ltd. 

泰商華貿有限公司 

1.15% 

UPS Taiwan investment account held under the 

custody of HSBC Taiwan 

1.13% 

Yi Feng Investment Co., Ltd. Heng Fu Ltd. (British Virgin Islands) 100.00% 

Y.S. Education Foundation Non-corporate entity (n/a) - 

Employees’ Welfare Committee, 


Non-corporate entity (n/a) - 

-8-

Dominant Shareholders of institutional shareholders (note 2) 

Name of institution (note 1) 

name of shareholder 

Percentage of 

shareholding 

Run Chen Holdings Co., Ltd. investment trust 

account held under the Custody of First Bank 

第一銀行受潤成投資控股公司信託專戶 

83.11% 

Ruen Chen Investment Holding Co., Ltd. 7.57% 

Tu Ying-Chung 3.25% 

Ruen Hua Dyeing & Weaving Co., Ltd. 0.43% 

Kuo Wen-Deh 0.11% 

Nan Shan Life Insurance Co., Ltd. 

Ji Pin Investment Co. Ltd. 

吉品投資股份有限公司 

0.11% 

Global Cheer Investment Limited 0.05% 

Bao Yi Investment Co. Ltd. 

寶意投資股份有限公司 

0.05% 

Bao Hui Investment Co., Ltd. 

寶暉投資股份有限公司 

0.05% 

Bao Huang Investment Co., Ltd. 

寶煌投資股份有限公司 

0.05% 

Vision Quest Overseas Ltd. 82.08% 

Mei An Investment Co., Ltd. JumpStart Investments Ltd. 16.67% 

Others 1.25% 

Tsu Fung Investment Corp. MiTAC International Corp. 100.00% 

Hua Chen Construction Co., Ltd. Lien Hua Industrial Corp. 100.00% 

Japan Trustee Services Bank, Ltd. (trust account) 6.04% 

State Street Bank & Trust Company 505223 4.94% 

The Master Trust Bank of Japan, Ltd. (trust account) 4.65% 

The Bank of Tokyo-Mitsubishi UFJ, Ltd. 4.06% 

The Bank of Kyoto, Ltd. 3.72% 

Omron Corporation, Japan 

Nippon Life Insurance Company 

The Chase Manhattan Bank 385036 

2.90% 

2.40% 

RBC Dexia Investor Services Trust, London 

Lending Account 

2.24% 

Omron Employee Stock Ownership Plan 2.17% 

Mellon Bank, N.A. As Agent For Its Client Mellon 

Omnibus US Pension 

1.80% 

Bao Hsin International Investment 

Co., Ltd. 

Hon Hai Precision Industry Co., Ltd. 100.00% 

Note 1: If any of the major shareholders listed in Table 1 is an institution, then the name of the institution must be 

provided. 

Note 2: Name the dominant shareholders (the top 10 owners) of institutional shareholders and their shareholding 

percentage 

-9-

Information on the directors and supervisors 

The no. of public companies where the person 

Five years of work experience and the 

following professional qualification 

Qualification Lecturer or Judge, public Work 

requirement higher level prosecutor, experience in 

of public or attorney at law, business, law, 

private CPA, or other finance, 

college or professional accounting, or 

university in licensing, other areas 

business, certification or required by 

legal studies, designation company 

finance, 

operation. 

accounting 

or other 

related 

topics 

required for 

company 

name 

management 

1 

Compliance with independent status (note 1) ) 

2 3 4 5 6 7 8 9 10 

Mathew Miau, 

Chairman 

- - - - - - - 

Billy Ho , Director 


- - - - - - - - 

MiTAC Inc. 

Representative: Kuo 

Yun 


- - - - - - 

UPC Technology Corp 

Representative: Yung-Do 

Way 


- - - 2 

UPC Technology Corp 

Representative: Simon 

Wu 

Supervisor 

- - - - - - 

Lien Hwa Industrial Corp 

Representative: 

Hu-Shi, Charles Ching 

- - - - - - 

Supervisor 

Arthur Chiao 

- - - - 

Note 1: Directors and Supervisors who meet the following requirements two years before their assumption of office or 

during their term of office shall put a “” in the appropriate box for specifying the qualification requirements. 

(1) Not an employee of the Company or its subsidiaries or affiliates. 

(2) Not a director or supervisor of the Company or its subsidiaries or affiliates (except an independent director of an 

investee of the Company, of the parent of the Company, or directly or indirectly controlled by the Company with 

more than 50% of its stakes). 

(3) The person, the spouse, underage children, who hold more than 1% of the outstanding shares or one of the top 10 

shareholders who are natural persons or who hold shares of this company under the title of a third party. 

(4) Not the spouse, kin within the 2 nd tier or the next of kin within the 5 th tier of any of the parties mentioned in (1) 

~(3). 

(5) Not a director, supervisor or employee of an institutional shareholders holding more than 5% of the outstanding 

shares of the Company, or of the top five institutional shareholders. 

(6) Not a director, supervisor, manager, or shareholder holding more than 5% of the outstanding shares of specific 

company or institution having business of financial transactions with the Company. 

(7) Not a professional, proprietor, partner, company or the owner, partner, director, supervisor, manager or spouse of 

the professional consulting entities providing services or consultation in business, law, finance, accounting and 

other for the Company or its subsidiaries or affiliates. 

(8) Not a spouse or kin within the 2 nd tier of another director. 

(9) The provisions of Article 30 of the Company Law are not applicable. 

(10) Not elected to the government, institution or their representatives under Article 27 of the Company Law. 

-10- 

acts as independent director

2. Information on General Managers, Vice GMs, Asst GMs, and managers of the departments and branches 

Shareholding by Shareholding under 

4/14/2012 

Manager who is the 

Title Name 

Date of 

office 

Shareholding spouse and underage 

children 

the title of a third 

party 

Major experience (education) Positions in other companies 

spouse or kin within the 

2 nd tier. 

Quantity Percentage Quantity Percentage Quantity Percentage Title Name Relation 

Santa Clara University, EMBA Chairman, SYNNEX 

California Berkley University, International Corp. 

Bachelor, Electrical Engineering Chairman, Lien Hwa Industrial 

General 

CEO 

Mathew 

Miau 

09.01.1998 21,805,999 1.43% 0 0.00% 0 0.00% 

Corp. 

Chairman, UPC Group 

Vice-President, MiTAC Inc. 

Getac Technology Corporation - 



MIS in Computer Science, Director, Gemtek Technology 

Fairleigh-Dickinson University Corp. 

Master UC San Diego 

Director, Harbinger Venture 

Marketing Manager, Pao Hwa Capital 

Trading Co., Ltd. 

Director, Linpus Technologies, 

Inc. 

General 

Billy Ho 

Manager 

03.27.2000 4,823,727 0.32% 0 0.00% 0 0.00% 

Chairman, MIO Technology 

Corp. 

Chairman, DLC Technology 

Corp. 

Director, 3-Probe Technologies 

Co., Ltd. 

Director, Loyalty Founder 

Enterprise corp. 


Senior Vice 

C. J. Lin 

GM 

06.15.2007 137,180 0.01% 1,102 0.00% 0 

Bachelor, Electrical Engineering, Director, Loyalty Founder 

0.00% 

National Taiwan University Enterprise Co., Ltd. 

MBA, senior management, 


Senior Vice 

Michael Lin 07.26.2010 

GM 

2,109,408 0.14% 11,420 0.00% 0 

National Chiao Tung University 

0.00% 

None 

Bachelor, Electrical Engineering, 

National Taiwan University 

Bachelor, Electrical Engineering, Director, DLC Technology Corp. 


National Taiwan University 

Vice GM and General Manager of 

Director, Mio Technology Corp. 

Vice GM King Chen 06.18.2009 1,247,654 0.08% 0 0.00% 0 0.00% Mobile Communication Division, 


Senior Advisor, Office of the GM, 



EMBA class, National Sun Director, 3Probe Technologies 

Vice GM Percy Chen 03.20.1997 510,626 0.03% 0 0.00% 0 0.00% Yat-Sen University 

Electronics Dept., Taipei 


-11-

Title Name 

Date of 

office 

Shareholding 

Shareholding by 

spouse and underage 

children 

Shareholding under 


party 

-12- 




2 nd tier. 


Technology University 

Manager, MiTAC Inc. 

Vice GM James Juan 06.06.1997 50,003 0.00% 0 0.00% 0 0.00% 

Vice GM Ted Chang 09.01.1999 5 0.00% 0 0.00% 0 0.00% 

Vice GM Alice Fang 02.23.2005 736,483 0.05% 0 0.00% 0 0.00% 

LLD, Rutgers State University, 

NJ, USA 

LLM, University of Washington, 

USA 

Baker & McKenzie 

Medical Engineering Dept., 

Christian Chung Yuan University 

Engineer, Shen Chia Engineering 

Co. Ltd.神嘉工程公司工程師 

Institute of Technology 

Management, National Chengchi 

University 

Director, MIO Technology Corp. 

Director, DLC Technology Corp. 


None None None None 

Director, Shen-Tong Construction 

& Developments Co., Ltd. 


Vice GM 

Johnson 

Wang 

12.19.2007 199,532 0.01% 5,884 0.00% 0 0.00% MBA, Tulane University, USA Master, Engineering 

Management, Stanford University 

Master, Electrical Engineering, 

University of Texas at Austin. 

Bachelor, Electronic Engineering, 

National Chiao Tung University 

General Manager, Intel Global 


Vice GM Albert Mu 08.24.2009 60,000 0.00% 0 0.00% 0 0.00% Server Innovation Corp. 

Vice President, Promise Corp. 

Chief Technology Officer, 

Wistron Corporation 

Vice President, Clarent Corp. 

Senior Manager, Cisco 

Manager, Hal Computer 

Manager, MIPS Computer 

EMBA, National Taipei 

University 

Electronic Dept., Taipei 


Vice GM J.J. Huang 01.25.2010 0 0.00% 0 0.00% 0 0.00% Technology University 

Section Manager of QC, Great 

electronics corp濟業電子公司品 

管課長 


Vice GM Bjorn Tsai 01.25.2010 691 0.00% 0 0.00% 0 

EMBA, National Central 

0.00% None 

University Bachelor, Mechanical 

None None None

Title Name 

Vice GM Huang 

Hsiu-Ling 

Head of Ting 

Accounting Hui-Yuan 

Date of 

office 

Shareholding 

Shareholding by 

spouse and underage 

children 

Shareholding under 


party 

-13- 




2 nd tier. 


Engineering, National Chengkung 

University 

Vice GM, Production Center, 

MiTAC Inc. 

VP, Operation & HP ODM, First 

International Computers, Inc., 

VP, Premier Technology, Co., 

Ltd. 

Asst VP, International 

Procurement, HP (Taiwan) 

Purchase staff, TI Taiwan 

01.31.2011 541 0.00% 0 0.00% 0 0.00% 

02.17.2009 0 0.00% 0 0.00% 0 0.00% 

Bachelor, Taxation and Finance, 

National Chung Hsing University 

Vice GM, Financial Center, 

MiTAC Computer (KunShan) 

Co., Ltd. 

Director of General Management 

Dept., Hanrei Technology 

Corporation 

瀚瑞科技總管理處處長 

Yung Cheng CPAs Office 

詠晟會計事務所 

Accounting Clerk, Lung Chang 

Enterprise隆彰企業會計員 

Bachelor, Accounting, Tamkang 

University 

Senior Staff, Acer Computers. 

Supervisor, Mio Technology Inc. 

Supervisor, Harbinger Venture 

Capital 

Supervisor, Tsu Fung Investment 

Corp. 

Director, Lian Jie Investment Co., 

Ltd. 

Supervisor, 3Probe Technologies 


None None None None

3. Remunerations to the Directors, Supervisors, General Managers, and Vice GMs 

Title Name 

Remuneration to directors 

Remuneration from 

distribution of 

Remuneration(A) Pension(B) 

earnings (C) 

(Note 1) 

MiTAC 

All companies in the consolidated financial 

statements 

MiTAC 


statements 

MiTAC 


statements 

Business 

expenses(D) 

MiTAC 

Remunerations to the Directors 


statements 

Total of A, B, C, and D 

in proportion to 

earnings before taxation 

(%) 

MiTAC 


statements 

-14- 

Salaries, bonus, 

and special 

expenses (E) 

MiTAC 


statements 

Remuneration from holding employee positions 

Pension 

(F) 

MiTAC 


statements 

Employee bonuses (G) 

(note 1) 

MITAC 

cash dividend 

stock dividend 

All in 

consolidated 

statement 

cash dividend 


2011 

Currency: NTD in thousand/ thousand shares 

Quantity of share 

subscription entitled 

by ESO(Note 5) 

MiTAC 


statements 

Total of A, B, C, D, E, 

F and G in proportion to 

earnings before taxation 

Chairman Mathew Miau 

408 408 - - 1,480 1,480 100 100 0.79% 0.79% 7,113 11,113 10 

Director Billy Ho 

MiTAC Inc. 


Rep: Kuo Yun 

UPC 

Technology 

105 112 - 112 - 12,400 12,400 3.68% 5.26% 4 

5 

Corp 

Director Rep: Yung-Do 

Way 

Rep: Simon 

Wu 

Note 1: The figures were the amount of earnings for distribution proposed by the Board of Directors before the approval of the general meeting of shareholders for approval. 

Note 2: In 2010, the total remunerations of the Company and all companies in the consolidated financial statements accounted for -0.06% of the earnings (loss) before taxation due to the corporate earnings in 2010 were 

negative. The same ratio in current year is 0.79% for remuneration to the directors and the supervisors, which resulted in an increase of the amount. 

Note 3: The remunerations to directors from earnings are compiled in a table for distribution of earnings subject to the approval of the Board of Directors and finalization of the general meeting of shareholders. The 

remunerations to directors were proposed at the recommendation of the Remuneration Committee, industry level, and the possible risks in the future by the Board of Directors at the authorization under the Articles of 

Incorporation. 

Note 4: Pension as stated is the amount of appropriation. 

Note 5: This refers to the quantity of shares (excluding the exercised portion) entitled to directors who also hold employee positions (including the General Manager, Vice General Managers, other managers and employees) in 

the Company from Employee Stock Options as of the date this report was printed (4/30/2012). 

Note 6: The Company does not single out the name and remuneration of particular director for disclosure and the disclosure of remunerations was presented on a salary scale with the names of all concerned. 

MiTAC 


statements 

Remuneration from subsidiaries or other investees

Salary Scale 

Bracket of salaries to directors of the Company Name of director 

Total of (A+B+C+D) Total of (A+B+C+D+E+F+G) 

Company 


statement 

The Company All investees 

Mathew Miau/Billy Ho/UPC Technology Mathew Miau/Billy Ho/UPC Technology Mathew Miau/UPC Technology 

Mathew Miau/UPC Technology 

Less than NT$2,000,000 

Corp/Yung-Do Way/Simon Wu/MiTAC Corp/Yung-Do Way/Simon Wu/MiTAC Corp/Yung-Do Way/Simon Wu/MiTAC Corp/Yung-Do Way/Simon Wu/MiTAC 

NT$2,000,000~NT$5,000,000 (Exclusive) 

Inc./Kuo Yun 

Inc./Kuo Yun 

Inc./Kuo Yun 

Inc./Kuo Yun 

NT$5,000,000~1NT$10,000,000(Exclusive) 

NT$10,000,000~NT$15,000,000(Exclusive) 



Billy Ho Billy Ho 

NT$50,000,000 ~NT$100,000,000(Exclusive) 

More than NT$100,000,000 

Total 7 7 7 7 

-15-

Title Name 

Supervisor Arthur Chiao 

Supervisor 

Lien Hwa Industrial Corp. 

Representative: Hu-Shi Charles Ching 

MiTAC 

Remuneration (A) 

All companies in 

the consolidated 

financial statements 

Remuneration to supervisors 

Remuneration to supervisors 

Remuneration from distribution of 

earnings (B) 

(Note1) 

MiTAC 




-16- 

Operating expenses (C) 

MiTAC 




2011 

Currency: NTD in thousand 

Total of A, B, and C in proportion to 

earnings before taxation 例 Remuneration 

MiTAC 



financial 

statements 

from 

subsidiaries or 

other investees 

144 144 520 520 40 40 0.28% 0.28% 100 

Note 1: The figures were the amount of earnings for distribution proposed by the Board of Directors before the approval of the general meeting of shareholders. 


negative. The same ratio in current year is 0.28% for remuneration to the directors and the supervisors, which resulted in an increase of the amount. 

Note 3: The remunerations to directors from earnings are compiled in a table for distribution of earnings subject to the approval of the Board of Directors and finalization of the general meeting of shareholders. The 

remunerations to directors were proposed at the recommendation of the Remuneration Committee, industry level, and the possible risks in the future by the Board of Directors at the authorization under the Articles of 

Incorporation. 

Note 4: The Company does not single out the name and remuneration of particular director for disclosure and the disclosure of remunerations was presented on a salary scale with the names of all concerned. 

Brackets of remuneration to supervisors of MiTAC 

Less than NT$2,000,000 

Arthur Chiao/ Lien Hwa Industrial 

Corp./Hu-Shi, Charles Ching 

Remuneration Scale 

Name of supervisor 

Total of (A+B+C) 

MiTAC All other investees 

Arthur Chiao/ Lien Hwa Industrial 

Corp./Hu-Shi, Charles Ching 

NT$2,000,000~NT$5,000,000 (Exclusive) 

NT$5,000,000~1NT$10,000,000(Exclusive) 




NT$50,000,000 ~NT$100,000,000(Exclusive) 

More than NT$100,000,000 

Total 3 3

Title Name 

General CEO Mathew Miau 

General Manager Billy Ho 

Senior Vice GM C. J. Lin 

Senior Vice GM Michael Lin 

Vice GM King Chen 

Vice GM Percy Chen 

Vice GM James Juan 

Vice GM Ted Chang 

Vice GM Alice Fang 

Vice GM Johnson Wang 

Vice GM Albert Mu 

Vice GM J.J. Huang 

Vice GM Bjorn Tsai 

Vice GM Huang Hsiu-Ling 

Vice GM Crystal Yang 

(resigned 

01.31.2011) 

Vice GM Stone Chen 

(Resigned 05.01. 

2011) 

Vice GM Jack Kuo 

(Resigned 

11.02.2012) 

Vice GM C.P. Lee 

(Resigned 

12.30.2011) 

MiTAC 

Salaries(A) Pension (B) 

All 

companies 

in the 

consolidated 

financial 

statements 

MiTAC 

Remunerations to General Manager and Vice GMs 

All 

companies 


consolidated 

financial 

statements 

Bonus and special 

expenses (C) 

MiTAC 

All 

companies 


consolidated 

financial 

statements 

Remuneration from distribution of earnings (D) 

(note 1) 

Cash 

dividend 

-17- 

MiTAC 

Stock 

dividend 

2011 

Currency: NTD in thousand/ thousand shares 

Total of A, B, C, and D 

Quantity of share 

in proportion to 

subscription entitled by 

earnings before 

ESO (Note 6) 

taxation (%) 

Remuneration 

from 

All companies in the 

All 

All 

subsidiaries 

consolidated financial 

companies 

companies 

or other 

statements MiTAC in the MiTAC in the 

investees 

consolidated 

consolidated 

Cash Stock 

financial 

financial 

dividend dividend 

statements 

statements 

35,024 42,131 1,378 1,458 17,365 25,625 583 - 583 - 21.46% 27.57% 40,505 40,505 5 

Note 1: The figures were the amount of earnings for distribution proposed by the Board of Directors before the approval of the general meeting of shareholders. 


negative and the same ratio in current years was 21.46%. 

Note 3: The remunerations of all companies in the consolidated financial statements in 2010 accounted for -10.53% of the corporate earnings and the same ratio for current year was 27.57% due the corporate earnings in 2010 

was in negative value. 

Note 4: The remunerations to the General Manager and the Vice GMs commensurate with their personal contribution to the overall operation performance of the Company at the recommendation of the Remuneration 

Committee, industry level, and the possible risks in the future. 

Note 5: Pension was the appropriation amount. 

Note 6: The quantity of shares (excluding the exercised portion) entitled to the General Manager and the Vice GMs under Employee Stock Options as of the date this report was printed (4/30/2012).

Salary Scale 

Brackets of salaries to the General Manager and all 

Vice GMs 

MiTAC 

Name of General Manager and Vice GMs 

All other companies in the consolidated financial 

statements 

Less than NT$2,000,000 Mathew Miau/Stone Chen/ Crystal Yang Mathew Miau/Stone Chen/ Crystal Yang 

C.J, Lin/Percy Chen/Alice Fang/James Juan/Ted Chang/ Percy Chen/ Alice Fang/James Juan/Ted Chang/C.P. 

NT$2,000,000~NT$5,000,000 

C.P. Lee/Johnson Wang/Albert Mu/J.J. Huang/Bjorn Lee/Johnson Wang/J.J. Huang/Bjorn Tsai/Huang 

Tsai/Huang Hsiu-Ling/Jack Kuo 

Hsiu-Ling/Jack Kuo 

NT$5,000,000 (inclusive) ~1NT$10,000,000 Billy Ho /Michael Lin/King Chen Billy Ho /C.J, Lin/ Michael Lin/Albert Mu/ King Chen 

NT$10,000,000 (inclusive)~NT$15,000,000 - - 

NT$15,000,000 (inclusive)~NT$30,000,000 - - 

NT$30,000,000 (inclusive)~NT$50,000,000 - 

NT$50,000,000 (inclusive) ~NT$100,000,000 - - 

More than NT$100,000,000 - - 

Total 18 18 

-18-

Managers 

Names of managers with distributions of employee bonuses 

Currency: 1,000 NTD 

Title Name 

General CEO Mathew Miau 

General Manager Billy Ho 

Senior Vice GM C. J. Lin 

Senior Vice GM Michael Lin 

Vice GM King Chen 

Vice GM Percy Chen 

Vice GM James Juan 

Vice GM Ted Chang 

Vice GM Alice Fang 

Vice GM Johnson Wang 

Vice GM Albert Mu 

Vice GM J.J. Huang 

Vice GM Bjorn Tsai 

Vice GM Huang 

Hsiu-Ling 

Vice GM Crystal Yang 

(resigned 

01.31.2011) 

Vice GM Stone Chen 

(Resigned 

05.01. 2011) 

Vice GM Jack Kuo 

(Resigned 

11.02.2012) 

Vice GM C.P. Lee 

(Resigned 

12.30.2011) 

Head of 

Ting Hui-Yuan 

Accounting 

Amount of 


-19- 

Amount of 

cash dividend 

Total 

Total amount in 

proportion to 

earnings before 

taxation (%) 

- 608 608 0.24% 

Note: The amount proposed for distribution by the Board of Directors on corporate earnings of the most recent year 

before presenting to the general meeting of shareholders for approval. 

(2) Disclosure of Remuneration to CPAs 

Range of Audit Remuneration 

Name of CPA firm Name of CPA Audit period Remarks 

Pricewaterhouse Coopers Liu Yin-Fe Lin Yu-Kuan 1.1.2011-12.31.2011

Unit: NTD in thousand 

Amount range 

Type of remuneration 

Audit Non-audit Total 

1 Below $2,000 thousand 

2 $2,000 thousand (inclusive) ~ $4,000 thousand 

3 $4,000 thousand (inclusive) ~ $6,000 thousand 

4 $6,000 thousand (inclusive) ~ $8,000 thousand 

5 $8,000 thousand (inclusive) ~ $10,000 thousand 

6 More than $10,000 thousand (inclusive) 

1. For remuneration of non-audit services to CPAs, CPAs’ firm and its affiliated companies 

exceeding one quarter of audit remuneration, the nature and amount of audit and non-audit 

services must be disclosed: 

Name of CPA 

firm 

Pricewaterhouse 

Coopers 

Name of 

CPA 

Liu 

Yin-Fei, 

Lin 

Yu-Kuan 

Audit 

fee 

System 

design 

Business 

Registration 

Non-audit fee 

-20- 

Human 

Others Subtotal 

Resources 

$5,006 $246 $4,107 $4,353 

Audit 

period 


Remarks 

01.01. Special project of 

2011 to IFRS and tax 

12.31.2011 consulting fee 

2. If a change in CPA firm results in a lower audit remuneration for that year compared to the 

previous year, the amount and reason of the reduction must be disclosed: none. 

3. For reductions of audit remuneration more than 15% compared to the previous years, the amount, 

percentage, and reasons for the reduction must be disclosed: none

(3) Information on replacement of CPA 

(1) Former CPA 

Date of change April 2010 

As a result of internal job transfers within the CPA firm, the 

Reasons and descriptions of change 

company’s CPAs were changed from Lin Yu-Kuan and Wang 

Wei-Chang of PricewaterhouseCoopers to Lin Yu-Kuan and Liu 

Yin-Fei since 2010. 

Participants 

CPA 

Situation 

Was the termination of audit services 

Initiated the Not 

initiated by the company or the 

termination applicable 

CPA? 

Service no longer Not 

accepted (continued) applicable 

Reasons for opinions other than 

The Company 

Not applicable 

Not applicable 

unqualified opinions issued within 

the recent 2 years. 

None 

Accounting policy or practice 

Disagreements with the issuer 

Yes 

Disclosure of financial reports 

Audit coverage or procedures 

Others 

No V 

Elaboration None 

Other disclosures None 

(2) Succeeding CPA 

Name of CPA firm Pricewaterhouse Coopers 

Name of CPA Liu Yin-Fei, Lin Yu-Kuan 

Date of Appointment April 2010 

Inquiries and replies relating to the accounting 

practices or accounting principles of certain 

transactions, or any audit opinions the CPAs 

were likely to issue to the financial reports prior 

to reappointment. 

Written disagreements made by the succeeding 

CPA against the opinions of the former CPA 

None 

None 

(3) Former CPAs replies to Section 10-5-1 and 10-5-2-3 of The Policy: not applicable. 

(4) Disclosure of any of The Company’s Chairman, General Manager, or managers involved 

in financial or accounting affairs being employed by the CPA firm or any of its affiliated 

company within the most recent year: none. 

-21-

(5) Details of shareholding transfers and share collateralization within the latest year, up till 

the publication date of this annual report, initiated by directors, supervisors, managers 

and shareholders with more than 10% ownership interest. 

(1) Changes of shares held by directors, supervisors, managers and dominant shareholders 

Title Name 

Change in quantity 

of shareholdings 

-22- 

2011 Jan 1 to Apr 14, 2012 


of collateralized 

shares 


of shareholdings 


of collateralized 

shares 

Chairman Mathew Miau 0 0 0 0 

Director Billy Ho 0 0 0 0 


MiTAC Inc. 

Representative: Kuo Yun 

UPC Technology Corp. 

0 0 0 0 


Representative: Way 

Yung-Do and Simon Wu 

0 0 0 0 

Supervisor Arthur Chiao 0 0 0 0 

Supervisor 


Representative: Charles 

Ching Hu-Shi 

0 

32,446,000 

(32,500,000) 

0 0 

Senior Vice General 

Manager 

C. J. Lin 0 0 0 0 

Senior Vice General 

Manager 

Michael Lin 0 0 0 0 

Vice General Manager King Chen 0 0 0 0 

Vice General Manager Percy Chen (260,000) 0 0 0 

Vice General Manager James Juan 0 0 0 0 

Vice General Manager Ted Chang 0 0 0 0 

Vice General Manager Jack Kuo 0 0 0 0 

Vice General Manager C.P. Lee 0 0 0 0 

Vice General Manager James Wu 0 0 0 0 

Vice General Manager Alice Fang 0 0 0 0 

Vice General Manager Johnson Wang 0 0 0 0 

Vice General Manager Albert Mu (5,000) 0 0 0 

Vice General Manager J.J. Huang 0 0 0 0 

Vice General Manager Bjorn Tsai 0 0 0 0 

Vice General Manager Huang Hsiu-Ling 0 0 0 0 

Vice General Manager 

Crystal Yang 

(resigned 01.31.2011) 

0 0 0 0 


Stone Chen 

(Resigned 05.01. 2011) 

0 0 0 0 


Jack Kuo 

(Resigned 11.02. 2011) 

0 0 0 0 


C.P. Lee 

(Resigned 12.30.2011) 

0 0 0 0 

Head of Accounting Ting Hui-Yuan 0 0 0 0 

Note: The counterparties of share transfer or collateralization arrangements are non-related parties. 

(2) Disclosure of share transfers: Not applicable. 

(3) Disclosure of share collateralization: Not applicable

(6) Relation between the top ten shareholders 

Name 

UPC Technology 

Corp. 



MiTAC Inc 

Representative: Kuo 

Yun 


Corp 



Shares held in own name 

Shares 

Shareholding 

percentage 

Shares held by 

spouses and underage 

children 

Shares Shareholding 

percentage 

-23- 

Shares held in the 

names of others 


percentage 

129,628,156 8.47% 0 0.00% 0 0.00% 

122,456,572 8.00% 0 0.00% 0 0.00% 

91,625,310 5.99% 0 0.00% 0 0.00% 

04/14/2012 

Disclosure of relationships between the top ten 

shareholders including spouses, 2 nd tier 

relatives or closer, or the relationships defined 

under Statement of Financial Accounting 

Principle No.6. 

MiTAC Inc. 

Name Relationship 


Corp. 


Tsu Fung Investment 

Corp. 

The Chairman of the 

company is the Vice 

Chairman of this 

company 

Investee with gains or 

losses recognized using 

the equity method 


company 


company also acts as 

Chairman of the parent 

company 

Synnex International common chairman 

Getac Technology 

Corporation 

Ho Li Investment 

Co., Ltd. 


Corp. 


Corp. 



Corp. 

Synnex International 


Corporation 


Co., Ltd. 


Corp. 

MiTAC Inc. 



Corp. 


company is a director 

of this company 


company is the vice 

chairman of the parent 

of this company. 

The Vice Chairman of 

the company Inc is the 


company 




company 

Vice Chairman of this 

company 


company also acts as 


company 




company 


the company Inc is a 

director of this company 

A subsidiary to the 

company 

Investee accounted for 

by the equity method 

Investee accounted for 

by the equity method 


company 

The chairman of the 

company is the 



Synnex International Common chairman 


Corporation 


Co., Ltd 

Mei-An Investment 30,270,278 1.98% 0 0.00% 0 0.00% None None 








Remarks

Name 


Shares 

Shareholding 

percentage 



children 


percentage 

-24- 




percentage 


shareholders including spouses, 2 nd tier 

relatives or closer, or the relationships defined 

under Statement of Financial Accounting 

Principle No.6. 


Corporation 

Representative: Chu 

Zong-Bin 

UPC Technology Chairman of this 

Corp. 

company 

MiTAC Inc. 

Vice Chairman of this 

company 

Lien Hua Industrial Chairman of this 

Corp. 

company 

Tsu Fung Investment Chairman of the parent 

Mathew Miau 21,805,999 1.43% 0 0.00% 0 0.00% Corp. 

company 

Synnex Technology Chairman of this 

International company 

Getac Technology Director of this 

Corporation company 


Co., Ltd. 

The vice chairman of 

the parent of this 

company 

Remarks

Name 


Corp. 

Representative: Billy 

Ho 

Special investment 

account of 元新興 

市場酏評估基金 in 

newly emerged 

markets held under 

the custody of 

Citibank (Taiwan) 

Synnex Technology 

International 

Corporation 




Corporation: 

Representative 

Huang Ming-Han 


Shares 

Shareholding 

percentage 



children 


percentage 

-25- 




percentage 


20,366,568 1.33% 0 0.00% 0 0.00% 


shareholders including spouses, 2 nd tier relatives 

or closer, or the relationships defined under 

Statement of Financial Accounting Principle 

No.6. 



Corp. 

MiTAC Inc 


Corp. 

Synnex 

International 


Corporation 


Co., Ltd. 

16,364,450 1.07% 0 0.00% 0 0.00% None None 

Common Chairman of 

the parent of the 

company. 


parent of the company 

is the vice chairman of 

this company. 

Common chairman of 


company. 

The chairman of the 


The company is an 

institutional director of 

this company. 



is a director of this 

company. 



is the vice chairman of 

this company. 


Corp. 

Common Chairman 


MiTAC Inc. 


chairman of this 

company. 


Corp. 

Common Chairman 

14,168,951 0.93% 0 0.00% 0 


0.00% 


company 

Tsu Fung Investment Institutional director of 

Corp. 

this company 


Corporation 





Ho Li Investment company is the vice 

Co., Ltd. chairman of the parent 


A director of the 

UPC Technology company is the 

Corp. 


company. 


13,378,094 0.87% 0 0.00% 0 

MiTAC Inc. 

0.00% 

company is the Vice 


company. 


Lien Hua Industrial company is the 

Corp. 


company. 



company 

Remarks

Name 


Rep: Deh-Chien 

Chou 


Shares 

Shareholding 

percentage 



children 


percentage 

-26- 




percentage 

10,828,602 0.71% 0 0.00% 0 0.00% 


shareholders including spouses, 2 nd tier relatives 

or closer, or the relationships defined under 

Statement of Financial Accounting Principle 

No.6. 


Tsu Fung 

Investment Corp. 


International 


Co., Ltd. 


Corp. 

MiTAC Inc. 

Lien Hwa Industrial 

Corp. 


Tsu Fung 



International 


Corporation 








company. 









company. 

The parent of the 

company 





company. 


the parent of this 

company 










company. 





company. 

Remarks

(7) Proportion of shareholding in aggregate 

Investee 

(Note) 

Holding of the company 

-27- 

Holding of directors, 

supervisors, managers and 

enterprises directly or 

indirectly controlled by the 

company 

04/30/2012 

Unit: share % 

Aggregate investment 

Qty of shares Proportion Qty of shares Qty of shares Qty of shares 

Qty of 

shares 


Corporation 

190,396,939 32.96% 16,537,052 2.86% 206,933,991 35.82% 

Tsu Fung Investment Corp. 124,476,913 100.00% 0 0.00% 124,476,913 100.00% 

3 Probe Technologies 1,080,000 23.13% 6,000 0.13% 1,086,000 23.26% 

Lien Jie Investment Co., 

Ltd. 

11,305,650 49.98% 0 0.00% 11,305,650 49.98% 

Shen Tong Construction and 

Development Co., Ltd. 

8,559,400 47.55% 0 0.00% 8,559,400 47.55% 

DLC Technology 

Corporation 

6,600,000 100.00% 0 0.00% 6,600,000 100.00% 

Silver Star Developments 

Ltd. 

215,495,404 100.00% 0 0.00% 215,495,404 100.00% 

Foreground Technology 

Ltd. 

9,045,492 100.00% 0 0.00% 9,045,492 100.00% 

Loyalty Founder Enterprise 

CO., Ltd. 

39,180,000 25.24% 979,500 0.63% 40,159,500 25.87% 

Mio Technology Co., Ltd. 4,000,000 88.89% 500,000 11.11% 4,500,000 100.00% 

Note: Long-term equity investment under the equity method

(1) Capital and shares 

1. Equity capital 

(1) Outstanding shares 

III. Capital and Shares 

04/30/2012 Currency: 1,000 NTD; share 

Authorized capital paid-in capital Remarks 

Date 

Issuing 

price Quantity of shares Amount Quantity of shares Amount Sources of capital 

Investment by 

properties other 

than cash 

Effective date (approval date) of new 

capital and approval document number 

08.1998 10 900,000,000 9,000,000,000 577,578,648 5,775,786,480 497,723,730 from capitalized reserves, 273,747,860 from 

- (87) Tai-Tsai-Cheng (1) - 49977 dated 

capitalized retained earnings, and 27,077,520 from conversion of 

corporate bond holdings 

06.09.1998 

09.1998 10 900,000,000 9,000,000,000 585,428,580 5,854,285,800 78,499,320 from conversion of corporate bond holdings - - 

02.1999 10 900,000,000 9,000,000,000 635,428,580 6,354,285,800 Cash issue 500,000,000 - (87) Tai-Tsai-Cheng (1) - 93004 dated 

11.06.1998 

08.1999 10 1,360,000,000 13,600,000,000 767,459,721 7,674,597,210 1,270,857,160 from capitalized earnings and 49,454,250 from the - (88) Tai-Tsai-Cheng (1) - 56780 dated 

issuance of employees’ stock bonus 

06.22.1999 

02.2000 10 1,360,000,000 13,600,000,000 769,108,799 7,691,087,990 16,490,780 from conversion of corporate bond holdings - - 

07.2000 10 1,360,000,000 13,600,000,000 892,427,727 8,924,277,270 1,153,663,180 from capitalized earnings, 78,956,480 from the 

- (89) Tai-Tsai-Cheng (1) - 47983 dated 

issuance of employees’ stock bonus, and 569,620 from 

conversion of corporate bond holdings 

06.03.2000 

07.2001 10 1,710,000,000 17,100,000,000 994,513,299 9,945,132,990 892,427,720 from capitalized earnings and 128,428,000 from the - (90) Tai-Tsai-Cheng (1) - 136070 dated 


06.07.2001 

07.2002 10 1,710,000,000 17,100,000,000 1,041,568,630 10,415,686,300 397,729,310 from capitalized earnings and 72,824,000 from the - Tai-Tsai-Cheng-1-0910132851 dated 


06.18.2002 

12.2003 10 1,710,000,000 17,100,000,000 1,056,381,210 10,563,812,100 $148,125,800 subscribed following the exercise of employees’ - Notice Yuan-Shang-0930001436 dated 

stock warrant - 2003 4th quarter 

01.29.2004 

03.2004 10 1,710,000,000 17,100,000,000 1,065,034,460 10,650,344,600 $86,532,500 subscribed following the exercise of employees’ 

- Notice Yuan-Shang-0930010105 dated 

stock warrant - 2004 1st quarter 

04.22.2004 



stock warrant - 2004 2nd quarter 

07.19.2004 



stock warrant - 2004 3rd quarter 

10.26.2004 

12.2004 10 1,710,000,000 17,100,000,000 1,081,476,055 10,814,760,550 $140,899,250 subscribed following the exercise of employees’ - Notice Yuan-Shang-0940001540 dated 


01.25.2005 




04.21.2005 

06.2005 10 1,710,000,000 17,100,000,000 1,142,483,297 11,424,832,970 $421,712,220 from capitalized earnings, $76,994,400 from the - Notice Yuan-Shang-0940020614 dated 

issuance of employees’ stock bonus, and $31,540,800 from the 

exercise of employees’ warrants - 2005 2nd quarter 

08.08.2005 



stock warrant - 2005 3rd quarter 

11.07.2005 




02.10.2006 




05.08.2006 

-28-

Authorized capital paid-in capital Remarks 

Date 

Issuing 

price Quantity of shares Amount Quantity of shares Amount Sources of capital 

Investment by 

properties other 

than cash 

Effective date (approval date) of new 

capital and approval document number 

06.2006 10 1,710,000,000 17,100,000,000 1,277,584,632 12,775,846,320 $906,690,250 from capitalized earnings, $177,782,900 from the - Notice Yuan-Shang-0950026982 dated 



10.11.2006 

09.2006 10 1,710,000,000 17,100,000,000 1,278,573,632 12,785,736,320 $9,890,000 subscribed following the exercise of employees’ stock - Notice Yuan-Shang-0950028931 dated 

warrant - 2006 3rd quarter 

11.01.2006 




02.08.2007 




05.10.2007 

06.2007 10 2,200,000,000 22,000,000,000 1,404,657,860 14,046,578,600 $1,016,921,700 from capitalized earnings, $193,805,580 from the - Notice Yuan-Shang-0960022806 dated 



08.30.2007 



stock warrant - 2007 3rd quarter, on top of a cash issue to Tyan 

Computer Corporation totaling $505,776,890 

12.07.2007 


warrant - 2008 1st quarter 

05.14.2008 

06.2008 10 2,200,000,000 22,000,000,000 1,535,234,711 15,352,347,110 $578,808,060 from capitalized earnings, and $203,337,430 from - Notice Yuan-Shang-0970025372 dated 

the issuance of employees’ bonuses 

09.12.2008 


warrant - 2008 2nd quarter 

10.01.2008 

09.2008 10 2,200,000,000 22,000,000,000 1,535,431,325 15,354,313,250 $367,020 subscribed following the exercise of employees’ stock - Notice Yuan-Shang-0970030945 dated 


11.05.2008 


warrant - 2008 4th quarter 

02.04.2009 


warrant - 2009 1st quarter 

05.14.2009 



11.10.2009 


12.2010 10 2,200,000,000 22,000,000,000 1,537,519,211 15,375,192,110 warrant - 2009 4th quarter 

- 02.12.2010 




03.24.2011 

Retired $100,000,000 against the 11th and 12th treasury stock 

Notice Yuan-Shang-1000008591 dated 

buyback 

03.24.2011 




05.19.2011 

06. 2011 10 2,200,000,000 22,000,000,000 1,529,718,942 15,297,189,420 $265,000 subscribed following the exercise of employees’ stock 

09. 2011 10 2,200,000,000 22,000,000,000 1,529,735,942 15,297,359,420 warrant – 2 nd quarter 2011 

$170,000 subscribed following the exercise of employees’ stock 

warrant – 3 rd - Notice Yuan-Shange - 1000027374 

- dated 90.16.2011 

Notice Yuan-Shang 1000033938 dated 

quarter 2011 

11.16.2011 

03. 2012 10 2,200,000,000 22,000,000,000 1,529,769,942 15,297,699,420 $340,000 subscribed following the exercise of employees’ stock 

warrant – 1 st quarter 2012 

- Registration in process 

-29-

04/14/2012 

Unit: share 

Type of 

Authorized capital stock 

Remarks 

share Outstanding (note) Unissued Total 

Common 

250,000,000 of the authorized shares were 

1,529,769,942 670,230,058 2,200,000,000 

share 

reserved for the exercise of employees’ warrants. 

Note: All outstanding shares are listed in TWSE, including the 21,122,000 shares of treasury stock. 

(2) Information relevant to the aggregate reporting policy: none 

2. The composition of Shareholders 

Composition 

Qty 

No. of 

shareholders 

Qty of 

shareholding 

Proportion of 

shareholding 

Government 

institutions 

financial 

institutions 

other 

institutions 

-30- 

QFII 

natural 

persons 

Treasury 


04/14/2012 

Total 

3 25 142 277 118,345 1 118,793 

1,446 13,910,934 464,717,637 118,006,103 912,011,822 21,122,000 1,529,769,942 

0.00% 0.91% 30.38% 7.71% 59.62% 1.38% 100.00% 

3. Diversification of Shareholding 

(1) Common shares 

(NT$10/share) 04/14/2012 

Level of holding No. of shareholders Qty of shareholding 

Proportion of 

shareholding 

1-999 37,943 10,735,742 0.70% 

1,000-5,000 49,965 118,978,666 7.79% 

5,001-10,000 14,377 110,757,569 7.24% 

10,001-15,000 5,456 65,592,959 4.29% 

15,001-20,000 3,270 60,023,438 3.92% 

20,001-30,000 2,858 70,992,779 4.64% 

30,001-40,000 1,401 49,311,676 3.22% 

40,001-50,000 874 40,456,308 2.64% 

50,001-100,000 1,533 109,801,463 7.18% 

100,001-200,000 653 93,149,025 6.09% 

200,001-400,000 247 69,211,757 4.52% 

400,001-600,000 82 39,530,589 2.58% 

600,001-800,000 36 25,139,387 1.64% 

800,001-1,000,000 21 18,883,371 1.23% 

Classify for holding of more 

than 1,000,001 shares 

77 647,205,213 42.32% 

Total 118,793 1,529,769,942 100.00% 

(2) Preferred share: none.

4. List of dominant shareholders 

04/14/2012 

Shareholding 

Quantity of shareholding Proportion of shareholding 

Name of dominant shareholder 

UPC Technology Corp. 129,628,156 8.47% 

MiTAC Inc. 122,456,572 8.00% 

Lien Hwa Industrial Corp. 91,625,310 5.99% 

Note: Three shareholders of the Company each holds more than 5% of the outstanding shares. 

5. Information on market price, net worth, earnings, and dividend per share 

Item 

Market 

price per 

share 

Net value 

per share 

EPS 

Dividend 

per share 

Analysis 

of ROI 

Year 

2010 2011 Jan 1 to April 

Before 

adjustment 

After 

adjustment 

Before 

adjustment 

After adjustment 

30, 2012 

(note 6) 

High 16.90 16.75 15.60 15.45 12.85 

Low 11.70 11.55 8.20 8.20(note 7) 9.00 

Average (note 2) 14.24 12.09 11.32 

Before adjustment 19.63 20.19 20.01 

After adjustment 19.48 20.04(note 1) - 

Weighted average EPS 1,503,111 1,503,111 1,504,227 1,504,227(note 1) 1,488,616 

EPS (0.55) (0.55) 0.17 0.17 ( note1) (0.11) 

Cash dividend 0.15 0.15 0.15 0.15 (note 1) - 


dividend 

From retained 

earnings 

From 

capitalization of 

surplus 

- 

- 

- 

- 

- 

- 

Accumulated unpaid 

dividend 

- 

- 

- 

P/E ratio (note 3) - 68.76 - 

P/P ratio (note 4) 91.67 77.93(note 1) - 

Cash dividend yield(note 5) 1.09% 1.28%(note 1) - 

Note 1: The allocation of earnings for 2011 has approved by the Board of Directors, but need to be recognized by 

shareholders’ meeting. 

Note 2: Average market price is calculated by the trade amount and shares each year. 

Note 3: Price/Earnings ratio = Yearly average closing price/Earnings per share. 

Note 4: Price/Dividend ratio = Yearly average closing price /Cash dividend per share. 

Note 5: Cash dividend yield rate = Cash dividend per share/ Yearly average closing price. 

Note 6: Net worth and earnings per share must be stated in the financial statements audited (reviewed) by CPAs; other 

columns should be filled with same year data in the annual report up to the publication of this report. 

Note 7: The lowest market price per share is the price after ex-right day, so no adjustment required 

-31-

6. Dividend policy and its implementation 

(1) Dividend policy under the Articles of Incorporation: 

The company is in a growing industry; hence the life cycle of the company grows 

with the industry. In order to take our industry’s conditions, long-term financial 

planning, and future cash flow into consideration, and also to satisfy shareholders’ 

demand for cash inflow, the company has withdrawn 10% of its earnings as a legal 

reserve. This 10 %, after making up for the deficits of previous years and tax 

deductibles, will have 5% leftover for employees’ bonus. The other, with remaining 

amounts from previous years, will be distributed after approval during the Board of 

Directors’ and the general meeting of shareholders. 

If employee bonuses re paid out in stock bonuses, employees who meet specific 

conditions are entitled. Such conditions shall be determined by the Chairman under 

authorization. 

The ratio of cash and stock dividends will be determined by the Board of 

Directors in consideration of different aspects, financial structure, future cash flow, 

and profitability. The cash dividend shall not fall below 10% of the total dividend 

subject to the approval of the general meeting of shareholders. 

(2) The resolution for dividend distribution at the general meeting of shareholders: 

Based on the principles above, the Board of Directors drafted a proposal for 

dividend distribution at its meeting on April 25, 2012. This proposal covers dividends 

for the fiscal year 2011 and the dividend per share is NT$0.15. The proposal will be 

presented for approval at the general meeting of shareholders held on June 12 th , 2012. 

(3) Anticipation of significant change in dividend policy: none. 

7. Impacts of stock dividends, to be proposed during the next general meeting of 

shareholders, to the company’s business performance and earnings per share 

The Company did not have such motion in the distribution of income in 2011, and is not 

applicable here. 

8. Employee bonuses and Remuneration to the Directors and Supervisors 

(1) Percentage or scope of employee bonuses and remuneration to directors and supervisors 

as stated in the Articles of Incorporation. 

i. Employee bonuses: Where the company has earnings at the end of a fiscal year, 

after all tax deductibles and cumulative deficits from past year, a 10% of legal 

reserve, plus special earnings surplus and payment of interest on stocks, a minimum 

of 5% of the remainder will be the employee bonuses. 

ii. Percentage of remuneration to directors and supervisors: Not specified in the 

Articles of Incorporation. 

(2) After accounting for changes in the basis of the estimation of employee bonuses, 

remunerations to directors and supervisors, changes to the calculation basis for stock 

dividends, and discrepancies between the amounts actually paid and the amounts it is 

estimated: 

i. The basis for the estimation of employee bonuses and remunerations to the directors 

and supervisors: The estimation of employee bonuses and remunerations to the 

directors and supervisors for fiscal year 2011 was based on the corporate earnings 

as of the end of current period net of mandatory reserves and capital surplus at the 

percentage stated in the Articles of Incorporation (5% for employee bonuses) and 

was recognized as operating expenses. 

ii. The basis for the calculation of stock dividends: The number of common shares to 

be distributed as stock dividends is calculated on the basis of the fair value per share 

(closing price) one trading day before the general meeting of shareholders for 

-32-

esolution held in the year after the fiscal period in consideration of ex-right and 

ex-dividend effect. 

iii. The accounting of the difference between the actual amount distributed and the 

estimated amount for distribution: The difference resolved by the general meeting 

of shareholders for distribution and the estimated amount for distribution shall be 

recognized as income or loss in the next fiscal period in accounting. 

(3) Information on the resolution of the general meeting of shareholders on employee 

bonuses: 

The proposal for the distribution of earnings in fiscal year 2011 was resolved by the 

general meeting of shareholders dated April 25 th , 2012, and specified as follows: 

i. The general meeting of shareholders resolved to the employee of cash dividends is 

NTD 5,381,325 and allocate NTD2,000,000 as remunerations to the directors and 

supervisors as proposed. No difference between the estimated and actual amount. 

ii. The amount of estimated stock dividends for the employees in proportion to the 

corporate earnings of the current period and total dividends paid to the employees: 

No stock dividend has been proposed for release for fiscal year 2011, this provision 

is not applicable. 

iii. The earnings per share are estimated at NTD 0.17 net of employee bonuses and 

remunerations to the directors and shareholders. 

iv. Specify if there is any difference between the recognized and actual amount of 

employee bonuses and remunerations to the directors and supervisors in the 

previous year: No recognition and actual distribution of employee bonuses and 

remunerations to the directors and supervisors in 2010. 

-33-

9. The repurchase of shares by the Company 

Instance of repurchase 13th 14th 

04/30/2012 

Currency: 1,000 NTD; 1,000 shares 

15th 

Date of Board Resolution 8.10. 2011 11.24. 2011 1.17. 2012 

Purpose of repurchase 

Assignment of shares to Assignment of shares to Assignment of shares to 

employees 

employees 

employees 

Repurchase period 8.11.2011 to 10.07.2011 

11.15.2011 to 1.13. 

2012 

1.18. 2012 to 3.2.2012 

Price range NTD 9~13 NTD 9~12 NTD 9~12 

Expected type and quantity of Common shares Common shares Common shares 

shares for repurchase 

10,000 

10,000 

20,000 

Type and quantity of shares Common shares Common shares Common shares 

repurchased 

6,350 

10,000 

4,772 

Amount of capital stock 

repurchased 

68,202 91,880 49,108 

Average cost for the repurchase 

of each share (NTD) 

10.74 9.19 10.29 

The reason for 

The reason for 

incomplete 

incomplete 

accomplishment of 

accomplishment of 

Reasons for incomplete Board resolution is the 

Board resolution is the 

accomplishment of the Board consideration of 

Not applicable consideration of 

Resolution 

shareholders’ equity 

shareholders’ equity 

and market mechanism 

and market mechanism 

and the efficiency of the 

and the efficiency of the 

use of capital. 

use of capital. 

Quantity of shares cancelled or 

assigned 

0 0 0 

Accumulated quantity of holding 

in Company shares 

Accumulated proportion of 

6,350 16,350 21,122 

holding Company shares in 

proportion to total outstanding 

shares of the Company (%) 

0.42% 1.07% 1.38% 

(2) Disclosure of corporate bonds: none. 

(3) Disclosure of preferred shares: none. 

(4) Disclosure of ADR/GDR: none. 

-34-

(5) Employee Stock Options 

1. Status of employee stock options 

Type of Employee Stock Options 

4 th employees’ stock option 

(1 st term) 

(3 rd time after merging with TYAN 

Computer Corp. shares) 


(2 nd term) 

(3 rd time after merging with TYAN 


-35- 


(1 st term) 


(2 nd term) 

04/30/2012 


Date approved by authorities 03.31.2006 03.31.2006 12.1.2006 12.01.2006 04.16.2007 

Issuing (processing) date 06.30.2006 03.19.2007 12.7.2006 01.11.2007 07.30.2007 

Issuance (Note 1) 404.759 units (Note 2) 711.895 units (Note 2) 32.000 units 32,000 units 32,000 units 

Ratio of stock option to outstanding 

shares 

0.03% 0.05% 2.08% 2.08% 2.08% 

Valid duration 6 years 6 years 6 years 6 years 6 years 

Performance Issue new stock shares Issue new stock shares Issue new stock shares Issue stock shares Issue stock shares 

Limited stock option period and ratio 

(%) 

Employees holding stock options 

over two years can exercise their 

options until ten days before their 

expiration, except for any 

suspension by law. 

Time Exercise Percentage 

More than 2 years 50% 


More than 4 year 100% 




























(1 st term) 










Stock shares exercised 0 share 0 share 0 share 0 share 0 share 

Stock value exercised NT$ 0 NT$ 0 NT$ 0 NT$0 NT$0 

Unexercised stocks (note 3) 138,887 shares 600,784 shares 130,000 shares 130,000 shares 130,000 shares 

Stock option price of outstanding stock 

option 

Ratio of outstanding stock option to 

outstanding shares (%) 

Impact on shareholder’s equity 

NT$20.2 NT$19.8 NT$30.0 NT$29.5 NT$34.8 

0.01% 0.04% 0.01% 0.01% 0.01% 

Employees cannot exercise their 

stock options for two years; 

therefore, it does not cause 

significant dilution effect on 

shareholder’s equity. 











Note 1: Each stock option can exercise 1,000 common shares of MiTAC. 

Note 2: Followed the merger agreement to make the shares-subscription amount and price per unit in a ratio of (MiTAC: Tyan = 1: 1.26). 

Note 3: After deduction of relinquished shares. 










shareholder’s equity.

04/30/2012 



(2 nd term) 


(4 th time after merging with TYAN 


-36- 


(1 st term) 


(2 nd term) 

9th employees’ stock option 

Date approved by authorities 04.16.2007 08.24.2007 09.30.2008 09.30.2008 01.06.2009 

Issuing (processing) date 08.17.2007 09.26.2007 10.13.2008 10.27.2008 04.29.2009 

Issuance (Note 1) 32,000 units 1,245.222units(note2) 42,500units 42,500units 21,500 units 

Ratio of stock option to outstanding shares 2.08% 0.08% 2.77% 2.77% 1.4% 

Valid duration 6 years 6 years 6 years 6 years 6 years 

Performance Issue stock shares Issue stock shares Issue stock shares Issue stock shares Issue stock shares 

Limited stock option period and ratio (%) 





































(1 st term) 










Stock shares exercised 0 share 0 share 1,095,000 shares 2,502,531 shares 0 share 

Stock value exercised $0 NT$0 NT$14,235,000 NT$28,028,348 NT$0 

Unexercised stocks (note 3) 120,000 shares 618,247 shares 34,100,500 shares 32,818,877 shares 17,726,000 shares 


option 




$31.5 NT$19.5 NT$13 NT$11.2 NT$14.1 

0.01% 0.04% 2.23% 2.15% 1.16% 































(2 nd term) 


(1 st term) 

-37- 


(2 nd term) 


Date approved by authorities 01.06.2009 09.22.2009 09.22.2009 09.22.2009 

Issuing (processing) date 07.03.2009 10.05.2009 04.19.2010 05.06.2010 

Issuance (Note 1) 21,500 units 47,500 units 23,000 units 24,500 units 

Ratio of stock option to outstanding shares 1.4% 3.09% 1.50% 1.59% 

Valid duration 6 years 6 years 6 years 6 years 

Performance Issue stock shares Issue stock shares Issue stock shares Issue stock shares 

Limited stock option period and ratio (%) 

Employees holding stock options over two 

years can exercise their options until ten 

days before their expiration, except for any 






















(3 rd term) 

04/30/2012 





Tim Exercise Percentage 




Stock shares exercised 0 0 0 0 

Stock value exercised NT$0 NT$0 NT$0 NT$0 

Unexercised stocks (note 3) 17,839,000 shares 43,867,000 shares 20,821,000 shares 22,388,000 shares 


option 




NT$13.1 NT$13.9 NT$14.45 NT$13.1 

1.17% 2.87% 1.36% 1.46% 

Employees cannot exercise their stock 

options for two years; therefore, it does not 

cause significant dilution effect on 

















2. Names, acquisition and subscription of the managers with employees’ stock options and employees who are top ten employees with stock options 

and obtained for more than NT$30 million 

04/30/2012 

1st term of the 5 th time of employee stock options 

Titles Names 



Senior Vice 

C. J. Lin 


Senior Vice 

Michael Lin 


Vice General 

Manager 

Percy Chen 

Vice General 

Manager 

James Juan 

Vice General 

Manager 

Ted Chang 

Vice General 

Manager 

Alice Fang 

Vice General 

Manager 

Johnson Wang 

Vice General 

Manager 

King Chen 

Vice General 

Manager 

Albert Mu 

Vice General 

Manager 

J.J. Huang 

Vice General 

Manager 

Bjorn Tsai 

Vice General 

Manager 

Huang Hsiu-Ling 

Vice General Crystal Yang 

Manager (resigned 01.31.2011) 

Vice General Stone Chen 


Vice General Jack Kuo 

Manager (Resigned.11.02 2011) 

Vice General C.P. Lee 

Manager (Resigned.12.302011) 

Head of 

Accounting 

Ting Hui-Yuan 

Shares of obtained 

stock options 


Percentage of 

obtained stocks to 

outstanding shares 

Qu a n t i t y 

Unit price 

(NT$) 

-38- 

Exercised 

Currency: 1,000 NTD; share 

Unexercised 

Percentage of Exercised 

options to outstanding shares 

Qu a n t i t y 

( Not e 1 ) 

Unit price 

(NT$) 

Total amount 

Percentage of 

unexercised options to 


Total amount 

3,465,000 0.23% 0 - 0 0.00% 0 30.0 0 0.00%

2nd term of the 5 th time of employee stock options 

Titles Names 



Senior Vice 

Billy Ho 

General 

Manager 

Senior Vice 

C. J. Lin 

General 

Manager 

Michael Lin 

Vice General 

Manager 

Percy Chen 

Vice General 

Manager 

James Juan 

Vice General 

Manager 

Ted Chang 

Vice General 

Manager 

Alice Fang 

Vice General 

Manager 

Johnson Wang 

Vice General 

Manager 

King Chen 

Vice General 

Manager 

Albert Mu 

Vice General 

Manager 

J.J. Huang 

Vice General 

Manager 

Bjorn Tsai 

Vice General 

Manager 



Manager 

Vice General 

(resigned 01.31.2011) 



Vice General 

Manager 

Jack Kuo 

(Resigned.11.02 

2011) 



Head of 

Accounting 

Ting Hui-Yuan 

Shares of 

obtained 

stock 

options 

Note 1: After deduction of relinquished shares 

Percentage of 



Qu antity 

Unit price 

(NT$) 

Exercised 

04/30/2012 


Unexercised 

Total amount 

Percentage of 

Exercised options to 


Qu antity 

(N ote 1 ) 

Unit price 

(NT$) 

Total amount 

Percentage of 



3,465,000 0.23% 0 - 0 0.00% 0 29.5 0 0.00% 

-39-

1st term of the 6 th time of employee stock options 

Titles Names 



Senior Vice 


C. J. Lin 

Senior Vice 


Michael Lin 

Vice General 

Manager 

Percy Chen 

Vice General 

Manager 

James Juan 

Vice General 

Manager 

Ted Chang 

Vice General 

Manager 

Alice Fang 

Vice General 

Manager 

Johnson Wang 

Vice General 

Manager 

King Chen 

Vice General 

Manager 

Albert Mu 

Vice General 

Manager 

J.J. Huang 

Vice General 

Manager 

Bjorn Tsai 

Vice General 

Manager 



Manager 

Vice General 

(resigned 01.31.2011) 



Vice General 

Manager 

Jack Kuo 


2011) 



Head of Accounting Ting Hui-Yuan 

Shares of 

obtained 


options 


Percentage of 



Qu antity 

Unit price 

(NT$) 

Exercised 

04/30/2012 


Unexercised 

Total amount 

Percentage of 



Qu antity 

(N ote 1 ) 

Unit price 

(NT$) 

Percentage of 

Total amount unexercised options to 


3,765,000 0.25% 0 - 0 0.00% 0 34.8 0 0.00% 

-40-

2nd term of the 6 th time employee stock options 

Titles Names 



Senior Vice 

Billy Ho 

General 

Manager 

Senior Vice 

C. J. Lin 

General 

Manager 

Michael Lin 

Vice General 

Manager 

Percy Chen 

Vice General 

Manager 

James Juan 

Vice General 

Manager 

Ted Chang 

Vice General 

Manager 

Alice Fang 

Vice General 

Manager 

Johnson Wang 

Vice General 

Manager 

King Chen 

Vice General 

Manager 

Albert Mu 

Vice General 

Manager 

J.J. Huang 

Vice General 

Manager 

Bjorn Tsai 

Vice General 

Manager 



Manager 

Vice General 

(resigned 01.31.2011) 



Vice General 

Manager 

Jack Kuo 


2011) 



Head of 

Accounting 

Ting Hui-Yuan 

Shares of 

obtained 


options 


Percentage of 



Qu antity 

Unit price 

(NT$) 

Exercised 

04/30/2012 


Unexercised 

Total amount 

Percentage of 



Qu antity 

(N ote 1 ) 

Unit price 

(NT$) 

Total amount 

Percentage of 



3,775,000 0.25% 0 - 0 0.00% 0 31.5 0 0.00% 

-41-

1st term of the 8 th time employee stock options 

04/30/2012 


Titles Names 

Shares of 

obtained 


options 

Percentage of 



Qu antity 

Unit price 

(NT$) 

Exercised 

Total amount 

Percentage of 



Qu antity 

Unexercised 

Unit price 

Total amount 

(NT$) 

Percentage of 





Senior Vice 

Billy Ho 

General 

Manager 

Senior Vice 

C. J. Lin 

General 

Manager 

Michael Lin 

Vice General 

Manager 

Percy Chen 

Vice General 

Manager 

James Juan 

Vice General 

Manager 

Ted Chang 

Vice General 

Manager 

Alice Fang 

Vice General 

Manager 

Johnson Wang 

Vice General 

Manager 

King Chen 

5,835,000 0.38% 0 - 0 0.00% 5,835,000 13.0 75,855 0.38% 

Vice General 

Manager 

Albert Mu 

Vice General 

Manager 

J.J. Huang 

Vice General 

Manager 

Bjorn Tsai 

Vice General 

Manager 



Manager 

Vice General 

(resigned 01.31.2011) 



Vice General 

Manager 

Jack Kuo 


2011) 



Head of 

Accounting 

Ting Hui-Yuan 

-42-


Titles Names 



Senior Vice 

Billy Ho 

General 

Manager 

Senior Vice 

C. J. Lin 

General 

Manager 

Michael Lin 

Vice General 

Manager 

Percy Chen 

Vice General 

Manager 

James Juan 

Vice General 

Manager 

Ted Chang 

Vice General 

Manager 

Alice Fang 

Vice General 

Manager 

Johnson Wang 

Vice General 

Manager 

King Chen 

Vice General 

Manager 

Albert Mu 

Vice General 

Manager 

J.J. Huang 

Vice General 

Manager 

Bjorn Tsai 

Vice General 

Manager 



Manager 

Vice General 

(resigned 01.31.2011) 



Vice General 

Manager 

Jack Kuo 


2011) 



Head of 

Accounting 

Ting Hui-Yuan 

Shares of 

obtained 


options 

Percentage of 



Qu antity 

Unit price 

(NT$) 

Exercised 

04/30/2012 


Unexercised 

Total amount 

Percentage of 



Qu antity 

Unit price 

(NT$) 

Total amount 

Percentage of 



5,935,000 0.39% 0 - 0 0.00% 5,935,000 11.2 66,472 0.39% 

-43-


Titles Names 



Senior Vice 

Billy Ho 

General 

Manager 

Senior Vice 

C. J. Lin 

General 

Manager 

Michael Lin 

Vice General 

Manager 

Percy Chen 

Vice General 

Manager 

James Juan 

Vice General 

Manager 

Ted Chang 

Vice General 

Manager 

Alice Fang 

Vice General 

Manager 

Johnson Wang 

Vice General 

Manager 

King Chen 

Vice General 

Manager 

Albert Mu 

Vice General 

Manager 

J.J. Huang 

Vice General 

Manager 

Bjorn Tsai 

Vice General 

Manager 



Manager 

Vice General 

(resigned 01.31.2011) 



Vice General 

Manager 

Jack Kuo 


2011) 



Head of 

Accounting 

Ting Hui-Yuan 

Shares of 

obtained 


options 

Percentage of 



Qu antity 

Unit price 

(NT$) 

Exercised 

04/30/2012 


Unexercised 

Total amount 


options to outstanding 

shares 

Qu antity 

Unit price 

(NT$) 

Total amount 

Percentage of 



3,590,000 0.23% 0 - 0 0.00% 3,590,000 14.1 50,619 0.23% 

-44-


Titles Names 



Senior Vice 

Billy Ho 

General 

Manager 

Senior Vice 

C. J. Lin 

General 

Manager 

Michael Lin 

Vice General 

Manager 

Percy Chen 

Vice General 

Manager 

James Juan 

Vice General 

Manager 

Ted Chang 

Vice General 

Manager 

Alice Fang 

Vice General 

Manager 

Johnson Wang 

Vice General 

Manager 

King Chen 

Vice General 

Manager 

Albert Mu 

Vice General 

Manager 

J.J. Huang 

Vice General 

Manager 

Bjorn Tsai 

Vice General 

Manager 



Manager 

Vice General 

(resigned 01.31.2011) 



Vice General 

Manager 

Jack Kuo 


2011) 



Head of 

Accounting 

Ting Hui-Yuan 

Shares of 

obtained 


options 

Percentage of 



Qu antity 

Unit price 

(NT$) 

Exercised 

04/30/2012 


Unexercised 

Total amount 



shares 

Qu antity 

Unit price 

(NT$) 

Total amount 

Percentage of 



3,665,000 0.24% 0 - 0 0.00% 3,665,000 13.1 48,012 0.24% 

-45-


04/30/2012 


Titles Names 

Shares of 

obtained 


options 

Percentage of 



Qu antity 

Unit price 

(NT$) 

Exercised 


Total amount options to outstanding 

shares 

Qu antity 

Unexercised 

Unit price 

Total amount 

(NT$) 

Percentage of 





Senior Vice 

Billy Ho 

General 

Manager 

Senior Vice 

C. J. Lin 

General 

Manager 

Michael Lin 

Vice General 

Manager 

Percy Chen 

Vice General 

Manager 

James Juan 

Vice General 

Manager 

Ted Chang 

Vice General 

Manager 

Alice Fang 

Vice General 

Manager 

Johnson Wang 

Vice General 

Manager 

King Chen 

8,700,000 0.57% 0 - 0 0.00% 8,700,000 13.9 120,930 0.57% 

Vice General 

Manager 

Albert Mu 

Vice General 

Manager 

J.J. Huang 

Vice General 

Manager 

Bjorn Tsai 

Vice General 

Manager 



Manager 

Vice General 

(resigned 01.31.2011) 



Vice General 

Manager 

Jack Kuo 


2011) 



Head of 

Accounting 

Ting Hui-Yuan 

-46-


04/30/2012 


Titles Names 

Shares of 

obtained 


options 

Percentage of 



Qu antity 

Unit price 

(NT$) 

Exercised 

Total amount 



shares 

Qu antity 

Unexercised 

Unit price 

Total amount 

(NT$) 

Percentage of 





Senior Vice 

Billy Ho 

General 

Manager 

Senior Vice 

C. J. Lin 

General 

Manager 

Michael Lin 

Vice General 

Manager 

Percy Chen 

Vice General 

Manager 

James Juan 

Vice General 

Manager 

Ted Chang 

Vice General 

Manager 

Alice Fang 

Vice General 

Manager 

Johnson Wang 

Vice General 

Manager 

King Chen 

6,450,000 0.42% 0 - 0 0.00% 6,450,000 14.45 93,203 0.42% 

Vice General 

Manager 

Albert Mu 

Vice General 

Manager 

J.J. Huang 

Vice General 

Manager 

Bjorn Tsai 

Vice General 

Manager 



Manager 

Vice General 

(resigned 01.31.2011) 



Vice General 

Manager 

Jack Kuo 


2011) 



Head of 

Accounting 

Ting Hui-Yuan 

-47-

04/30/2012 


Titles Names 

Shares of 

obtained 


options 

Percentage of 



Qu antity 

Unit price 

(NT$) 

Exercised 

Total amount 



shares 

Qu antity 

Unexercised 

Unit price 

Total amount 

(NT$) 

Percentage of 





Senior Vice 

Billy Ho 

General 

Manager 

Senior Vice 

C. J. Lin 

General 

Manager 

Michael Lin 

Vice General 

Manager 

Percy Chen 

Vice General 

Manager 

James Juan 

Vice General 

Manager 

Ted Chang 

Vice General 

Manager 

Alice Fang 

Vice General 

Manager 

Johnson Wang 

Vice General 

Manager 

King Chen 

7,025,000 0.46% 0 - 0 0.00% 7,025,000 13.1 92,028 0.46% 

Vice General 

Manager 

Albert Mu 

Vice General 

Manager 

J.J. Huang 

Vice General 

Manager 

Bjorn Tsai 

Vice General 

Manager 



Manager 

Vice General 

(resigned 01.31.2011) 



Vice General 

Manager 

Jack Kuo 


2011) 



Head of 

Accounting 

Ting Hui-Yuan 

Note 2: 4 th time stock options 1 st term and 2 nd term (3 rd time after merging Tyan Computer Corp. shares), 7 th time stock options (4 th time after merging Tyan Computer Corp. shares): 

No managers obtained and exercised stocks. 

Note 3: Except for managers who obtained stock options, employees who obtained stock options in the top ten list and exercised amounting to NT$ 30million: None 

3rd term of the 10 th Employee stock options 

-48-

(6) Information on new shares from acquisition or assignment by a third party: none. 

(7) Progress on the use of funds: The Company did not have any planned use of capital that 

was incomplete, or whose expected yield had yet to materialize, up till the one quarter 

prior to the publication date of this annual report. 

-49-

(1) Business Activities 

VI. Operation Overview 

1. Scope of business 

(1) Principal business activities 

Three major businesses and main current products of MiTAC’s are: (1) Client 

system business products; (2) enterprise products, including workstations, servers, and 

storage devices; corporate and channel servers/workstations including Intel and AMD 

based 2-way, 4-way, and 8-way X86 high-performance servers/workstations; 

high-density servers, and corporate servers/workstations customized for project 

customers; (3) mobile products including in-car navigation (Audio Video Navigation 

devices), consumer electronics (portable navigation devices - PND and navigation 

software for smartphones), recreational and fitness GPS devices, commercial products 

(e.g. fleet management and B2B solutions), and cloud computing applications. 

(2) Business distribution 


Years 

2011 Ratio (%) 

Products 

Computer & communication 

products 

33,627,963 100.00 

(3) Premium running items 

(i) Terminal computer products 

High performance business systems Industrial use PC motherboard 

All-In-One LCD computers High performance PC motherboard 

Compact client system Basic and intermediate levels workstations 

High performance PC system High performance POS (rPOS) 

Mobile payment POS (mPOS) 

(ii) Business Products series/business and channel servers/workstations series 

• High-end workstations General-purpose servers Rack-mounted servers 

• Communicational servers Blade Servers 

• Storage 

• High Density Server 

• High-performance database server 

• GPU Supporting Server 

• Cloud Computing Server 

(iii) Mobile communication products 

• Vehicle GPS (Audio Video Navigation device) 

• Consumer electronics (portable navigation device - PND, and smartphone 

navigation software) 

• Recreational navigation device, fitness navigation device 

• Corporate products (fleet management, B2B) 

• Cloud application 

-50-

(4) New products or technology under planning 

(i) Client system business products 

• High-performance PC gaming computers 

• System protocols and integration of thin client computers & servers 

• R&D of All-In-One LCD computer technologies 

• Integrated technological development for Point of Sale (mPOS) systems. 

(ii) Business products 

• High-performance server. 

• Optimized virtual server. 

• Communication server. 

• GPU supporting server. 

• Storage device and system administration software. 

• Cloud Computing Server 

(iii) Business and channel server/workstation series 

• Development of high-performance servers/workstations, including 4-way or 

8-way HPC servers / workstations. 

• Development of High Density Servers. 

• Blade Servers. 

• Development of storage devices and related technologies. 

• Development and production of customized platform servers/workstations for 

project customers. 

• Development of high-density GPU servers. 

• Development of cloud computing servers 

(iv) Mobile communications products 

• Cloud computing applications and technologies. 

• Integrated data capture, voice, and wireless broadband communication. 

• Technologies that are derived from the Internet and integrated with PCs, 

communication, IA products and storage. 

• Multimedia application technologies. 

• Development of wireless communication and networking technologies. 

• Research on technologies used in wireless communication devices. 

• Operating system and application R&D. 

• Global positioning system (GPS), electronic navigation technologies and mobile 

positioning services. 

• Telematics 

• Compact portable electronic devices; technological development for green 

energy products. 

2. Industry Outlook: 

(1) Terminal PC series 

i. Industry outlook 

a. According to a report published by IDC, global PC shipments started to recover from 

the 2008 financial crisis sometime during the second-half of 2009. In 2010, global 

PC shipments grew by 19.8%, which surpassed general expectations. This 

performance was attributed to PC vendors' efforts on price promotions, and 

highlighted the fact that PCs are becoming daily necessities. The world’s PC market 

is expected to grow between 2011 and 2014, with shipments increasing 

consecutively year after year at double digit rates; however, as tablet PCs become 

-51-

widely accepted day by day, we are witnessing a slowdown in growth momentum. 

b. The statistical analysis by Gartner is shown in the chart below. The momentum of 

overall growth in PC is Mobile PC and Media Tablet while the growth of desktops 

and Netbook will remain at the same level. 

The growth in desktop PCs will be stagnant but other types of PCs, including AIO PCs, 

will grow with momentum. In 2011, growth of this type of PC was 31.1% and in 2012 the 

growth is projected at 17.0% or at total shipment volume of 15.8 million units. Further growth 

in stable pace is expected. 

-52-

Unit: 10,000 units; 

Source: Digitimes, November 2011 

ii. Connection among the upstream, midstream and downstream industries 

a. There is now less demand for DT specifications and upgrades; as a result, the 

conventional design that separated monitors from their DT cores in order to 

maintain flexibility for future upgrades are becoming less attractive, and therefore 

giving rise to AIO DTs. Because AIO DTs require highly integrated components, 

there is also heightened demand for product coordination and compatibility from 

upstream, midstream, and downstream industry participants. System 

manufacturers’ ability to integrate upstream and midstream component suppliers is 

the key to success. 

b. Apart from deploying a comprehensive All-In-One product line, promoting product 

differentiation, and utilizing distinct designs, The Company is also working with its 

main technology providers (e.g. Intel, AMD) to develop the next generation 

products for more added value, and thereby increasing sales. 

iii. Product development trends 

a. In the home product market, client system business has been repositioned, with 

their raw processing horsepower deemphasized and the focus shifted to their use in 

multimedia entertainment and digital home applications. As a result, personal 

computers are integrating functionality related to graphics, video, audio, and data, 

and all of above are to initiate a new phase of strong growth. 

b. Under the demands for building high security and a highly-efficient remote control, 

all business computers of MiTAC’s urgently need our vendors to integrate our 

brand with the system. Our goal is to precisely meet MiTAC’s powerful system 

integration capability, to work with world-known manufacturers, and then to 

achieve a steady growth in the future. 

c. The application of Cloud Computing has made thin computers popular. From the 

development of remote control, to local servers, and from tiny monitors to VOIP 

and video conference devices, the market is calling for mainframe supported 

multiple high-definition monitors without fans. In terms of product structure, thin 

computers evolved from the conventional micro form factors into all-in-one 

devices with integrated screen display, and into portable thin computers. Whereas 

operating platforms also extended from the x86-structure into silicon on-chip 

(SOC). The company has ready access to comprehensive product lines to meet 

customers’ every need. 

d. All-in-one computers are rapidly growing in popularity. In fact, there are many 

-53-

easons for AIO DT to be popular again. First, monitors are getting too big for 

computer desks. 22 to 24 inch monitors are already considered oversized; hence, 

monitors have reached their limits. 

e. The point-of-sale systems (POS) are showing signs of recovery as European and 

US economies stabilize; food, beverages, and other service industries that the POS 

system is mainly targeted to are showing signs of revived business activities. In 

light of the potential of POS systems and the ability to integrate with more 

powerful systems, the company has also begun its preparation for the POS product 

line. The main stream of POS consists of two models, the Retail POS for channel 

sales and the payment function Mobile POS EFT- Electronic Funds Transfer. The 

later requires series of security design to ensure security of the transaction data and 

a gold key for preventing the theft of the access code. This dictates for strong 

design capacity and industry knowledge. 

iv. Competition 

There are far too many suppliers and products in the computer terminals 

market; industry competition has always been very intense. It also shows that 

product differentiation is negligible at best. 

Contrary to the generic products available on the market, The Company 

develops its products with unique functionalities that add value to users, such as 

multimedia functions in ALL-in-One PCs, energy conservation and sensory 

technologies etc. The Company utilizes a mercury-free design for its LED back-lit 

panels, and for energy conservation. An ECO button and motion sensor were built 

on the front side, a touch screen design was implemented, and a proximity sensor 

was introduced. 

With its strength in system integration and the potential in the development of 

POS, MiTAC will proactively develop the MOBILE POS-EFT system. 

(2) Business products series 

i. Industry Outlook 

Servers are used mainly for building corporate information systems, making 

them an essential infrastructure investment for businesses. Because information 

systems are a critical tool for any modern corporation seeking to sustain its 

operations, companies place great importance on Total Cost of Ownership (TCO) 

when it comes to purchasing servers. TCO includes the business costs incurred 

when the system is not operational, as well as regular maintenance costs. Therefore, 

they demand Reliability, Availability, Serviceability, Usability, and 

Manageability – characteristics that are collectively termed RASUM – from servers, 

which consequently require longer time for product development and testing. Once 

products are introduced on the market, they have correspondingly higher margins 

and longer product life cycles. As a result, major multinational server vendors are 

relatively cautious when it comes to outsourcing manufacturing or design of their 

server products, and building a business partnership requires a longer time. Besides 

hardware products, software products are another important factor in the quality of 

services provided by servers. 

In terms of product types, traditional pedestal servers are already seeing gradual 

decreases in their share of shipments in the American market. Replacing them as the 

mainstream choice are rack-mounted servers, and this shift should become evident in 

Europe and Asia as well over the next one or two years. Following rack-mounted 

servers are highly computing-density blade servers. Because of the more stringent 

heat dissipation demands of rack-mounted and blade servers stemming from their 

high computation densities, vendors in this segment will be spending more for R&D 

and allied investment than was necessary in the past for pedestal servers. 


-54-

Storage devices used to enjoy higher profit margins under a close-ended 

structure with low variety and volume, and therefore there was a lesser need for 

manufacturers to outsource production to Asia. In recent years, however, intensified 

market competition is forcing manufacturers to seek OEM partners in Asia. Major 

storage brands are expected to raise their percentage of outsourced production, and 

Taiwanese producers are expected to become the primary beneficiaries under this 

trend. 

Since Taiwanese manufacturers are already quite mature in server hardware / 

firmware design and development at lower costs, the world’s leading brands will 

increasingly outsource server design and development to Taiwanese manufacturers, 

while they retain advantage in software design. 

iii. Product development trend 

Intel processors are progressively gaining market share and have long been the 

mainstream brand; as a result, our product plans and ODM contracts are closely tied 

with Intel’s product trends and lifecycles. Due to Intel’s extended product life 

cycles, the average span of our ODM contracts will also extend from above one 

year to more than two years. In addition, Intel’s new products are more finely 

segmented, therefore giving rise to more varieties of server models. 


As for general purpose servers, the underlying technologies are maturing and 

the technological advantages among ODMs are narrowing down. Competition thus 

intensifies, gross profit margin disappears, and manufacturers need to commit more 

R&D resources into new product development just to maintain a competitive edge. 

The growing demand for cloud computing servers (high-density and 

high-performance servers), with differentiated product specs, is an ideal product 

category where intense competition can be avoided. 

(3) Business and channel server/workstation series 


IDC projects that the market potential of cloud computing services will grow 

by a staggering compound rate of 27% per annum worldwide, reaching USD 42.2 

billion by 2012 in terms of market size (IDC Taiwan, Tsao Yung-Huei, 02/12/2009). 

A study of the overall server market of Taiwan in 2011 indicated that the shipment 

volume of servers from Taiwan in Q4 of this year fell significantly by 12.8% as 

compared with the same period of 2010 due to the sluggish economy worldwide 

and the shortage in the supply of HDD. However, the proportion of shipment 

volume in mid to high-end products under certain purchase programs drove the 

factory revenue up by a margin of 0.2% as compared with the same period of 2010. 


Most servers offered by the world’s leading vendors are manufactured and 

assembled by Taiwanese companies; this is a good demonstration of Taiwan’s 

comprehensive industry chain, and the industry’s ability to integrate vertically 

across upstream, midstream, and downstream participants. 

The market for new applications, like the Cloud computing market, brought 

about a refocus on the market of servers and made system OEM manufacturers pay 

higher attention to their customers and the expansion of product lines and markets. 

These manufacturers include Quanta, Hon Hai, Inventec, and Wistron, who intend 

to establish their stronghold in cloud computing and related market through the 

growth in demand in the server market. 


In 2011, Tyan integrated with the brand new technologies of the leading firms 

to launch a new series of server hardware platforms in response to the 

mushrooming of Cloud Computing for helping its customers to prepare an ideal IT 

-55-

hardware operating environment for good quality cloud computing service. Tyan 

unveiled the brand new TYAN Micro Server FM65-B5511.The conventional 4U 

severs houses 18 computing notes, which is a new high-density energy efficient 

server in the market. Based on the storage equipment market, Tyan launched the 

conventional 2U server equipped with 12 3.5” HDD and install two GPU cards in 

addition to 8 3.5” HDD in order to satisfy the needs of the customers in storage and 

high-speed computing. 

The new generation of TYAN servers and mainboard and quasi-system fully 

support the latest technologies of Intel with expandability, high flexibility, high 

performance and high efficiency so that the customers can have a wide array of 

choices for products to establish a flexible and smart IT operating environment. 

Compared to industry peers, MiTAC’s products ensure compliance with the 

broadest range of standards, passing regulations in most countries, and work with 

the largest number of operating systems. Furthermore, MiTAC offers its customers 

a wide variety of products to help address the needs of different market segments. 


a. The business of MiTAC brands and ODM is confronted by acute competition 

from other firms particularly the direct contact between a few major domestic 

firms and foreign customers, which surpassed the traditional mode of ODM 

business model. In shaping its product strategy, the Company continues to work 

closely with its customers in product definition and development in order to 

understand the real needs of the customers. This in turn helps to maintain our 

edge. 

b. In product strategy, the Company will continue its development in storage and 

server products. MiTAC is also engaged in joint venture with a few major 

chipset firms for the development of new products. Through this mode of 

cooperation, MiTAC can sell the products to its own customers while the chipset 

firms can sell the products to other customers through different channels. 

(4) Mobile communication products 


a. Portable Navigation Devices 

In recent years, GPS technologies have made several breakthroughs with 

regards to compactness and energy saving qualities; it is becoming widely accepted 

with the reduced costs of related components and the maturity of digitized mapping 

technologies. According to the statistics of several research institutions, GPS 

navigation will attract billions of users by year 2020; the market of similar products 

is estimated to reach NTD 16 trillion and the demand for GPS navigation products 

may reach EUR270 billion. 

The market data released by GFK, a research institution, indicated that the 

shipment volume of PND in 2012 worldwide is estimated at 28 million units, which 

showed a decline from 36 million in the same period of 2011. 

As more manufacturers and brands enter the PND market, the future of GPS 

lies in its integration with cell phones, cameras and other mobile devices, and the 

introduction of value-added services. With more functionality available, selling 

prices are continually dropping; several GPS brands are trying to control costs by 

acquiring map data providers. However, more than 500 million cars in the world 

have yet to install navigation systems, and on top of which, the cost of producing 

cars with embedded GPS navigation remains high, thus there is still significant 

potential to the PND market. Although the PND market remains, the maturing of 

existing GPS technologies will give rise to more LBS products such as GPS for 

bicycle, fitness, entertainment, and iTracers GPS vehicles. The Company is 

targeting the B to B medical and health care market and vehicle data management 

-56-

market in the future thereby launch the community web integration service related 

to cloud computing. 

b. Audio Video Navigation 

The successful development of navigation technology prompted the installation 

of vehicle video GPS in the future. An analysis of Fuji Chimera showed that there 

will be some 7.5 million of vehicle video GPS in 2012 worldwide. The market in 

Europe and America is expected to grow by 11% and 18% respectively while the 

BRICs market is expected to grow by 16%. The Company has already engaged in 

joint ventures with a number of benchmark companies for product development. 

As communication technologies will be developed well in the future, the 

markets of auto navigation shall become a critical industry in the 4C mix, thereby 

attracting participation from world renowned manufacturers. 


Approximately 80% of personal GPS devices are made and installed by 

Taiwanese vendors, which shows the powerful integrating capability of Taiwanese 

GPS vendors along the GPS industry supply chain. The handheld device industry 

belongs to “short, small, light and thin”, so they are both easy to carry and stylish. 

Therefore, from innovative and fashionable design on the outside, to testing and 

whole machine production, vendors are required to make GPS devices all-in-one 

embedded hardware and software. Specifically, all upstream and mid-stream 

vendors produce key hardware components including microprocessors, displays, 

touch panels, memories, IC drivers, batteries, acoustic filters, quartz oscillators, 

objective devices, antennas, GPS chipsets, GPS modules, receivers, connectors and 

pushbuttons, etc. They also produce integration devices, GIS graphic data terminals, 

and digital content and software applications. Downstream vendors are mainly 

OEM/ODM clients and channel providers. 


Handheld devices are “portable information” devices. They also incorporate 

the latest web applications and wireless technology, as well as cloud computing, to 

access personal information any time anywhere. All handheld products aim at 

different audiences. 

a. LBS – location based service 

Users in different geographic locations have different needs for GPS products. 

For example, Asia-Pacific consumers are more concerned with multimedia 

entertainment (digital TV / DVD) and drive recording; whereas in Japan, the market 

where GPS applications are used most extensively focuses more on driving 

information, 3D navigation, and dead reckoning. In European and American 

markets, driving safety, real-time information, and portability stand above all else, 

while North American consumers prefer to have GPS products integrated with other 

electronics and green energy functions available in the car. As a result, The 

Company needs to incorporate product functions over a highly integrated platform 

to ensure consistency. 

Applications of GPS technology are well-developed, and will give rise to more 

varieties of LBS products. In the future, GPS applications will become increasingly 

segmented, miniaturized, feature-rich, and affordable. 

Applications of GPS technology are trending towards recreational activities 

such as cycling, mountain hiking, camping, etc., and therefore demand more 

product varieties designed for specific purposes. People’s need for GPS is no longer 

confined to within vehicles, but extends to outdoor uses as well; in response to this 

demand, recreational navigation devices are gradually becoming the market’s new 

favorite. 


-57-

3. 

In the future, Audio Video Navigation will be able to handle many more 

applications at more affordable prices with the maturity of our communication 

technologies. This development will eventually drive market demand and attract 

involvements from large manufacturers. 

vi. Competition 

Competition among the world top three in global market is obvious 

Many PND producers or cell phone vendors have undertaken the means to 

merge or invest large production facilities or other suppliers in an attempt to control 

hardware/software costs; this, on top of the matured technology, caused the market 

to be divided among three major PND vendors in 2010, which mitigated the keen 

competition. 

MiTAC, for example, has continued its efforts in supplying products featuring 

design and consumer orientation as its direction for product development. At the 

same time, it also explored the needs of the consumers in depth for providing more 

suitable service and complete content with graphic data. 

MiTAC is persistent in innovation and positive attitude. Its effort has been 

recognized by market trend and customer satisfaction in the domains of product 

R&D, production quality, and cost control. Currently, MiTAC won the third place 

and gained 14% of the market share in the global market of PND. 

Technology and R&D 

(1) R&D spending 


Item 

Year 

2011 3.31.2012 (note) 

R&D expenses 1,712,555 393,649 

Note: to the end of the quarter before this report was printed. 

2. Successful technologies and products launched as of the date this report was printed: 

The R&D directions of MiTAC are to control new technology and new products, 

following the trends developing toward wireless, mobile communication, and the 

Internet niche market. Additionally, MiTAC’s human resources are from Taiwan, China 

and North America, and can observe the mainstream market and then use the existing 

specs to create our own similar products in time to meet the market’s demands. Our 

advantages are product diversity, serial completion, a whole supply chain and global 

locations. 

(1) Major success: 

a. Allied with leading brands and corporations, using high power processor 

techniques to provide different servers and workstations and become a channel 

leading brand. 

b. We have developed location-based navigation products by integrating 

Microsoft’s and Google’s mobile operating systems, among other software 

technologies and geographical information systems (GIS), into recreational 

navigation devices. 

c. Based on MiTAC’s global vertical and horizontal teamwork and integration 

system, from ID design to tooling molds and vertical integration of production, 

we seek to satisfy customers and market demand. Drawing from the 

comprehensive distribution network, and coordination capability of MiTAC to 

develop high-tech wireless Internet and PC technology with international brands. 

MiTAC aims to become one of the major PC suppliers with the core products of 

PC and home computers that combine imagery, sound effects, video, and 

wireless. 

(2) Products 

-58-

a. Clients system products: 

1 Business and home PCs: Computers designed with a basic architecture and 

latest technologies built around processors; integrating PCI-Express graphics 

cards, high-definition audio, wireless networking, high-speed interface (USB 

3.0 / PCIe 3.0), and highly efficient heat sink designs. 

2 Intermediate to high-end workstations: Based on single and dual Intel and 

AMD X86 processors. 

3 Multimedia set-top box: Provide digital home with multimedia set top box as a 

solution for online system and digital TV signals in generating multimedia. 

4 The highly integrated all-in-one LCD PC series in 20”, 21.5” or 23”, 

embedded with touch screen, web cam, VoIP and other convenient 

applications. 

In 2011, under a strategic alliance with Intel, The Company jointly introduced 

the world’s first standardized platform, the Thin Mini-ITX, designed 

specifically for channel customers. Models of the new generation will be 

launched in 2012, this product incorporated a single-screw design in the back 

cover, so that channel customers and system vendors can easily customize out 

of cost concerns. 

Its innovative designs were truly reflected through multimedia, energy 

conservation, and sensory functionalities. The monitor features a mercury-free 

LED back-lit panel. For energy conservation, an ECO button was built on the 

front side, which will put the product into sleep mode and reduce CPU usage 

when pressed, thereby conserving energy. The computer also features a motion 

sensor that detects if anyone is sitting in front of the computer, and adjusts 

screen brightness accordingly as well as the computer’s operational mode. The 

monitor also features touch screen control and a proximity sensor. When the 

user places hands near the monitor, the functional menu appears automatically 

for easy reading and selection. The computer features a high-quality web cam 

that can be used to capture high quality video and conduct video conferencing. 

Simply with the press of a button, users can input images from cell phones, 

HD cameras, or game consoles through HDMI. 

5 Slim PC: These are highly integrated terminal computers without fans. There 

are three types: Desktops, portable and All-in-one PCs. As for their platforms, 

there are X86 and SOC servers. 

6 The main stream of POS consists of two models, the Retail POS for channel 

sales and the payment function Mobile POS EFT- Electronic Funds Transfer. 

The later requires a series of security design to ensure security of the 

transaction data and a gold key for preventing the theft of the access code. 

This dictates for strong design capacity and industry knowledge. 

b. Business product series 

1 Workstations: Expand joint development, design, manufacture, and 

distribution of high-performance single- and dual-processor workstations with 

world-class vendors. Become one of the few vendors with SPAR and x86 

system workstations made available. 

2 MiTAC has accumulated extensive R&D experience with multiprocessor 

servers over the years. In response to market growth and demand globally for 

server storage devices, MiTAC’s R&D team has developed single-, dual-, and 

quad-processor servers, and draws on high-density system integration 

technologies to develop high-density servers. The increasing demand for 

energy efficiency compelled the Company to use system integration 

technologies to research and development different types of high-density and 

-59-

energy efficient servers to reduce the total cost of Ownership or TCO of the 

customers in the installation of machine room. In the future, MiTAC will 

continue to develop x86 products in further depth and will invest in the 

development of ARM base products. 

3 Storage devices: as dictated by the needs of massive date transmission and 

storage in cloud computing, and the growth in market size of storage devices 

and equipment, MiTAC will continue to commit its effort in its R&D team in 

the development of storage device technologies and products, including the 

4U/60 Bays featuring SAS6G transmission interface and JBOD/RBOD 

products complying the SBB2.0 specifications. 

c. Business and channel servers/workstation series 

Cloud computing barebones servers: IDC’s research report dated December 

2009 indicated that the market potential for cloud computing is valued as high 

as USD 2.4 billion worldwide, with the potential to increase to USD 8.1 billion 

by the year 2010. The foundation of cloud computing, which involves a massive 

database center that is remotely accessible (cloud) and users’ ultra-portable 

electronic devices (client). Users connect to the Internet using their handheld 

devices, establishing connections with the data center using remote access 

management protocols, and utilizing the data center’s powerful computation and 

storage capabilities to perform any complex task or daily, regular calculations. 

This arrangement facilitates users and corporations to deliver extensively 

complex processing of massive data at the maximum effectiveness and lowest 

costs. 

Cloud suppliers construct hardware infrastructure and effectively integrate 

with software into a working platform. Combined with various solutions offered 

by software suppliers, these services can be leased to corporations across many 

industries for a fee. By leasing clouds, corporations can effectively reduce their 

cost of data center establishment and maintenance; they can even retrieve 

products or services that these clouds provide over the Internet and deliver them 

immediately into ultra-portable electronic devices at the client’s end. End 

consumers can then access products or services rapidly and easily using 

handheld devices without being tied to the conventional, heavy computer 

equipment. 

In responding to the mushrooming of Cloud Computing, Tyan unveiled the 

brand new TYAN Micro Server FM65-B5511.The conventional 4U severs 

houses 18 computing notes, which is a new high-density energy efficient server 

in the market. Based on the storage equipment market, Tyan launched the 

conventional 2U server equipped with 12 3.5”HDD and installed two GPU cards 

in addition to a 8 3.5” HDD in order to satisfy the needs of the customers in 

storage and high-speed computing. 

d. Mobile communication product series 

1 Magellan eXplorist® Pro 10: Magellan, a brand of MiTAC, released the 

Magellan® eXplorist® Pro 10 portable GPS navigation products. This is a 

professional GPS navigation system exclusively designed for GPS and GIS 

gathering of geographic data. Its heavy-duty design, slim and light weight, 

water resistance, and built-in Bluetooth function matched with the 3” 

WQVGA color touch panel, 533MHz processor and 128MB RAM, and built 

in storage space of 4GB and expandability through microSDHC. The slim and 

light Pro 10 allows for viable operation of processing map data and storage of 

related data. 

2 Mio Cyclo:Mio launched its new generation Mio Cyclo series in ISPO 2012 

-60-

in Munich, Germany. The series contained the Mico Cyclo 300 and Mio Cyclo 

305, matched with the unique Surprise Me, built-in GPS map and operation 

interface fully integrated with the habit of the users. This could be taken as a 

major breakthrough of Mio Cyclo series into sports, entertainment, and fitness 

activities. 

3 Magellan Switch: In the world biggest consumer electronics show, the CES 

2012, Magellan released its brand new Switch and Switch Up. This product is 

designed to satisfy the needs of runners, cyclists, and triathlon athletes and is 

full-range function and high-adaptive GPS watch. At the same time, it can be 

linked to a third party web seamlessly. This product is also recognized by the 

IF product design award, the so-called “Design Oscar” at the same time. 

-61-

4. Long and short-term business plans 

1. Client system products 

(1) Short-term business plans: The US, Europe, and Japan are the major PC markets. 

MiTAC has focused on these markets, and will continue to develop further ODM 

and channel business opportunities in these markets in the future. Further, MiTAC 

will stretch out to newly emerged markets, including Russia and the Middle East. In 

product strategies, compact systems are getting more attention in the market. 

Mobile handhelds and E-Family products have just begun to flourish. For the 

short-term plan, we will focus on ODM in North America and Europe and expand 

the source of customers from different walks of lives. fields. 

(2) Long-term business plans: The Asia-Pacific region had the highest shipping volume 

in the world in 2011. The Asia-Pacific region has already passed Japan, with 

Mainland Chinese being the No 1 supplier in the Asia-Pacific region. Therefore, for 

long-term business development, we plan to explore potential markets, like 

Asia-Pacific, China, Russia and the Middle East. As for product strategy, 

diversified products for all age groups remain the focus of our development. 

MiTAC gained our R&D capability from all of the ODM digital production and we 

will expand our market from the existing American & European markets to the 

global ones and to develop more leading- edge products. Besides, we are working 

on making alliances with digital services providers in order to open a new 

audio-video market. 

2. Business Product Series 

(1) Short-term business plans: Our strategy is to maintain and cooperate with existing 

clients on workstations and various types of servers and storages devices in order to 

expand our customer base and increase revenues. 

(2) Long-term business plans: In the next three years, we will continue the development 

and sales for storage devices and servers. On the other hand, we seek long-term and 

stable cooperation with clients in the whole food chain, from entry-level to high-end 

solutions, single product line and multiple ones. We want to strengthen our product 

development capability and speed, product quality and delivery control. Our aim is 

to reinforce our role as a major server ODM supplier. 

3. Business and channel servers/workstation product series 

(1) Short-term business plan: analyze market trends; adopt the latest upstream and 

downstream technologies to develop products driven by customers’ needs. Actively 

participate in global exhibitions and execute marketing campaigns to enhance brand 

image and explore potential customers. Deliver rapid and accurate production 

through the established global marketing network under the best supply chain 

management practice. Shift businesses and investments toward emerging markets 

such as Mainland China, India, and Russia; strengthen the supply relationship to 

major customers. 

(2) Long-term business plan: Since the USA, Mainland China, and Taiwan are the key 

markets and centers of world’s technological development. We shall identify the 

most influential customers in every market and take the initiative to offer samples 

and understand their requirements; we will then produce custom-made products for 

the customer and duplicate our successful experiences to other countries. We have 

already delivered successes in Mainland China that can drive demands from other 

customers, and will perform better in countries of Asia-Pacific, like Japan and 

Korea. MiTAC is expected to intensify its business in Japan this year. 

4. Mobile communication product series 

a. Location-based services 

(1) Short-term business plans: We closely observe the market and user’s feedback in 

-62-

order to design the most competitive mobile communications products. We use our 

product planning, development, design and production capabilities to provide our 

customers high-value services. We will also give clients cheap mapping and points 

of interest in order to open different markets. 

(2) Long-term business plans: We will utilize global distribution, sales models and 

service networks to work closely with partners and vendors. MiTAC SYNNEX 

Group will be the global channel with highly integrated product planning and 

high-value-added products, thus to expand the foundation of major international 

client base and to develop a varsity of clients. 


(1) Short-term business plans: Focus on existing customers, and grow sales of Audio 

Video Navigation devices while offering customers high value added services 

through innovation and professional product planning, research, development, 

design and manufacturing capabilities. 

(2) Long-term business plans: Build on top of our existing location-based service 

technologies, broaden communication service, and utilize cloud computing as a 

foundation for highly integrated and high value-adding products; expand our 

multinational customer base, and grow customer variety. 

(2) Market and Sales 

1. Market analysis 

1. Main market by region 

Regions 


2011 

N. America 16,368,301 

Europe 6,378,744 

Asia, Australia, Africa 10,633,702 

Taiwan 247,216 

Total 33,627,963 

2. Market share 

(1) Client system products 

Currently, MiTAC’s OEM customers mainly consist of the world’s top 10 PC 

manufacturer brands. However, the company is striving toward technological 

integration to broaden product variety (such as slim PC, point of sale systems, 

all-in-one integrated computers, mobile Internet devices etc.) as well as customer 

variety. Our goal is to expand the business scope in multiple directions for optimal 

risk diversification. 

(2) Business product series 

Drawing on many years of experience, Taiwan’s major IT vendors are already 

able to provide integrated global logistics management, providing customers with the 

best possible competitive advantage by coordinating design, testing, manufacturing, 

assembly, and distribution with the customer’s market launch timetable. The evident 

trend towards international brand vendors continuing to seek Taiwanese partners 

shows that more and more non-PC products will be seeking to have their design and 

manufacture outsourced to Taiwanese companies. Most Taiwanese companies, 

including MiTAC, can anticipate enhanced competitiveness through this type of 

alliance, helping them expand market share. 

MiTAC mainly produces its products for ODM customers; it is more difficult to 

gauge their market share. However, MiTAC accumulated more than 10 years’ 

experience in the design and manufacturing of corporate products; MiTAC’s 

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customers include world renowned server brands that also recognize MiTAC’s 

professional capabilities, which is why there is still room for market share gains. 

(3) Business channel servers/workstation series 

The new general of Intel servers, the Romley, will be launched on the market in 

March of this year. Tyan will also unveil a wide array of new products at the same 

time in line with Intel for higher visibility. 

(4) Mobile communication product series 

GPS products have made several technological breakthroughs in recent years 

with respect to miniaturization and energy conservation. Component costs have 

reduced while digital mapping technologies have matured. According to the statistics 

provided by research institutions, GPS users may reach as many as billions 

worldwide by 2020; the market size is estimated to reach NTD16 trillion, while 

worldwide GPS product outputs amount to EUR2.70 billion. 

The latest market data released by research institution GFK indicated that the 

shipment volume of PND in 2012 worldwide is estimated at 28 million units, which 

is a decline from 36 million units as of the same period in 2011. 

With more vendors and brands joining the PND market, GPS is increasingly 

integrated with other devices such as cell phones and cameras to offer value-adding 

services and more functions at lower prices; as a result, many GPS brands tried to 

merge map data providers for cost control. However, given the fact that more than 

500 million cars in the world have yet to install navigation systems, and the high 

price associated with embedded navigation equipment, the PND will continue to exist. 

As GPS technology matures, it will give rise to more LBS products such as GPS for 

cycling, fitness training, recreational use, and fleet management etc. The successful 

development of existing navigation technologies also prompted car manufacturers to 

build in navigation devices at factory production. Europe and America together still 

constitute the biggest market, but the focus will gradually switch to Latin America 

and the newly emerged markets. 

3. Supply and demand in market and growth 

(1) Client System product series 

PCs have undergone many changes in the last twenty years and have reached 

maturity. As for the U.S., Europe and Japan markets, the market is quite saturated, so 

there is little room to grow. As for rising markets like China, India and South 

America, because PCs there are not as common as in developed countries, we believe 

that we will be able to maintain a positive growth in the future. 

Further to common PC products, MiTAC have been actively studying 

high-value added products, like all-in-one integration PCs, thin computers, point of 

sale systems (POS) and portable mobiles devices etc. for cloud calculating and other 

high-value products. 

(2) Business product series 

With the economic recovery becoming evident, enterprises are more willing to 

invest in IT; therefore, the server market has seen some growth, and international 

servers are also on the rise. Global server shipments have grown by 10%. 

In response to the increase in shipments but the decrease in prices, major 

international vendors have been outsourcing in order to gain more advantages. 

Taiwanese companies have competitive edges in low cost, quick R&D and flexibility 

of delivery time. Therefore, the scale of the server industry has grown because of the 

increase of orders. Even though most are entry-level and low-end products, the 

increase in volume and more expensive rack-optimized and blade servers are 

compensating for falling prices for some components, so that the overall shipment 

value continues to show growth. 

-64-

Given the worldwide economic recovery and the growing demand for cloud 

computing, we can expect significant growth from Taiwan’s server and storage 

device industries in the next few years. 

(3) Business and channel servers/workstation product series 

In recent years, corporate users have become increasingly aware of ROI and C/P 

ratios; the availability of low-cost yet high-performance products has become the 

primary concern when it comes to IT procurement. The company’s TYAN brand 

offers multiple server products from entry-level to high-end setups, adopting the 

latest production of 6-core and 12-core designs and supports to DDRIII; some of 

which can even support GPU. Hence, the company is able to provide suitable 

products for any hardware platforms, regardless of whether they are ordinary server 

rooms, large-scale computing center, database center, cloud computing center, public 

infrastructures or government projects etc. These users are also the main business 

targets of the company’s X86 server market. 

(4) Mobile communication product series: 

In the wake of the demand for user friendliness, precision, low price, and the 

extensive application of leisure activities and the increasing demand for vehicle video 

GPS, MiTAC will further utilize its abundance of resources in the IT industry. The 

rich content of GPS service will be integrated with mobile communication which will 

push for the diversity of the GPS market and detonate the best of business 

opportunity for GPS. MiTAC will attune to market changes and launch new products 

timely for meeting the needs of the consumers. 

4. Favorable and unfavorable factors affecting the competitive position of MiTAC and 

responses 

To cope with the challenges under global economic recession, MiTAC will take 

advantage of the new Joint Development Manufacturing (JDM) approach, combining 

global R&D, engineering, manufacturing, designing, electronic manufacturing, sales 

distribution, and technical/after-delivery services to achieve a higher customer 

satisfaction for a greater competitive advantage over the competitors. 

(1) Competitive edge 

The competitive edge of MiTAC in the wireless communications business and 

products lines is: Sales development, R&D capabilities, effective cost control, stable 

product quality and high-yield production process, fast mass production ramp-up, 

inventory management and component procurement, thorough logistic support 

capabilities, and market cooperation and sound financials. 

The competitive edge of MiTAC: 

A. The understanding of customer requirements and market directions: We work 

hand-in-hand with all software and hardware clients to explore consumer’s 

needs; in addition, MiTAC is seeking ventures with several worldwide IT and 

communications companies. Once we partner with them, we believe that 

MiTAC will be able to proceed to the next step ahead of time 

B. Collaborate with the best software and hardware vendors to ensure sufficient 

material supply for key hardware components. 

C. R&D innovation: Many of our products have won awards and become market 

leaders. 

D. Continue to improve product quality and production capacity: Our years of 

experience in embedded systems are our unique advantage. 

E. By taking advantages of existing channel markets and our group’s global 

logistics and service network, MiTAC can provide more comprehensive 

customer service. 

-65-

(2) Favorable factors in development 

A. The integration of all supply chains for the Internet infrastructure 

MiTAC has developed an effective distribution approach to combine global 

e-commerce mechanisms, and by developing products with high unit prices with a 

direct sales model, we greatly increase our efficiency, reduce costs and raise 

customer satisfaction. 

B. Global e-manufacturing model 

After several years of refining our logistic model, MiTAC’s e-manufacturing 

system has been completed. This system allows us to perform R&D and design in 

Taiwan and in the US, to produce in China and Taiwan for modules and semi-parts, 

and assemble in these BTO/CTO centers in the US, Australia, and the UK. The 

whole system was designed by considering the factors of technicality, cost for 

production, shipping and delivery, and tariffs. Taiwan is a major manufacturer of 

motherboards, workstations servers and storage devices; whereas less technical 

products with longer delivery times are made in Mainland China. All high-priced 

major parts can be acquired anywhere in the world. MiTAC’s global organization 

has enabled us to become to an international e-manufacturer. 

C. The expansion of high value-added products 

In response to the connection of wireless network communications and 

computers, MiTAC will continue to form strategic alliances with leading vendors 

too. MiTAC introduced several navigation products ahead of its competitors in the 

GPS market with superior innovation, design, R&D, production, and integration 

capabilities. MiTAC combines voice and data communication through the 

integration of computing and GPS. MiTAC introduced several navigation products 

ahead of its competitors in the GPS market with superior innovation, design, R&D, 

production, and integration capabilities. MiTAC combines the concepts of outdoor 

use, GPS & Apple to provide voice and data communication, thereby maintaining 

competitiveness in functionality (multimedia, gaming, personal data management, 

PC data transmission etc.), design, and pricing. 

MiTAC is devoted to developing LBS, AVN, mobile TV with embedded GPS, 

outdoor navigation devices…etc. More and more features are added every day to 

LBSs so the products will be more dedicated and practical and can create many 

highly-added values. LBS’s navigation combined with digital maps and 

well-designed navigation software will make the LBS a must-have gadget in the 

future. 

D. Keeping the momentum of growth n market 

In addition to working at key markets, such as North America and Europe, 

MiTAC will emphasize on developing Asia Pacific and Emerging markets with 

potential growth in GPS demands, including Mainland China, Japan and Eastern 

Europe. 

E. E-commerce 

In light of the needs of MiTAC in global production, and the geographic 

specificity and product segments for the customers, MiTAC modularized the design 

of its parts and components and integrated the e-commerce capacity of the upstream 

partner firms for on-time delivery worldwide. These help to reduce operation risk, 

lower inventory level, and provide customers timely delivery service. 

(3) Unfavorable factors in the future and responses 

A. Keen competition: Competition from cell phones and Audio Video Navigation 

systems, as well as participation from large manufacturers to the R&D and 

production of GPS devices, all put pressure on pricing. The average selling price of 

-66-

PNDs is expected to fall below USD100 after 2010. Additionally, the functions of 

PND and wireless communications products continue to integrate. GPS smart 

phones will become a necessity, which will bring an even more competitive 

market. 

(a) Enhance integration with vehicle features; differentiate from GPS applications 

using smartphones. 

(b) Closely observe R&D innovation, strengthen our R&D results, shorten product 

development times, and keep developing new models; focus on location-based 

services and variety; utilize differences in products and mass-produce to 

maintain our profitability. 

(c) Upgrade customer satisfaction in design, mass production and backup support 

services and make effort to ally with major brands in the world. 

(d) Utilize our global sales and logistic model and build a comprehensive material 

system, a value chain and the backup support. 

B. Key components remain under control of foreign vendors and software and 

hardware integration: 

Responses: 

(a) Maintain a good relationship with providers; in the meantime, train people who 

can operate platform and communication components. 

(b) Diversify the sources of key components: Seek alternative suppliers to ensure 

ample sources and gain competitive prices. In addition, maintain good 

relationships with domestic vendors for more options. 

(c) Leverage with large quantity: Our several products are top sellers, and we have 

won substantial orders from large OEM/ODM companies; therefore, the 

procurement cost has been greatly reduced. 

2. Important applications and production process for main products 

1. The functions of major products 

Product type Major purpose and function s 

Workstations Graphical computing tool for designers 

Servers Data computing tool for businesses 

Storage Equipment Data storage tool for businesses 

Desktop PCs For personal, family, school, and company use to 

manufacture, educate, wireless transmission in home video 

entertainment and share multi-media information. 

Mobile Communication Devices Audio Video Navigation, consumer electronics (recreational, 

fitness training, and driving navigation), fleet management 

solutions, cloud computing applications. 

-67-

2. Production Process 

a. Cloud Computing Business Group 

PCB 

baking 

Repair 

3D re-check 

machine 

Solder paste 

printer 

Solder paste 

inspection 

machine 

Surface 

mount parts 

placing 

Reflow 

soldering 

oven with 

Nitrogen 

atmosphere 

Automatic 

optical tests 

(PCB) 

Slitting 

machine 

Manual 

insertion 

Motherboard 

soldering 

spot repair 

Press parts 

A 

Repair 

-68- 

A B 

Automatic 

X-ray 

inspection 

Circuit test 

PCB 

assembly 

Function 

tests 

Visual 

inspection 

PCB 

packing 

PCB 

delivery 

inspection 

PCP 

stocking 

B 

Repair 

System 

assembly 

System 

test 

HV test 

Aging test 

Visual 

inspection 

System 

packing 

System 

delivery 

inspection 

System 

Stocking

.Mobile communication products Business Group 

-69-

3. Supply of key components 

Component name Origin Supply status 

CPU Original maker: US., Korea Good 

HDD Original maker: US, Japan Fair 

DRAM Original Maker: US, Japan, Korea, Taiwan Good 

Flash Original Maker: US, Japan, Korea, Taiwan Good 

PCB Original Maker: Taiwan, US, China Good 

LCD panels Original Maker: Taiwan, Korea, Japan, China Good 

CHIPSET Original Maker: Taiwan, US, Korea Good 

CDROM Original Maker: Taiwan, Korea, Japan, Good 

MODEM Original Maker: Taiwan Good 

Camera Module Original Maker: Taiwan, Korea, Japan, Good 

Battery Pack Original Maker: Taiwan, Korea, Japan, China Good 

4. Major customers and suppliers in the last two years 

1.List of major suppliers 

Item Name amount 

1 

MiTAC 

Computer 

(Kunshan) 

Co., Ltd. 

(Note 2) 

2010 2011 2012, Q1 

Ratio to 

net 

annual 

purchase 

(%) 

Relation 

with the 

issuer 

4,271,485 10 note1 

Item Name amount 

MiTAC 

Computer 

(Shun De) 

Ltd. 

10,532,923 

-70- 


net 

annual 

purchase 

(%) 

35 note 1 

Name Amount 

MiTAC 

Computer 

(Shun De) 

Ltd. 


Ratio to net 

purchase in 

Q1 2012 

Relation 


issuer 

2,545,838 44 note 1 

2 Others 37,913,871 90 

MiTAC 

Computer 

(Kunshan) 

Co., Ltd. 

(Note 2) 

3,901,149 13 note 1 Others 3,248,338 56 

3 others 15,761,437 52 

Net 

purchase 

42,185,356 100 

Net 

purchase 

30,195,509 100 Net purchase 5,794,176 100 

All variations take into consideration The Company’s production and marketing policies, raw material demands, suppliers’ prices, actual delivery, and 

quality in each year. 

Note 1: The Company’s indirectly held investee accounted using the equity method. 

Note 2: Transactions with MiTAC Computer (Kunshan) Co., Ltd. were conducted through Mio International Ltd. located in another country. 

2.List of major customers 

Item Name Amount 

1 

MiTAC 

Logistics 

Corporation 

2010 2011 2012, Q1 


annual 

net sales 

(%) 

Relation 


issuer 

6,347,390 13 Note 1 

Name Amount 

MiTAC 

Information 

Systems 

Corporation 


annual 

net sales 

(%) 

Relation 


issuer 

6,479,209 19 Note 1 

Name Amount 

MiTAC 

Information 

Systems 

Corporation 


Ratio to net 

sales in Q1 

2012 (%) 

Relation 


issuer 

1,270,906 18 Note 1 

2 Customer E 6,269,230 13 None Customer E 4,947,480 15 None Customer E 1,147,583 16 None 

3 

MiTAC 

Logistics 

Corporation 

3,657,971 11 Note 1 

MiTAC 

Logistics 

Corporation 

893,037 12 Note 1 

4 Others 37,025,791 74 Others 18,543,303 55 Others 3,844,548 54 

Net sales 49,642,411 100 Net sales 33,627,963 100 Net sales 7,156,074 100 

All variations take into consideration future market trends, product demands, industry prospect, R&D technology, profit margins, and customers’ 

contracts. 

Note 1: The indirect investee of the Company accounted for under the equity method

5. Production volume and value in the last two years 

Volume/value year 

2010 

Currency: 1,000 NTD; unit 

2011 

Main items 

PC and communication 

products 

capacity volume value capacity volume value 

15,625,000 7,744,466 41,005,309 11,297,292 5,731,607 27,438,685 

Note: These figures listed above include overseas processing work 

6. Sales volume and value in the last two years 

Volume/value year 

Main items 

PC and 

communication 

products 

2010 2011 

-71- 

Currency: 1,000 NTD; unit 

Domestic sales Export Domestic sales Export 

capacity volume value capacity volume value capacity volume 

122,494 276,594 7,906,338 49,365,817 119,833 247,216 5,671,085 33,380,747 

7. KPI of MiTAC 

1. The cost of human resources required for average revenue in the last two years 


2010 2011 

Revenue 49,642,411 33,627,963 

HR cost 1,624,762 1,580,727 

HR cost/revenue 3% 5% 

2. Per capita revenue in the last two years 


2010 2011 

Revenue 49,642,411 33,627,963 

Number of employees 1,363 1,282 

Revenue/no. of employees 36,421 26,231 

3. Financial structure, ability to repay debts, and utility in the last two years 

2010 2011 

Assets to liabilities ratio(%) 37.19 37.84 

Current ratio (%) 146.23 133.66 

Quick ratio(%) 113.67 105.84 

A/R turnover rate (times) 4.00 3.08 

Inventory turnover rate (times) 6.78 5.41

V. Financial Position 

(1) Supervisors’ Report on Financial Statement of the most recent year 

MITAC INTERNATIONAL CORP 

SUPERVISORS’ REPORT 

We reviewed the financial statements prepared by the Board of Directors of MiTAC 

International Corp. for fiscal year 2011 (from January 1 to December 31, 2011), the report on 

operation covering the year then ended with a proposal on the distribution of earnings. The 

aforementioned financial statements were audited by Liu Yin-Fei and Lin Yu-kuan, CPAs of 

Pricewterhouse Cooper. We confirmed that the aforementioned statements are prepared and 

presented in compliance with applicable legal rules including the Company Law. We issue this 

report pursuant to Article 219 of the Company Law. 

To: General Meeting of Shareholders 

MiTAC International Corp., 2012 

Supervisors: Chiao:Arther Chiao 

Fu-Shi, Charles Ching 

(Representative of Lien Hwa Industrial Co., Ltd.) 

-72- 

April 30 2012

(2) The latest financial statements and independent auditor’s report 

MiTAC INTERNATIONAL CORP. AND SUBSIDIARIES 

CONSOLIDATED FINANCIAL STATEMENTS AND 

REPORT OF INDEPENDENT ACCOUNTANTS 

DECEMBER 31, 2011 AND 2010 

------------------------------------------------------------------------------------------------------ 

For the convenience of readers and for information purpose only, the auditors’ report 

and the accompanying financial statements have been translated into English from 

the original Chinese version prepared and used in the Republic of China. In the event 

of any discrepancy between the English version and the original Chinese version or 

any differences in the interpretation of the two versions, the Chinese-language 

auditors’ report and financial statements shall prevail. 

-73-

REPORT OF INDEPENDENT ACCOUNTANTS TRANSLATED FROM CHINESE 

To the Board of Directors and Stockholders of MiTAC International Corp. 

-74- 

PWCR11000390 

We have audited the accompanying consolidated balance sheets of MiTAC International Corp. 

and its subsidiaries as of December 31, 2011 and 2010, and the related consolidated statements of 

income, of changes in stockholder’s equity and of cash flows for the years then ended. These 

financial statements are the responsibility of the Company’s management. Our responsibility is to 

express an opinion on these financial statements based on our audits. 

We conducted our audits in accordance with the“Rules Governing the Examination of Financial 

Statements by Certified Public Accountants”and generally accepted auditing standards in the 

Republic of China. Those standards and rules require that we plan and perform the audit to obtain 

reasonable assurance about whether the financial statements are free of material misstatement. An 

audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the 

financial statements. An audit also includes assessing the accounting principles used and 

significant estimates made by management, as well as evaluating the overall financial statement 

presentation. We believe that our audits provide a reasonable basis for an opinion. 

In our opinion, the consolidated financial statements referred to above present fairly, in all 

material respects, the financial position of MiTAC International Corp. and its subsidiaries as of 

December 31, 2011 and 2010, and the results of their operations and their cash flows for the years 

then ended in conformity with the “Rules Governing the Preparation of Financial Statements by 

Securities Issuers” and generally accepted accounting principles in the Republic of China. 

March 26, 2012 

----------------------------------------------------------------------------------------------------------------- 

The accompanying consolidated financial statements are not intended to present the financial 

position and results of operations and cash flows in accordance with accounting principles 

generally accepted in countries and jurisdictions other than the Republic of China. The standards, 

procedures and practices in the Republic of China governing the audit of such financial statements 

may differ from those generally accepted in countries and jurisdictions other than the Republic of 

China. Accordingly, the accompanying consolidated financial statements and report of the 

independent accountants are not intended for use by those who are not informed about the 

accounting principles or auditing standards generally accepted in the Republic of China, and their 

applications in practice. 

As the financial statements are the responsibility of the management, PricewaterhouseCoopers, 

Taiwan cannot accept any liability for the use of, or reliance on, the English translation or for any 

errors or misunderstandings that may derive from the translation.


CONSOLIDATED BALANCE SHEETS 

DECEMBER 31, 

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS) 

2011 2010 2011 2010 

ASSETS LIABILITIES AND STOCKHOLDER’S EQUITY 

Current Assets Current Liabilities 

Cash and cash equivalents (Note 4 (1)) $ 9,514,546 $ 8,926,695 Short-term loans (Note 4 (12)) $ 6,675,514 $ 4,491,652 

Financial assets at fair value through profit or loss-current Financial liabilities at fair value through profit or loss-current 64,197 44,627 

(Note 4 (2)) 44,392 23,746 (Note 4 (13)) 

Available-for-sale financial assets – current (Note 4 (3)) 447,836 566,562 Accounts payable 6,207,571 7,653,194 

Notes receivable – net 2,310 3,195 Accounts payable – related parties (Note 5) 431,456 647,680 

Notes receivable – related parties (Note 5) - 197,650 Income tax payable (Note 4 (21)) 1,152,419 1,141,947 

Accounts receivable – net (Note 4 (5)) 7,667,199 9,641,274 Accrued expenses 3,536,272 3,985,918 

Accounts receivable – related parties (Notes 4 (5) and 5) 65,338 106,409 Other payables (Note 5) 281,186 358,796 

Other receivables (Note 5) 263,908 255,338 Receipts in advance 311,293 341,806 

Other financial assets – current (Note 6) 3,104,104 1,563,566 Current portion of long-term debts (Notes 4 (14) and 6) 500,000 250,000 

Inventories - net (Note 4 (6)) 8,904,425 9,023,687 Deferred income tax liabilities-current (Note 4 (21)) 10,518 10,121 

Prepayments 390,659 540,266 Provision for product warranty 691,557 666,190 

Non-current assets held for sale (Note 4 (7)) - 58,260 Other current liabilities 526,121 571,246 

Deferred income tax assets – current (Note 4 (21)) 480,836 357,982 20,388,104 20,163,177 

30,885,553 31,264,630 Long-term Liabilities 

Long- term loans (Note 4 (14)) 750,000 1,900,000 

Long-term Investments 

Available-for-sale financial assets – non-current Other Liabilities 

(Note 4 (3)) 742,470 1,030,381 Accrued pension payable (Note 4 (15)) 91,360 89,421 

Financial assets carried at cost – non-current (Note 4 (4)) 1,548,488 1,607,951 Deposit in 11,223 10,191 

Long-term investments accounted for under the equity Deferred income tax liability – non current (Note 4 (21)) 41,363 - 

method (Notes 4 (8) and 6) 10,802,020 9,661,690 Other liabilities-other-non current 28,832 29,303 

13,092,978 12,300,022 172,778 128,915 

Total Liabilities 21,310,882 22,192,092 

Property, Plant and Equipment - net Stockholder’s Equity 

(Notes 4 (9) , 5 and 6) 5,052,309 5,520,186 Common stock (Note 4 (16)) 15,297,359 15,375,192 

Capital reserve (Note 4 (17)) 4,398,329 4,361,988 

Intangible Assets (Note 4 (10)) Retained earnings (Note 4 (18)) 

Patents 519,232 649,040 Legal reserve 2,800,751 2,800,751 

Other intangible assets 455,670 464,610 Special reserve 28,104 - 

974,902 1,113,650 Unappropriated earnings 7,002,683 7,053,565 

Unrealized gain or loss on financial instruments 65,819 642,145 

Other Assets Cumulative translation adjustments 1,019,187 ( 92,140 ) 

Refundable deposits 63,762 59,169 Treasury stock (Note 4 (21)) ( 501,202 ) ( 609,503 ) 

Deferred charges 219,353 262,398 Total Stockholder’s Equity 30,111,030 29,531,998 

Deferred income tax assets – non-current (Note 4 (21)) 150,574 232,075 

Others assets-other-non current (Note 4 (11)) 982,481 971,960 Commitments and Contingent Liabilities (Note 7) 

1,416,170 1,525,602 

TOTAL ASSETS $ 51,421,912 $ 51,724,090 TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY $ 51,421,912 $ 51,724,090 

The accompanying notes are an integral part of these consolidated financial statements. 

-75-


CONSOLIDATED STATEMENTS OF INCOME 

FOR THE YEARS ENDED DECEMBER 31, 

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, 

EXCEPT EARNINGS PER SHARE) 

2011 2010 

Operating revenues-net (Note 5) $ 46,304,150 $ 55,914,955 

Operating costs (Note 5) ( 40,145,796 ) ( 48,815,243 ) 

Gross profit 

Operating expenses (Note 5) 

6,158,354 7,099,712 

Selling expenses ( 2,922,857 ) ( 3,031,231 ) 

Administrative expenses ( 1,710,200 ) ( 1,715,474 ) 

Research and development expenses ( 2,514,271 ) ( 2,764,855 ) 

( 7,147,328 ) ( 7,511,560 ) 

Operating loss 

Non-operating income and gains 

( 988,974 ) ( 411,848 ) 

Interest income 

Investment income accounted for under the equity 

174,051 77,288 

method (Note 4 (8)) 

971,158 

1,103,874 

Dividend income 

Gain on disposal of property, plant and equipment 

128,643 117,363 

(Note 4(9)) 

1,951 

- 

Gain on disposal of investments 19,855 323,930 

Foreign exchange gain, net - 73,395 

Gain on reversal of asset impairment loss (Note 4(11)) - 90,763 

Gain on valuation of financial assets (Note 4 (2)) 22,380 - 

Gain on valuation of financial liabilities (Note 4 (13)) 13,044 - 

Other income (Note 5) 363,971 193,248 

Non-operating expenses and losses 

1,695,053 1,979,861 

Interest expense ( 141,730 ) ( 58,009 ) 

Loss on disposal of property, plant and equipment - ( 13,514 ) 

Foreign exchange loss, net ( 4,040 ) - 

Impairment loss (Note 4 (4)(7)(10)) ( 17,793 ) ( 1,933,391 ) 

Loss on valuation of financial assets (Note 4 (2)) - ( 7,901 ) 

Loss on valuation of financial liabilities (Note 4 (13)) - ( 34,893 ) 

Other losses ( 17,788 ) ( 32,023 ) 

( 181,351 ) ( 2,079,731 ) 

Income (loss) before income tax 524,728 ( 511,718 ) 

Income tax expense (Note 4 (21)) ( 271,524 ) ( 311,964 ) 

Consolidated net income (loss) 

Attributable to: 

$ 253,204 ( $ 823,682 ) 

Equity holders of the Company $ 253,204 ( $ 823,682 ) 

Basic earnings per share (in NT dollars) (Note 4 (18)) 

Consolidated net income (loss) attributable to the 

Company 

Diluted earnings per share (in NT dollars) (Note 4 (18)) 

Consolidated net income (loss) attributable to the 

Company 

-76- 

Before 

income tax 

After 

income tax 

Before 

income tax 

After 

income tax 

$ 0.21 $ 0.17 ( $ 0.46 ) ( $ 0.55 ) 

$ 0.20 $ 0.16 ( $ 0.46 ) ( $ 0.55 ) 

The accompanying notes are an integral part of these consolidated financial statements.



CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER’S EQUITY 


Retained Earnings 

-77- 

Cumulative 

Translation 

Adjustments 

Unrealized 

Gain or Loss 

on Financial 

Istruments 

Common Capital 

Legal 

Special Unappropriated 

Treasury 

2010 


Reserve Reserve Reserve Earnings 


Total 

Balance at January 1, 2010 

Distribution of 2009 earnings: 

$15,361,724 $ 4,153,640 $ 2,771,835 $ - $ 8,180,440 $ 1,206,095 $ 539,949 ( $ 609,503 ) $ 31,604,180 

Legal reserve - - 28,916 - ( 28,916 ) - - - - 

Cash dividends - - - - ( 228,926 ) - - - ( 228,926 ) 

Exercise of employee stock options 13,468 2,392 - - - - - - 15,860 

Employee compensation plan - employee stock options - 195,316 - - - - - - 195,316 

Consolidated net loss for 2010 - - - - ( 823,682 ) - - - ( 823,682 ) 

Capital reserve due to change in ownership of long-term investments 

Recognition of unrealized gain or loss on available-for-sale financial 

- 7,253 - - ( 45,351 ) - - - ( 38,098 ) 

assets 

- 

- 

- 

- 

- 

- 102,196 

- 102,196 

Cash dividends received by subsidiaries from the Company - 3,387 - - - - - - 3,387 

Cumulative translation adjustments - - - - - ( 1,298,235 ) - - ( 1,298,235 ) 

Balance at December 31, 2010 $15,375,192 $ 4,361,988 $ 2,800,751 $ - $ 7,053,565 ($ 92,140 ) $ 642,145 ( $ 609,503 ) $ 29,531,998 

2011 

Balance at January 1, 2011 

Distribution of 2010 earnings: 

$15,375,192 $ 4,361,988 $ 2,800,751 $ - $ 7,053,565 ( $ 92,140 ) $ 642,145 ( $ 609,503 ) $ 29,531,998 

Special reserve - - - 28,104 ( 28,104 ) - - - - 

Cash dividends - - - - ( 229,454 ) - - - ( 229,454 ) 

Exercise of employee stock options 22,167 3,855 - - - - - - 26,022 

Employee compensation plan - employee stock options - 149,460 - - - - - - 149,460 

Consolidated net loss for 2011 - - - - 253,204 - - - 253,204 

Capital reserve due to change in ownership of long-term investments 

Recognition of unrealized gain or loss on available-for-sale financial 

- ( 5,859 ) - - ( 4,697 ) - - - ( 10,556 ) 

assets 

- 

- 

- 

- 

- 

- ( 576,326 ) 

- ( 576,326 ) 

Cash dividends received by subsidiaries from the Company - 3,470 - - - - - - 3,470 

Cumulative translation adjustments - - - - - ( 1,111,327 ) - - ( 1,111,327 ) 

Treasury stock transactions ( 100,000 ) ( 114,585 ) - - ( 41,831 ) - - 108,301 ( 148,115 ) 

Balance at December 31, 2011 $15,297,359 $ 4,398,329 $ 2,800,751 $ 28,104 $ 7,002,683 ( $ 1,019,187 ) $ 65,819 ( $ 501,202 ) $ 30,111,030 

The accompanying notes are an integral part of these consolidated financial statements.


CONSOLIDATED STATEMENTS OF CASH FLOWS 



2011 2010 

Cash flows from operating activities: 

Consolidated net income (loss) $ 253,204 ( $ 823,682 ) 

Adjustments to reconcile consolidated net income (loss) to net cash 

provided by operating activities: 

Loss (gain) on inventory obsolescence and market value decline 242,992 ( 12,806 ) 

Bad debts expense 9,865 18,711 

Depreciation 830,369 1,128,794 

Gain on reversal of asset impairment loss - ( 90,763 ) 

Amortization 

Loss on impairment of financial assets carried at cost – 

414,429 510,558 

non-current 

17,793 

62,757 

Loss on impairment of intangible assets - 1,870,634 

Gain on disposal of patent right ( 1,220 ) - 

(Gain) loss on valuation of financial liabilities ( 13,044 ) 34,893 

(Gain) loss on valuation of financial assets 

Long-term investment income accounted for under the equiity 

( 22,380 ) 7,901 

method 

Cash dividends received from long-term investments accounted 

( 971,158 ) ( 1,103,874 ) 

for under the equity method 

76,092 

244,508 

(Gain) loss on disposal of property, plant and equipment, net ( 1,951 ) 13,514 

Gain on disposal of investments ( 19,855 ) ( 323,930 ) 

Employee compensation plan - employee stock options 

Changes in assets and liabilities: 

(Increase) decrease in: 

149,460 195,316 

Notes receivable 885 1,223 

Accounts receivable 2,328,523 1,919,679 

Other receivables 6,300 ( 61,566 ) 

Inventories 44,240 ( 1,251,079 ) 

Prepayments 149,607 ( 8,386 ) 

Deferred income tax assets ( 41,353 ) 97,765 

Notes payable - ( 252 ) 

Accounts payable ( 2,117,177 ) ( 1,191,490 ) 

Income tax payable 10,472 ( 207,741 ) 

Accrued expenses ( 449,646 ) ( 785,934 ) 

Other payables ( 77,610 ) 14,524 

Receipts in advance ( 30,513 ) ( 16,340 ) 

Accrued pension payable 1,939 3,165 

Other current liabilities ( 45,125 ) ( 46,242 ) 

Provision for product warranty 25,367 ( 263,505 ) 

Deferred income tax liabilities 41,700 ( 53,667 ) 

Other liabilities – other - 1,516 

Net cash provided by (used in) operating activities 812,265 ( 115,799 ) 

(CONTINUED) 

-78-


CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued) 



2011 2010 

Cash flows from investing activities: 

Increase in other financial asstes ( $ 1,436,426 ) ( $ 1,528,624 ) 

Increase in available-for-sale financial assets ( 5,722 ) - 

Increase in financial assets carried at cost – non-current ( 23,000 ) ( 402,609 ) 

Decrease in financial assets carried at cost – non-current, net of 

cash receive from return of capital 

80,558 

38,724 

Proceeds from disposal of financial assets carried at cost – 

non-current 

43,690 

141,761 

Proceeds from disposal of available-for-sale financial assets - 394,061 

Proceeds from disposal of long-term investments 37,880 537,628 

Decrease in long-term investments, net of cash received from 

return of capital 

- 

530,000 

Acquisition of property, plant, equipment and other assets ( 110,293 ) ( 179,899 ) 

Proceeds from disposal of property, plant, equipment and other 

assets 

211,040 363,097 

Increase in deferred charges ( 200,382 ) ( 313,273 ) 

Proceeds from disposal of patents 44,610 - 

(Increase) decrease in refundable deposits, net ( 4,593 ) 899 

Net cash used in investing activities 

Cash flows from financing activities: 

( 1,352,638 ) ( 418,235 ) 

Increase in short-term debts, net 2,081,001 3,099,621 

Repayment of bonds payable - ( 240,500 ) 

Repayment of long-term loans ( 900,000 ) - 

Proceeds from long-term loans - 650,000 

Increase (decrease) in deposit-in 1,032 ( 3,571 ) 

Exercise of employee stock options 26,022 15,860 

Cash dividends paid ( 225,985 ) ( 225,539 ) 

Purchase of treasury stocks ( 148,115 ) - 

Net cash provided by financing activities 833,955 3,295,871 

Effects of changes in exchange rates 294,269 248,728 

Net increase in cash and cash equivalents 587,851 3,010,565 

Cash and cash equivalents at beginning of year 8,926,695 5,916,130 

Cash and cash equivalents at end of year 

Supplemental disclosures of cash flow information: 

$ 9,514,546 $ 8,926,695 

Cash paid for interest $ 137,629 $ 56,550 

Cash paid for income tax 

Investing activities partially received in cash 

$ 228,567 $ 448,790 

Decrease in property and equipment 

$ 23,390 $ 163,097 

Add: property and equipment receivables at beginning of year 

197,650 

397,650 

Less: property and equipment receivables at end of year - ( 197,650 ) 

Cash received 

Investing activities partially received in cash 

$ 221,040 $ 363,097 

Decrease in patents $ 59,480 $ - 

Less: patents receivables at end of year ( 14,870 ) - 

Cash received $ 44,610 $ - 

The accompanying notes are an integral part of these consolidated financial statements. 

-79-


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

DECEMBER 31, 2011 AND 2010 

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, 

EXCEPT AS OTHERWISE INDICATED) 

1. HISTORY AND ORGANIZATION 

The Company 

MiTAC International Corp. (“the Company”) was incorporated as a company limited by 

shares under the provisions of the Company Law of the Republic of China (R.O.C) on 

December 8, 1982 and started its operations on December 15, 1982. The main 

activities of the Company include the design, manufacture, sales and services of 

micro-computers, mobile communications and related products as well as other related 

investments. As of December 31, 2011, the Company and its subsidiaries had 7,829 

employees. 

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 

The accompanying consolidated financial statements of the Company and its subsidiries 

(collectively referred herein as the “Group”) are prepared in accordance with the “Rules 

Governing the Preparation of Financial Statements by Securities Issuers” and accounting 

principles generally accepted in the Republic of China. The Group’s significant 

accounting policies are summarized below: 

1) Basis for preparation of consolidated financial statements 

A. All majority-owned subsidiaries and controlled entities are included in the 

consolidated financial statements. The Company prepares consolidated financial 

statements on a quarterly basis. Significant inter-company transactions and 

assets and liabilities arising from inter-company transactions are eliminated. 

B. Subsidiaries included in the consolidated financial statements and their changes 

in 2011 and 2010. 

Subsidiary Investor Main activities 

-80- 

Ownership (%) 

December 31, 

2011 2010 

Tsu Fung Investment Corp. MiTAC International Corp. General investments 100% 100% 

Silver Star Developments Ltd. MiTAC International Corp. General investments 100% 100% 

Foreground Technology Ltd. MiTAC International Corp. General investments 100% 100% 

System Glory International Ltd. Silver Star Developments Ltd. General investments 100% 100% 

Pacific China Corp. Silver Star Developments Ltd. General investments 100% 100% 

Magicmate Group Ltd. Silver Star Developments Ltd. General investments 100% 100% 

Best Profit Ltd. Silver Star Developments Ltd. General investments 100% 100% 

Sky Universe Enterprise Ltd. Silver Star Developments Ltd. General investments 100% 100% 

Great Rich Ltd. Silver Star Developments Ltd. General investments 100% 100% 

MiTAC Star Service Ltd. Pacific China Corp. General investments 100% 100% 

Software Insights Ltd. Pacific China Corp. General investments 100% 100% 

Start Well Tecnology Ltd. Pacific China Corp. General investments 100% 100% 

Dynamic Star Investments Ltd. Pacific China Corp. General investments 100% 100% 

Huge Extent Ltd. Pacific China Corp. General investments 100% 100% 

Bright Crown Management Ltd. Pacific China Corp. General investments 100% 100% 

MiTAC Cooperatie U.A. Great Rich Ltd. General investments 100% 100% 

Booming Enterprises Inc. Best Profit Ltd. General investments 100% 100% 

Description


-81- 

Ownership (%) 

December 31, 

2011 2010 

Top Sheen Enterprises Ltd. Best Profit Ltd. General investments 100% 100% 

MiTAC Netherlands B.V. MiTAC Cooperatie U.A. General investments 100% 100% 

Strength Value Ltd. Foreground Technology Ltd. General investments 100% 100% 

DLC Technology Corp. MiTAC International Corp. Research, development and 

manufacture of computer software, 

sale of own-produced products and 

related technical advisory services 

100% 100% 

Mio Technology Corp. MiTAC International Corp. and 


Data processing services and 

wholesale and retail of software 

and communication products 

Tyan Computer Corp.(USA) Foreground Technology Ltd. Sale of computer peripherals, 

hardware/software and related 

products 

Mio Technology GMBH Mio Technology UK Ltd. Sale of communication products, 

computer peripherals, 


products 

MiTAC U.S.A. Inc. Silver Star Developments Ltd. Sale of communication products, 



products 

MiTAC Japan Corp. Silver Star Developments Ltd. Sale of communication products, 



products 

Mio Technology Benelux N.V. Silver Star Developments Ltd. Sale of communication products 

and related after-sale services 

MiTAC (U.K.) Ltd. Silver Star Developments Ltd. Sale of communication products, 



products 

MiTAC Pacific (H.K.) Ltd. Silver Star Developments Ltd. Sale of communication products, 



products 

Mio International Ltd. Silver Star Developments Ltd. Sale of communication products, 



products 

MiTAC Australia Pty Ltd. Silver Star Developments Ltd. Sale of communication products 


Navman Technology NZ Ltd. Silver Star Developments Ltd. Sale of communication products 

MiTAC Computer (Kunshan) 

Ltd. 

MiTAC Service (ShangHai) 

Co.,Ltd. 

MiTAC Computers (Shunde) 

Ltd. 

MiTAC Research (Shanghai) 

Ltd. 

MiTAC Technology (Kunshan) 

Co., Ltd. 


Start Well Tecnology Ltd. Manufacture of computers, 



products and sale of own-produced 

products 

Pacific China Corp. Testing, maintenance and display 

of computer components and 


and after-sale services 

MiTAC Star Service Ltd. Manufacture of computer frame, 

motherboard, interface card, 

display, power supply, keyboard, 

related metal stamping parts and 

plastic parts and maintenance of 

motherboard 

Software Insights Ltd. Research, development and 

manufacture of computer software, 

sale of own-produced products and 


Dynamic Star Investments Ltd. Testing, maintenance and display 

of computer components and 


and after-sale services 

Mio Technology Korea Magicmate Group Ltd. Sale of communication products, 



products 

100% 100% 

100% 100% 

100% 100% 

100% 100% 

100% 100% 

100% 100% 

100% 100% 

100% 100% 

100% 100% 

100% 100% 

100% 100% 

100% 100% 

100% 100% 

100% 100% 

100% 100% 

100% 100% 

100% 100% 

Description


Mio Technology (Chengdu) 

Ltd. 

Mio International Ltd. Development and manufacture of 

software, sale of own-produced 

products and related technical 

services 

-82- 

Ownership (%) 

December 31, 

2011 2010 

100% 100% 

Description 

Mio Technology Ltd. Mio International Ltd. Sale of communication products 100% 100% 

Mio Technology USA Ltd. Booming Enterprises Inc. 


Sale of communication products 


100% 100% 

Mio Technology UK Ltd. Best Profit Ltd. Sale of communication products 100% 100% 

MiTAC Logistics Corp. Sky Universe Enterprise Ltd. 


Sale of communication products, 



100% 100% 

MiTAC Logistic Service 

products 

Bright Crown Management Ltd. Agency of freight transport, export 100% 100% 

(Kunsan) Ltd. 

MiTAC Digital Corp. Top Sheen Enterprises Ltd. 

and import trading and 

warehousing services 

Sale of communication products 100% 100% 

MiTAC Information 


Bright Crown Management Ltd. After-sale maintenance, testing 100% 100% 

Technology Ltd. 

and technical advisory services of 

computers, communication 

products and consumer electronic 

products; establishment of 

customer service centers; customer 

data processing, analysis and 

integrated services and business 

MiTAC Information Systems Sky Universe Enterprise Ltd. 

administration services 

Sale of communication products, 100% 100% 

Corp. 



products 

MiTAC Innovation (Kunshan) 

Ltd. 

Software Insights Ltd. Sale of communication products 


100% - Note 

Note:The company was established in the first quarter of 2011. 

C. Majority-owned subsidiaries excluded in the consolidation: None. 

D. Adjustment for subsidiaries with different balance sheet dates: 

Some of Silver Star Development Ltd.’s subsidiaries adopted accounting periods 

that are different from the Company’s accounting period. However, as the 

difference is not over 3 months, the financial reports of these subsidiaries are 

consolidated without any adjustment. 

E. Special operating risks in foreign subsidiaries: None. 

F. Nature and extent of the restrictions on fund remittance from subsidiaries to the 

parent company: None. 

G. Contents of subsidiaries’ securities issued by the parent Company: Refer to Note 

4 (20) 

H. Information on convertible bonds and common stock issued by subsidiaries: Mio 

Technology Corp. increased their capital $40,000 in 2010. 

2)Translation of financial statements of foreign subsidiaries 

Assets and liabilities of foreign subsidiaries are translated into New Taiwan dollars 

using the exchange rates at the balance sheet date. Equity accounts are translated at 

historical rates except for beginning retained earnings, which are carried forward 

from prior year’s balance. Dividends are translated at the rates prevailing at the date 

of declaration. Profit and loss accounts are translated at weighted-average rates of 

the year. The resulting translation differences are included in “cumulative 

translation adjustments” under stockholders’ equity. 

3)Foreign currency transactions

A. Transactions denominated in foreign currencies are translated into functional 

currency at the spot exchange rates prevailing at the transaction dates. 

Exchange gains or losses due to the difference between the exchange rate on the 

transaction date and the exchange rate on the date of actual receipt and payment 

are recognized in current year’s profit or loss. 

B. Receivables, other monetary assets and liabilities denominated in foreign 

currencies are translated at the spot exchange rates prevailing at the balance 

sheet date. Exchange gains or losses are recognized in profit or loss. 

C. When a gain or loss on a non-monetary item is recognized directly in equity, any 

exchange component of that gain or loss shall be recognized directly in equity. 

Conversely, when a gain or loss on a non-monetary item is recognized in profit 

or loss, any exchange component of that gain or loss shall be recognized in 

profit or loss. However, non-monetary items that are measured on a historical 

cost basis are translated using the exchange rate at the date of the transaction. 

4)Classification of current and non-current items 

A.Assets that meet one of the following criteria are classified as current assets; 

otherwise they are classified as non-current assets: 

a) Assets arising from operating activities that are expected to be realized or 

consumed, or are intended to be sold within the normal operating cycle; 

b) Assets held mainly for trading purposes; 

c) Assets that are expected to be realized within twelve months from the balance 

sheet date; 

d) Cash and cash equivalents, excluding restricted cash and cash equivalents and 

those that are to be exchanged or used to pay off liabilities more than twelve 

months after the balance sheet date. 

B.Liabilities that meet one of the following criteria are classified as current 

liabilities; otherwise they are classified as non-current liabilities: 

a) Liabilities arising from operating activities that are expected to be paid off 

within the normal operating cycle; 

b) Liabilities arising mainly from trading activities; 

c) Liabilities that are to be paid off within twelve months from the balance sheet 

date; 

d) Liabilities for which the repayment date cannot be extended unconditionally 

to more than twelve months after the balance sheet date. 

5) Cash equivalents 

Cash equivalents refer to highly-liquid, short-term investments with the following 

characteristics: 

A.Investments that can be readily converted into known amount of cash; 

B. Investments of which the values are not significantly affected by the 

fluctuations in interest rates. 

-83-

The preparation of cash flow statement is based on cash and cash equivalents. 

6) Financial assets and financial liabilities at fair value through profit or loss 

A. Financial assets and financial liabilities at fair value through profit or loss are 

recognized and derecognized using trade date accounting and are recognized 

initially at fair value. 

B. These financial instruments are subsequently remeasured and stated at fair 

value, and the gain or loss is recognized in profit or loss. The fair value of 

listed stocks, OTC stocks and closed-end mutual funds is based on latest 

quoted fair prices of the accounting period. The fair value of open-end and 

balanced mutual funds is based on the net asset value at the balance sheet date. 

C. When a derivative is an ineffective hedging instrument, it is initially 

recognized at fair value on the date a derivative contract is entered into and is 

subsequently remeasured at its fair value. If a derivative is a non-option 

derivative, the fair value initially recognized is zero. 

7) Available-for-sale financial assets 

A. Available-for-sale financial assets are recognized and derecognized using trade 

date accounting and are initially stated at fair value plus transaction costs that 

are directly attributable to the acquisition of the financial asset. 

B. The financial assets are remeasured and stated at fair value, and the gain or 

loss is recognized in equity, until the financial asset is derecognized, at which 

time the cumulative gain or loss previously recognized in equity shall be 

recognized in profit or loss. The fair values of listed stocks, OTC stocks and 

closed-end mutual funds are based on latest quoted fair prices of the 

accounting period. The fair values of open-end and balanced mutual funds 

are based on the net asset value at the balance sheet date. 

C. If there is any objective evidence that the financial asset is impaired, the 

cumulative loss that had been recognized directly in equity shall be transferred 

from equity to profit or loss. When the fair value of an equity instrument 

subsequently increases, impairment losses recognized previously in profit or 

loss shall not be reversed. When the fair value of a debt instrument 

subsequently increases and the increase can be objectively related to an event 

occurring after the impairment loss was recognized in profit or loss, the 

impairment loss shall be reversed to the extent of the loss recognized in profit 

or loss. 

8) Financial assets carried at cost 

A. Investment in unquoted equity instruments is recognized or derecognized using 

trade date accounting and is stated initially at its fair value plus transaction 

costs that are directly attributable to the acquisition of the financial asset. 

B. If there is any objective evidence that the financial asset is impaired, the 

impairment loss is recognized in profit or loss. Such impairment loss shall not 

be reversed when the fair value of the asset subsequently increases. 

9) Notes ,accounts ,and other receivables 

A. Notes and accounts receivable are claims resulting from the sale of goods or 

-84-

services. Receivables arising from transactions other than the sale of goods 

or services are classified as other receivables. Notes, accounts and other 

receivables are recognized initially at fair value and subsequently measured at 

amortized cost using the effective interest method, less provision for 

impairment. 

B. The Group assesses at each balance sheet date whether there is any objective 

evidence that a financial asset or a group of financial assets is impaired. If 

such evidence exists, a provision for impairment of financial asset is 

recognized. The amount of impairment loss is determined based on the 

difference between the asset’s carrying amount and the present value of 

estimated future cash flows, discounted at the original effective interest rate. 

When the fair value of the asset subsequently increases and the increase can be 

objectively related to an event occurring after the impairment loss was 

recognized in profit or loss, the impairment loss shall be reversed to the extent 

of the loss previously recognized in profit or loss. Such recovery of 

impairment loss shall not result to the asset’s carrying amount being greater 

than its amortized cost had no impairment loss been recognized. Subsequent 

recoveries of amounts previously written off are recognized in profit or loss. 

10) Inventories 

A. The perpetual inventory system is adopted for inventory recognition. Inventories 

are stated at standard cost, which is adjusted to actual cost at year-end. 

B. At the end of period, inventories are evaluated at the lower of cost or net 

realizable value, and the individual item approach is used in the comparison of 

cost and net realizable value. The calculation of net realizable value should be 

based on the estimated selling price in the normal course of business, net of 

estimated costs of completion and estimated selling expenses. 

11) Long-term equity investments accounted for under the equity method 

A. Long-term equity investments in which the Group holds more than 20% of the 

investee company’s voting shares or has the ability to exercise significant 

influence on the investee’s operational decisions are accounted for under the 

equity method. The excess of the initial investment cost over the acquired net 

asset value of the investee attributable to goodwill is no longer amortized, 

effective January 1, 2006. Such goodwill is tested for impairment when there 

is indication that it is impaired. Retrospective adjustment of the amount of 

goodwill amortized in previous year(s) is not required. The excess of acquired 

net asset value of investee over the initial investment cost is allocated 

proportionately and applied as a reduction to the book values of identifiable 

non-current assets, and any remaining amount of such excess after this 

allocation is credited to extraordinary gains. However, negative goodwill 

occurred prior to December 31, 2005 is continuously amortized. All 

majority-owned (50% or above ownership) subsidiaries and controlled entities 

are accounted for under the equity method and are included in the consolidated 

financial statements on a quarterly basis. 

B. For investments accounted for under the equity method, the Company 

recognizes investment gains or losses by quarter. The unrealized profits and 

losses from intercompany transactions between the Company and investee 

companies during the current year shall be eliminated. 

C. Exchange differences arising from translation of the financial statements of 

overseas investee companies accounted for under the equity method are 

-85-

ecorded as “cumulative translation adjustments” under stockholder’s equity. 

12) Property, plant and equipment 

A. Property, plant and equipment are stated at cost. Interest incurred on loans 

used to finance the construction of fixed assets is capitalized and depreciated 

accordingly. 

B. Depreciation is calculated on a straight-line basis over the assets’ estimated 

useful lives. The useful lives of the fixed assets are 3 - 10 years, except for 

buildings, which are 3 - 55 years. 

C. Maintenance and repairs are expensed as incurred. Significant renewals and 

improvements are capitalized and depreciated accordingly. 

D. Idle assets are valued at the lower of book value or net realizable value (based 

on the appraised value by a real estate appraisal company) and shown as other 

assets. Rental assets are valued at cost and shown as other assets; current 

depreciation is recorded as non-operating expense. 

13) Intangible assets 

A. Goodwill represents the excess of the cost of an acquisition over the fair value 

of the Group’s share of the net identifiable assets of the acquired subsidiary at 

the date of acquisition and reviewed for impairment testing annually. 

B. Trademark is stated at cost and assessed to generate continuous future economic 

benefits. Accordingly, it is deemed to have an indefinite useful life and shall 

not be amortized. Instead, it is reviewed for impairment testing annually. 

C. Other intangible assets, mainly patent rights, technologies, customer 

relationships and non-compete agreements, are stated at cost and amortized on a 

straight-line basis over 5 ~ 10 years. 

D. Land use right is stated at cost and amortized over the useful life of 50 years 

using the straight-line method. 

14) Deferred charges 

A. Telephone installation expenditure is amortized on a straight-line method over 5 

years. 

B. Mold expenses are amortized on a straight-line method over 2 years or the 

units-of-output method. 

C. Issuance costs of bonds are deferred and amortized on a straight-line method 

over the life of the bonds. 

D. Software cost is amortized based on contract stipulations or a straight-line 

method over 5 years. 

15) Impairment of non-financial assets 

The Group recognizes impairment loss when there is indication that the recoverable 

amount of an asset is less than its carrying amount. The recoverable amount is the 

higher of the fair value less costs to sell and value in use. The fair value less costs to 

sell is the amount obtainable from the sale of the asset in an arm’s length transaction 

after deducting any direct incremental disposal costs. The value in use is the present 

value of estimated future cash flows to be derived from continuing use of the asset 

and from its disposal at the end of its useful life. When the impairment no longer 

exists, the impairment loss recognized in prior years shall be recovered. 

The recoverable amount of goodwill, intangible assets with indefinite useful lives 

and intangible assets which have not yet been available for use shall be evaluated 

periodically. Impairment loss will be recognized whenever there is indication that 

-86-

the recoverable amount of these assets is less than their respective carrying amount. 

Impairment loss of goodwill recognized in prior years is not recoverable in the 

following years. 

16) Pension plan 

Under the defined benefit pension plan, net periodic pension costs are recognized in 

accordance with the actuarial calculations. Net periodic pension costs include 

service cost, interest cost, expected return on plan assets, and amortization of 

unrecognized net transition obligation and gains or losses on plan assets. 

Unrecognized net transition obligation is amortized on a straight-line basis over 15 

years. Under the defined contribution pension plan, net periodic pension costs are 

recognized as incurred. 

17) Warranty 

Warranty is estimated based on historical experience. Service warranty expense is 

included in the current year's operating expense. 

18) Income tax 

A. Income taxes are allocated on the inter- and intra-period basis. Over or under 

provision of prior years’ income tax liabilities is included in current year’s 

income tax. 

B. Investment tax credits arising from expenditures incurred on acquisitions of 

equipment or technology, research and development, employees’ training, and 

equity investments are recognized in the year the related expenditures are 

incurred. 

C. An additional 10% tax is levied on the unappropriated retained earnings and is 

recorded as income tax expense in the year the stockholders resolve to retain the 

earnings. 

D.When a change in the tax laws is enacted, the deferred tax liability or asset should 

be recomputed accordingly in the period of change. The difference between the 

new amount and the original amount, that is, the effect of changes in the deferred 

tax liability or asset, should be recognized as an adjustment to income tax 

expense (benefit) for income from continuing operations in the current period. 

19)Share-based payment - employee compensation plan 

A. The employee stock options granted from January 1, 2004 through December 31, 

2007 are accounted for in accordance with EITF 92-070, EITF 92-071 and EITF 

92-072 “Accounting for Employee Stock Options” as prescribed by the 

Accounting Research and Development Foundation, R.O.C.. Under the 

share-based employee compensation plan, compensation cost is recognized using 

the intrinsic value method and pro forma disclosures of net income and earnings 

per share are prepared in accordance with the R.O.C. SFAS No. 39, “Accounting 

for Share-based Payment”. 

B. For the grant date of the share-based payment agreements set on or after January 

1, 2008, the Company shall measure the services received during the vesting 

period by reference to the fair value of the equity instruments granted and 

account for those amounts as payroll expenses during that period. 

-87-

20)Employees’ bonuses and directors’ and supervisors’ remuneration 

Effective January 1, 2008, pursuant to EITF 96-052 of the Accounting Research and 

Development Foundation, R.O.C., dated March 16, 2007, “Accounting for 

Employees’ Bonuses and Directors’ and Supervisors’ Remuneration”, the costs of 

employees’ bonuses and directors’ and supervisors’ remuneration are accounted for 

as expenses and liabilities, provided that such a recognition is required under legal 

or constructive obligation and those amounts can be estimated reasonably. However, 

if the accrued amounts for employees’ bonuses and directors’ and supervisors’ 

remuneration are significantly different from the actual distributed amounts 

resolved by the stockholders at their annual stockholders’ meeting subsequently, the 

differences shall be recognized as gain or loss in the following year. In addition, in 

accordance with EITF 97-127 of the Accounting Research and Development 

Foundation, R.O.C., dated March 31, 2008, “Criteria for Listed Companies in 

Calculating the Number of Shares of Employees’ Stock Bonus”, the Company 

calculates the number of shares of employees’ stock bonus based on the closing 

price of the Company's common stock at the previous day of the stockholders’ 

meeting held in the year following the financial reporting year, and after taking into 

account the effects of ex-rights and ex-dividends. 

21)Revenues, costs and expenses 

Revenues are recognized when the earning process is substantially completed and 

are realized or realizable. Costs and expenses are recognized as incurred. 

22) Treasury stock 

A. When a company acquires its outstanding shares as treasury stock, the 

acquisition cost should be debited to the treasury stock account (a contra 

account under stockholders’ equity) if the shares are purchased. 

B. Treasury stocks transferred to employees on or after January 1, 2008 are 

accounted for in accordance with R.O.C. SFAS No. 39, “Accounting for 

Share-based Payment”. 

C. When a company’s treasury stock is retired, the treasury stock account should 

be credited, and the capital surplus- premium on stock account and capital stock 

account should be debited proportionately according to the share ratio. An 

excess of the carrying value of treasury stock over the sum of its par value and 

premium on stock should first be offset against capital surplus from the same 

class of treasury stock transactions, and the remainder, if any, debited to retained 

earnings. An excess of the sum of the par value and premium on stock of 

treasury stock over its carrying value should be credited to capital surplus from 

the same class of treasury stock transactions. 

D. The cost of treasury stock is accounted for on a weighted-average basis. 

E. When the Company prepares its financial statements and recognizes investment 

income (loss), it treats the shares of the Company held by subsidiaries as 

treasury stocks and discloses the pro forma information in the statement of 

income assuming that the shares of the Company held by subsidiaries are 

regarded as investments instead of treasury stocks. 

23) Use of estimates 

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The preparation of financial statements in conformity with generally accepted 

accounting principles requires management to make estimates and assumptions that 

affect the amounts of assets and liabilities and the disclosures of contingent assets 

and liabilities at the date of the financial statements and the amounts of revenues 

and expenses during the reporting period. Actual results could differ from those 

assumptions and estimates. 

24) Business combination 

The Group adopted the R.O.C. SFAS No. 25, “Accounting for Business 

Combination - Purchase Method” to account for any business combination 

transactions. 

25) Operating segments 

Operating segments are reported in a manner consistent with the internal reporting 

provided to the chief operating decision-maker. The chief operating 

decision-maker is responsible for allocating resources and assessing performance of 

the operating segments. 

In accordance with R.O.C. SFAS No. 41, “Operating Segments”, segment 

information is disclosed in the consolidated financial statements rather than in the 

separate financial statements of the Company 

3. EFFECT OF CHANGES IN ACCOUNTING PRINCIPLES 

1)Notes, accounts and other receivables 

Effective January 1, 2011, the Group adopted the amendments to R.O.C. SFAS No. 

34, “Financial Instruments: Recognition and Measurement”. A provision for 

impairment (bad debts) of notes, accounts and other receivables is recognized when 

there is objective evidence that the receivables are impaired. This change in 

accounting principle had no significant effect on the financial statements for the 

years ended December 31, 2011 and 2010. 

2)Operating segments 

Effective January 1, 2011, the Group adopted the newly issued R.O.C. SFAS No. 

41, “Operating Segments” to replace the original R.O.C. SFAS No. 20, “Segment 

Reporting”. In accordance with such standard, the Group restated the segment 

information for 2010 upon the first adoption of R.O.C. SFAS No. 41. This change 

in accounting principle had no significant effect on consolidated net income and 

earnings per share for the years ended December 31, 2011 and 2010. 

4. DETAILS OF SIGNIFICANT ACCOUNTS 

1) Cash and cash equivalents 

December 31, 

2011 2010 

Cash: 

Petty cash $ 1,956 $ 1,933 

Checking and savings accounts 2,523,293 1,713,237 

Time deposits 5,216,322 6,440,195 

Cash equivalents: 

7,741,571 8,155,365 

Repurchase bonds 1,772,975 771,330 

$ 9,514,546 $ 8,926,695 

-89-

2)Financial assets at fair value through profit or loss 

December 31, 

2011 2010 

Current items: 

Adjustment of financial assets held for trading 

- Derivative financial instruments $ 44,392 $ 23,746 

A. The Group recognized net gain of $22,380 and net loss of $7,901 for the years 

ended December 31, 2011 and 2010, respectively. 

B. The trading items and contract information of derivatives are described in Note 

11. 

3)Available-for-sale financial assets 

December 31, 

2011 2010 


Listed (TSE and OTC) stocks $ 473,893 $ 468,171 

Adjustments of available-for-sale financial assets ( 26,057 ) 98,391 

$ 447,836 $ 566,562 

Non-current items: 

Listed (TSE and OTC) stocks $ 444,124 $ 441,715 

Adjustments of available-for-sale financial assets 298,346 588,666 

$ 742,470 $ 1,030,381 

4)Financial assets carried at cost 

December 31, 

2011 2010 

Non-current items: 

Emerging stocks $ 862,992 $ 862,992 

Unlisted stocks 685,496 744,959 

$ 1,548,488 $ 1,607,951 

A. The investments were measured at cost since its fair value cannot be measured 

reliably. 

B. In 2010, Tsu Fung Investment Corp. subscribed for 1,607 thousand shares of 

private placement stock of UPC Technology Corp. totaling $21,534 with the price 

of $13.4 (in dollars) per share. Such stocks are subject to certain transfer 

restrictions pursuant to Article 43-8 of the Securities and Exchange Law. 

C.Silver Star Developments Ltd.’s investee, Brilliant Star Holdings Ltd., made a 

capital reduction in 2010 and returned share capital of $38,724. 

D.The Company assessed that the investment value on its investee, Mireo d. d. had 

been impaired and the probability of recovery was remote, thus, it recognized 

impairment loss of $62,757 on its investment in Mireo d. d. for 2010. 

E.Harbinger Venture Capital Corp. had made a capital reduction in 2011 and returned 

-90-

share capital of $42,149. 

F. Silver Star Developments Ltd.’s investee, Budworth Investment Ltd., made a 

capital reduction in 2011 and returned share capital of $38,409. 

G. The Company assessed that the investment value on its investee, Rasilent Systems, 

Inc. had been impaired and the probability of recovery was remote, thus, it 

recognized impairment loss of $17,793 on its investment in Rasilent Systems, Inc. 

for 2011. 

5)Accounts receivable - net 

December 31, 

2011 2010 

Third parties $ 8,929,058 $ 11,744,004 

Less: Allowance for sales return and allowance ( 998,999 ) ( 1,859,393 ) 

Allowance for doubtful accounts ( 262,860 ) ( 243,337 ) 

7,667,199 9,641,274 

Related parties 65,338 106,409 

$ 7,732,537 $ 9,747,683 

6)Inventories – net 

December 31, 

2011 2010 

Raw materials $ 4,870,603 $ 4,772,725 

Work in process 540,967 607,348 

Finished goods 4,989,497 4,939,554 

10,401,067 10,319,627 

Less: Allowance for obsolescence and market 

value decline 

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( 1,496,642 ) ( 1,295,940 ) 

$ 8,904,425 $ 9,023,687 

Expense and loss incurred on inventories for the years ended December 31, 2011 and 2010 

were as follows: 

For the years ended 

December 31, 

2011 2010 

Cost of goods sold $ 39,839,211 $ 48,803,481 

(Gain) loss on market value decline 242,992 ( 12,806 ) 

Others 309,424 404,518 

$ 40,391,627 $ 49,195,193 

Due to some of the inventories which have been provided an allowance for market price 

decline in prior years were sold during the period, the Company reversed the related 

allowance for inventory loss. 

7)Non-current assets held for sale 

In February, 2011, the Company signed a contract with a foreign company to sell a patent 

with book value of $58,260 (net of impairment loss) to a foreign company. The Company 

classified the underlying asset as non-current assets held for sale in 2010.

8)Long-term investments accounted for under the equity method 

A. Details of long-term equity investments are set forth below: 

December 31, 

2011 2010 

Percentage Percentage 

of direct of direct 

Amount ownership Amount ownership 

Equity method: 

Getac Technology Corp. $ 3,992,473 33.25% $ 3,731,663 33.26% 

3 Probe Technology Co., Ltd. 9,196 23.13% 9,443 23.13% 

Lian Jie Investment Co., Ltd. 142,855 49.98% 172,910 49.98% 

Loyalty Founder Enterprise Co., Ltd. 

Shen-Tong Construction & 

213,559 25.24% 170,341 25.24% 

Development Co., Ltd. 

Harbinger II (BVI) Venture Capital 

83,545 47.55% 

83,656 47.55% 

Corp. 

49,438 49.96% 

55,645 49.96% 

Mainpower International Ltd. 167,984 19.12% 157,853 19.12% 

Synnex Corp. 

Suzhou MiTAC Precision Technology 

5,865,094 16.72% 4,954,228 17.13% 

Co., Ltd. 

248,236 21.62% 

233,398 21.62% 

Harbinger Ruyi Venture Ltd. 29,640 28.57% 39,699 28.57% 

Tung Da Investment Co., Ltd. - - 52,854 19.99% 

$ 10,802,020 $ 9,661,690 

B. Investment income (loss) accounted for under the equity method for the years 

ended December 31, 2011 and 2010 is set forth below: 

Equity method: 

-92- 

For the years ended December 31, 

Investee company 2011 2010 

Getac Technology Corp. $ 154,057 $ 248,773 

3 Probe Technology Co., Ltd. ( 247 ) ( 1,669 ) 

Lian Jie Investment Co., Ltd. 38,159 47,365 

Loyalty Founder Enterprise Co., Ltd. 36,253 42,238 

Shen-Tong Constuction & Development Co., Ltd. ( 111 ) ( 169 ) 

Harbinger II (BVI) Venture Capital Corp. 720 2,333 

Mainpower International Ltd. ( 4,414 ) 4,516 

Synnex Corp. 746,604 771,465 

Suzhou MiTAC Preclsion Technology Co., Ltd. ( 6,368 ) 6,406 

Harbinger Ruyi Venture Ltd. 6,505 ( 9,152 ) 

Tung Da Investment Co., Ltd. - ( 8,232 ) 

$ 971,158 $ 1,103,874 

C. Tung Da Investment Co., Ltd. made a capital reduction in 2010 and returned share 

capital of $530,000 to the Company. 

D. The Company transferred the ownership in Tung Da Investment Co., Ltd. to its 

subsidiary during the first quarter of 2011 and therefore lost significant influence 

on Tung Da Investment Co., Ltd.. The investment in Tung Da Investment Co., Ltd. 

was reclassified to “financial assets carried at cost – non-current”.

9)Property, plant and equipment - net 

Cost 

-93- 

December 31, 

2011 2010 

Land $ 920,902 $ 920,789 

Buildings 4,757,003 4,507,350 

Machinery 3,236,282 3,776,921 

Computer and communication equipment 390,652 476,122 

Transportation equipment 68,572 84,653 

Furniture and fixtures 653,270 649,478 

Leasehold improvements 103,870 94,023 

Other equipment 767,974 748,749 

10,898,525 11,258,085 

Accumulated depreciation ( 5,862,179 ) ( 5,794,939 ) 

Construction in progress and prepayments for equipment 15,963 57,040 

Net book value $ 5,052,309 $ 5,520,186 

No interest expense was capitalized for the years ended December 31, 2011 and 2010. 

10)Intangible Assets 

A. 

Trademarks 

Patent rights 

and 

technologies 

2011 

Goodwill 

Other intangible 

assets (Note) 

Cost: 

Book value, January 1, 2011 $ 

Effects of exchange rate 

- $ 908,657 $ - $ 584,515 $ 1,493,172 

changes 

Book value, December 31, 

- 

- 

- ( 7,879 ) ( 7,879 ) 

2011 

Accumulated amortization: 

- 908,657 

- 576,636 1,485,293 

Book value, January 1, 2011 

Amortization for current 

- ( 259,617 ) - ( 119,905 ) ( 379,522 ) 

period 

Reclassified into 

- ( 129,808 ) 

- ( 38,346 ) ( 168,154 ) 

held-for-sale assets 


- 

- 

- 

- 

- 

changes 


- 

- 

- 

37,285 37,285 

2011 

Net book value, December 

- ( 389,425 ) 

- ( 120,966 ) ( 510,391 ) 

31, 2011 

$ - $ 519,232 $ - $ 455,670 $ 974,902 

Total

Trademarks 

Patent rights 

and 

technologies 

-94- 

2010 

Goodwill 

Other intangible 

assets (Note) 

Cost: 

Book value, January 1, 2010 $ 398,368 $ 1,030,223 $ 1,547,666 $ 630,517 $ 3,606,774 

Impairment loss 

Adjustment for current 

( 398,368) - ( 1,443,693) - ( 1,842,061 ) 

period 


- 

- ( 21,026) 

- ( 21,026 ) 



- ( 121,566 ) 

- 

- ( 121,566 ) 

changes 


- 

- ( 82,947) ( 46,002) ( 128,949 ) 

2010 

Accumulated amortization: 

- 908,657 

- 584,515 1,493,172 

Book value, January 1, 2010 

Amortization for current 

- ( 147,175 ) - ( 88,634) ( 235,809 ) 

period 


- ( 147,175 ) 

- ( 40,899) ( 188,074 ) 



- 34,733 

- 

- 34,733 

changes 


- 

- 

- 

9,628 9,628 

2010 

Net book value, December 

- ( 259,617 ) 

- ( 119,905) ( 379,522 ) 

31, 2010 

$ - $ 649,040 $ - $ 464,610 $ 1,113,650 

Note: Other intangible assets include customer relationships, non-compete agreements 

and land use rights. 

B. Impairment losses of the goodwill resulting from the merger with Tyan Computer 

Technology Co., Ltd., acquisition of Navman Corp. and purchase of Consumer 

Global Navigation Satellite Systems Division owned by Magellan Navigation, 

Inc. and its subsidiary and trademark obtained from the purchase of Consumer 

Global Navigation Satellite Systems Division owned by Magellan Navigation, 

Inc. and its subsidiary had been recognized in full on December 31, 2010. 

C. Goodwill impairment test was conducted in accordance with the R.O.C. SFAS 

No. 35 “Impairment of Assets”. On December 31, 2011 and 2010, the Company 

evaluated the recoverable amount of assets used for operations and goodwill 

based on their value in use. The value in use is the present value of estimated 

future cash flows to be derived from continuing use of the asset and goodwill and 

from their disposal at the end of their useful life, which is based on the five-year 

financial forecast with the discount rate of 11.26%. The following sets forth the 

methods and assumptions used to estimate the recoverable amount of assets and 

goodwill: 

a) Estimated operating revenue: it is calculated based on industrial and market 

information and the Company’s future operations and sales planning. 

b) Estimated operating cost: it is calculated based on the estimated gross profit 

margin, which is derived from prior years’ operating costs and the Company’s 

future operations and sales planning. 

c) Estimated operating expense: it is calculated based on prior years’ operating 

expenses and the Company’s future operations and sales planning. 

Total

The recoverable amount calculated based on the above assumptions is lower than 

the sum of carrying value of identifiable assets of the cash-generating unit and 

goodwill on December 31, 2010. The Company and its subsidiaries recognized 

impairment loss of $1,842,061 thousand on goodwill and trademarks in 

accordance with the asset impairment assessment reports issued by the 

independent professionals. 

11)Other assets 

December 31, 

2011 2010 

Land $ 808,963 $ 790,855 

Building 108,967 112,008 

Rental buildings, net 29,080 35,412 


$ 982,481 $ 971,960 

Impairment loss of $90,763 was recognized on idle land for 2004. As idle land’s 

net fair value was greater than its book value in accordance with the asset 

appraisement report issued by independent professionals in 2010, the Company 

recognized gain on reversal of impairment loss amounting to $90,763 for 2010. 

12)Short-term loans 

December 31, 

2011 2010 

Unsecured bank loans 

$ 3,687,582 $ 2,749,677 

Secured bank loans 

2,987,932 

1,741,975 

$ 6,675,514 $ 4,491,652 

Interest rates 0.0093%~3.289% 0.6026%~2.767% 

13)Financial liabilities at fair value through profit or loss - current 

December 31, 

2011 2010 


Adjustment of financial liabilities held for 

trading 

-Derivative financial instruments $ 64,197 $ 44,627 

A. The Group recognized the net gain of $13,044 and a net loss of $34,893 for the 

years ended December 31, 2011 and 2010, respectively. 

B. The trading items and contract information of derivatives are described in Note 1 

14)Long-term loans 

December 31, 

Bank Due date 2011 2010 

The Land Bank of The last repayment due $ 1,250,000 $ 1,500,000 

Taiwan (LBOT)-led 10 

bank consortium: 

before April 22, 2014 

Fubon Financial October 22, 2013 

(repaid in May, 2011) 

- 

650,000 

Less: Current portion 

( 500,000 ) ( 250,000 ) 

$ 750,000 $ 1,900,000 

-95-

Interest rates 1.5842% 1.3379~1.3467% 

Under the syndicated facility agreement, the Company should maintain the following 

financial ratios during the contract period based on its annual consolidated financial 

statements audited by independent accountants: 

A. Current assets to current liabilities ratio of at least 100%; 

B. Liabilities not exceeding 125% at December 31, 2009 and 110% at December 31, 

2010 and 100% from December 31, 2011 to the end of contract; 

C. When the Company fails to comply with any one of the above financial ratios, it 

should make financial ratio improvements within 5 months from May 1 of the 

year following the audited year (i.e. the consolidated financial statement year) 

and obtain a certificate from the independent accountants, showing that its 

financial ratios have improved and met the requirements within the prescribed 

period above. If its financial ratios have improved and met the requirements 

within the prescribed period, the Company is not considered to be in default on 

financial commitments; however, the interest rates of the loans charged to the 

Company shall be increaced by an additional 0.20% per annum from the date of 

notification by the management bank to the day before the financial ratios’ 

improvements are completed. 

15)Pension plan 

A. The Company has a non-contributory and funded defined benefit pension plan in 

accordance with the Labor Standards Law, covering all regular employees. Under 

the defined benefit plan, two units are accrued for each year of service for the 

first 15 years and one unit for each additional year thereafter, subject to a 

maximum of 45 units. Pension benefits are based on the number of units accrued 

and the average monthly salaries and wages of the last 6 months prior to 

retirement. The Company contributes monthly an amount equal to 2% of the 

employees’ monthly salaries and wages to the retirement fund deposited with 

Bank of Taiwan, the trustee, under the name of the independent retirement fund 

committee. 

B. Based on the actuarial assumptions for 2011 and 2010, the discount rate were 2% 

and 2.25%, respectively, the expected rate of return on plan assets were 2% and 

2.25%, respectively, and both the rate of compensation increase were 2%. The 

transition obligation is amortized equally over 15 years. 

C. The following sets forth the pension information based on the actuarial report: 

a. Funded status of the pension plan: 

December 31, (the measurement date) 

2011 2010 

Vested benefit obligation ( $ 96,507 ) ( $ 107,238 ) 

Non-vested benefit obligation ( 218,827 ) ( 233,997 ) 

Accumulated benefit obligation ( 315,334 ) ( 341,235 ) 

Effect of projected salary increase ( 90,704 ) ( 95,118 ) 

Projected benefit obligation ( 406,038 ) ( 436,353 ) 

Fair value of plan assets 251,089 271,612 

Funded status ( 154,949 ) ( 164,741 ) 

Unrecognized gain 73,260 85,092 

Accrued pension cost ( $ 81,689 ) ( $ 79,649 ) 

Vested benefit $ 123,750 $ 120,107 

-96-

. Net pension cost comprises the following: 

2011 2010 

Service cost $ 5,063 $ 6,194 

Interest cost 9,818 10,817 

Expected return on plan assets 

Amortization of unrecognized gain on plan 

( 6,218 ) ( 6,706 ) 

assets 

Amortization of unrecognized transition 

2,182 

2,505 

asset 

- ( 1,048 ) 

Net periodic pension cost $ 10,845 $ 11,762 

D. Effective July 1, 2005, the Company established a defined contribution pension 

plan (the “New Plan”) under the Labor Pension Act, covering all regular 

employees of R.O.C. nationality. Employees have the option to be covered under 

the New Plan. Under the New Plan, the Company and its subsidiary contributes 

monthly an amount based on 6% of the employees’ monthly salaries and wages 

to the employees’ individual pension accounts at the Bureau of Labor Insurance. 

The benefits accrued are portable upon termination of employment. Pensions are 

paid by monthly installments or in lump sum based on the accumulated balances 

of the employees’ individual pension accounts. 

E. The Company’s mainland subsidiaries have a defined contribution plan. Monthly 

contributions are based on a certain percentage of employees' monthly salaries 

and wages to an independent fund administered by the government in accordance 

with the pension regulations in the People’s Republic of China. 

F. The pension costs were $82,737 and $78,963 in 2011 and 2010, respectively. 

16)Capital 

As of December 31, 2011, the Company′s authorized capital was $22,000,000, 

consisting of 2,200,000 thousand shares of common stock (including 250,000 

thousand shares reserved for employee stock options), and the paid-in capital was 

$15,297,359 with a par value of $10 (in dollars) per share. 

17)Capital reserve 

Pursuant to the Company Law, capital reserve, including additional paid-in capital in 

excess of par and donation, shall be exclusively used to cover accumulated deficit or 

issuing new stock or cash to shareholders in proportion to their ownership when the 

Company has no accumulated deficit. However, pursuant to the R.O.C. Securities 

and Exchange Law, capital reserve arising from paid-in capital in excess of par value 

on issuance of common stock and donations can be capitalized once a year, provided 

that the Company has no accumulated deficit and the amount to be capitalized does 

not exceed 10% of the paid-in capital. 

18)Retained earnings 

A. Legal reserve 

Pursuant to the Company Law, 10% of current year’s earnings, after payment of 

all taxes, shall be appropriated as legal reserve, until the total equals the issued 

share capital. Such reserve can only be used to offset accumulated deficit. 

Except for covering accumulated deficit or issuing new stocks or cash to 

-97-

shareholders in proportion to their share ownership, the legal reserve shall not be 

used for any other purpose. The use of legal reserve for the issuance of stocks 

or cash to shareholders in proportion to their share ownership is permitted, 

provided that the balance of the reserve exceeds 25% of the Company’s paid-in 

capital. 

B. Retained earnings 

Under the Company’s Articles of Incorporation, the current year’s earnings, if 

any, shall first be used to pay all taxes and offset prior year’s operating losses 

and then 10% of the remaining amount shall be set aside as legal reserve. 

Special reserve shall also be set aside pursuant to the decrees. After dividends 

are appropriated, at least 5% of the remainder may be appropriated as 

employees’ bonus. Appropriation of the remainder plus prior year’s accumulated 

unappropriated retained earnings shall be proposed by the Board of Directors and 

resolved by the stockholders. 

Earnings appropriation ratio and cash dividends ratio are decided by the Board of 

Directors, taking into account the Company’s financial structure, future capital 

requirements and profitability, and cash dividends shall account for at least 10% 

of the total dividends appropriated. Earnings appropriation ratio and cash 

dividends ratio are subject to adjustments once approved by the stockholders. 

C. The appropriation of 2010 and 2009 earnings had been resolved at the 

stockholders’ meeting on June 18, 2011 and June 10, 2010, respectively. Details 

are summarized below: 

2010 2009 

Dividends per 

Dividends per 

Amount share (in dollars) Amount share (in dollars) 

Legal reserve $ 28,104 $ - $ 28,916 $ - 

Cash dividends 229,454 0.15 228,926 0.15 

Total $ 257,558 $ 0.15 $ 257,842 $ 0.15 

(a) The amounts of directors’ and supervisors’ remuneration of 2010 and 2009 

are $0 and $2,000, and employees’ bonus are $0 and $13,102, respectively. 

Employees’ bonus and directors’ and supervisors’ remuneration of 2010 and 

2009 as resolved by the stockholders were in agreement with those amounts 

recognized in the 2010 and 2009 financial statements. 

(b) The appropriation of 2010 and 2009 earnings had been resolved at the 

stockholders’ meeting and coincided with the proposal by the Board of 

Directors, on April 25, 2011 and April 22, 2010, respectively. 

D. The estimated amounts of employees’ bonus and directors’ and supervisors’ 

remuneration of 2011 are $5,831 and $2,000, respectively, and are recognized as 

operating costs or operating expeneses for 2011. The basis of estimates for 

employees’ bonus is based on a 5% percentage (as prescribed by the Company’s 

Articles of Incorporation) of net income in 2011 after taking into account the 

legal reserve and other factors. 

E. As of the audit report date, the Company had not yet held the meeting of Board 

of Directors to discuss the earnings distribution proposal for 2011. Information 

on the appropriation as resolved by the Board of Directors and approved by the 

stockholders will be posted in the “Market Observation Post System” at the 

website of the Taiwan Stock Exchange. 

-98-

19)Share-based payment - employee compensation plan 

A.As of December 31, 2011, the Company’s share-based payment transactions are set 

forth below: 

Type of 

arrangement 

Third stock 

option 

incentive plan 

(Note 1) 

Fourth stock 

option 


(Note 2) 

Fifth stock 

option 


Sixth stock 

option 


Seventh stock 

option 


(Note 3) 

Eighth stock 

option 


Ninth stock 

option 


Tenth stock 

option 


Grant date 

2005.08.31 

and 

2006.03.10 

2006.06.30 

and 

2007.03.19 

Quantity granted 

(in thousands of 

shares) 

3,279 

(Note 4) 

1,117 

(Note 4) 

Contract 

period Vesting conditions 

Actual 

resignation rate 

in the current 

period 

Estimated future 

resignation rate 

6 years 50% can be exercised 

after 2 years of grant 

75% can be exercised 




- - 

6 years ″ - - 

2006.12.07 

and 

2007.01.11 

64,000 6 years ″ - - 

2007.07.30 

and 

2007.08.17 

64,000 6 years ″ - - 

2007.09.26 1,245 

(Note 4) 

6 years ″ - - 

2008.10.13 

and 

2008.10.27 

2009.04.29 

and 

2009.07.03 

2009.10.05 

and 

2010.04.19 

and 

2010.05.06 

85,000 6 years ″ 14.99% 15% 

43,000 6 years 25% can be exercised 






95,000 6 years 30% can be exercised 






-99- 

17.27% 20% 

7.31% 15~20% 

Note 1:Assumed second stock option incentive plan of Tyan Computer Technology Co., Ltd. 

Note 2:Assumed third stock option incentive plan of Tyan Computer Technology Co., Ltd. 

Note 3:Assumed fourth stock option incentive plan of Tyan Computer Technology Co., Ltd. 

Note 4:According to the business merger agreement of Tyan Computer Technology Co., Ltd. could 

be exchanged for one unit of the Company’s employee stock options.

B. (a) A summary of the movements under the Company’s assumed stock option plan 

of Tyan Computer Technology Co., Ltd. is set forth below: 

In thousands 

of shares 

-100- 

December 31, 

2011 2010 

Weighted average 

exercisable price 

(in NT dollars) 

In thousands 

of shares 

Options outstanding 

at the beginning 

of the year 

2,043 $ 18.11 

2,276 

Options granted - - 

Stock dividends or 

adjustment of 

number of options 

- 

Options exercised - - 

Options revoked ( 547 ) ( 233 ) 


at the end of the 

year 

Options exercisable 


year 

Options approved 

and not yet issued 


year 

1,496 

1,496 

- 

19.41 

- 

2,043 

1,712 


exercisable price 


$ 18.19 

(b) As of December 31, 2011, the summary of the outstanding stock option plan 

was as follows: 

Range of 

exercise 

price 


- 

18.11 

Number of options outstanding at the end of the year Exercisable options at the end of the year 

In thousands 

of shares 

Expected 

weighted 

average 

residual years 

Weighted 

average 

exercise price 


In thousands 

of shares 




$ 16.5 138 0.19 $ 16.5 138 $ 16.5 

20.2 139 0.50 20.2 139 20.2 

19.8 601 1.22 19.8 601 19.8 

19.5 618 1.75 19.5 618 19.5 

1,496 $ 19.41 1,496

C. (a) A summary of the movements under the Company’s fifth stock option is set 

forth below: 


at the beginning of 

the year 

December 31, 

2011 2010 



In thousands of exercise price In thousands of exercise price 

shares (in NT dollars) shares (in NT dollars) 

284 

-101- 

$ 29.85 

Options granted 


adjustment of 

- - 


- 


Options revoked 



( 24 ) ( 76 ) 

year 



year 

Options approved and 

not yet issued at the 

end of the year 

260 

260 

- 

29.75 

360 

- 

284 

213 

- 

$ 29.95 

(b) As of December 31, 2011, the summary of the outstanding fifth stock option 

plan was as follows: 

Range of 



In thousands 

of shares 

Expected 

weighted 

average 


Weighted 

average 



In thousands 

of shares 

29.85 

Weighted 

average 



$29.5 and 30 260 0.98 $ 29.75 260 $ 29.75 

D. (a) A summary of the movements under the Company’s sixth stock option is set 

forth below: 




In thousands 

of shares 

274 

December 31, 

2011 2010 



exercisable price In thousands exercisable price 

(in NT dollars) of shares (in NT dollars) 

$ 33.31 



adjustment of 

- - 


- 


Options revoked ( 24 ) ( 75 ) 



year 



year 




year 

250 

250 

- 

33.22 

349 

- 

274 

206 

- 

$ 33.40 

33.31

(b) As of December 31, 2011, the summary of the outstanding sixth stock option 



Range of 

Expected Weighted 

exercise 

weighted average 


price 

In thousands average exercise price In thousands exercise price 

(in NT dollars) of shares residual years (in NT dollars) of shares (in NT dollars) 

$31.5 and 34.8 250 1.6 $ 33.22 250 $ 33.44 

E. (a)A summary of the movements under the Company’s eighth stock option plan is 

set forth below: 

December 31, 

2011 2010 



In thousands exercisable price In thousands exercisable price 

of shares 





71,019 $ 12.11 

81,810 $ 12.10 



adjustment of 

- - 


- 

- 

Options exercised ( 2,217 ) 11.74 ( 1,347 ) 11.78 

Options revoked ( 1,790 ) ( 9,444 ) 



year 



67,012 

12.12 

71,019 

12.11 

year 




50,260 

35,510 

year 

- 

- 

(b) As of December 31, 2011, the summary of the outstanding eighth stock option 


Range of 

exercisable 

price 



In thousands 

of shares 

Expected 

weighted 

average 


-102- 

Weighted 

average 



In thousands 

of shares 




$ 11.2 and 13 67,012 2.8 $ 12.12 50,260 $ 12.12

F. (a) A summary of the movements under the Company’s ninth stock option plan is 





In thousands 

of shares 

38,106 

December 31, 

2011 2010 





-103- 

$ 13.60 

42,050 



adjustment of 

- - 


- 





year 



year 




year 

35,565 

8,891 

- 

13.60 

- 

38,106 

- 

- 

$ 13.6 

(b) As of December 31, 2011, the summary of the outstanding ninth stock option 



Range of 

Expected Weighted 

exercisable 

weighted average 


price 

In thousands average exercise price In thousands exercise price 

(in NT dollars) of shares residual years (in NT dollars) of shares (in NT dollars) 

$13.1 and 14.1 35,565 3.42 $ 13.60 8,891 $ 13.60 

G. (a) A summary of the movements under the Company’s tenth stock option plan is 





In thousands 

of shares 

93,500 

13.6 

December 31, 

2011 2010 





$ 13.83 

47,500 

$ 13.90 



adjustment of 

- 47,500 13.75 


- 





year 



year 




year 

88,052 

- 

- 

13.83 

- 

93,500 

- 

- 

13.83

(b) As of December 31, 2011, the summary of the outstanding tenth stock option 


Range of 

exercisable 

price 



In thousands 

of shares 

Expected 

weighted 

average 


-104- 

Weighted 

average 



In thousands 

of shares 




$13.1 and 14.45 88,052 4.04 $ 13.83 - $ - 

H. The following sets forth the pro forma net (loss) income and earnings per share 

based on the assumption that the compensation cost is accounted for using the fair 

value method (the intrinsic value method) for the stock options granted before the 

effectivity of R.O.C. SFAS No. 39, “Accounting for Share-based Payment”: 

Net income (loss) Net income (loss) 

stated in the 

statement of income 

Pro forma net income 

(loss) 

Basic EPS (in 

dollars) 

Diluted EPS (in 

dollars) 

EPS stated in the 


Pro forma EPS 

EPS stated in the 


Pro forma EPS 

For the year ended 

December 31, 2011 

$ 253,204 

241,243 

0.17 

0.16 

0.16 

0.15 

For the year ended 


( $ 823,682 ) 

( 876,240 ) 

( 0.55 ) 

( 0.58 ) 

( 0.55 ) 

( 0.58 ) 

(a) The Company assumed the employee stock options issued by Tyan Computer 

Technology Co, Ltd. as a result of the merger. The Company estimated the fair 

value of stock options as of grant date under the Black-Scholes option pricing 

model except for the grant date of September 26, 2007 which was under the 

Binomial option pricing model. The factor’s weighted-average information and 

fair value are listed as follows: 

Grant date 

August 31, 

2005 

Grant date 

March 10, 

2006 

Dividend yield rate 0% 0% 

Expected price volatility 50.00% 50.00% 

Risk-free interest rate 2.00% 2.00% 

Expected vesting period 6 years 6 years 

Options granted (in shares) 3,422,000 667,000 

Weighted-average fair value per 

share (in dollars) 

12.44 12.46

-105- 

Grant date 

June 30, 

2006 

Grant date 

March 19, 

2007 


Expected price volatility 50 % 75% 

Risk-free interest rate 2.00% 2.00 % 

Expected vesting period 6 years 6 years 

Options granted (in shares) 



510,000 

12.78 

897,000 

10.78 

Grant date 

September 26, 

2007 

Dividend yield rate 0% 

Expected price volatility 27.78% 

Risk-free interest rate 2.52% 

Expected vesting period 4.375 years 

Options granted (in shares) 1,569,000 



4.68 

(b) The Company estimated the fair value of fifth stock option as of grant date 

under the Black-Scholes option pricing model. The factor’s weighted average 

information and fair value are listed as follows: 

Grant date 

December 7, 

2006 

Grant date 

January 11, 

2007 




Expected vesting period 3.75 years 3.75 years 

Options granted (in shares) 32,000,000 32,000,000 



9.39 9.16 

(c) The Company estimated the fair value of sixth stock option as of grant date 

under the Black-Scholes option pricing model. The factor’s weighted average 

information and fair value are listed as follows: 

Grant date 

July 30, 

2007 

Grant date 

August 17, 

2007 




Expected vesting period 3.75 years 3.75 years 

Options granted (in shares) 32,000,000 32,000,000 



11.46 9.25

I. For the stock options granted after January 1, 2008 with the compensation cost 

accounted for using the fair value method, their fair value on the grant date is 

estimated using the Black-Scholes option pricing model. The weighted-average 

parameters used in the estimation of the fair value are as follows: 

Type of 

arrangement Grant date 

Eighth stock 

option 


Ninth stock 

option 


Tenth stock 

option 


2008.10.13 

2008.10.27 

2009.04.29 

2009.07.03 

2009.10.05 

2010.04.19 

2010.05.06 


price (in 

dollars) 

$13.2 

$11.35 

$14.3 

$13.3 

$13.9 

$14.45 

$13.10 

Exercise 

price (in 

dollars) 

$13.2 

$11.35 

$14.3 

$13.3 

$13.9 

$14.45 

$13.10 

-106- 

Expected 

price 

volatility 

(Note) 

28.37% 

28.42% 

34.87% 

34.36% 

35.25% 

30.04% 

29.85% 

Expected 

vesting 

period 

3.47 years 

3.47 years 

3.67 years 

3.67 years 

3.61 years 

3.61 years 

3.61 years 

Expected 

dividend 

yield rate 

0% 

0% 

0% 

0% 

0% 

0% 

0% 

Risk-free 

interest rate 

1.96% 

1.89% 

0.93% 

1.02% 

0.55% 

0.75% 

0.74% 

Note:In accordance with EITF 92-205, if the entity’s historical stock prices were 

significantly abnormal, those prices shall be excluded from the reference 

values in calculating expected price volatility rate. The expected price 

volatility rate is determined based on the stock prices for the recent period 

that is as long as the expected vesting period of stock options, and taking 

into account the effect of earnings appropriation every year on stock price. 

J. Expenses incurred on share-based payment transactions are shown below: 

2011 2010 

Equity-settled $ 149,460 $ 195,316 

20) Treasury stock 

A. Changes in the treasury stock for the years ended December 31, 2011 and 2010 

are set forth below: 

Fair value 

per unit 

(in dollars) 

$3.12 

$2.67 

$3.92 

$3.62 

$3.75 

$3.40 

$3.06 

Reason for reacquisition 

2011 

(in thousands of shares) 

Beginning shares Addition Reduction Ending shares 

To be reissued to employees 10,000 15,050 (10,000) 15,050 

Company’s common shares held by 

its subsidiaries, TFC Investment 

Co., Ltd. 

20,366 - - 20,366 


its subsidiaries, SSDL 

2,764 - - 2,764 

Reason for reacquisition 

2010 

(in thousands of shares) 

Beginning shares Addition Reduction Ending shares 

To be reissued to employees 10,000 - - 10,000 


its subsidiaries, TFC Investment 

Co., Ltd. 

20,366 - - 20,366 


its subsidiaries, SSDL 

2,764 - - 2,764

B. Pursuant to the R.O.C. Securities and Exchange Law, the number of shares 

bought back as treasury stock should not exceed 10% of the number of the 

Company’s issued and outstanding shares and the amount bought back should not 

exceed the sum of retained earnings, paid-in capital in excess of par value and 

realized capital reserve. As of December 31, 2011, the shares bought back as 

treasury stock amounted to $148,115. 

C. Pursuant to the R.O.C. Securities and Exchange Law, treasury stock should not 

be pledged as collateral and is not entitled to dividends before it is reissued to the 

employees. 

D. Pursuant to the R.O.C. Securities and Exchange Law, treasury stocks should be 

reissued to the employees within three years and shares not reissued within the 

three-year period are to be retired. Treasury shares to enhance the Company’s 

credit rating and the stockholder’s equity should be retired within six months of 

acquisition. As of December 31, 2011, treasury stocks totaling 10,000,000 shares 

that had been bought back by the Company to be reissued to the employees but 

were not reissued to the employees within three years were all retired. The 

change in shares had been registered. 

E. As of December 31, 2011, the total number of the Company’s shares held by its 

subsidiaries, Silver Star Developments Ltd., was 2,764 (in thousand shares) with 

an average book value of $77,002 and $27.86 (in dollars) per share and market 

vaule of $9.24 (in dollars) per share. 

F. As of December 31, 2011, the total number of the Company’s shares held by its 

subsidiaries, Tsu Fung Investment Corp., was 20,366 (in thousand shares) with an 

average book value of $276,084 and $13.56 (in dollars) per share and market 

value of $9.24 (in dollars) per share. 

G. In accordance with EITF 91-341, when the subsidiaries obtain cash dividends 

from the Company, it should write off investment income and adjust its capital 

reserve-treasury stock transaction account. As of December 31, 2011 and 2010, 

the adjustment amount was $3,470 and $3,387, respectively. 

H. In accordance with (2002) Tai-Cai-Zheng (1) Letter No. 170010, the Company 

sets aside special reserve for an amount equal to the excess of book value over 

market value of the Company’s shares held by its subsidiaries on balance sheet 

date multiplied by the share ownership. This part of special reserve set aside 

shall not be appropriated. When the excess above subsequently decreases, the 

special reserve shall be reversed to the extent of the amount decreased multiplied 

by the share ownership. 

-107-

21) Income tax 

A. Income tax expense and payable are reconciled as follows: 

2011 2010 

Income tax at statutory tax rate $ 136,730 $ 93,660 

Tax effect of permanent differences ( 35,344 ) 132,690 

10% tax on unappropriated earnings - 3,132 

Tax effect of investment tax credits 197,690 24,408 

Loss carryforwards 

Estimated effects of income tax assessments 

by the Tax Authority on the following years’ income 

( 82,030 ) ( 130,555 ) 

tax 

85,767 

90,856 

Adjustment of prior year’s income tax 29,436 1,633 

Tax effect of amendments to the tax laws 

Valuation allowance on deferred income tax assets and 

- 23,692 

liabilities 

( 60,725 ) 

72,448 

Income tax expense 271,524 311,964 

Net effect of deferred income tax liabilities ( 407 ) ( 44,098 ) 

Adjustment of prior year’s income tax 

Overdue tax assessed and approved by the Tax 

( 29,436 ) ( 1,633 ) 

Authority 

998,522 

962,642 

Prepaid income tax ( 59,866 ) ( 56,178 ) 

Translation adjustment ( 27,918 ) ( 34,909 ) 

Income tax payable - net $ 1,152,419 $ 1,137,788 

Income tax refundable $ - $ 4,159 

Income tax payable $ 1,152,419 $ 1,141,947 

B. Deferred income tax assets and liabilities: 

-108- 

December 31, 

2011 2010 

Deferred income tax assets – current $ 1,269,243 $ 1,426,293 

Deferred income tax liabilities – current ( 10,518 ) ( 10,121 ) 

Valuation allowance ( 788,407 ) ( 1,068,311 ) 

$ 470,318 $ 347,861 

Deferred income tax assets – non-current $ 1,587,004 $ 1,467,262 

Deferred income tax liabilities – non-current ( 358,845 ) ( 358,845 ) 

Valuation allowance ( 1,118,948 ) ( 876,342 ) 

$ 109,211 $ 232,075 

C. Components of deferred income tax assets and liabilities: 

December 31, 2011 December 31, 2010 

Amount Tax Effect Amount Tax Effect 

Current: 

Temporary differences 

Provision for loss on obsolete 

inventories 

$ 1,395,122 $ 301,539 $ 1,181,284 $ 250,839 

Allowance for sales rebate 984,621 375,612 1,576,079 589,900 

Unrealized warranty 621,333 122,596 521,627 96,901 

Impairment of assets - - 28,573 4,857


Amount Tax Effect Amount Tax Effect 

Loss on uncollectible accounts 315,928 125,869 338,526 128,450 

Others 960,223 154,775 1,066,194 276,457 

Loss carryforward 14,420 9,805 - - 

Investment tax credits 168,529 68,768 

Valuation allowance ( 788,407 ) ( 1,068,311 ) 

$ 470,318 $ 347,861 

Non-current: 

Temporary differences 

Unrealized investment gain ( $ 2,110,629 ) ( $ 358,845 ) ( $ 2,110,854 ) ( $ 358,845 ) 

Impairment of assets 398,368 67,723 598,296 143,583 

Book-tax difference in depreciation 973,020 243,255 975,600 243,900 

Others 699,112 140,259 783,447 150,317 

Loss carryforward 2,777,790 923,984 1,354,837 405,136 

Investment tax credits 211,783 524,326 

Valuation allowance ( 1,118,948 ) ( 876,342 ) 

$ 109,211 $ 232,075 

D. The Company is eligible for investment tax credits under the statute for 

Upgrading Industry as of December 31, 2011 as follows: 

Item Total tax credits Unused tax credits 

-109- 

Final year tax 

credits are due 

Research and Development $ 266,752 $ 168,529 2012 

Research and Development 216,947 211,539 2013 

$ 380,068 

E. As of December 31, 2011, the expiry date and income tax effect of the Company’s 

unused loss carryforwards are as follows: 

Year Reporting Total tax 

Unused tax Final year tax 

Occurred income credits 

credits 

credits are due 

2010 $ 542,499 $ 92,225 $ 92,225 2020 

2011 368,777 62,692 62,692 2021 

$ 154,917 

F.As of December 31, 2011, the Company’s income tax returns through 2008 have 

been assessed and approved by the Tax Authority. The Company filed 

administrative relief for its 2000, 2001 and 2003 income tax returns. The 

administrative relief filing for its 2000 and 2001 income tax returns had been 

dismissed and the Company had paid additional taxes for the two years. The Tax 

Authority recognized part of tax credits filed by the Company for 2003 income tax 

returns after tax re-examination. In addition, the Company had appealed to the 

Supreme Court for its 2004 income tax returns and applied for tax re-examination 

with the Tax Authority for its 2005, 2006 and 2007 income tax returns, because all 

investment tax credits for research and development and part of investment tax 

credits for employees’ training filed by the Company were rejected by the Tax 

Authority and other income was added by the Tax Authority, which resulted in 

additional tax payable for years 2004, 2005, 2006 and 2007. The appeal for its 

2004 income tax returns had been dismissed by the Supreme Court; the Company 

had filed for a re-trial. In January, 2012, the Tax Authority rendered a judgment 

to recognize part of tax credits filed by the Company for 2005 and 2006 income 

tax returns after tax re-examination. For all the cases above, the Company has 

assessed their income tax effects and accrued related tax liabilities in the financial 

statements.

G. Under the PRC tax regulations, the corporate income tax for the Mainland China 

subsidiary shall be levied at the rate of 25%. However, as MiTAC Computer 

(Kunshan) Co. Ltd. is a foreign-invested manufacturing enterprise established in 

the PRC, according to the Corporate Income Tax Law of the PRC, it is exempt 

from corporate income tax for the first and second profit-making years and is 

subject to a 50% reduction of corporate income tax from the third through fifth 

profit-making years. Pursuant to Article 57 of the Corporate Income Tax Law of 

the PRC (“new tax law”) passed at the National People’s Congress held on March 

16, 2007, those enterprises which were established before the effective date of 

new tax law and have enjoyed tax relief shall be assessed at the tax rate regulated 

by new tax law after five-year enforcement of the law. In addition, those 

enterprises which enjoy tax relief for a specific period can continue enjoying tax 

relief until due date, and for those enterprises which have not reported any profit 

and not enjoyed tax relief, the tax grace period starts from January 1, 2008. 

Accordingly, the corporate income tax rate for MiTAC Computer (Kunshan) Co. 

Ltd. was 22% for 2010, and the corporate income tax rate for MiTAC Research 

(ShangHai) Ltd. was 15% for 2010 because it gained the qualification for a 

national supportive high-tech enterprise on November 25, 2008. 

H. Unappropriated earnings 

I. 

-110- 

December 31, 

2011 2010 

Earnings earned before 1998 

Earnings earned in and after 

$ - $ 305,502 

1998 

7,002,683 

6,748,063 

$ 7,002,683 $ 7,053,565 

Balance of stockholders’ 

tax credit account 

Ratio of deductible tax 

credit 


$ 1,439,632 

$ 1,463,460 

2011 (estimated) 2010 (actual) 

20.56% 

20.13%

22)Earnings per share (Loss) 

For the year ended December 31, 2011 

Amount 

Weighted 

Average 

Outstanding 

Common 

Shares 

Earnings per share (in dollars) 

Income before 

(in thousands Loss before 

income tax Net income of shares) income tax Net icome 

Basic earnings 

per share: 

Consolidated net 

income 

Net income 

attributable to 

majority 

$ 524,728 $ 253,204 

stockholders 

Less: effect of 

dilutive 

potential 

common stocks 

issued by 

investee 

310,204 253,204 1,504,227 $ 0.21 $ 0.17 

companies 

Effect of dilutive 

potential 

( 9,941 ) ( 9,941 ) 

common stocks 

Employee stock 

options 

Net income 


common stock 

holders plus 

dilutive effect of 

common stock 

642 

equivalents $ 300,263 $ 243,263 1,504,869 $ 0.20 $ 0.16 

-111-

Basic loss 

per share: 

Consolidated net 

loss 

Net loss 


majority 

stockholders 

a. The weighted-average outstanding common stock for 2011 and 2010 excluded 

treasury stock. 

b. As the Group incurred operating losses for 2010, potential common shares are 

not included in the calculation of losses per share. 

c. The employee stock options had anti-dilution effect on earnings per share for the 

years ended December 31, 2011 and 2010, so they are not included in the 

calculation of diluted earnings per share. 

23)Personnel expenses, depreciation and amortization 

The personnel expenses, depreciation and amortization for 2011 and 2010 were as 

follows: 

Loss before 

income tax 

($ 511,718 ) 

( $ 696,344 ) 


Amount Loss per share (in dollars) 

Net loss 

($ 823,682 ) 

($ 823,682 ) 


Operating Non-operating 

Operating costs expenses expenses Total 

Personnel expenses $ 1,094,850 $ 4,012,670 $ - $ 5,107,520 

Salaries 986,539 3,569,954 - 4,556,493 

Labor and health insurance 54,991 266,508 - 321,499 

Pension 1,551 81,186 - 82,737 

Others 51,769 95,022 - 146,791 

Depreciation 532,912 292,602 4,855 830,369 

Amortization 140,664 273,765 - 414,429 


Operating Non-operating 

Operating costs expenses expenses Total 

Personnel expenses $ 926,469 $ 3,905,521 $ - $ 4,831,990 

Salaries 850,054 3,496,454 - 4,346,508 

Labor and health insurance 30,489 219,572 - 250,061 

Pension 604 78,359 - 78,963 

Others 45,322 111,136 - 156,458 

Depreciation 770,049 352,067 6,678 1,128,794 

Amortization 221,507 289,051 - 510,558 

-112- 

Weighted 

Average 

Outstanding 

Common 

Shares 

(in thousands 

of shares) 

1,503,111 

Income before 

income tax 

($ 0.46 ) 

Net loss 

($ 0.55 )

5. RELATED PARTY TRANSACTIONS 

1) Names of the related parties and their relationship with the Company 

Names of the related parties Relationship with the Company 

3Probe Technologies Corp. Investee company accounted for under the equity method. 

Lian Jie Investment Co., Ltd. Investee company accounted for under the equity method. 

Shen-Tong Construction & Development Co., 

Ltd. 

Investee company accounted for under the equity method. 

Loyalty Founder Enterprise Co., Ltd. Investee company accounted for under the equity method. 

Getac Technology Corp.(GTC) and its 

subsidiaries 

Investee company accounted for under the equity method 

Synnex Corp. (SYNNEX) and its subsidiaries Indirect investee company accounted for under the equity method. 

Synnex Technology International Corp. (SIC) Common board chairman. 

Synnex Electronics HongKong Ltd. Common board chairman. 

Harbinger Venture Management Co., Ltd. Common board chairman. 

Lien Hwa Industrial Corp. Common board chairman. 

Harbinger II (BVI) Venture Capital Corp. Common board chairman. 

UPC Technology Corporation Common board chairman. 

Harbinger VI Common board chairman. 

BOC Lien Hwa Industrial Gas Corp. The Company’s chairman is BOC’s director. 

Gemtek Technology Co., Ltd. (Gemtek) The Company is Gemtek’s director. 

MiTAC Inc. The Company’s chairman is MiTAC Inc.’s vice director. 

MiTAC Communication Co., Ltd. The Company’s chairman is MiTAC Inc.’s vice director. 

2) Significant related party transactions and balances 

A. Purchases (including process expenditures) 

For the years ended December 31, 2011 and 2010, the Company had purchases from 

related parties amounting to $3,310,646 and $5,967,084, respectively. 

The purchase price to related parties is based on market value. The payment period is 

150 days and 90 days after offsetting certain receivables and payables according to 

payment terms to overseas and domestic related parties, respectively. The payment 

period to regular suppliers is approximately 90 days after purchase date. 

B. Sales 

For the years end December 31, 2011 and 2010, the Company had sales to related 

parties amounting to $351,188 and $4,482,519, respectively. 

The selling price to related parties is based on market value. The collection period is 

150 days and 90 days after offsetting certain receivables and payables according to 

collection terms to overseas and domestic related parties, respectively. The collection 

period for regular customers is approximately 90 days after shipping date. 

C. Notes receivable 

December 31, 

Notes receivable- 2011 2010 

MiTAC Inc. $ $ 197,650 

D.Accounts receivable 

As for December 31, 2011 and 2010, the accounts receivable from related parties 

-113-

were $65,338 and $106,409, respectively. 

E. Other receivables 

F. Accounts payable 

As of December 31, 2011 and 2010, the accounts payable to related parties were 

$431,456 and $647,680, respectively. 

G. Other payables 

As of December 31, 2011 and 2010, the other payables to related parties were $19,831 

and $30,482, respectively. 

H. During 2011 and 2010, the Company paid to related parties expenses amounting to 


I. (a) During 2011 and 2010, the Company sold machinery and mold equipment to 

related parties at the sales price of $93,130 and $0, respectively. In 2009, the 

Company disposed of land and buildings to MiTAC Inc. in the amount of 

$587,000. Gain on disposal was $196,386. According to the sales agreement, the 

total selling price will be collected in three installments within two years. MiTAC 

Inc. had issued installment notes to the Company. As of December 31, 2011, the 

notes had not been cashed already. 

(b) During 2011 and 2010, the Company purchased machinery and mold equipment 

from Getac Technology Corp.(GTC) and its subsidiaries at the purchase price of 


During 2011 and 2010, the Company purchased machinery and mold equipment 

from other related parties at the purchase price of $30,063 and $51,092, 

respectively. 

J. As of December 31, 2011 and 2010, Getac Technology Corp. provided guarantees for 

rent to the Company amounting to $0 and $3,600, respectively. 

K. (a) In 2011 and 2010, the Company earned rent revenue from related parties 

amounting to $44,941 and $50,999, respectively. 

(b) In 2011 and 2010, the Company paid rent expenses to related parties amounting 

to $8,384 and $9,362, respectively. 

(c) To expand and integrate product supply channels, the Board of Directors of the 

Company adopted a resolution on July 16, 2010 to purchase the inventories of 

the specific assembling OEM business from Synnex Corp. and its subsidiary 

through the Company’s overseas subsidiary- MiTAC Information Systems Corp. 

(“MIS”) and take over relevant business on July 31, 2010. The transaction 

amount is based on the total inventory value of US$65,000 thousand on the 

closing date, July 31, 2010, plus contingent consideration. 

-114- 

December 31, 

2011 2010 

GTC and its subsidiaries $ 51,257 $ 54,873 


$ 53,273 $ 57,082

L. Directors’, supervisors’ and key managers’ salary, bonus, and remuneration 

(a)Salaries included wages, bonuses, meal expense, retirement pension, employees’ 

bonuses and travel allowance. 

(b)Remuneration included appropriation of directors’ and supervisors’ remuneration and 

employees’ bonuses. 

(c)The relevant information above was disclosed in the Company’s annual report. 

6. ASSETS PLEDGED AS COLLATERAL 

December 31, 

ASSETS 2011 2010 Subject of collateral 

Building $ 372,847 $ 422,636 Short-term loans 

Marketable securities 733,922 930,971 Medium-term loans from banks 

Time deposits 3,350 3,313 Guarantee deposit for land 

leasing in Science Park 

Time deposits 1,434 1,417 Guarantee deposit for dorm 

leasing in Science Park 

Time deposits 9,500 9,500 Guarantee for application for 

letters of credit 

Time deposits 3,089,820 1,549,336 Short-term loans 

$ 4,210,873 $ 2,917,173 

7. COMMITMENTS AND CONTINGENT LIABILITIES 

1) The Company has credit lines for guarantee of customs duties in 2011 and 2010. As of 

December 31, 2011 and 2010, the amount of customs duties guaranteed by the bank 

were both $3,100. 

2) The Company leased certain land (from 2008 to 2026), factories and offices (up to 

December 2013) under operating leases. Annual rental payments amounted to 

approximately $68,552. 

8. SIGNIFICANT DISASTER LOSS 

None. 

9. SIGNIFICANT SUBSEQUENT EVENTS 

None. 

-115- 

2011 2010 

Salaries, bonus, and service execution fees $ 87,186 $ 142,760 

Remuneration 2,583 - 

$ 89,769 $ 142,760

10. OTHER INFORMATION 

1) The fair values of the financial instruments. 

Financial Assets 

Financial assets with 

fair value equal to 

book value 

Available-for-sale 

financial assets 

Financial assets carried 

at cost 

Derivatives 

Forward foreign 

exchange 

Exchange rate 

contracts 

Financial Liabilities 

Financial liabilities 

with fair value equal 

to book value 

Book value 

$ 20,681,167 

1,190,306 

1,548,488 


Quotations 

in an active 

market 

$ - 

1,190,306 

Fair value Fair value 

- 

-116- 

Evaluation 

model 

$ 20,681,167 

- 

1,548,488 

Book value 

$20,753,296 

1,596,943 

1,607,951 

Quotations 

in an active 

market 

$ - 

1,596,943 

- 

Evaluation 

model 

$ 20,753,296 

- 

1,607,951 

$ 23,419,961 $ 1,190,306 $ 22,229,655 $ 23,958,190 $ 1,596,943 $ 22,361,247 

$ 44,137 

$ - 

$ 44,137 

$ 23,746 

$ - 

$ 23,746 

255 - 255 - - - 

$ 44,392 $ - $ 44,392 $ 23,746 $ - $ 23,746 

Book value 

$ 19,513,319 


Quotations 

in an active 

market 

$ - 

Fair value Fair value 

Evaluation 

model 

$ 19,513,319 

Book value 

$ 19,227,212 

Quotations 

in an active 

market 

$ - 

Evaluation 

model 

$ 19,227,212 

Long-term loans 1,250,000 - 1,250,000 2,150,000 - 2,150,000 

Derivatives 

Purchase of forward 

foreign exchange 

Exchange rate 

contracts 

$ 20,763,319 $ - $ 20,763,319 $ 21,377,212 $ - $ 21,377,212 

$ 63,757 

$ - 

$ 63,757 

$ 44,627 

$ - 

$ 44,627 

440 - 440 - - - 

$ 64,197 $ - $ 64,197 $ 44,627 $ - $ 44,627 

The methods and assumptions used to measure the fair value of financial instruments are as 

follows: 

(a) For short-term instruments, the fair values were determined based on their carrying 

values because of the short maturities of the instruments. This method was applied to 

cash and cash equivalents, notes receivable, accounts receivable, other receivables, 

other financial assets, refundable deposits, long-term notes and accounts receivables, 

short-term loans, notes payable, accounts payable, income tax payable, accrued 

expenses, other payables, provision for product warranty, other current liabilities and 

deposits-in. 

(b) Available-for-sale financial instruments are based on the market value of securities.

(c) Fair value of bonds payable is estimated using the market value. 

(d) The book value of long-term loans is used as fair value as the loans bear floating 

interest rates. 

(e) The fair values of derivative financial instruments are provided by counterparty 

financial institutions. The fair value estimate is based on the closing rate or central 

parity rate of the foreign exchange market at the last business day of month shown 

in the “Reuters Quotation System”. The fair values of derivative financial 

instruments which include unrealized gains or losses on unsettled contracts are 

determined based upon the amounts to be received or paid assuming that the 

contracts were settled as of the reporting date. 

2) As of December 31, 2011 and 2010, the financial assets and financial liabilities with 

fair value risk due to the change of interest amounted to $1,772,975 and $771,330; $0 

and $0, respectively, and the financial assets and the financial liabilities with cash flow 

risk due to the change of interest amounted to $9,976,844 and $8,936,454; $7,925,514 

and $6,641,652, respectively. 

3) Financial risk management 

In order to identify, evaluate and manage market risk, credit risk, liquidity risk and cash 

flow risk, the Group has established a risk management program and carries out 

procedures to monitor the fluctuations in exchange rate and interest rate, as well as 

implement credit controls over its transaction counterparties. 

By considering factors such as changes in industrial environment, competitive position, 

and market risks, the Group adjusts related positions of financial assets and liabilities in 

order to optimize its risk exposure, maintain liquidity and centrally manage all market 

risks. The Group mainly use derivative financial instruments to hedge the operating risk. 

To meet its risk management objectives, the Group adopts the following strategies to 

control financial risk: 

A. Interest rate 

The Group undertakes derivative financial instruments such as interest rate swaps, to 

hedge cash flow risk and fair value risk arising from fluctuations in interest rates. 

B. Foreign exchange 

To hedge cash flow fair value risk arising from fluctuations in exchange rates, the 

Group undertakes derivative financial instruments such as forward exchange 

contracts to hedge recognized assets and liabilities denominated in foreign 

currencies and highly probable forecast transactions. 

4) Information of financial risk 

-117-

A. Market risk 

The Group’s business involves some non-functional currency operations. The 

information on monetary assets and liabilities denominated in foreign currencies, whose 

values would be materially affected by the fluctuations of the foreign exchange rates is 

as follows: 

(Foreign currency: 

Functional currency) 

Financial Assets 

Monetary item 

Foreign 

Currency 

-118- 

2011 2010 

Exchange 

Rate 

Foreign 

Currency 

Exchange 

USD:TWD $ 167,433 30.275 $ 151,591 29.13 

Rate 

USD:RMB 6,163 6.3009 9,838 6.6227 

Long-term investments 

accounted for under the 

equity method 

Monetary item 

RMB:USD 51,663 0.15871 53,063 0.15100 

Financial liabilities 

Monetary item 

USD:TWD 229,307 30.275 314,769 29.13 

USD:RMB 63,856 6.3009 91,010 6.6227 

(a) Equity financial instruments: The investments in these financial instruments is 

influenced by market price. The Group evaluates the investment performance 

periodically. Thus, the market risk is low. 

(b) Short-term financial instruments: Maturities of these financial instruments are 

within one year. Therefore, the Group expects to have no significant market risk. 

(c) Derivative financial instruments: The forward contract was entered into for 

hedging the fluctuation of exchange rate. Gains or losses on this contract is likely 

to be offset from the hedged items. Therefore, the market risk is low. 

(d) Long-term liabilities of financial instruments: The Group borrows loans with 

floating interest rate. Thus, the Group expects to have no significant market risk. 

B. Credit risk 

(a) Equity financial instruments: The Group trades with reputable counterparties. 

Thus, there is no significant credit risk. 

(b) Short-term financial instruments: The Group has established control procedures 

over the credit management on counterparties, and the counterparties are 

reputable companies and financial institutions with high credit ratings. The Group 

believes its exposure to potential default risk is low. 

(c) Derivative financial instruments: The Group believes its exposure to potential 

default risk is low due to the counterparties being reputable institutions, and the 

Group diversifies the credit risks by entering into transactions with multiple 

counterparties.

C.Liquidity risk 

(d) Long-term liabilities of financial instruments: No credit risk is expected to arise 

from the debt instruments. 

(a) Equity financial instruments: 

The Group invests in available-for-sale financial assets, which are traded in 

active markets and can be readily converted into certain amount of cash 

approximate to their fair vaules. The liquidity risk exposure is low. 

The Group is exposed to a higher liquidity risk since its investments in financial 

assets carried at cost have no active market. However, the Group has no intention 

to hold these financial assets for trading and does not expect to sell those 

financial assets frequently. Therefore, the exposure to liquidity risk would be 

effectively reduced. 


within one year. And the Group has set operating plans to deal with future cash 

needs. Thus, liquidity risk is believed to be minimal. 

(c) Derivative financial instruments: The forward for trading was entered for hedging 

the foreign exchange risk. It results in both cash inflow and cash outflow, 

respectively, at maturity. Because the Group will receive and pay the cash on 

settlement dates and the future working capital is sufficient, the liquidity risk and 

cash flow risk is low. 

(d) Long-term liabilities of financial instruments: The Group has sufficient working 

capital to meet various funding needs and major capital expenditures. Thus, the 

Group expects to have no significant liquidity risk. 

D. Cash flow risk 

(a) Derivative financial instruments: These financial instruments are non-interest 

bearing financial instruments. Thus, there is no cash flow risk. 


within one year, there is no material cash flow risk. 

(c) Long-term liabilities of financial instruments: The Group borrows loans, with 

floating interest rate. The effective interest rate of loans would be changed due to 

changes in market interest rates, which would cause the fluctuations in future 

cash flows. The Group also has established a risk management program and 

carries out procedures to monitor cash flow risk arising from fluctuations in 

interest rates. Thus, the Group expects to have no significant cash flow risk. 

-119-

11.SUPPLEMENTARY DISCLOSURES 

A. Information of Significant Transactions: 

(1) Loans granted during the year ended December 31, 2011: 

Creditor Borrower 

MiTAC 

International 

Corp. 

MiTAC 

Digital Corp. 

General 

ledger 

account 

Other 

receivables 

Note 1: Intracompany accounts. 

Maximum 

Outstanding 

balance 

$ 639,651 

(Note 3) 

Ending 

balance 

Interest 

rate 

Nature of 

loan 

Amount of 

transaction 

with 

borrower 

-120- 

Reason of 

short-term 

financing 

Collateral 

Allowance 

for 

doubtful 

accounts Item Value 

Limit on loans granted 

to a singly party 

$ - 1.1% Note 1 $3,019,675 None $ - None $ - $2,969,004 

(Note 2) 

Ceiling on total 

loans granted 

$5,938,008 

Note 2: Ceiling on total loans granted by the Company to all parties is 20% of the Company’s net assets value on its most recent financial statements, which are audited or 

reviewed by independent accountants; limit on loans granted by the Company to a single party, which has business association with the Company, is the lower of total 

transaction amount of the recent one year between the two parties or 10% of the Company’s net assets value on its most recent financial statements, which are audited or 

reviewed by independent auditor (total transaction amount as referred to herein means the higher of purchase amount or sales amount of the recent one year between the 

two parties). 

Note 3: It was approved by the Board of Directors under authorization. 

(2) Endorsements and guarantees provided during the year ended December 31, 2011: 

Endorser / guarantor 

MiTAC 

International Corp. 

Party being 

endorsed / 

guaranteed 

Tsu Fung 


″ Mio Technology 

UK Ltd. 

″ MiTAC Australia 

Pty Ltd. 

″ Tyan Computer 

Corp. (USA) 

″ MiTAC Digital 

Corp. 

″ Mitac 

Information 

Systems Corp. 

Relationship with 

the endorser / 

guarantor 

Limit on 

endorsements / 

guarantees 

provided for a 

single party 

Maximum 

outstanding 


guarantees amount 

during 2011 

Outstanding 



at Dec. 31, 2011 

Amount of 


guarantees with 

collateral placed 

Ratio of 

accumulated 



to net asset value 

of the Company 

(Note 2) 

Ceiling on total 

amount of 


guarantees 

provided 

Subsidiary $14,845,020 $160,000 $160,000 $ - 0.54% $14,845,020 

″ ″ 193,080 190,227 - 0.64% ″ 

″ ″ 16,090 

(Note) 

14,487 - 0.05% ″ 

″ ″ 61,564 58,010 - 0.20% ″ 

″ ″ 48,525 43,463 - 0.15% ″ 

″ ″ 240,985 239,025 - 0.81% ″ 

Note: Equal to 50% of the net worth based on the financial statements audited or reviewed by independent accountants.

(3) Marketable securities held as of December 31, 2011: 

Securities held by Type 

MiTAC 

International 

Corp. 

Name of marketable 

securities 

Relationship with the 

issuer 

Stocks Getac Technology Corp. Investee company 


equity method 

General ledger 

account 

Long-term 

investment 

accounted for 

under the equity 

method 

-121- 


Number of shares Book value Percentage Market value (Note 1) 

190,396,939 $3,992,473 33.25% $2,694,117 

″ ″ Tsu Fung Investment 

Corp. 

″ ″ 124,476,913 1,139,232 100.00% 1,415,316 

″ ″ 3 Prode Technologies 

Co., Ltd. 

″ ″ 1,080,000 9,196 23.13% 9,196 

″ ″ DLC Technology Corp. ″ ″ 6,600,000 52,835 100.00% 52,835 

″ ″ Lian Jie Investment Co., 

Ltd. 

″ ″ 11,305,650 142,855 49.98% 142,855 

″ ″ Silver Star 

Developments Ltd. and 

its subsidiaries 

″ ″ 215,495,404 14,153,519 100.00% 14,515,965 

″ ″ Loyalty Founder 

Enterprise Co.,Ltd. 

″ ″ 39,180,000 213,559 25.24% 278,178 

″ ″ Foreground Technology 

Ltd. and its subsidiaries 

″ ″ 9,045,492 511,944 100.00% 522,705 

″ ″ Shen-Tong Construction 

& Development Co., 

Ltd. 

″ ″ 8,559,400 83,545 47.55% 83,545 

″ ″ Mio Technology Corp. ″ ″ 4,000,000 28,583 88.89% 29,734 

″ ″ MiTAC Inc. The Company’s 

chairman is MiTAC 

Inc.’s director. 

″ ″ MiTAC information 

Technology Corp. 

The Company’s 

chairman is MiTAC 

information System 

Corp.’s director. 

Financial assets 

carried at 

cost-non current 

17,369,516 586,164 8.69% 586,164 

″ 13,041,116 58,887 8.69% 58,887 

″ ″ Overseas Investment & 

Development Corp. 

None ″ 1,000,000 10,000 1.11% 10,000 

″ ″ Asia-Pacific Technology 

& Intellectual Property 

None ″ 140,000 - 0.85% - 

″ ″ 

Service Inc. 

Harbinger Venture Common board 

″ 18,966,825 146,979 14.05% 146,979 

″ ″ 

Management Co., Ltd. 

Harbinger VI 

chairman 

″ ″ 10,000,000 100,000 13.28% 100,000 

″ ″ Linpus Technology 

None Financial assets 

1,211,596 16,094 4.95% 16,094 

Corp. 

carried at cost-non 

current

Securities held by Type 

MiTAC 

International 

Corp. 


securities 


issuer 

Stocks UPC Technology Corp. Common board 

chairman 

″ ″ Lien Hwa Industrial 

Corp. 

″ ″ Gemtek Technology Co., 

Ltd. 

Board member of 

Gemtek 


account 

Available-for-sale 

financial 

assets-non 

current 

-122- 


Number of shares Book value Percentage Market value (Note 1) 

13,253,745 $ 205,433 1.25% $ 205,433 

″ ″ 14,011,961 245,910 1.65% 245,910 

″ 3,678,883 75,049 1.19% 75,049 

Note 1: The market value of listed securities was based on the closing price as at December 31, 2011, while, the market value of unlisted securities accounted for under the 

equity method was based on the net asset value per share of the investee company; the fair value of financial assets carried at cost was based on their carrying value. 

Note 2: 35,000,000 shares were pledged for medium-term loans. 

Note 3: The book value decreased by $353,086 as the Company accounted for shares held by Tsu Fung Investment Corp. and Silver Star Developments Ltd. and its 

subsidiaries in accordance with the Statement of Financial Accounting Standards for treasury stocks. 

Note 4: Such stocks are subject to certain transfer restrictions pursuant to Article 43-8 of the Securities and Exchange Law. 

Note 5: The Company’s subsidiary- Tsu Fung Investment Corp. transferred share ownership of Linpus Technology Corp. to the Company, Mio Technology Corp. and DLC 

Technology Corp., respectively. Such disposal gain has not been realized. 

(4) Marketable securities for which total buying or selling exceeded $100,000 or 20 percent of capital for the year ended December 31, 2011: None. 

(5) Real estate acquired amounting to over $100,000 or 20 percent of the Company’s capital stock for the year ended December 31, 2011: None. 

(6) Real estate disposed amounting to over $100,000 or 20 percent of the Company’s capital stock for the year ended December 31, 2011: None. 

(7) Purchases or sales transactions with related parties exceeding $100,000 or 20 percent of capital for the year ended December 31, 2011: 

The company 

buying /selling 

products 

MiTAC 

International 

Corp. 

Name of related 

parties 

MiTAC 

Logistics Corp. 

″ MiTAC Digital 

Corp. 

″ MiTAC 

Information 

Systems Corp. 


Benelux N.V. 

Transactions Reason and situation of having different 

transaction terms between related parties 

Accounts and notes receivable 

(payable) 


the counterparty 

Purchases / 

Sales Amount 

Percentage of 

purchase / 

sales Credit Term Unit price Credit Term Balance 

Percentage of 

account Footnote 

Indirect investee 

company 

accounted for 


method. 

Sales $3,657,971 10.88% Note 1 Note 2 Note 1 $1,073,648 9.84% 

″ Sales 1,969,183 5.86% Note 1 ″ Note 1 1,782,617 16.33% 

″ Sales 6,479,209 19.27% Note 1 ″ Note 1 3,706,517 33.96% 

″ Sales 264,629 0.79% Note 1 ″ Note 1 166,915 1.53%

The company 

buying /selling 

products 

Name of related 

parties 


UK Ltd. 

MiTAC 

International 

Corp. 

MiTAC 

Australia Pty 

Ltd. 

Transactions Reason and situation of having different 

transaction terms between related parties 

Accounts and notes receivable 

(payable) 

Percentage of 


the counterparty 

Purchases / 

Sales Amount 

purchase / 


Percentage of 

account Footnote 

″ Sales 1,498,845 4.46% Note 1 ″ Note 1 830,740 7.61% 

Indirect investee Sales $ 602,421 1.79% Note 1 Note 2 Note 1 $ 324,063 2.97% 

company 

accounted for 


method. 

″ Purchases 3,901,149 12.92% Note 3 ″ Note 3 ( 1,988,866 ) 25.86% 

″ MiTAC 

Computer 

(Kunshan) Co., 

″ 

Ltd. 

MiTAC 

Computer 

″ Purchases 10,532,923 34.88% Note 3 ″ Note 3 ( 3,302,803 ) 42.95% 

″ 

(Shunde) Corp. 

Pacific Metal 

Developments 

″ Purchases 1,010,145 3.35% Note 3 ″ Note 3 ( 147,455 ) 1.92% 

″ 

Ltd. 

Tyan Computer 

Corp.(USA) 

″ Sales 1,731,487 5.15% Note 1 ″ Note 1 120,652 1.11% 

″ ″ ″ Purchases 670,184 2.22% Note 3 ″ Note 3 - - 

″ Synnex 

Common board Purchases 482,572 1.60% Note 3 ″ Note 3 ( 113,015 ) 1.47% 

Electronics 

Hong Kong Ltd. 

chairman 

″ Mio Technology Investee company Sales 366,128 1.09% Note 1 ″ Note 1 42,003 0.38% 

Corp. 

accounted for 


method 

Note 1:The collection period is 150 days and 90 days after offsetting certain receivables and payables according to collection terms to overseas and domestic related parties, 

respectively. The collection period for regular customers is approximately 90 days after shipping date. 

Note 2:The selling price to related parties is based on market value. 

Note 3:The payment period is 150 days and 90 days after offsetting certain receivables and payables according to payment terms to overseas and domestic related parties, 

respectively. The payment period for regular suppliers is approximately 90 days after purchase date. 

-123-

(8) Receivables from related parties exceeding $100,000 or 20 percent of capital as of December 31, 2011: 

Company Name 

MiTAC 

International 

Corp. 

Name of the 

counterparty 


counterparty 

MiTAC Logistics Corp. Indirect investee 

company accounted 

for under the equity 

method. 

Note 

receivable 

Balance of receivable from related party Overdue receivables 

Accounts 

receivable 

-124- 

Other 

receivables 

Total 

Turnover rate 

(times) 

Amount Collection 

method 

Subsequent 

received amount 

- $1,073,648 $ - $1,073,648 3.00 $ - N/A $ 583,089 

″ MiTAC Digital Corp. ″ - 1,782,617 3,877 1,786,494 1.50 120,555 on demand 537,135 

″ Mio Technology UK 

Ltd. 


Benelux N.V. 

″ MiTAC Australia Pty 

Ltd. 

″ Tyan Computer 

Corp.(USA) 

″ MiTAC Information 

Systems Corp. 

(9) Information on derivative transactions: 

″ - 830,740 1,759 832,499 1.83 62,940 ″ 141,026 

″ - 166,915 2,735 169,650 1.71 25,598 ″ 109,295 

″ - 324,063 1,529 325,592 1.61 - N/A 312,648 

″ - 120,652 3 120,655 12.35 - N/A 120,652 

″ - 3,706,517 3,264 3,709,781 2.11 884,310 on demand 588,514 

(a) Purpose: Derivative financial instruments are undertaken for non-trading purposes and to hedge the fluctuation of exchange rate of foreign currency denominated assets 

and liabilities. 

(b)To hedge existing assets denominated in foreign currencies: 

Financial Instrument 

Item 


Notional Amount 

(in thousands) 

Fair Market Value 


Sales forward foreign exchange Advance booking USD to buy TWD. USD 10,000 NTD 491 

″ ″ USD 1,000 (NTD 45) 

″ Advance booking EUR to buy USD. EUR 21,560 NTD 32,090 

″ Advance booking AUD to buy USD AUD 7,356 NTD 3,304 

″ Advance booking AUD to buy USD. AUD 2,751 (NTD 1,789) 

″ Advance booking GBP to buy USD. GBP 3,900 NTD 3,230 

″ Advance booking NZD to sell USD. NZD 500 NTD 28 

″ Advance booking NZD to sell USD. NZD 500 (NTD 375) 

Purchase of currency SWAP USD 3,000 NTD 255 

″ USD 5,000 (NTD 400)

Financial Instrument 

Item 

-125- 


Notional Amount 


Fair Market Value 


Sales forward foreign exchange Advance booking EUR to buy USD. EUR 13,050 NTD 17,553 

″ Advance booking EUR to buy USD. EUR 7,800 (NTD 1,470) 

″ Advance booking EUR to buy AUD. EUR 500 NTD 49 

″ Advance booking AUD to buy USD. AUD 16,100 (NTD 14,221) 

″ 

″ Advance booking GBP to buy USD. GBP 1,750 NTD 2,784 

″ 

Purchase of forward foreign exchange Advance booking NZD to sell USD. NZD 1,000 NTD 136 

″ Advance booking JPY to sell USD. JPY 50,000 NTD 567

B. Information of Subsidiaries: 

(1) Related information of Subsidiaries as of December 31, 2011: 

Investor 

MiTAC 

International 

Corp. 

MiTAC 

International 

Corp. 

MiTAC 

International 

Corp. 

MiTAC 

International 

Corp. 

MiTAC 

International 

Corp. 

MiTAC 

International 

Corp. 

MiTAC 

International 

Corp. 

Investee 

Company 

Getac 

Technology 

Corp. 

Tsu Fung 

Investment 

Corp. and its 

subsidiaries 

3Probe 

Technologies 

Corp. 

DLC 

Technology 

Corp. 

Lian Jie 

Investment Co., 

Ltd. 

Silver Star 

Developments 

Ltd. and its 

subsidiaries 

Loyalty 

Founder 

Enterprise 

Co.,Ltd. 

Location 

(Country) 

Main business 

operations 

Taiwan Manufacturing 

and sale of 

notebook 

computer, 

military and 

industrial 

computer 

systems, etc. 

Currency 

Ending 

balance 

Original amount Shares held by the Company 

Currency 

Beginning 

balance 

-126- 

Number of 

shares 

Percentage 

owned 

Currency 

Book value Currency 

Income 

(loss) of the 

investee 

Company 

Currency 

Gain/Loss 

recognized by 

the Company 

NTD $ 1,391,549 NTD $ 1,391,549 190,396,939 33.25% NTD $ 3,992,473 NTD $ 461,705 NTD $ 154,057 Investee 

accounted 

for under 

equity 

method 

Taiwan Investment NTD 625,000 NTD 625,000 124,476,913 100.00% NTD 1,139,232 NTD 44,761 NTD 40,149 Subsidiary 

Taiwan Information 

process service, 

sales of 

software and 

international 

trading. 

Taiwan Manufacturing 

of data storage 

media , 

computer and 

communication 

equipment 

NTD 16,800 NTD 16,800 1,080,000 23.13% NTD 9,196 NTD (1,070) NTD (247) Investee 

accounted 

for under 

equity 

method 

NTD 65,755 NTD 65,755 6,600,000 100.00% NTD 52,835 NTD 1,678 NTD 1,678 Subsidiary 

Taiwan Investment NTD 113,057 NTD 113,057 11,305,650 49.98% NTD 142,855 NTD 76,348 NTD 38,159 Investee 

accounted 

for under 

equity 

method 

British 

Virgin 

Islands 

Investment USD 215,495 USD 215,495 215,495,404 100.00% NTD 14,153,519 NTD 425,375 NTD 450,866 Subsidiary 

Taiwan Sales and 

manufacturing 

of metal and 

plastic 

electronics 

enclosure 

NTD 150,000 NTD 150,000 39,180,000 25.24% NTD 213,559 NTD ( 12,345) 

Note 

NTD 36,253 Investee 

accounted 

for under 

equity 

method


MiTAC 

International 

Corp. 

MiTAC 

International 

Corp. 

MiTAC 

International 

Corp. 

Silver Star 

Developments 

Ltd. (SSDL) 

Silver Star 

Developments 

Ltd. (SSDL) 

Silver Star 

Developments 

Ltd. (SSDL) 

Silver Star 

Developments 

Ltd. (SSDL) 

Silver Star 

Developments 

Ltd. (SSDL) 

Investee 

Company 

Foreground 


and its 

subsidiaries 

Shen-Tong 

Construction & 

Development 

Co., Ltd. 

Mio Technology 

Corp. 

Harbinger II 

(BVI) Venture 

Capital Corp. 

Mainpower 

International 

Ltd. 

Location 

(Country) 

British 

Virgin 

Islands 

Main business 

operations 

Currency 

Ending 

balance 

Investment USD $ 9,045 

Taiwan Building and 

factory 

construction, 

leasing and 

sales 

British 

Virgin 

Islands 

″ Information 

process service, 

sales of 

software. 


Currency 

Beginning 

balance 

-127- 

Number of 

shares 

Percentage 

owned 

Currency 


Income 


investee 

Company 

Currency 

Gain/Loss 

recognized by 


USD $ 9,045 9,045,492 100.00% NTD $ 511,944 NTD $ 8,729 NTD $ 36,180 Subsidiary 

NTD 85,594 NTD 85,594 8,559,400 47.55% NTD 83,545 NTD (241) NTD (111) Investee 

accounted 

for under 

equity 

method 

NTD 40,000 NTD 40,000 4,000,000 88.89% NTD 28,583 NTD (13,764) NTD (13,543) Subsidiary 

Investment USD 1,458 USD 1,458 1,457,850 49.96% NTD 49,438 NTD 1,790 NTD - Investee 

accounted 

for under 

equity 

method by 

SSDL 

″ ″ USD 5,500 USD 5,500 5,500,001 19.12% NTD 167,984 NTD (23,087) NTD - Investee 

accounted 

for under 

equity 

method by 

SSDL 

Synnex Corp. USA Information 

process 

services, sales 

of computer 

peripheral, 

system and 

network 

products 

Suzhou MiTAC 

Precision 

Technology Co., 

Ltd. 

Harbinger Ruyi 

Venture Ltd. 

China Manufacturing 

of mainboard, 

desktop 

computers, 

interfere cards, 

etc. 

British 

Virgin 

Islands 

USD 18,064 USD 18,123 6,157,796 16.72% NTD 5,865,094 NTD 4,418,345 NTD - Investee 

accounted 

for under 

equity 

method by 

SSDL 

USD 8,000 USD 8,000 - 21.62% NTD 248,236 NTD (29,456) NTD - Investee 

accounted 

for under 

equity 

method by 

SSDL 

Investment USD 1,000 USD 1,000 1,000,000 28.57% NTD 29,640 NTD 22,767 NTD - Investee 

accounted 

for under 

equity 

method by 

SSDL 

Note


Tsu Fung 

Investment 

Corp. 

Investee 

Company 


Corp. 

Location 

(Country) 

Main business 

operations 

Taiwan Information 

process service 

and sales of 

software. 

Currency 

Ending 

balance 


Currency 

Beginning 

balance 

-128- 

Number of 

shares 

Percentage 

owned 

Currency 


Income 


investee 

Company 

Currency 

Gain/Loss 

recognized by 


NTD $ 5,000 NTD $ 5,000 500,000 11.11% NTD $ 4,244 NTD ($ 13,764) NTD - Subsidiary 

of Tsu Fung 

Investment 

Corp. 

Note

(2) Loans granted during the year ended December 31, 2011: 

Creditor Borrower 

Silver Star MiTAC 

Developments Cooperatie 

Ltd. 

U.A. 

″ MiTAC 

Internation 

Corp. 

″ Mio 

Technology 

Korea 

″ MiTAC 

(U.K.) Ltd. 

″ Sky Universe 

Enterprise 

Ltd. 

″ Mitac Japan 

Corp. 

″ Top sheen 

Enterprise 

Ltd. 

″ Software 

Insights ltd. 

″ MiTAC 

Digital Corp. 

Tyan Computer 

Corp.(USA) 

Mio 

Technology 

(USA) Ltd. 

Pacific China 

Corp. 

MiTAC 

Digital Corp. 

MiTAC 

Digital Corp. 

Bright Crown 

Management 

Ltd. 


account 

Affiliated loans 

receivable 

Maximum 

outstanding 

balance 

Ending 

balance 

Interest 

rate 

Nature 

of loan 

-129- 

Amount of 

transaction 

with 

borrower 

Reason of 

short-term 

financing 

Collateral 

Allowance 

for 

doubtful 

accounts Item Value 

Limit on loans 

granted to a 

singly party 

(Note 2) 

$ 857 $ 851 - Note 1 $ - Operations $ - None $ - $5,515,961 

(Note 2) 

″ 1,410,345 1,407,788 - ″ - ″ - ″ - ″ ″ 

″ 27,432 27,248 - ″ - ″ - ″ - ″ ″ 

″ 19,196 18,692 - ″ - ″ - ″ - ″ ″ 

″ 91,440 90,825 - ″ - ″ - ″ - ″ ″ 

″ 17,490 11,718 - ″ - ″ - ″ - ″ ″ 

″ 762,000 756,875 - ″ - ″ - ″ - ″ ″ 

″ 30,480 30,275 - ″ - ″ - ″ - ″ ″ 

″ 274,320 272,475 - ″ - ″ - ″ - ″ ″ 

Accounts 

receivable from 

related parties 

Other accounts 

receivable from 


Affiliated loans 

receivable 

Ceiling on 

total loans 

granted 

(Note 2) 

$5,515,961 

(Note 2) 

198,120 196,788 0.56% ″ - ″ - ″ - 197,937 197,937 

45,720 45,413 0.56% ″ - ″ - ″ - 71,491 

18,288 18,165 - ″ - ″ - ″ - 1,510,619 

Note 1: Limit on loans granted by Silver Star Developments Ltd. to a single party and ceiling on total loans granted by Silver Star Developments Ltd. to all parties is both 40% of the 

net assets value per its most recent financial statements audited by independent accountants. 

Note 2: Limit on loans granted by Pacific China Corp. to a single party and ceiling on total loans granted by Pacific China Corp. to all parties is both 40% of the net assets value per 

its most recent financial statements audited by independent accountants. 

Note 3: Limit on loans granted by Tyan Computer Corp.(USA) to a single party and ceiling on total loans granted by Tyan Computer Corp.(USA) to all parties is both 40% of the net 

assets value per its most recent financial statements audited by independent accountants. 

71,491 

1,510,619 

Foot 

Note

Note 4: Limit on loans granted by Mio Technology USA Ltd. to a single party and ceiling on total loans granted by Mio Technology USA Ltd. to all parties is both 200% of the net 

assets value per its most recent financial statements audited by independent accountants. 

(3) Endorsements and guarantees provided during the year ended December 31, 2011:None 

(4) Marketable securities as held of December 31, 2011: 

Security held by Type 

Tsu Fung 



securities 

Stocks Synnex Technology 


Relationship with the issuer General ledger account 

None Available-for-sale 

financial assets -current 

-130- 

Number of 

shares 


Book value Percentage 

Market value 

(Note 1) 

1,817,119 $ 132,831 0.12% $ 132,831 

″ ″ UPC Technology Corp. ″ ″ 6,530,945 101,230 0.62% 101,230 

″ ″ MiTAC International 

Corp. 

Tsu Fung’s investor company 

accounted for under the equity 

method 

″ 20,366,568 188,187 1.33% 188,187 

″ ″ Getac Technology Corp. None ″ 14,329,741 202,766 2.50% 202,766 

″ ″ Loyalty Founder 

Enterprise Co.,Ltd. 

″ Fund stock Prudential Financial 

money market 

″ Stocks National Aerospace 

Fasteners Corp. 

″ ″ Linpus Technology 

Corp. 

″ ″ Harbinger Venture 

Management Co., Ltd. 

″ ″ 3Probe Technologies 

Corp. 

″ ″ Cirocomm Technology 

Corp. 

″ ″ Lien Yung Investment 

Corp. 

″ ″ 65,300 464 0.04% 464 

″ ″ 373,442 5700 - 5700 

″ ″ 1,000 27 - 27 

″ Financial assets carried at 


897,499 690 3.66% 690 

″ ″ 621,307 479 19.99% 479 

″ ″ 6,000 30 0.13% 30 

″ ″ 2,352,086 24,560 4.73% 24,560 

″ ″ 9,015,254 87,969 19.99% 87,969 

″ ″ G. Marso Electronics, 

Inc. 

″ ″ 1,266,816 14,138 3.73% 14,138 

″ ″ UPC Technology Corp. ″ ″ 1,639,119 20,464 0.15% 20,464 

″ ″ Mitac Inc. ″ ″ 8,754,860 276,828 4.38% 276,828 

″ ″ MiTAC Information 

Technology Corp. 

″ ″ Tung Da Investment Co., 

Ltd. 

″ ″ Mio Technology Corp. Tsu Fung’s investee company 


method. 

″ ″ 7,918,551 74,800 5.28% 74,800 

″ ″ 4,630,492 72,884 19.99% 72,884 

Long-term investment 


equity method. 

500,000 4,244 11.11% 4,244

Security held by Type 


Corp. 

DLC Technology 

Corp. 

Silver Star 

Developments 

Ltd. And its 

subsitdiaries 


securities 

″ Linpus Technology 

Corp. 

Stocks Linpus Technology 

Corp. 

″ Harbinger II (BVI) 

Venture Capital Corp. 

Relationship with the issuer General ledger account 

None Financial assets carried at 


″ Financial assets carried at 


SSDL’s investee company 


method 

-131- 

Long-term investment 


equity method. 

Number of 

shares 


Book value Percentage 

Market value 

(Note 1) 

1,211,596 16,094 4.95% 16,094 

1,211,596 $ 16,094 4.95% $ 16,094 

1,457,850 49,438 49.96% 49,438 

″ ″ Synnex Corporation ″ ″ 6,157,796 5,865,094 16.72% 5,678,575 

″ ″ Suzhou MITAC 

Precision Technology 

Co., Ltd. 

″ ″ Mainpower International 

Ltd. 

″ ″ Harbinger Ruyi Venture 

Ltd. 

″ ″ - 248,236 21.62% 248,236 

″ ″ 5,500,001 167,984 19.12% 167,984 

″ ″ 1,000,000 29,640 28.57% 29,640 

″ ″ Budworth Investments 

None Financial assets carried at 3,483,875 46,410 14.83% 46,410 

Ltd. 


″ ″ Gapura Inc. ″ ″ 295,831 - 5.55% - 

″ ″ Global Strategic 

Investment Inc. 

″ ″ 1,000,000 21,273 1.26% 21,273 

″ ″ Panasas Inc. ″ ″ 1,391,354 - 0.98% - 

″ ″ Cirocomm Technology 

Corp. 

″ ″ 2,352,086 22,948 4.73% 22,948 

″ ″ Rasilent Systems, Inc. ″ ″ 1,210,763 - 4.16% - 

″ ″ Synnex Technology 


″ ″ MiTAC International 

Corp. 

SSDL’s investor company 


method 

″ Available-for-sale 

financial assets-non 

current 

2,955,921 216,078 0.19% 216,078 

″ 2,763,889 25,538 0.18% 25,538 

Note 1: The market value of marketable securities held was based on the closing price as of December 31, 2011, if listed, while the market value of marketable securities held was 

based on the net asset value of the investee company, if not listed. 

Note 2: Such stocks are subject to certain transfer restrictions pursuant to Article 43-8 of the Securities and Exchange Law. 

Note 3: The Company’s subsidiary- Tsu Fung Investment Corp. transferred share ownership of Linpus Technology Corp. to the Company, Mio Technology Corp. and DLC 

Technology Corp., respectively. Such disposal gain has not been realized. 

Note 4: In the first quarter, 2011, MiTAC International Corp disposed of the shares of Tung Da Investment Co., Ltd. and Tsu Fung Investment Corp. in the amount of $72,665. 

Gain on disposal of those shares amounting to $19,811 was deferred.

(5) Marketable securities for which total buying or selling exceeded $100,000 or 20 percent of capital for the year ended December 31, 2011: None. 

(6) Real estate acquired exceeding $100,000 or 20 percent of the Company’s capital for the year ended December 31, 2011: None. 

(7) Real estate disposed exceeding $100,000 or 20 percent of the Company’s capital for the year ended December 31, 2011: None. 

(8) Purchases or sales transactions with related parties exceeding $100,000 or 20 percent of capital for the year ended December 31, 2011: 

The company 

buying/selling 

products 

Silver Star 

Developments 

Ltd. (SSDL) 

and its 

subsidiaries 

Mio 

Technology 

Corp. 

Name of 


MiTAC 

International 

Corp. 


counterparty Purchase / Sales Amount 

SSDL’s parent 

company 

″ MTW’s Investor 



method 

Transactions 

-132- 

Reason and situation of having 

different transaction term 

between related parties and 

others Accounts and notes receivable (payable) 

Percentage of 

purchase / 


Sales $14,539,535 30.31% Note 1 Note 3 Note 1 $5,433,024 70.82% 

Percentage of 

account Note 

″ ″ ″ Purchases 14,692,986 32.58% Note 2 ″ Note 2 (7,937,372) 64.30% 

″ Getac 

Technology 

Corp. and its 

subsidiaries 

Associated company Sales 326,556 0.68% Note 1 ″ Note 1 46 - 

″ ″ ″ Purchase 1,526,005 3.38% Note 2 ″ Note 2 (111,026) 0.90% 

Tyan computer ″ Tyan’s Investor 

Sales 670,184 34.44% Note 4 ″ Note 4 - - 

corp. (USA) 



method 

″ ″ ″ Purchases 1,731,487 95.14% Note 5 ″ Note 5 (120,652) 87.20% 

Purchases 366,128 2.87% Note 3 ″ None 3 (42,003) 1.97% 

Note 1:The collection period is 150 days and 90 days after offsetting certain receivables and payables according to payment terms to overseas and domestic related parties, 

respectively. The collection period for regular customers is approximately 90 days after shipping date. 

Note 2:The payment period is 150 days and 90 days after offsetting certain receivables and payables according to payment terms to overseas and domestic related parties, 

respectively. The payment period to regular supplies is approximately 90 days after purchase date. 

Note 3:The selling price to overseas related parties is based on market value. The selling price to domestic related parties is based on common domestic price. 

Note 4:The collection period is 150 days after offsetting certain receivables and payables according to payment terms to overseas related parties. The collection period for regular 

customers is approximately 90 days after shipping date. 

Note 5:The payment period is 150 days after offsetting certain receivables and payables according to payment terms to overseas related parties. The payment period to regular 

supplies is approximately 90 days after purchase date.

(9) Receivables from related parties exceeding $100,000 or 20 percent of capital as of December 31, 2011: 

Company Name 

Silver Star 

Developments Ltd. and 


Name of the 

counterparty 

MiTAC International 

Corp. 

(10) Information on derivative transactions: 


counterparty 

SSDL’s parent 

company 

Balance of receivables from related party Overdue receivable 

Notes / Accounts 

receivable 

Other receivables Total 

-133- 

Turnover rate 

(times) 

Amount Collection method 

Subsequent 

amount received 

$5,433,024 $1,567,006 $7,000,030 3.86 $ - N/A $2,095,951 


Company Financial Instrument Item Notional Amount (in thousands) Fair Market Value (in thousands) 

MiTAC Computer 



(Kunshan) Co., Ltd 

Buy of forward 


Advance booking USD to sell RMB USD 18,392 

CNY 1,724 

″ ″ Advance booking HKD to sell RMB HKD 183,400 ( CNY 1,716 ) 

″ Structured Notes USD option CNY 145 CNY 1,039 

Buy of forward foreign 

exchange 

MiTAC Digital Corp Sell of forward foreign 

exchange 

Advance booking USD to sell RMB USD 58,727 

Advance booking CAD to buy USD CAD 1,905 


( CNY 10,836 ) 

USD 15 

Company Financial Instrument Item Notional Amount (in thousands) Fair Market Value (in thousands) 




(Kunshan) Co., Ltd. 

Sales of forward 


Advance booking USD to buy RMB USD 12,000 CNY 604 

″ Advance booking USD to buy RMB USD 54,587 ( CNY 6,578 )

C. Relevant Information Regarding Investments In Mainland China: 

a) Basic information, change in investment balance and profits/losses recognized from the direct investment: 

Name of 

investee in 

Mainland China 

MiTAC 

Computer 


MiTAC 

Computer 


Ltd. 

MiTAC Service 

(Shanghai) Co., 

Ltd. 

MiTAC 

Technology 


Ltd. 

MiTAC 

Research 

(ShangHai) 

Ltd. 

Main activities of 

investee 

Manufacturing of 

computer cases and 

monitors, etc. 

Sales and 

manufacturing of 

computer 

accessories, 

hardware, software 

and related 

services. 

Manufacturing, 

assembling 

computers and 

provide test, 

maintenance and 

service for related 

product. 

Sales and 


computer 

accessories, 

hardware, software 

and related service. 

Design and 


computers and 

related accessories 

Capital 

Method of 

investment 

$ 2,963,820 Invest in 

Mainland 

China 

through 

investing 

company in 

third area 

Beginning balance 

of remittance in 

2010 

Amount of remittance 

Remittance 

out 

out in 2011 

Remittance 

in 

-134- 

Ending balance of 

remittance from 

Taiwan on 

December 31, 

2011 



(Direct/indirect) 

Profit/loss 

recognized in 

2011 (Note 1) 


book value on 

December 31, 

2011 

Ending balance 

of profit 

remittance into 

Taiwan 

$ 2,113,195 $ - $ - $ 2,113,195 100.00% ( $ 62,915 ) $ 3,297,155 $ - 

1,462,220 ″ 868,893 - - 868,893 100.00% 41,762 1,858,355 - 

39,771 ″ 30,275 - - 30,275 100.00% ( 2,588 ) 45,887 - 

39,770 ″ 30,275 - - 30,275 100.00% 2,802 66,926 - 

206,802 ″ 157,430 - - 157,430 100% 14,332 315,196 - 

Note

Name of 

investee in 

Mainland China 

Suzhou MITAC 

Precision 

Technology 

Co., Ltd. 

Mio 

Technology 

(Chengdu) Ltd. 

Mio 

Technology 

Ltd. 

MiTAC 

Logistic 

Service 

(KunShan) Ltd. 

MiTAC 

Information 

Technology 

Ltd. 

MiTAC 

Innovation 

(Kunshan) Ltd 

Main activities of 

investee 

Design and 


computer chassis 

and its components, 

precision plastic 

injection mould, 

molding parts and 

molding equipment 

processing, and 


repair services. 

Manufacturing 

assembling 

computers and 

provide test, 


service for related 

products 

Sales of computer 

accessories and 

related service. 

Import and export 

in Mainland 

China ,international 

distribution and 

simple processing 

After-sales 

maintenance, 

testing, consulting 

services and related 

supporting 

technology services 

Research and 

development of 

computer, server, 

mobile phone, 

PDA, GNSS and 

GPS, and related 

technology transfer, 

technical advisory 

services and 

technical services 

Capital 

Method of 

investment 

1,148,177 Invest in 

Mainland 

China 

through 

investing 

company in 

third area 

Beginning balance 

of remittance in 

2010 

Amount of remittance 

Remittance 

out 

out in 2011 

Remittance 

in 

-135- 


remittance from 

Taiwan on 

December 31, 

2011 



(Direct/indirect) 

Profit/loss 

recognized in 

2011 (Note 1) 


book value on 

December 31, 

2011 

Ending balance 

of profit 

remittance into 

Taiwan 

408,713 - - 408,713 36.61% ( 10,782 ) 420,305 - 

50,212 ″ 45,413 - - 45,413 100.00% 732 54,352 - 

9,418 ″ 7,569 - - 7,569 100.00% 943 18,604 - 

32,773 ″ 30,275 - - 30,275 100.00% 706 32,964 - 

9,483 ″ 9,083 - - 9,083 100.00% 8,284 30,060 - 

31,571 ″ - 30,275 - 30,275 100.00% 1,400 33,049 

Note

Company name 

Ending balance of investment from Taiwan 

on December 31, 2010 

Approved investment amount by Ministry 

of Economic Affairs R.O.C. 

-136- 

The ceiling amount of the Company for investment 

in Mainland China 

MiTAC International Corp. $ 4,048,557 $ 4,227,878 N/A 

Note 1: Profit/Loss recognized based on the unaudited financial statements, except for MiTAC Computer (Shunde) Corp., MiTAC Computer (Kunshan) CO., Ltd., Mio Technology Ltd. 

and Suzhou MITAC Precision Technology Co., Ltd. 

Note 2: The Company has obtained the certificate of conforming to the business scope of headquarters (Certificate No.: Gong-Zhi-Zi Letter No. 09900112601), issued by the Industrial 

Development Bureau, MOEA, in accordance with “Regulations Governing Investment and Technology Cooperation in Mainland China”. Accordingly, the ceiling on 

investments in Mainland China imposed on the Company is not limited.

) Major transactions with the subsidiaries in third region and Mainland China: 

1) Purchases 

The Company’s purchases from Mainland China subsidiaries (Note): 

-137- 

2011 2010 

MiTAC Computer (Shunde) Corp. $ 18,305,784 $ 1,704,636 

MiTAC Computer (Kunshan) Co., Ltd. 8,414,526 9,177,570 

Others 76 975 

$ 26,720,386 $ 10,883,181 

Note: The above purchase amounts included raw materials and supplies and 

processing overhead charged to the Company since the Company 

commissioned its Mainland China subsidiaries to process products for it. In 

addition, some of the Company’s transactions with MiTAC Computer 

(Kunshan) Co., Ltd. were conducted indirectly through Mio International Ltd. 

located in the third territory which amounted to $8,082,315 and $8,938,037 for 

the years ended December 31, 2011 and 2010, respectively. 

The purchase prices from Mainland China subsidiaries are negotiated based on the 

material and manufacturing cost. The payment period is 150 days after offsetting 

certain receivables and payables according to the payment terms. 

The purchase prices that the Company purchases from regular suppliers are 

negotiated based on local market value. The payment period is approximately 90 days 

from shipping date. 

As of December 31, 2011, there is no unrealized intercompany gain due to upstream 

sales. 

2) Sales 

The Company sales to Mainland China subsidiaries: 

2011 2010 

MiTAC Computer (Shunde) Co., Ltd. $ 7,772,861 $ - 



$ 12,327,632 $ 5,080,086 

The sales prices to Mainland China subsidiaries are negotiated based on the product 

cost. The collection period is 150 days after offsetting certain receivables and 

payables according to the collection terms. 

The sales prices to regular customers are negotiated based on local market value. The 

collection period is approximately 90 days from shipping date. 

As of December 31, 2011 and 2010, there is no unrealized intercompany gain due to 

down stream sales.

3) Property transactions: 

In 2011 and 2010, the Company sold equipment and molds to third region and 

Mainland China subsidiaries amounting to $0 and $547, respectively. The total 

disposal gain was $0 and $9, respectively. 

In 2011 and 2010, the Company purchased equipments and molds from third region 

and Mainland China subsidiaries amounting to $2,025 and $258, respectively. 

4) Accounts payable: 

The Company to Mainland China subsidiaries: 

-138- 

December 31, 

2011 2010 

MiTAC Computer (Shunde) Corp. $ 3,302,803 $ 406,615 


5) Loans to third region and Mainland China subsidiaries: None. 

$ 5,291,669 $ 2,079,327 

6)The endorsements and guarantees provided by the Company to Mainland China 

subsidiaries: None. 

7) Other significant transactions which affect current income or financial conditions: 

i)In 2011 and 2010, the Company paid warranty expense to the subsidiaries in 

Mainland China amounting to $242,713 and $287,556, respectively.

D) The business relationships and significant transactions between the Company and its subsidiaries 


Company Name 

Name of the counterparty 

MiTAC International Corp. Silver Star Developments Ltd. 

(SSDL) and its subsidiaries 


counterparty (Note 1) 

General Ledger Account 

-139- 

Transaction 

Amount 

Transaction terms 

Percentage of consolidated total operating 

revenue or total assets (Note 2) 

(1) Sales $ 14,692,986 Note 3 31.73% 

" " (1) Purchases 14,539,535 Note 4 31.40% 

" " (1) Accounts receivable 7,937,372 Note 3 15.44% 

" " (1) Accounts payable 5,433,024 Note 4 10.57% 

" " (1) Warranty expense 462,626 Note 4 1.00% 

" " (1) Accrued expenses / Other payables 159,218 Note 4 0.31% 

" " Other payable(loans) 1,407,788 2.74% 

" " (1) Endorsements and guarantees 487,202 0.95% 

" Tsu Fung Investment Corp. and 


(1) Endorsements and guarantees 160,000 0.31% 

Mio Technology Corp. Sales 366,128 Note 3 0.79% 

" Foreground Technology Ltd. and 


(1) Sales 1,731,487 Note 3 3.74% 

" " (1) Purchase 670,184 Note 4 1.45% 

" " (1) Account receivable 120,652 Note 3 0.23% 

Silver Star Developments Ltd. 


MiTAC International Corp. (2) Sales 14,539,535 Note 3 31.40% 




" " (2) Other receivables 1,567,006 Note 3 3.05% 

" " (2) Other revenues 462,626 Note 3 1.00% 

Foreground Technology Ltd. and 


MiTAC International Corp. (2) Sales 670,184 Note 3 1.45% 

" " (2) Purchases 1,731,487 Note 4 3.74%


Company Name 

Name of the counterparty 

MiTAC International Corp. Silver Star Developments Ltd. 



counterparty (Note 1) 

General Ledger Account 

Transaction 

Mio Technology Corp. " (2) Purchases 249,271 Note 4 0.45% 

Note 1: The relationship with the transaction parties are as follows: 

(1) The Company to the consolidated subsidiary. 

(2) The consolidated subsidiary to the Company. 

(3) The consolidated subsidiary to the consolidated subsidiary. 

Note 2: Ratio of asset/liability is divided by consolidated total assets, and ratio of profit/loss accounts is divided by consolidated sales revenue. 

Note 3: The collection period is 150 days after offsetting certain receivables and payables according to collection terms to overseas related parties. The sales price to related parties is 

based on market value. 

-140- 

Amount 

Transaction terms 

Percentage of consolidated total operating 

revenue or total assets (Note 2) 

(1) Sales $ 16,551,462 Note 3 29.60% 




" " (1) Warranty expense 556,853 Note 4 1.00% 

" " (1) Accrued expenses / other payables 199,253 Note 4 0.39% 

" " (1) Endorsements and guarantees 411,605 0.80% 

" Tsu Fung Investment Corp. (1) Endorsements and guarantees 160,000 0.31% 

" Mio Technology Corp. (1) Sales 249,271 Note 3 0.45% 

" Foreground Technology Ltd. and 


(1) Sales 1,855,587 Note 3 3.32% 

" " (1) Purchases 611,157 Note 4 1.09% 

" " (1) Accounts receivable 159,679 Note 3 0.31% 



MiTAC International Corp. (2) Sales 6,215,047 Note 3 11.12% 




" " (2) Other receivables 199,253 Note 3 0.39% 

" " (2) Other revenues 556,853 Note 3 1.00% 

Foreground Technology Ltd. and 


MiTAC International Corp. (2) Sales 611,157 Note 3 1.09% 


" " (2) Accounts payable 159,679 Note 4 0.31%

Note 4: The payment period is 150 days after offsetting certain receivables and payables according to payment terms to overseas related parties. The purchase price from related parties 

is based on market value. 

Note 5: The standard of disclosure is the transaction amounts exceeding $100,000 or 20 percent of the Company’s capital. 

-141-

12. SEGMENT INFORMATION 

1) General information: 

Management has determined the operating segments based on the reports reviewed by the 

chief operating decision-maker that are used to make strategic decisions. 

The chief operating decision-maker considers the business from both a brand business and 

non-brand business (product business) perspective. The main business lines of the 

Company are development, design, manufacture and sale of computers, computer peripherals 

and communication-related products. 

2) Measures of segment information: 

The chief operating decision-maker assesses the performance of the operating segments based 

on the operating income (loss). This measurement basis excludes the effects of 

non-recurring expenditures from the operating segments such as non-operating expenses. 

3) Information about segment profit or loss, assets and liabilities: 

The segment information provided to the chief operating decision-maker for the reportable 

segments and reconciliations are as follows: 

-142- 

2011 

Item Brand Product Total 

Revenue $ 11,605,731 $ 34,698,419 $ 46,304,150 

Department (Loss) Gain ( 1,327,064) 338,090 ( 988,974) 

Department Asset - - - 

2010 

Item Brand Product Total 

Revenue $ 14,501,615 $ 41,413,340 $ 55,914,955 

Department (Loss) Gain ( 865,452) 453,604 ( 411,848) 

Department Asset - - - 

The measurement amount of segment assets is not provided to the chief operating 

decision-maker. Therefore, in accordance with EITF 99-151 of ROC Accounting Research 

and Development Foundation, the measurement amount of segment assets that should be 

disclosed is zero.

4) Reconciliation for segment profit (loss) 

A reconciliation of profit (loss) for reportable segments to profit (loss) before tax and 

discontinued operations is provided as follows: 


-143- 

2011 2010 

Profit (loss) for reportable segments ( $ 988,974 ) ( $ 411,848 ) 

Unallocated: 

Investment income accounted for under the equity 

method 971,158 1,103,874 

Gain (loss) on disposal of investments 19,855 323,930 

Other income (losses) 522,689 ( 1,527,674 ) 

Profit (loss) before tax and discontinued 

operations 

5) Information on product/service categories: 

$ 524,728 ( $ 511,718 ) 


2011 2010 

Sales $ 45,834,139 $ 55,776,913 

Other revenue 470,011 138,042 

6) Information by regions: 

$ 46,304,150 $ 55,914,955 

In 2011 and 2010, revenues and noncurrent assets from certain regions are listed below: 

2011 2010 

Revenue Assets-Noncurrent Revenue Assets-Noncurrent 

Taiwan $ 350,033 $ 3,378,922 $ 324,673 $ 3,637,701 

USA 20,864,916 260,564 24,845,386 280,699 

Europe 11,321,512 176,169 11,952,540 188,292 

Others 13,767,689 3,477,153 18,792,356 3,820,672 

Total $ 46,304,150 $ 7,292,808 $ 55,914,955 $ 7,927,364 

8) Major customer information: 

In 2011 and 2010, the major customer information of the Company are listed below: 


Customer Revenue Segment 

Customer A $ 8,810,197 All Department 


Customer Revenue Segment 

Customer A $ 12,549,498 All Department 

13.Disclosures relating to the adoption of IFRSs 

Pursuant to the regulations of the Financial Supervisory Commission, Executive Yuan, R.O.C., 

effective January 1, 2013, a public company whose stock is listed on the Taiwan Stock Exchange

Corporation or traded in the GreTai Securities Market should prepare financial statements in 

accordance with the International Financial Reporting Standards (“IFRSs”), International 

Accounting Standards (“IASs”), and relevant interpretations and interpretative bulletins that are 

ratified by the Financial Supervisory Commission. 

The Company discloses the following information in advance prior to the adoption of IFRSs 

under the requirements of Jin-Guan-Zheng-Shen-Zi Order No. 0990004943 of the Financial 

Supervisory Commission, dated February 2, 2010: 

A. Major contents and status of execution of the Company’s plan for IFRSs adoption: 

The Company has formed an IFRSs group headed by the Company’s general manager, which 

is responsible for setting up a plan relative to the Company’s transition to IFRSs. The major 

contents and status of execution of this plan are outlined below: 

Working Items for IFRSs Adoption Status of Execution 

1.Formation of an IFRSs group Done 

2.Setting up a plan relative to the Company’s transition to 

Done 

IFRSs 

3.Identification of the differences between current 

Done 

accounting policies and IFRSs 

4.Identification of consolidated entities under the IFRSs 

Done 

framework 

5.Evaluation of the impact of each exemption and option on Done 

the Company under IFRS 1 – First-time Adoption of 

International Financial Reporting Standards 

6.Evaluation of needed information system adjustments Done 

7.Evaluation of needed internal control adjustments Done 

8.Establish IFRSs accounting policies Done 

9.Selection of exemptions and options available under IFRS Done 

1 – First-time Adoption of International Financial 

Reporting Standards 

10. Preparation of statement of financial position on the 

In Progress 

date of transition to IFRSs 

11. Preparation of IFRSs comparative financial information In Progress 

for 2012 

12. Completion of relevant internal control (including 

In Progress 

financial reporting process and relevant information 

system) adjustments 

B.Material differences that may arise between current accounting policies used in the preparation 

of financial statements and IFRSs and “Rules Governing the Preparation of Financial 

Statements by Securities Issuers” that will be used in the preparation of financial statements in 

the future: 

The Company uses the IFRSs already ratified currently by the Financial Supervisory 

Commission and the “Rules Governing the Preparation of Financial Statements by Securities 

Issuers” that will be applied in 2013 as the basis for evaluation of material differences in 

accounting policies as mentioned above. However, the Company’s current evaluation results 

may be different from the actual differences that may arise when new issuances of or 

amendments to IFRSs are subsequently ratified by the Financial Supervisory Commission or 

relevant interpretations or amendments to the “Rules Governing the Preparation of Financial 

Statements by Securities Issuers” come in the future. 

Material differences identified by the Company that may arise between current accounting 

policies used in the preparation of financial statements and IFRSs and “Rules Governing the 

-144-

Preparation of Financial Statements by Securities Issuers” that will be used in the preparation 

of financial statements in the future are set forth below: 

1.Financial assets: equity instruments 

i)In accordance with the amended “Rules Governing the Preparation of Financial 

Statements by Securities Issuers”, dated July 7, 2011, unlisted stocks and emerging 

stocks held by the Company should be measured at cost and recognized in “Financial 

assets carried at cost”. However, in accordance with IAS 39, “Financial Instruments: 

Recognition and Measurement”, investments in equity instruments without an active 

market but with reliable fair value measurement (i.e. the variability of the estimation 

interval of reasonable fair values of such equity instruments is insignificant, or the 

probability for these estimates can be made reliably) should be measured at fair value. 

ii)For the convertible bonds issued by the Company before January 1, 2006, the equity 

component of the bonds was not required to be separated from the bonds payable as 

ROC SFAS 36, “Presentation and Disclosure of Financial Instruments” had not taken 

effect then. However, in accordance with IAS 32, “Financial Instruments: 

Presentation”, the equity component of the bonds should be separated from the bonds 

payable from the issuance of bonds. 

2.Business combinations 

i)Although no rules concerning the recognition of costs related to the acquisition in a 

business combination are specified in current accounting standards in R.O.C., in 

practice, certain acquisition-related costs are usually viewed as part of the acquisition 

cost of the acquiring corporation. However, in accordance with IFRS 3, “Business 

Combinations”, all acquisition-related costs must be expensed by the acquiring 

corporation when such costs are incurred and services are received. 

ii)The measurement date for the equity stock issued in a business combination is the 

announcement date of the combination agreement in accordance with current 

accounting standards in R.O.C. and is the acquisition date in accordance with IFRS 3, 

“Business Combinations”. 

iii)In accordance with current accounting standards in R.O.C., when the fair value of 

identifiable net assets acquired exceeds the acquisition cost, the difference should be 

assigned to non-current assets acquired proportionate to their respective fair values. 

If the book values of those non-current assets are reduced to zero, the remaining 

excess should be recorded as extraordinary gains. However, in accordance with IFRS 

3, “Business Combinations”, the difference should be directly recognized in profit or 

loss. 

3.Investments in associates/long-term equity investments accounted for under equity method 

i)Current accounting standards in R.O.C. do not prescribe that the investor and the associate 

should use uniform accounting policies in the preparation of financial statements. 

However, in accordance with IAS 28, “Investments in Associates”, an associate should 

use uniform accounting policies as the investor in the preparation of its financial 

statements for like transactions and other events in similar circumstances; otherwise, 

the associate’s financial statements should be adjusted to reflect the investor’s 

accounting policies for the purpose of applying the equity method. 

ii)In accordance with current accounting standards in R.O.C., if an investee company issues 

new shares and original shareholders do not purchase or acquire new shares 

proportionately, but the investor company does not lose its significant influence over 

the investee company, the investment percentage, and therefore the equity in net assets 

for the investment that an investor company has invested, will be changed. Such 

difference shall be used to adjust the ‘Additional paid-in capital’ and the ‘Long-term 

equity investments’ accounts. However, in accordance with IAS 28, “Investments in 

Associates”, increase in investment percentage is accounted for as an acquisition of 

investment; while, decrease in investment percentage is accounted for as a disposal of 

-145-

investment and any related disposal gain or loss is recognized. 

4.Investment property 

In accordance with current accounting standards in R.O.C., the Company’s property that is 

leased to others is presented in ‘Other assets’ account. In accordance with IAS 40, 

“Investment Property”, property that meets the definition of investment property is classified 

and accounted for as ‘Investment property’. 

5.Pensions 

i) The discount rate used to calculate pensions shall be determined with reference to the 

factors specified in R.O.C. SFAS 18, paragraph 23. However, IAS 19, “Employee 

Benefits”, requires an entity to determine the rate used to discount employee benefits 

with reference to market yields on high quality corporate bonds that match the currency 

at the end day of the reporting period and duration of its pension plan; when there is no 

deep market in corporate bonds, an entity is required to use market yields on 

government bonds (at the end day of the reporting period) instead. 

ii)In accordance with current accounting standards in R.O.C., actuarial pension gain or loss 

of the Company is recognized in net pension cost of current period using the ‘corridor’ 

method. However, IAS 19, “Employee Benefits”, requires that actuarial pension gain 

or loss should be recognized immediately in other comprehensive income. 

6.Employee benefits 

The current accounting standards in R.O.C. do not specify the rules on the cost recognition 

for accumulated unused compensated absences. The Company recognizes such costs as 

expenses upon actual payment. However, IAS 19, “Employee Benefits”, requires that the 

costs of accumulated unused compensated absences should be accrued as expenses at the 

end of the reporting period. 

7.Share-based payment 

The employee stock options granted from January 1, 2004 through December 31, 2007 are 

accounted for in accordance with EITF 92-070, EITF 92-071 and EITF 92-072, “Accounting 

for Employee Stock Options”, of the R.O.C. Accounting Research and Development 

Foundation, dated March 17, 2003. Compensation cost of such employee stock options is 

recognized as an expense using the intrinsic value method. Compensation cost of treasury 

stock transferred to employees and cash capital increase reserved for employee preemption 

incurred before December 31, 2007 was not recognized as an expense by the Company. 

Employees’ bonus distributed before January 1, 2007 was accounted for as earnings 

distribution, and was not recognized as an expense by the Company. However, according to 

IFRS 2, “Share-based Payment”, the cost of the share-based payment arrangements stated 

above should be expensed at the fair value of the equity instruments over the vesting period. 

8.Income taxes 

i)In accordance with current accounting standards in R.O.C., a deferred tax asset or liability 

should, according to the classification of its related asset or liability, be classified as 

current or noncurrent. However, a deferred tax asset or liability that is not related to an 

asset or liability for financial reporting, should be classified as current or noncurrent 

according to the expected time period to realize or settle a deferred tax asset or liability. 

However, under IAS 1, “Presentation of Financial Statements”, an entity should not 

classify a deferred tax asset or liability as current. 

ii)In accordance with current accounting standards in R.O.C., when evidence shows that part 

or whole of the deferred tax asset with 50% probability or above will not be realized, an 

entity should reduce the amount of deferred tax asset by adjusting the valuation 

allowance account. In accordance with IAS 12, “Income Taxes”, a deferred tax asset 

should be recognized if, and only if, it is considered highly probable that it will be 

realized. 

iii)Regarding tax rates that shall apply to the deferred tax assets or liabilities associated with 

unrealized gains or losses arising from transactions between parent company and 

-146-

subsidiaries by buyer tax rate or seller tax rate, the current accounting standards in 

R.O.C. do not specify the rules for this issue; while, the Company adopts seller tax rate 

for computation. However, under IAS 12, “Income Taxes”, temporary differences in 

the consolidated financial statements are determined by comparing the carrying amounts 

of assets and liabilities in those statements and applicable taxation basis. The 

Company’s taxation basis is determined by reference to the Group entities’ income tax 

returns. Accordingly, buyer tax rate shall apply to the deferred tax assets or liabilities 

in the consolidated financial statements. 

Some of the above differences may not have a material effect on the Company in transition 

to IFRSs due to the exemption rules in IFRS 1, “First-time Adoption of International 

Financial Reporting Standards”, adopted by the Company. 

-147-

(3) Insolvency of the Company and subsidiaries in the last two years to the date this report was 

printed and the impact on the financial position of the Company: none. 

-148-

(1) Information on subsidiaries/affiliates 

1. Consolidated report on operation of subsidiaries 

(1) Organizational Chart of Subsidiaries 

VI. Important Notice 

100% 100% 

100% 

DLC 鼎磊科技鼎磊科技(股) 

鼎磊科技 Technology 

Corp. 

公司 

公司 

Tsu Fung 

資豐投資資豐投資(股) 

資豐投資 


公司 

公司 

11.11% 

MiTAC Logistic 

昆山丰達物流 

昆山丰達物流 

Service 

(KunShan) Ltd. 

有限公司 

有限公司 

88.89% 

MIO 宇達電通宇達電通(股) 

宇達電通 Technology 

Corp. 

公司 

公司 

100% 

Bright Crown 

Management Ltd. 

100% 100% 

Mitac 

昆山聯達信息 

昆山聯達信息 

Information 

技術有限公司 

技術有限公司 


Huge Extent 

Ltd. 

MiTAC 神達電腦股份有限公司 

神達電腦股份有限公司 


100% 100% 100% 

100% 100% 100% 

100% 100% 

Dynamic Star 

Investments 

Ltd. 

MiTAC 

Technology 

旭達電腦旭達電腦(昆 

旭達電腦 (KunShan) Co., 

山)有限公司有限公司 

Ltd. 


Pacific China Corp. 

Start Well 

Technology 

Ltd. 

100% 100% 100% 100% 

昆達電腦科技 

昆達電腦科技 

MiTAC 

(昆山昆山昆山)有限公 

昆山 

Computer 

有限公 


Ltd. 司 

-149- 

Mitac Star 

Service Ltd. 

Mitac Computer 

佛山市順德區 

佛山市順德區 

(Shunde) Ltd. 

順達電腦廠有 



限公司 

限公司 

See the next 

page 

MiTAC 

宇達電腦 

宇達電腦 Service 

(上海 (ShangHai) 上海上海)有限上海有限 

Co., 

公司 

公司 

Ltd. 

環達電腦環達電腦(上海 

環達電腦 MiTAC Research 上海上海) 上海 

(ShangHai) Ltd. 

有限公司 

有限公司 

100% 

Software Insights 

Ltd. 

100% 

MiTAC 

昆山研達電腦 

昆山研達電腦 

Innovation(KunS 

科技有限公司 

科技有限公司 

han) Ltd. 

100% 

Foreground Technology Ltd. 

Tyan Computer 

Corporation - 

USA 

Strength Value 

Ltd.

Great Rich 

Ltd. 

MiTAC 

Cooperatie 

U.A. 

MiTAC 

Netherlands 

B.V. 

100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 

MiTAC Australia 

Pty Ltd. 

Navman 

Technology NZ 

Ltd. 

Mio 

Technology 

Benelux N.V. 

Magicmate 

Group Ltd. 

100% 

100% 100% 100% 100% 100% 100% 100% 100% 100% 

Mio 

Technology 

Korea 

Top Sheen 

Enterprises 

Ltd. 

Mio 

Technology 

UK Ltd. 

100% 100% 100% 100% 

Mitac Digital 

Corporation 

Best Profit Ltd. 

Mio 

Technology 

GmbH 





Booming 

Enterprises 

Inc. 

Mio 

Technology 

USA Ltd. 

成都宇達電通有 


成都宇達電通有 

(ChengDu) Ltd. 

限公司 

限公司 

-150- 

Mio International 

Ltd. 

SuZhou 

蘇州宇達電通有 

蘇州宇達電通有 

MIO Technology 

Corp. 

限公司 

限公司 

MiTAC U.S.A. 

Inc. 

MiTAC Japan 

Corp. 

MiTAC (U.K.) 

Ltd. 

System Glory 

International 

Ltd. 

MiTAC Pacific 

(H.K.) Ltd. 

MiTAC 

Logistics 

Corporation 

Sky Universe 

Enterprise Ltd. 

MiTAC 

Information 

Systems Corp.

(2). Basic information of all subsidiaries and affiliates: 

-151- 

Currency: 1,000NTD 

Enterprise name 

Date of 

incorporation 

Address Paid-in capital principal business or running items 

Tsu Fung Investment Corp. Feb. 16, 1998 10/F, No. 77. MinSheng East Road Section III, Taipei NT$1,244,769 General Investment 

Silver Star Developments Ltd. Jun. 05, 1990 P.O. Box 71, Craigmuir Chambers, Road Town, Tortola, British Virgin Islands US$215,495 General Investment 

Post-delivery maintenance and repair 

MiTAC U.S.A. Inc. Mar. 15, 1993 47988 Fremont Blvd, Fremont, CA 94538 U.S.A. US$2,750 service and provide related technical 

consultation service 

MiTAC Japan Corp. Apr. 30, 1983 

Yasuda Shibaura-building No2 3F, Kaigan 3-2-12, Minato-ku, Tokyo, Japan 

108-0022 

Sales of computer peripherals, software 

YEN 50,000 and hardware and post-delivery 

maintenance and repair service 

Mio Technology Benelux N.V. Sept. 13, 1993 Z5 Mollem 318 - 1730 Asse (Mollem), Belgium 

Sales of communication products and 

EUR 1,618 

related post-delivery service 

Post-delivery maintenance and repair 

MiTAC (U.K.) Ltd. Nov. 21, 2000 Mitac House, Nedge Hill, Telford, Shropshire TF3 3AH, U.K. GBP 524 service and provide related technical 

consultation service 

MiTAC Pacific (H.K.) Ltd. Jun. 13, 1991 20th Floor ,Sunning Plaza 10 Hysan Avenue Causeway Bay, Hong Kong 

Sales of computer peripherals, software 

US$10 

and hardware and related products 

System Glory International Ltd. Oct. 25, 1995 

P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin 

Islands 

General Investment 

US$0 



Dec. 27, 1996 

Islands 


US$120,924 

MiTAC Star Service Ltd. Jan. 12, 2001 


Islands 


US$74,500 

Software Insights Ltd. Jul. 18, 2000 


Islands 


US$5,200 

Production of communication, computer 

MiTAC Computer (KunShan) Co., 

Ltd. 

Nov. 01, 2000 No.269, No.2 Avenue, Export Processing Zone Kunshan, Jiangsu 

and peripheral products, software and 

CNY 304,321 

hardware and related products, sales of 

own products. 

MiTAC Service (ShangHai) Co., 

Ltd. 

Oct. 11, 2001 2 nd Testing, maintenance, display of computer 

Floor,No.129 Fute RD(N.), Waigaoqiao Free Trade Zone,Shanghai,China 

parts and components and related 

CNY 8,277 

products, and technical consultation and 

post-delivery service of related products. 

Production of mainboard, motherboard, 

interface cards, display card, power 

Mitac Computer (Shunde) Ltd. Jan. 18, 1993 No .1, Shunda Road, Lunjiao Street, ShunDe District,Foshan City, Guangdong CNY 616,837 supply, keyboards, related metal molding 

parts, plastic parts, and repair of 

motherboard. 

R&D, production of computer software, 

MiTAC Research (ShangHai) Ltd. Nov. 23, 2004 No.213, Jiang Chang San Road, Zha Bei District, Shanghai CNY 43,040 sales of own products and related 

technical consultation service.


Date of 

incorporation 


Data processing service, information 

Mio Technology Corp. Jan. 17, 2000 10/F, No. 10, NanGang Road, Section 1, Nan Gang ,Taipei NT$45,000 software, electronic communication 

products wholesaling and retailing. 

Start Well Technology Ltd. Apr. 20, 2000 


Islands 


US$29,900 

Dynamic Star Investments Ltd. 


Nov. 28, 2001 

Islands 


US$550 

Testing, maintenance, display of computer 

MiTAC Technology (KunShan) Co., 

Ltd. 

Jan. 28,2002 No. 269 No. 2 Avenue, Export Processing Area, Kunshan 

parts and components and related 

CNY 8,277 

products, and technical consultation and 

post-delivery service of related products 

Mio International Ltd. Feb. 06, 2004 


Islands 

US$1,275 Sales of communication related products 

Magicmate Group Ltd. Jul. 27, 2006 


Islands 

US$111 General Investment 

Mio Technology Korea Jul. 27, 2006 7F Miso-building, 890-47, Daechi-dong, Gangnam-gu, Seoul, 135-839, Korea 


KRW 100,000 


Huge Extent Ltd. Jun. 22, 2006 


Islands 

US$8,000 General Investment 

Development, production of software, 

Mio Technology (ChengDu) Ltd. Oct. 24, 2006 A7-2 Tianfu Software Park, 108 Tianfu Ave., Chengdu, China CNY 10,450 sales of own products and provide related 

technical services. 

Booming Enterprises Inc. 


May. 18, 2006 

Islands 


Mio Technology USA Ltd. Jul. 17, 2006 47988 Fremont Blvd, Fremont, CA 94538 U.S.A. 


US$2,297 


MiTAC Australia Pty Ltd. Mar. 06, 2007 Suite 2, 408 Victoria Rd, Gladesville NSW 2111 Australia 


AUD 127 


Navman Technology NZ Ltd. Mar. 06, 2007 7-11 Kawana Street, Northcote, PO Box. 36 173, Northcote Auckland, New Zealand 


NZD 140 


Mio Technology UK Ltd. 

Spectrum House, Beehive Ring Road, London Gatwick Airport, RH6 0LG, UNITED 

May. 10, 2001 

KINGDOM 


EUR 6,665 


DLC Technology Corporation Jun. 20, 2007 1/F, No. 40, WenHua 2 nd R&D, production of computer software, 

Road, GuiShan, Taoyuan County NT$66,000 sales of own products and provide related 

technical consultation service. 

Mio Technology Ltd. Dec. 04, 2003 No. 300, Di Yi Da Dao, Kunshan Development Zone, Jiangsu Province. 

Trading, import/export and distribution of 

CNY 1,960 

related items and technologies. 

Foreground Technology Ltd. Jun. 05, 2002 


Islands 


Tyan Computer Corporation - USA Jul. 17, 1989 3288 Laurelview Ct., Fremont, CA 94538 

Sales of computer peripheral equipment, 

US$3,950 

software and hardware and related 

-152-


Date of 

incorporation 


products 

Mio Technology GmbH Dec. 03, 1998 Einsteinstr. 14 85716 Unterschleißheim Germany 


EUR 26 


Top Sheen Enterprises Ltd. Jan. 23, 2003 


Islands 


US$20,440 

Best Profit Ltd. Jan. 03, 2007 

Scotia Centre, 4th Fl., P.O. Box 2804, George Town, Grand Cayman KY1-1112, 

Cayman Islands 


US$37,131 

Bright Crown Management Ltd. 


Mar. 13, 2007 

Islands 


US$700 

Sky Universe Enterprise Ltd. 


Mar. 13, 2007 

Islands 


US$100 

Sales of communication, computer 

MiTAC Logistics Corporation Apr. 17, 2007 3288 Laurelview Ct., Fremont, CA 94538 USA US$100 peripheral equipment, software and 

hardware, and related products. 

Great Rich Ltd. Jan. 08, 2007 

Scotia Centre, 4th Floor, P.O. Box 2804, George Town, Grand Cayman KY1-1112, 

Cayman Islands 


US$2,115 

MiTAC Cooperative U.A. Nov. 08, 2007 Papiermolen 68, 2906 RC Capelle a/d Ijssel The Netherlands EUR 1,500 General Investment 

MiTAC Netherlands B.V. Mar. 17, 2008 Papiermolen 68, 2906 RC Capelle a/d Ijssel The Netherlands EUR 1,518 General Investment 

MiTAC Logistic Service (KunShan) 

Ltd. 

Mar. 17, 2008 No. 269, Di-er Da Dao, Kunshan Export Processing Zone 

Shipping agent, import/export, and 

CNY 6,821 

warehouse service. 

MiTAC Digital Corporation Nov. 21, 2008 471 El Camino Real, Santa Clara, CA 95050 USA 


US$45,000 


Post-delivery maintenance, testing, 

consultation service of computers, 

communication products and consumer 

Mitac Information Technology Ltd. Nov. 19, 2009 No. 300, Diyi Da Dao, Kunshan Economic Development Zone, Jiangsu CNY 2,048 electronics and related technical services. 

Establish customer service center, provide 

professional data processing, analysis and 

integration service and ERP service. 

Strength Value Ltd. 


May. 25, 2010 

Islands 

US$0 General investment 

Assembly, sales of computer peripheral 

MiTAC Information Systems Corp. Jul. 08, 2010 44131 Nobel Dr., Fremont, CA 94538 U.S.A. US$3,000 equipment, software and hardware and 

related products. 

R&D of computers, servers, cell phone, 

portable personal digital device and GPS 

MiTAC Innovation(KunShan)Ltd. Jan. 21, 2011 No. 300, Diyi Da Dao, Kunshan Economic Development Zone, Jiangsu CNY 6,571 navigation devices, transfer of 

technologies, technical consultation of 

related inventions and technical services. 

-153-

(3) Information on the same shareholder deemed having control or in dominant-subordinate relation: none. 

(4) The industries and connections of the subsidiaries in business operation 

Industry Name of subsidiary/affiliate Connection with other subsidiaries/affiliates in business operation 

Manufacturing and MiTAC Computer (KunShan) Co., Ltd. Production and sales of MiTAC products 

sales of PC and 

communication 

products 

Mitac Computer (Shunde) Ltd. Production and sales of MiTAC products 

Silver Star Developments Ltd. Investment in overseas subsidiaries for the production and sales of MiTAC products with post-delivery service 

System Glory International Ltd. General investment 

Pacific China Corp. Investment in overseas subsidiaries for the production and sales of MiTAC products with post-delivery service 

Software Insights Ltd. Investment in overseas subsidiaries for the sales of MiTAC products with post-delivery service 

Start Well Technology Ltd. Investment in overseas subsidiaries for the production and sales of MiTAC products with post-delivery service 

MiTAC Star Service Ltd. Investment in overseas subsidiaries for the production and sales of MiTAC products with post-delivery service 

Dynamic Star Investments Ltd. Investment in overseas subsidiaries for the sales of MiTAC products with post-delivery service 

Magicmate Group Ltd. Investment in overseas subsidiaries for the sales of MiTAC products with post- delivery service 

Huge Extent Ltd. General investment 

Investment and Booming Enterprises Inc. Investment in overseas subsidiaries for the sales of MiTAC products with post-delivery service 

Holding Companies Foreground Technology Ltd. Investment in overseas subsidiaries for the sales of MiTAC products with post-delivery service 

Top Sheen Enterprises Ltd. Investment in overseas subsidiaries for the sales of MiTAC products with post- delivery service 

Best Profit Ltd. Investment in overseas subsidiaries for the sales of MiTAC products with post- delivery service 

Bright Crown Management Ltd. Investment in overseas subsidiaries for the sales of MiTAC products with post-delivery service 

Sky Universe Enterprise Ltd. Investment in overseas subsidiaries for the sales of MiTAC products with post- delivery service 

Great Rich Ltd. Investment in overseas subsidiaries for the sales of MiTAC products with post- delivery service 

Strength Value Ltd. General investment 

MiTAC Cooperative U.A. General investment 

MiTAC Netherlands B.V. General investment 

Tsu Fung Investment Corp. General investment 

MiTAC Research (ShangHai) Ltd. 

R&D and production of computer software, sales of MiTAC products and provide related technical consultation 

services. 

Mio Technology (Chengdu) Ltd. 


services 

Technical Service DLC Technology Corp. 


services 


Ltd. 

Post-delivery maintenance and repair services on MiTAC products and provide related technical consultation services 

MiTAC Service (ShangHai) Co., Ltd. Post-delivery maintenance and repair services on MiTAC products and provide related technical consultation services 

Mitac Information Technology Ltd. Post-delivery maintenance and repair services on MiTAC products and provide related technical consultation services 

-154-

Industry Name of subsidiary/affiliate Connection with other subsidiaries/affiliates in business operation 

MiTAC U.S.A. Inc. Post-delivery maintenance and repair services on MiTAC products and provide related technical consultation services 

MiTAC (U.K.) Ltd. Post-delivery maintenance and repair services on MiTAC products and provide related technical consultation services 

MiTAC Innovation (KunShan) Ltd. 


services. 

MiTAC Pacific (H.K.) Ltd. Sales of MiTAC products and provide post-delivery service 

Mio Technology Corp. Sales of MiTAC products and provide post-delivery service 

MiTAC Japan Corp. Sales of MiTAC products and provide post-delivery service 

Mio Technology Benelux N.V. Sales of MiTAC products and provide post-delivery service 

Mio International Ltd. Sales of MiTAC products 

Mio Technology Korea Sales of MiTAC products and provide post-delivery service 

Mio Technology Ltd. Sales of MiTAC products and provide post-delivery service 

Trading 

Mio Technology USA Ltd. Sales of MiTAC products and provide post-delivery service 

MiTAC Australia Pty Ltd. Sales of MiTAC products and provide post-delivery service 

Navman Technology NZ Ltd. Sales of MiTAC products and provide post-delivery service 

Mio Technology UK Ltd. Sales of MiTAC products and provide post-delivery service 

Tyan Computer Corporation - USA Sales of MiTAC products and provide post-delivery service 

Mio Technology GmbH Sales of MiTAC products and provide post-delivery service 

MiTAC Logistics Corporation Sales of MiTAC products and provide post-delivery service 

MiTAC Digital Corporation Sales of MiTAC products and provide post-delivery service 

Trading and 

assembly 

MiTAC Information Systems Corp. Assembly and sales of MiTAC products and provide post-delivery service 

Shipping agent and 

import/export trade 


Ltd. 

Shipping agent, import/export trade, warehouse service. 

-155-

5. Information on the Directors, Supervisors, and General Managers of the subsidiaries and affiliates 

Enterprise name Title Name or representative 

Shareholding 

Quantity percentage 

Chairman MiTAC International Corp/Rep: Billy Ho 124,476,913 100% 




MiTAC International Corp/Rep: Crystal Yang 124,476,913 

MiTAC International Corp/Rep; Chung Shu-Ling 124,476,913 

100% 

100% 

Supervisor MiTAC International Corp/Rep: Huang Hsiu-Ling 124,476,913 100% 

Director Ho Jhi-Wu 0 0% 

Silver Star Developments Ltd. Director Yang Hsiang-Yun 0 0% 

Director Yuan Chi-Ying 0 0% 

Director Yang Hsiang-Yun 

0 0% 

MiTAC U.S.A. Inc 

Director Ho Jhi-Wu 

0 0% 

President Robert Chen 

0 0% 


MiTAC Japan Corp. 

Director Yang Hsiang-Yun 

Director/President Toshihiko Hara 

0 

0 

0% 

0% 

Supervisor Hsin-Ling Huang 0 0% 

Mio Technology Benelux N.V. 



Ho Jhi-Wu 

Yang Hsiang-Yun 

0 

0 

0% 

0% 

MiTAC (U.K.) Ltd. 



Ho Jhi-Wu 


0 

0 

0% 

0% 

MiTAC Pacific (H.K.) Ltd. 



Ho Jhi-Wu 


0 

0 

0% 

0% 


System Glory International Ltd. Director Yang Hsiang-Yun 0 0% 




Director Yang Hsiang-Yun 0 0% 



MiTAC Star Service Ltd. Director Yang Hsiang-Yun 0 0% 



Software Insights Ltd. Director Yang Hsiang-Yun 0 0% 


Chairman Start Well Technology Ltd./Rep: C.J. Lin N/A 100% 

MiTAC Computer (KunShan) 

Co., Ltd. 


Director/GM 

Start Well Technology Ltd./Rep: Billy Ho 

Start Well Technology Ltd./ Rep: C.P. Lee, 

Crystal Yang 

N/A 

N/A 

100% 

100% 

Supervisor N/A 0% 

MiTAC Service (ShangHai) Co., Chairman Pacific China Corp. /Rep: Billy Ho N/A 100% 

-156-


Shareholding 


Ltd. Director/GM Pacific China Corp. /Rep: Percy Chen N/A 100% 

Director Pacific China Corp. /Rep: C.P. Lee N/A 100% 

Chairman MiTAC Star Service Ltd. /Rep: Billy Ho N/A 100% 

Vice Chairman MiTAC Star Service Ltd/Rep: C.J. Lin N/A 100% 

Mitac Computer (Shunde) Ltd. 



MiTAC Star Service Ltd./Rep: Mathew Miau 

MiTAC Star Service Ltd./Rep: F.C, Tsai 

N/A 

N/A 

100% 

100% 

Supervisor Huang His-Ling N/A 0% 

General Manager J.J. Huang N/A 0% 

MiTAC Research (ShangHai) 

Ltd. 

Mio Technology Corp. 

Start Well Technology Ltd. 

Chairman Software Insights Ltd. /Rep: Billy Ho N/A 100% 

Director/GM Software Insights Ltd./Rep: Di-Yuan Yeh N/A 100% 

Director Software Insights Ltd. /Rep: Crystal Yang N/A 100% 

Chairman MiTAC International Corp/Rep: Billy Ho 4,000,000 88.89% 

Director MiTAC International Corp/Rep: James Juan 4,000,000 88.89% 

Director/GM MiTAC International Corp/Rep: King Chen 4,000,000 88.89% 

Supervisor Tsu Fung Investment Corp./Huang Hsiu-Ling 500,000 11.11% 




-157-


Shareholding 



Dynamic Star Investments Ltd. Director Yang Hsiang-Yun 0 0% 


Chairman Dynamic Star Investments Ltd. /Rep: Billy Ho N/A 100% 

MiTAC Technology (KunShan) Co., Ltd. Director Dynamic Star Investments Ltd. /Rep: C.P. Lee N/A 100% 

Director/GM Dynamic Star Investments Ltd. /Rep: Percy Chen N/A 100% 


Ho Jhi-Wu 

0 0% 

Mio International Ltd. 



0 0% 


Yuan Chi-Ying 

0 0% 


Magicmate Group Ltd. 



Mio Technology Korea 



Ho Jhi-Wu 


0 

0 

0% 

0% 


Ho Jhi-Wu 

0 0% 

Huge Extent Ltd. 



0 0% 


Chairman Mio International Ltd. /Rep: Billy Ho N/A 100% 

Mio Technology (ChengDu) Ltd. Director/GM Mio International Ltd./Rep: Di-Yuan Yeh N/A 100% 

Director Mio International Ltd. /Rep: Crystal Yang N/A 100% 


Booming Enterprises Inc. 



Mio Technology USA Ltd. 



Ho Jhi-Wu 


0 

0 

0% 

0% 


MiTAC Australia Pty Ltd. 


Director Liu Fung Kiu 0 0% 

Navman Technology NZ Ltd. 



Ho Jhi-Wu 


0 

0 

0% 

0% 

Mio Technology UK Ltd. 



Ho Jhi-Wu 


0 

0 

0% 

0% 

Chairman MiTAC International Corp/Rep: Billy Ho 6,600,000 100% 

DLC Technology Corporation 



MiTAC International Corp/Rep: James Juan 

MiTAC International Corp/:Rep: King Chen 

6,600,000 

6,600,000 

100% 

100% 

Supervisor MiTAC International Corp/Rep: Crystal Yang 6,600,000 100% 

Mio Technology Ltd. 

Chairman 


Mio International Ltd. /Rep: Billy Ho 

Mio International Ltd./Rep:James Juan 

N/A 

N/A 

100% 

100% 

-158-


Shareholding 


Director/GM Mio International Ltd. /Rep: C.P. Lee N/A 100% 

Supervisor Mio International Ltd. /Rep: Crystal Yang N/A 100% 


Foreground Technology Ltd. 



Tyan Computer Corporation - USA 



Ho Jhi-Wu 

Robert Chen 

0 

0 

0% 

0% 

Mio Technology GmbH 



Ho Jhi-Wu 


0 

0 

0% 

0% 


Top Sheen Enterprises Ltd. 




Best Profit Ltd. 




Ho Jhi-Wu 

0 0% 

Bright Crown Management Ltd. Director 


0 0% 


Yuan Chi-Ying 

0 0% 


Ho Jhi-Wu 

0 0% 

Sky Universe Enterprise Ltd. 



0 0% 


-159-


Shareholding 



MiTAC Logistics Corporation Director Yuan Chi-Ying 0 0% 

Director/Vice President Robert Chen 0 0% 


Great Rich Ltd. 



MiTAC Cooperative U.A. 



Ho Jhi-Wu 


0 

0 

0% 

0% 

MiTAC Netherlands B.V. 



Ho Jhi-Wu 


0 

0 

0% 

0% 

Chairman 

Bright Crown Management Ltd. /Rep: Billy Ho N/A 100% 


MiTAC Logistic Service (KunShan) Ltd. 


Bright Crown Management Ltd./Rep: Percy Chen 

Bright Crown Management Ltd. /Rep: C.P. Lee 

N/A 

N/A 

100% 

100% 

Supervisor Huang Hsiu-Ling N/A 0% 


MiTAC Digital Corporation Director Fong Shu-Chi 0 0% 


Chairman Bright Crown Management Ltd. /Rep: Billy Ho N/A 100% 

Mitac Information Technology Ltd. 



Bright Crown Management Ltd./Rep: C.P. Lee 

Bright Crown Management Ltd. /Rep: Percy Chen 

N/A 

N/A 

100% 

100% 

Supervisor Crystal Yang N/A 0% 


Strength Value Ltd. 




MiTAC Information Systems Corp. 




Robert Chen 

0 

0 

0% 

0% 

Director/President Charlotte C.Y. Chou 0 0% 

Chairman Software Insights Ltd. /Rep: Billy Ho N/A 100% 

MiTAC Innovation (KunShan) Ltd. 



Software Insights Ltd./Rep: Di-Yuan Yeh 

Software Insights Ltd./Rep: Michael Lin 

N/A 

N/A 

100% 

100% 

Supervisor 

Crystal Yang 

N/A 0% 

-160-

6. The operation of the subsidiaries and affiliates: Currency: 1,000 NTD 

Enterprise name Capital Total assets 

Total 

liabilities 

Net worth Revenue 

-161- 

Operating 

Income 

Earnings in 

current period 

(after taxation) 

EPS (after 

taxation 

MiTAC International Corp. 15,297,359 48,442,779 18,331,749 30,111,030 33,627,963 (789,257) 253,204 0.17 

Tsu Fung Investment Corp. 1,244,769 1,368,721 16,857 1,351,864 52,669 46,054 44,761 0.36 

Silver Star Developments 

Ltd.-Consolidated 

6,524,123 32,620,645 18,157,736 14,462,909 48,965,457 (251,892) 425,375 1.97 

MiTAC U.S.A. Inc. 83,257 120,617 18,087 102,530 89,554 4,925 3,030 2.27 

MiTAC Japan Corp. 19,530 43,087 21,989 21,098 96,512 5,709 5,604 5,604.00 

Mio Technology Benelux N.V. 63,401 334,592 252,151 82,441 573,577 (13,419) (18,819) (288.41) 

MiTAC (U.K.) Ltd. 24,466 38,837 27,095 11,742 46,171 5,967 4,933 9.87 

MiTAC Pacific (H.K.) Ltd. 303 24,862 22,014 2,848 0 (377) (163) (16.30) 

System Glory International Ltd. 0 277,513 28,832 248,681 0 0 5,543 5,543,000.00 

Pacific China Corp. 3,660,970 3,779,581 3,028 3,776,553 0 0 5 0.00 

MiTAC Star Service Ltd. 2,255,488 2,272,162 0 2,272,162 0 0 0 0.00 

Software Insights Ltd. 

MiTAC Computer (KunShan) Co., 

157,433 163,073 30,275 132,798 0 0 0 0.00 

Ltd. 1,462,220 5,013,847 3,155,492 1,858,355 7,669,343 68,104 41,762 NA 

MiTAC Service (ShangHai) Co., Ltd. 39,771 58,577 12,690 45,887 77,482 (1,449) (2,588) NA 

Mitac Computer (Shunde) Ltd. 2,963,820 7,339,516 4,042,361 3,297,155 13,630,865 (74,368) (62,915) NA 

MiTAC Research (ShangHai) Ltd. 206,802 362,314 47,118 315,196 308,872 1,029 14,332 NA 

Mio Technology Corp. 45,000 176,644 142,665 33,979 553,953 (14,208) (13,764) (3.06) 

Start Well Technology Ltd. 905,223 1,176,084 28,645 1,147,439 0 0 0 0.00 

Dynamic Star Investments Ltd. 


16,651 30,283 0 30,283 0 0 0 0.00 

Ltd. 39,770 95,044 28,118 66,926 72,366 1,945 2,802 NA 

Mio International Ltd. 38,601 2,056,134 2,010,552 45,582 8,077,921 0 0 0.00 

Magicmate Group Limited 3,364 3,370 0 3,370 0 0 0 0.00 

Mio Technology Korea 2,627 35,373 55,120 (19,747) 40,786 (10,811) (11,770) (588.50) 

Huge Extent Limited 242,200 242,200 0 242,200 0 0 0 0.00 

Mio Technology (ChengDu) Ltd. 50,212 54,833 481 54,352 0 0 732 NA 

Booming Enterprises Inc. 236,145 236,145 0 236,145 0 0 0 0.00 

Mio Technology USA Ltd. 69,543 53,456 17,472 35,984 0 (112) 231 28.88 

MiTAC Australia Pty Ltd. 3,903 761,543 736,431 25,112 1,105,641 7,106 8,265 65.08 

Navman Technology NZ Ltd. 3,276 145,166 71,957 73,209 283,103 8,148 6,037 43.12 

Mio Technology UK Ltd. 261,135 428,864 1,178,191 (749,327) 2,279,515 (224,947) (230,331) (41.82) 

DLC Technology Corporation 66,000 53,155 320 52,835 0 (47) 1,678 0.25 

Mio Technology Ltd. 9,418 61,097 42,493 18,604 109,087 835 943 NA 

Foreground Technology Ltd. 273,852 522,749 44 522,705 0 0 8,729 0.97 

Tyan Computer Corporation-USA 119,596 757,977 253,991 503,986 1,974,558 21,023 8,878 8,878.00 

Mio Gmbh 1,019 6,047 740 5,307 0 (221) (329) NA 

Top Sheen Enterprises Ltd 618,808 1,362,375 756,875 605,500 0 0 0 0.00 

Best Profit Ltd. 1,124,148 1,124,151 0 1,124,151 0 0 0 0.00 

Bright Crown Management Ltd. 21,193 39,358 18,165 21,193 0 0 0 0.00

Enterprise name Capital Total assets 

Total 

liabilities 

Net worth Revenue 

-162- 

Operating 

Income 

Earnings in 

current period 

(after taxation) 

EPS (after 

taxation 

Sky Universe Enterprise Ltd. 3,028 93,853 90,825 3,028 0 0 0 0.00 

MiTAC Logistics Corporation 3,028 1,143,906 1,102,028 41,878 3,863,391 31,184 14,622 146.22 

Great Rich Limited 64,032 64,032 0 64,032 0 0 0 0.00 

MiTAC Cooperative U.A. 58,770 59,491 1,344 58,147 0 (225) (225) NA 

MiTAC Netherlands B.V. 


59,475 17,659 309 17,350 0 (409) 18,025 1,187.42 

Ltd. 32,773 33,214 250 32,964 4,492 1,143 706 NA 

MiTAC Digital Corporation 1,362,375 3,887,145 3,688,259 198,886 3,729,979 (115,283) (118,502) (2.63) 

Mitac Information Technology Ltd. 9,843 72,491 42,431 30,060 174,012 11,168 8,284 NA 

Strength Value Ltd. 0 0 0 0 0 0 0 0.00 

MiTAC Information Systems Corp. 90,825 4,600,917 4,419,326 181,591 14,969,864 97,089 64,305 21.44 

MiTAC Innovation (KunShan) Ltd. 31,571 48,755 15,706 33,049 59,609 2,457 1,400 NA 

Note 1: Related figures of the subsidiaries incorporated in foreign countries shall be denominated in NTD at the exchange rate between NTD and respective foreign 

currencies as of the day of reporting. 

Note 2: The disclosure of Silver Star Developments Ltd.-Consolidated is the consolidation of information of this company and its subsidiaries. 

Note 3: At the exchange rate on 

December 31 2011: 

12/31/2011 Average 

USD: 30.275 29.391 

GBP: 46.730 47.130 

EUR: 39.180 40.899 

JPY: 0.391 0.369 

CNY: 4.805 4.550 

KRW: 0.026 0.027 

AUD: 30.735 30.328 

NZD: 23.400 23.256

(2) Consolidated financial statement of subsidiaries 


Declaration of Consolidated Financial Statement of Subsidiaries 

We consolidated the financial statements of our subsidiaries covering the period of January 1 

to December 31, 2011 in compliance with the Criteria for Compiling Consolidated Report on 

Operation, Financial Statements, and Report with Subsidiaries and pursuant to No. 7 of the 

Statement of Financial Accounting Standards. The subsidiaries included in the consolidated 

financial statement under the aforementioned two regulations are identical and the disclosures of 

which were presented in the aforementioned consolidated financial statement of the parent and 

subsidiaries and the separate presentation of financial information on the subsidiaries shall not be 

necessary. 

3. Stakeholder Report: none 

-163- 

Company Name: MiTAC International Corp 

Representative: Mathew Miau 

March 26 2012

-164-

I. A Letter to the shareholders - Mitac

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