2010_CSR Cover.eps - MSI · PDF fileMICRO-STAR INTERNATIONAL CORPORATE SOCIAL RESPONSIBILITY REPORT 2010 Beautiful life and Green Homeland

MICRO-STAR INTERNATIONAL CORPORATE SOCIAL RESPONSIBILITY REPORT 2010

Beautiful life andGreen Homeland

MSI 2010 Corporate Social Responsibility Report

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1 Editing Principles ...................................................................... 2

1.1 About the Report .................................................................................. 2

1.2 Reporting Period and Cycle ................................................................. 2

1.3 Report Content and Boundary ............................................................ 2

1.4 Reporting Framework .......................................................................... 2

1.5 Identification and Engagement of Stakeholders ............................... 3

2 CEO Commitment .................................................................... 4

2.1 President’s Report ................................................................................ 4

3 Company Profile ....................................................................... 5

3.1 Introduction .......................................................................................... 5

3.2 Business Overview ............................................................................... 7

3.3 Financial Performance ......................................................................... 7

3.4 Business Development ........................................................................ 8

3.5 Corporate Governance ........................................................................ 8

3.6 Business Strategy .............................................................................. 10

3.7 Risk Management .............................................................................. 11

3.8 Trade Association ............................................................................... 13

3.9 Awards ................................................................................................ 13

4 Environmental Policy ............................................................. 14

4.1 Organization and Missions ................................................................ 14

4.2 System & Certification ....................................................................... 15

4.3 Green Policy ....................................................................................... 16

4.4 Challenges and Opportunities of Climate Change .......................... 18

4.5 Greenhouse Gas Inventory ............................................................... 19

4.6 Environmental Performance Indicators ........................................... 20

4.7 Green Products ................................................................................... 22

4.8 Promotion of Energy Conservation .................................................. 23

5 Social Policy ............................................................................ 25

5.1 Our Customers ................................................................................... 25

5.1.1 Customer Service and Customer Satisfaction ................................. 25

5.2 Our Employees ................................................................................... 26

5.2.1 Workforce ............................................................................................ 26

5.2.2 Employee Development .................................................................... 29

5.2.3 Wages and Benefits ........................................................................... 30

5.2.4 Health, Safety and Risk Management .............................................. 32

5.2.5 Employee Health ................................................................................ 35

5.3 Suppliers ............................................................................................. 36

5.3.1 Supplier Policy ................................................................................... 36

5.3.2 Supplier Management ....................................................................... 36

5.3.3 Contractor Management ................................................................... 37

6 Public Welfare .......................................................................... 38

6.1 Community Giveback ........................................................................ 38

6.2 Corporate Volunteer ........................................................................... 41

1 Supplemental information 1: Contact Window ................... 43

2 Supplemental Information 2: GRI G3 Content Index .......... 43

Editing Principles

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2010 Corporate Social Responsibility Report

1.3 Report Content and Boundary

This report includes the data of MSI, MSI computer (Shenzhen), MSI Electronics (Kunshan), and the worldwide subsidiaries of MSI, and covers financial information, business operation, environmental issues concerning product responsibility and environmental protection, and social issues concerning employees, suppliers and contractors, and public interest activities.

1.4 Reporting Framework

The MSI Corporate Social Responsibility Report 2010 is published in Chinese and English in reference to the generation of sustainability reporting guidelines of Global Reporting initiative (GRI G3). The report also declares GRI Application Level C and encloses a GRI G3 Content index. The report will be laid out by electronic file, and to cut down the printing of hardcopy reports as to reduce the material use and the impact of environment.

1. Editing Principles

1.1 About the Report

Micro-Star International (MSI) takes “Excellent Product, Superior Quality, Perfect Service, and Customer Satisfaction” as its business tenets and the goals of sustained operation since inception on August 4, 1986. We endeavor to achieve excellence in product quality, services and operating performance and share the results of our efforts with our clients, consumers, employees, shareholders and investors.

Thus in September 2008, we published the first corporate social responsibility report- MSI Corporate Social Responsibility Report 2008 to share with our stakeholders our operating performance over the years and our efforts in addressing the environmental issues and caring for the society. This report is the third release. We disclosure the financial performance, supplier management, employee caring, environmental performance indicators, social welfare, and the relevant information about msi. We welcome any comment or feedback from our stakeholder, their opinions will be the base for us to improve and adjust ourselves.

1.2 Reporting Period and Cycle

The MSI Corporate Social Responsibility Report 2009 covers the period from January 1, 2009 to December 31, 2009. We will publish it in both Chinese and English language, and make it available on our website (http://tw.msi.com/html/popup/csr/index.php）for perusal and download by the public. The last one was released on October 2009. From 2010, we will publish it before August, so the public can understand the operating status of MSI earlier.


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Stakeholder Engagement Methods

Stakeholder Issues of concern Our response

Shareholders/

investors

Clients/

consumers

Suppliers/

contractors

Community

Media

Employees

Government

agencies

1. Financial reports.

2. Provide reports or make reply in a timely manner as requested or required by the competent authorities.

1. Telephone communication.

2. Community activities.

Frequency of communication

Communication methods and channels

1. Shareholders’ meeting.

2. Investor conference.

3. Financial report.

4. Website.

5. News release.

1. Website.

2. Online service.

3. 080 service hotline.

4. Showrooms and service centers.

5. Customer satisfaction survey.

1. E-mail.

2. Teleconferencing.

3. Suppliers conference.

4. Green Product Manage-ment platform (online)

1. Gathering (year-end banquet)

2. Labor- management meeting.

3. E-mail.

4. Bulletin board.

5. Employee hotline.

6. Suggestion box.

7. Employee satisfaction survey.

8. Employee meeting.

1. Press conference.

2. Press release.

1. Once a year.

2. From time to time.

3. Four times a year.

4. All year round.

5. From time to time.

1. Irregularly.

2. As initiated by client.



5. Irregularly.

1. Irregularly.

2. Irregularly.

3. When needed.

4. Latest information posted from time to time.

1. Once a year.


3. Announcement posted from time to time.

4. Announcement posted from time to time.

5. As initiated by employee.

6. As initiated by employee.

7. Once a year.

8. Once a year.

1. Irregularly.

2. Irregularly.


2. As needed.

Press conference and press release when needed.

1. Corporate profits.

2. Operating status.

1. Product quality.

2. Product prices.

3. After-sale service.

Supply chain conditions (products, delivery date, financial control, ESH requirements).

1. Wages.

2. Benefits.

3. Work Conditions.

4. Career development.

1. Impact on community environment.

2. Giveback and contribution to community.

3. Job opportunities for the locals.

1. Operating status of the company.

2. Labor- management relationship.

1. Operating status of the company.

We hold regular shareholders’ meeting, in which the responsible officers are present to answer questions of concern to the investors, and update the company’s financial information on company website regularly to enhance information transparency.

Consumers can receive instant technical assistance and have their questions answered through website and 080 phone service, and learn about the latest product information through our constantly updated website.

Aside from communicating our policies and objectives to our suppliers and contractors through the annual corporate social responsibility report, we would exchange opinions and engage in discussions with suppliers and contractors via e-mail, phone or in-person meeting from time to time. In the future, we will also use the online support system as a communication platform with our suppliers.

Employees can obtain corporate information via e-mail, bulletin board and annual corporate reports, and express their views and opinions via labor-management meetings, suggestion box and employee hotline.

We create job opportunities for the locals and try to give back to the community by adopting road trees, and providing monetary and material support. We have setted up msi corporate volunteer team since 2009 to enhance our support to local community.

We pay tax honestly, comply with the laws and regulations of local governments, support the activities of the competent authorities, and readily respond to the request or demand of the competent authorities.

Based on the needs of internal operations and activities, we hold press conference or make press release from time to time.

1.5 Identification and Engagement of Stakeholders

MSI stakeholders include primarily shareholders, investors, clients, consumers, suppliers, contractors, government agencies and communities. The table below outlines the methods and channels we use to communicate with our stakeholders, the frequency of communication, issues of concern to the stakeholders and how we address those issues. All communications with our stakeholders are documented and saved for analysis, improvement and follow-up.

Editing Principles

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2. CEO Commitment

2.1 President’s Report

We have been introducing consumer-oriented products with emphasis on quality perfection, innovation excellence and localization services. After more than twenty years of unceasing efforts, we are now world’s top three and leading motherboard and graphics card maker. Our excellent products and corporate brand image have long been recognized by consumers around the world and well received in the global markets.

We have been heading into the R&D and production of notebook computers and all-in-one (AIO) PC in recent years to response to marker and consumer demands. The purpose is to build a complete product line and boost MSI’s brand recognition and market visibility. Bur we started out as a motherboard and graphics card manufacturer. Motherboard and graphics card products are our core business. We fully realize that you must shore up the core business before branching out. Thus we will continue to seek innovation and continue R&D on motherboard and graphics card products and introduce products that meet consumers’ expectation.

In the 21st century, the world will be faced with more political, economic and social problems as well as challenges and difficulties brought about by climate change. For a business to survive and even grow in such formidable environment, it must been continually innovated and modified the facets of its economic, environment and social. In economical aspect, we will adjust our step to face more and more challenge and to pursue the p stabilizing grow of profit and revenue. In social aspect, starting from employee care within and then outreaching to the social and even the world, a business can maintain flexibility, vigor and adaptability by keeping communication, interaction with, and readily responding to the outside world and stakeholders. In environmental aspect, we know environmental policy is not merely a slogan, cherishing

the earth and being friendly to the environment must be implemented in daily activity. Thus we will heed the domestic and foreign environmental regulations and international trends, develop low energy consumption products, to promote energy conservation inside the company. We hope such corporate culture will take root inside MSI and be implemented in our daily operations. This is the only way to answer to challenges, also the goal and commitment that we will continue to work towards. More so, this is our embodiment of corporate citizenship.


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3. Company Profile

3.1 Introduction

MSI was established on August 4, 1986. Headquartered in Taipei, Taiwan, MSI has production lines at MSI Computer (Shenzhen) and MSI Electronics (Kunshan), and 28 subsidiaries and service centers spread around the world in Europe, Asia, America and Oceania to provide global client with timely services and respond to their needs.

In 2009, MSI and subsidiaries reported a consolidated revenue of NT$82.2 billion, while MSI alone recorded NT$82.77 billion in revenue, NT$240 million in earnings, and EPS of NT$0.23. As of year-end 2009, MSI and subsidiaries had a global workforce of 15,587 employees.

MSI Computer (Shenzhen) Co., Ltd.Address: Shenzhen, Guangdong. Date of establishment: April 2000.

Functions: Manufacture of motherboards and graphics cards, system assembly and others.

MSI Electronics (Kunshan) Co., Ltd.Address: Kunshan, Jiangsu. Date of establishment: December 2001.

Functions: Manufacture of motherboards, graphics cards, notebook computers, R&D and others.

HeadquartersDate of establishment: 1986 (moved to current location in 1997).

Address: Taipei, Taiwan.

Chairman & President: Joseph Hsu.

Capital: NT$10.69 billion

Number of employees: 15,587 worldwide (as of year-end 2009).

Functions: Administration, R&D, business, sales and marketing.

Hong Kong

MSI Computer(SHANGHAI)Co.,Ltd.

Micro-Star International (Hong Kong)Co.,Ltd.

Russia

Poland

UK

Canada

USA

Mexico

Latin America

France

Netherlands

Germany

Czech

Brazil

Italy

Serbia

Saudi Arabia

India

China (Kunshan)

Korea

Japan

China (Shanghai)

China (Shenzhen)

Taiwan Headquarters

AustraliaUkraine

Turkey

MSI Global Sales and Services

Company Profile

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3.2 Business Overview

Products and Services

MSI started out as motherboard and graphics card manufacturer and supplier, but we have been actively investing in the R&D and production of new product lines in recent years, including notebook computer, consumer electronics, industrial computer, All-in-One, and smart robot. We set our short-term, medium-term and long-term goals based on the scheme of maintaining stable profit levels with existing product lines and developing new clients and markets with new product lines.

Products Mix

Product type Main products

Motherboard Intel and AMD motherboards

Graphics card NVIDIA and ATI graphics cards

Server

Barebone

Robot Smart robot

Others Cloud computing

Industrial computer

Consumer electronics

Server motherboard, workstation motherboard, rack-mounted server

All-in-one PC, mini PC, Wind Nettop PC, home theater PC

Industrial motherboard, industrial computer system

Automotive electronic products, communication products

Notebook computer

3.3 Financial Performance

Damped by global financial storm, our consolidated revenue for the year amounted to NT$82.77 billion, a decrease of 15% as compared to 2008. Our consolidated after-tax profit was NT$240 million, and our earnings per share dropped to NT$0.23.

In the effort of business development, we will continue to develop new emerging markets to disperse the impact of market saturation in developed countries and exchange rate fluctuation on our profits. Internally we will continue to nurture outstanding sales and marketing personnel, get a better grasp on the market dynamics, establish good rapport with distributors, and step up marketing efforts to enhance brand recognition with the ultimate goals of boosting sales, revenue and brand affiliation.

Revenue – by Product In NT$1,000

Global Sales Distribution, 2007-2009

Graphics cardMotherboard Others200920082007

NT$1,000

Europe Asia America Others Taiwan

20000000

0

40000000

60000000

80000000

100000000

2007-2009 Financial Performance Highlights

In NT$1,000

2007-2009 Shareholder Structure In NT$1,000

0

20000000

40000000

60000000

80000000

100000000

Sales revenue90,589,643



Net income2,912,697

20072008

2009

Net income2,269,634

Net income241,246

NT$1,000

Government agenciesFinancial institutionsOther institutional investorsForeign institutional and individual investorsIndividuals

Company Profile

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3.4 Business Development

The MSI notebook is gaining positive consumer feedback and recognition in world markets and heading toward the ranking of world’s top ten notebook brands. In our OEM service, we continue to work with large multinational corporations, improve product quality and cut down production costs through rigorous quality control and enhanced economy of scale. High-quality, low-cost, wide-variety and complete product line are our unwavering commitment to consumers.

Challenges, Opportunities and Response Measures

The life cycle of information products is getting increasingly shorter in recent years as the electronic industry evolves rapidly and becomes globalized. Manufacturers try to shorten the time to market to vie for profit or even business survival. In the face of such intense competition, we respond to market challenges by nurturing outstanding R&D personnel, superior know-how, integrated supply chain and diversified operations:

Outstanding R&D personnel and superior know-how: Our R&D zunit is staffed with highly experienced professional personnel and most of our executive officers heading respective business division have more than twenty years of R&D experience. We also input abundant resources to support the R&D of new technology and encourage employees to receive on-the-job training to enhance their professional capabilities. In recent years, we vigorously embark on campus recruitment for we believe talented professionals will create leading technology, which in turn will create a bigger niche and more development opportunities for the company.

Diversified operations: We make substantial investment in the R&D of znotebook computer, consumer electronics, industrial computer, AIO PC, smart robot and cloud computing products and technologies to create complete product lines, offer our clients diverse options and create potential for market development. The availability of internal technical support and collaboration also enables us to introduce products with functions that appeal to the diverse demands of consumers.

Integrated supply chain: As we diversify our operations, both our zdemands for raw materials and the scale of production increase, which will help stabilize our supply chain and lower the overall production costs. Drawing on the strength of integrated supply chain in Taiwan’s ICT industry, we will vie for ODM/OEM orders from large multinational corporations to ensure stable growth and profit.

3.5 Corporate Governance

We observe the Corporate Governance Best-Practice Principles for TSE/GTSM Listed Companies promulgated by Taiwan Stock Exchange in corporate management and governance, including:

(1) Setting up a spokesperson system to handle the suggestions or complaints of shareholders;

(2) Setting up a shareholder registrar unit to keep track of information concerning our major shareholders;

(3) Establishing risk control mechanism and firewalls with respect to affiliates;

(4) The board of directors periodically evaluating the independence of certifying accountant;

(5) Periodically disclosing company’s financial and corporate governance related information on company website; and

(6) Assigning different units to communicate with and respond to the questions of stakeholders.

Board of Directors

For the purposes of enhancing our business performance, maintaining industrial competence and retaining talented personnel, we hope to bring more valuable senior employees with professional knowledge and a wealth of industry experience into corporate governance. Thus the Board of Directors underwent re-election in 2009, in which two senior employees were elected to replace the independent directors. As a result, our Board of Directors previously with five non-independent directors and two independent directors now comprises seven directors to carry on corporate governance related operations.

Organizational Structure

We set up an independent Finance & Accounting Department, Human Resources Department, and Administration Department that were previously under the Administration Division. So our organizational structure has evolved from the previous two offices and eight divisions to two offices, three departments and seven divisions.

1. Auditing Office: In charge investigating and evaluating the implementation of internal controls and operating performance of various functions.

2. President’s Office: Overseeing business operations and development relating to ESH, legal affairs, IPR management, and information security.

3. Finance & Accounting Department:(1) Accounting Section: In charge of account processing, voucher

preparation, preparation and analysis of financial reports.(2) Finance Section: In charge of fund management, risk management,

investment management, and registrar and transfer operation.4. Administration Division: In charge of general affairs, general works

and asset management.5. Human Resources Department: In charge of personnel administration,

human resources development, employee benefits, education and training.

6. Sales & Marketing Division: In charge of order handling, market development, gathering of business intelligence, and credit check operation.

7. Materials Division: In charge of material procurement, control, and production scheduling.

8. R&D Division: In charge of product design, development, quality control, and production technology.

9. Production Division: In charge of production and process arrangement.

10. Quality Assurance Division: In charge of product quality, customer complaints and after-sale services.

11. CE Product Business Unit: In charge of development and sales of consumer electronic products.

12. NB Business Unit: In charge of notebook development and sales

IIPO

Sales & Marketing Division

Materials Division

R&D Division

Finance & Accounting

Division

Human Resources Division

Administration Division

Production Division

Quality Assurance Division

CE Product Business

Unit

Materials Division

Supervisor

Auditing Office

Shareholders’ Meeting

Board of Directors

Chairman

President

President’s Office

Business Planning Office

Legal Affairs Office

Management System Center

Global Operation Management Office

Information Technology Service

Green Project Team

MSI Organization Chart

Political Contribution

We are politically neutral and do not make any political contribution or engage in lobbying. We did not make any political donation in 2009.

Financial government assistance

We hadn’t received any financial assistance or bailout bill by government in 2009.


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3.6 Business Strategy

Damped by global financial storm, we face the harshest challenge since our establishment, we try to learn from the painful lessons by undertaking self-inspection and self-criticism. On the other hand, we keep a positive perspective on the whole predicament, taking the crisis as an opportunity and modifying our business strategies as follows:

(1) Business: Expanding brand market share and vying for more profitable OEM orders.

(2) R&D: Developing high-end mainstream products and responding to market demands in a timely manner.

(3) Finance: Giving quotes in major currencies to hedge and reduce the effect of exchange rate fluctuation on profit.

(4) Service: Harnessing customer loyalty with excellent after-sale service and service efficiency.

(5) Management: Enhancing manpower, asset and cost management with global information system.

(6) Production: Introducing online supplier management system to enable timely and flexible production line and material management.

(7) Sales: Getting a better grasp on the market and customers and setting specific sales and profit targets for respective market.

Research and Development

The electronic industry is intensively competitive, and R&D capability has become a key to the core competency and future development of an enterprise. We started to hold internal innovation contest in 2008 to encourage employees, to come up with innovative ideas and inventions for MSI’s products. Ideas proposed by employees are assessed and taken into consideration in product development as we strive to enhance our product functions and market competitiveness. Through the internal innovation contests, MSI employees have made 1,200 propositions as of now, and patent application has been filed for 25 of them.

Patent Application and Patent Granted Worldwide. 2004-2009

Patent Application and Patent Granted in Taiwan, 2004-2009

Number of patent applicationsNumber of patents granted

Number of patent applicationsNumber of patents granted

Exchange of Knowledge and Passing on Experience

We began the first factory communication conference between MSI Shenzhen and MSI Kunshan in 2008. It is hoped that through communication and learning between their management, the two plants can learn from each other’s core competency in manufacturing technology and management experience. By exchanging management mechanism and differences in actual operating process flows, the two plants can achieve beneficent interaction conducive to learning and growing.

Given the success of the first factory communication conference in 2008, we continued the event in 2009. Aside from including the features in 2008, we also identified three objectives for the 2009 event:

(1) Focusing on the level of observation and learning and enhancing the depth and breadth of observation;

(2) Reducing communication barriers and identifying common values and visions; and

(3) Establishing similar management mechanism and enhancing information transparency.

Company Profile

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After a few days of observation and learning, the two plants learned from each other’s management advantage and narrow the differences in management mechanism. The most important result is that they were able to maximize the exchange of knowledge and passing on of experience. We have identified factory communication conference as one of the key tasks for continual improvement. In the future, we will continue the exchange and learning between plants and launch such exchange between headquarters and plants. It is hoped through exchange in technology, system and culture among our operations in Taiwan and China, we can achieve the circulation of know-how and talents and sharing of corporate culture.

Poster for Factory Communication Conference

Personnel of two plants attending the communication conference

3.7 Risk Management

The impact of global financial storm in 2008 was extended to 2009. The general lack of confidence in economy has led to weak consumer demand, inflation, shortage of raw materials and price hike. Under such macroeconomic environment, cost control and the ability to keep in line with market demands become keys to profitability. Thus we implement operational and financial controls to keep all kinds of latent risks to the minimum.

(1) Understand more about the sales channels and get better grasp to reflect consumer demands in product R&D and marketing strategies in a timely manner;

(2) Expand the economy of scale in production and material purchase by offering OEM services, and enhance the cooperation with key component suppliers to keep a stable supply chain and readily respond to market demands;

(3) Implement rigorous quality control to maintain standard production process and quality and enhance product competitiveness;

(4) Periodically review the growth of respective business division, and set reasonable sales target and profit margin in line with regional and market potentials;

(5) Reexamine and adjust strategic targets on a quarterly basis, and promptly undergo organizational adjustment and modification of marketing strategies to reflect changed profit target.

(6) Readily grasp the daily status of shipment, inventory, purchase orders, and working capital of MSI operations around the world through IT system; and

(7) Call global managers meeting once every six months to report on and review the business operations of the company and make strategic adjustment to achieve the most effective allocation of corporate resources.

Company Profile

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Financial Risk Control

(1) We employ total risk management and control system to identify latent market risk, credit risk, liquidity risk, and cash flow risk, and implement necessary controls and response measures;

(2) All of our purchases and sales are denominated in USD to reduce the impact of exchange rate fluctuation on profit; and

(3) We do not undertake interest rate related transactions. We engage in derivatives transactions for hedging purpose only to render our fund utilization more flexible while lowering the risk of exchange rate fluctuation.

Business Continuity Plan (BCP)

We established an internal crisis management cabinet and conducted the first BCP drill in 2008. The purpose is to set up a crisis response team, familiarize employees with the crisis handling process and prepare them for crisis to keep a major disaster from disrupting business operation, delaying shipment personnel casualty, and to minimize personnel, financial and monetary loss in such an event.

We carried out the second BCP drill against the scenario of H1N1 epidemics in 2009. This practice was conducted to make sure that in the case of a H1N1 outbreak, we are prepared to respond to and control the extent of contagion in the shortest possible time and able to maintain good internal and external communication to ensure that the company operations, production and shipment are not disrupted. In the post-drill self-review, we found that we are inadequate in making effective utilization of medical resources and the assignment of epidemic control team. To make sure the effect of the drill would last and enhance the rapid response capability of our employees, we will standardize the operating procedure and continue to carry out internal audits of the BCP system.

In the future, BU or LOB will take turns conducting BCP drill. Each drill is documented and reviewed afterwards. We hope to create a benign cycle via P(Plan)-D(Do)-C(Check)-A(Action) and internalize such knowledge and experience in the daily operations of the company to retain existing customers, improve competitive edge, earn new customers, enhance the benefit of resource preparedness and lower operating costs, comply with prevailing laws and regulations, and showcase the operating capabilities, protect the personal safety of employees and reduce the latent risks in work environment; and decrease the incidence of accidents and reduce reliance on key assets.

SurvivabilityMaintain the basic survivability of business

Income/profit protectionProtect the financial targets of business

Sustained business developmentMaintain the ability to sell products or services

Business imagePrevent loss of corporate image caused by business disruption

BCP goals


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3.8 Trade Association

We are a member of a number of associations in Taiwan and China. Becoming a member of international organizations or institutions is the goal we work on as we endeavor to enhance the international visibility of our products.

Association Participant Status Purpose

Taiwan Electrical and Electronic Manufacturers’ Association (TEEMA)

MSI Taiwan

MSI Taiwan

Member

Member

Stay in touch with industrial development and trends, and enhance communication




To be included in the administration of customs declaration

Promote labor-management relationship and worker management

Keep track of state policies and regulations and stay in touch with the status of local human resources

Keep track of state policies and regulations and stay in touch with the status of local human resources

Taipei Computer Association

MSI Taiwan

MSI Taiwan

MSI Taiwan

Member

Member


Member

Promote corporate governanceThe Institute of Internal Auditors, ROC (Taiwan)

Institute of Electrical and Electronics Engineers (IEEE)

Robotics Association Taiwan Director

Taiwan Businessmen Association of Shihyan

MSI Shenzhen



MemberMSI Shenzhen

Member

To be included in the administration of customs declaration

Member

MSI Shenzhen

Member

Member

MSI Shenzhen

Taiwan Chamber of Commerce Shihyan

Shenzhen Customs Honesty League Association

Shenzhen Baoan District Bureau of Labor Affairs

Taiwan Businessmen Association Kunshan MSI Kunshan

MemberMSI Kunshan

MSI Kunshan

MemberMSI Kunshan

Kunshan Human Resources Association

China Customs Brokers Association

China Commodity Inspection Association

3.9 Awards

Awards received in 2009

Named Taiwan Top 20 International Brands two years in a row.

Received 2009 Fifth Corporate Social Responsibility Award from Views Monthly Magazine.

Received Best Choice of Computex Taipei Award from the world’s second largest ICT tradeshow.

Named “Reader’s Top Choice of IT Brand” by readers of the biggest IT print media in China.

Received Taiwan Excellence Award eleven years in a row.

Ranked in 2009 Corporate Citizen Top 50 by Common Wealth Magazine.

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Company Profile

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4 Environmental PolicyAccording to the data of International Energy Agency (IEA), Taiwan’s

carbon dioxide emissions per capita is 12.08 tons a year, ranking 18th in the world, but 1st in Asia. The most direct impact of carbon dioxide emissions is worsened global warming and erratic climate patterns with increased incidence of natural disasters around the world that result in the loss of lives and properties.

Environmental policy is not merely a slogan. We hope to show our love for Earth and environmental friendliness through actions. Thus we not only promote energy conservation inside the company and develop low energy consumption products, we also heed the domestic and foreign environmental regulations and international trends, and participate in environmental protection activities. We take the initiative to disclose the greenhouse gas (GHG) emissions from our internal activities starting 2008, and will continue to promote and participate in environmental protection activities to demonstrate our beliefs in cherishing the environment and sustainable earth in actions.

4.1 Organization and Missions

We establish two units – Management System Center and Green Project Team under the President’s Office. The former is in charge of organization-related environmental issues, while the latter is in charge of product-related environmental issues. Through clear division of labor and full authorization from senior management to make sure all MSI products and services consume minimum resource during production and small amount of energy in use to achieve the goals of minimal environmental impact and sustainable earth.

Green Project Team: This unit is in charge of tracking, understanding zand responding to domestic and foreign regulations related to MSI products, assisting in the planning and R&D of green products or energy consumption and plan execution, supervising and communicating with material suppliers, and responding to the concerns of customers, consumers and governments over MSI products for the ultimate purposes of making sure our products meet the regulatory requirements of each country, enhancing product performance and efficiency, and reducing the environmental impact of MSI products.

Management System Center: This unit is in charge of tracking, zunderstanding and responding to domestic and foreign environmental, safety and health (ESH) related regulations, formulating the annual ESH system and compliance with international standards, ensuring the normal operation of ESH operation, reducing process risk and ensuring process risk control, and responding to the concerns of customers, consumers, communities, suppliers and governments over ESH issues to continuously improving the overall ESH performance of the company, reducing organizational risks and operation impact on the environment.

President’s Office


Green Project Team


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4.2 System & Certification

The purposes of establishing and implementing all kinds of standards and systems are to improve product efficiency and quality, ensure the health and safety of our work environment, boost work morale and dignity at work, provide reasonable wages and benefits to employees, and ensure observance of corporate ethics. Through the normal system operation of P-D-C-A, we are able to ensure the smooth operations of the company, boost overall performance, ensure a safe, healthy and dignified work environment for our employees, and provide outstanding products to our clients and consumers.

MSI, MSI Shenzhen, and MSI Kunshan have all been ISO 9001 (quality system), ISO 14001 (environmental management system), and OHSAS 18001 (occupational health and safety) certified. MSI Shenzhen and MSI Kunshan are the production facilities of the company. Thus we started to implement hazardous substance process management at those plants in early 2006 and they became QC080000 certified at the end of 2006. Through system operation and control, we are able to effectively control product quality and work environment to reduce the impact of our daily activities on the environment.

To better control the GHG emission of our operations, we lead the pack of electronic companies by simultaneously implementing ISO14064-1 (quantification and reporting of GHG emissions and removals) at MSI, MSI Shenzhen, and MSI Kunshan and conducting third-party verification of emission data in 2008. We are now continuously promoting company-wide GHG reduction program.

We conducted the first external EICC (Electronic Industry Code of Conduct) audit in 2009. The audit covered labor practices in the areas of labor, health and safety, environment, management systems, and ethics, and compliance with ISO 14001, OHSAS18001, QC08000, ISO9001, and SA8000. The reason why we conducted an external EICC audit is to undergo a general examination of all company systems and use the audit findings as basis for future self-inspection and continual improvement.

According to the audit report prepared by the verification service provider in April 2009, our business practices were largely in compliance with the EICC requirements with room for improvement for some items. Based on the audit results, we held an intra-company conference meeting involving operations in Taiwan and China and embarked on improvement of software and hardware equipment and adjustment of operational processes.

We will continue to promote the normal functioning of our systems according to the established processes and implement them in the daily operations of the organization and incorporate them into the organizational performance.

MSI GHG Inventory Certificate

Company Profile

16


4.3 Green Policy

Following the enforcement of RoHS and WEEE in 2006, European Union (EU) will implement the ErP Directive (Energy-related Products) in 2010 to regulate the energy consumption of products along with the latest U.S. Energy Star requirements. The ErP requires the manufacturers of energy-using products to incorporate ecodesign requirements into the life cycle of a product, from design, R&D, manufacture to disposal. In production, considerations should be given to energy-saving, improved energy efficiency, improved fan noise, lowered temperature and use of minimal hazardous materials.

Thus we take ecodesign into consideration during the R&D and design phases of a product. All of our products use environmentally friendly materials for packaging to make sure our products meet the RoHS, WEEE and ErP requirements. Our ultimate goal is to develop products that are environmentally friendly and offer great performance. Eco-label represents a country’s highest environmental requirements for a product. It is the basic threshold of green procurement for governments around the world and indicates that the product meets the environmental requirements for design, use, recycling, energy consumption and low toxicity. Our All-in-One (AIO) PC has received Taiwan Green Mark certification in 2009, the first AIO certified by Taiwan Green Mark. MSI AIO’s certification represents the recognition of our many years of efforts and that MSI product offers reliable quality and embraces the eco concept in every detail. Our AIO is also expected to receive EU Flower and Czech eco-label certification in 2010.

MSI has received Taiwan Green Mark Certificate

EU Ecolabel Czech Ecolabel


17

Green Supply Chain

In response to the increasingly stringent environmental regulations and the demands of our international clientele, provide environmentally friendly products and services to consumers and move towards the goals of green design, green resources and green technology, we have built a Green Product Management (GPM) platform in 2009. It is hoped that through the GPM platform, MSI and its suppliers will work together towards the aforementioned goals, starting with the procurement of raw materials to render all MSI products conform to the four tenets of “low hazard”, “extended product life”, “energy saving” and “ease of recycling” and observe the three Rs -- reduce, reuse, recycle. And through this online system to:

make sure that our products comply with the environmental regulations zof different countries; reduce man-made errors and save costs of labor; and zenhance product competitiveness and market response capabilities. z

After receiving a notice from the GPM platform, a supplier should upload documents, including “Material Composition Declaration”, “Approval Sheet”, “Material Safety Data Sheet”, and “Environmental Compliance Certificate” for review. If a supplier is unable to meet the requirements, MSI order to the supplier and the use of its supply will be suspended until the supplier has submitted all required documentation and passed the review. This way we can control our supplies at the source.

MSI Products and ErP and Taiwan Green Mark Certification

Product Part Number

Pending

Pending

Pending

Pending

Taiwan Green Mark Certification

November 2009

November 2009PendingPending

Pending

Pending

Pending

Pending

Pending

PendingPendingPending

Pending

ErP Certification

Company Profile

18


Diagram of MSI Green Product Management Platform

ERP

Bill of Material

Green Parts Database

Green Platform

SupplierUpload declaration, test reports and report update

MSI Taipei/PlantsPart number, document review, test data review, data inquiry, supplier audit

Regulations/market/customer requirements

Customer/market demandsPart qualification data

Part testing data or report

We held suppliers conference in Taipei, Baan (Shenzhen) and Kunshan respectively in December 2009. More than 600 people from 400 suppliers attended those conferences. We explicitly declared in the conferences the four product tenets and three Rs of MSI and hoped that suppliers would incorporate the ideas of energy conservation, enhanced efficiency and decreased use of hazardous substances in the design stage of their products, that the whole supply chain will endeavor and collaborate towards the goals of sustainable environment.

4.4 Challenges and Opportunities of Climate Change

For us, environmental protection is not an appeal to emotion, nor a tax-saving scheme. It is a one-way path that we must tread. Maybe not all environmental actions we take will be a success, for we do have other factors, such as manpower and costs to consider. But we are willing to embrace the issues starting from ourselves and starting with our own environment and products. We endeavor to adopt business practices that produce less impact on the environment and to cut down the use of hazardous materials in our products so that our next generation and generations thereafter could benefit from our efforts.

The biggest impacts of climate change on businesses are imbalance of material supply and demand, rising costs and transportation problem. We address these problems with an IT system. Our IT system monitors the daily operations of our establishments around the world, including the status of shipment, inventory, purchase orders, and working capital, and there are alarm indicators set to control material costs and product transportation. Senior management of the company will hold regular meetings to review the control status of those operations.

Aside from constant monitoring through the IT system, we continue to offer energy-saving product designs, ex. Circu-Pipe cooling solution, Dual Core Cell technologh and turbo battery technology, and design easy to disassemble and easy to recycle products and packaging, and cut down the use of composite materials to address the problems of material shortage and rising costs. We also continue to promote energy saving measures and activities inside the company. For example, we switch energy-saving T5 lighting fixtures, use environmentally friendly utensils inside the plant, and encourage employees to switch off unused lights, share rides to work and walk stairs instead of taking elevators. We also take the initiative to disclose our GHG emissions since 2008 to have a better grasp of our own GHG emissions and carry on GHG reduction activities.

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4.5 Greenhouse Gas Inventory

We start undertaking GHG inventory accounting since 2007, the first company in Taiwan’s electronic industry to do so. Our aim is to have a firm grasp on the level of GHG produced from our business activities. To raise the awareness of our employees to the importance of GHG reduction, we have enlisted the service of outside professionals to give training on GHG many times as we vigorously promote the work of GHG reduction.

We conduct the inventory accounting in accordance with ISO14064-1 and the GHG Protocol. The inventory boundary covers MSI Taiwan, MSI Shenzhen and MSI Kunshan. By sources, the emissions are defined under Scope 1, direct GHG emission, and Scope 2, indirect GHG emission. The inventory is taken on six types of gas: carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and hexafluoro-sulfide (SF6).

GHG Training Class

2007~2009 MSI Greenhouse Gas Inventory – Boundary, Standards and Emissions

MSI Greenhouse Gas Inventory

Year Boundary Standards Total emissions

Major sources

Remark

1. MSI2. MSI Shenzhen3. MSI Kunshan



ISO 14064-1 The GHG Protocol



113,675 metric tonCo2e



Outsourcing electricity



Verified by third-party



2009 Emission Ratios of Various Greenhouse Gases

Emissions of Six Types of GHGs, 2007 ~ 2009

Our operations consist of primarily R&D in office setting and factory assembly activities and are free of any heavily polluting or energy consuming processes. The major source of our GHG emission is outsourcing electricity. Our 2009 total GHG inventory was 100,336 tonnes of CO2e, a decrease of 21,269 tonnes or 17.5% as compared to 2008 GHG emissions totaling 121,605 CO2e.

Environmental Policy

20


However if measured by revenue versus CO2e emission (eco-efficiency per $1 million in revenue), the carbon emissions per 1,000 tonnes generated NT$8,249,6000 in revenue in 2009 as compared to NT$8,040,200 in revenue in 2008, indicating some improvement resulting from our internal campaign of energy conservation and carbon reduction. We will continue to promote such activities to work towards the goal of continuous decline in GHG emission per $1 million in revenue.

CO2e emissions (tonnes)

Year Revenue ($1,000) Eco-efficiency indicator

= = = 796.9290589.943

CO2 emissions (1,000 tonnes)

113.675

2007 eco-efficiency indicator

Revenue ($1 million)

= = = 804.0297773.051


121.605



= = = 824.9682773.488


100.336



4.6 Environmental Performance Indicators

Gasoline and Diesel Consumption

We use gasoline mainly as fuel for company vehicles in the conduct of business and consumed altogether 70 kiloliters of gasoline in 2009. We use diesel for boilers and emergency generators and consumed 577.565 kiloliters of diesel in 2009. We use liquefied petroleum gas (LPG) for employee cafeteria cooking and consumed 192 tonnes in 2009, an increase of 97 tonnes as compared to the level in 2008. This is because the consumption of LPG was paid for by the food service provider prior to 2007. Starting in 2008, we gradually decrease the percentage of payment on LPG consumption by food service provider and assume a higher share of their costs in exchange of better food quality and service for our employees.

Gasoline Diesel LPG

Total Gasoline and Diesel Consumption, 2007~2009

21


Waste Management

We underwent a new round of waste hauler selection in 2009. It is hoped that through open tendering, we could engage legal and appropriate waste haulers and make sure the manner of waste disposal by the haulers would create minimal impact on the environment. The selection process entailed qualification review and qualified bidders were then compared with respect to methods of waste transport and disposal.

We engage mainly in the assembly of electronic products. Thus the solid waste we generate mainly including IC tray, tin slag, waste plastic, mixed metals and waste paper. IT tray, tin slag, waste plastic, waste paper and mixed metals are processed and recycled by professional waste hauler, whereas general waste, mainly including refuse are collected by the water hauler and hauled to incinerator or landfill for disposal. Hazardous waste, including waste light tubes, gloves with oil smudge, waste battery, and waste solvents are collected by the waste hauler and then buried or treated in other manners. In 2009, we generated 5,223,632 kg of total recyclable solid waste and 10,812,353 kg of non-recyclable solid waste.

MSI MSI Shenzhen MSI Kunshan

Total recycled solid waste, 2007~2009 (Unit: kilogram)

Transport of Toxic Waste and Serious Leak

We do not use any toxic material or article in our operations so we do not have to any problem associated with toxic waste production, transport or leak. We don’t receive any fine or disciplinary action related to environmental violation by government in 2009.

Environmental Expenditure

Environmental expenditures are expenditures related to activities for preventing, decreasing or eliminating pollution or public hazard generated in the process of production and consumption, which exclude expenditures on work safety, eco-conservation, and natural resources management, daily cleaning expenses, neighborhood fellowship budget, pollution-related damages and fines paid for environmental violation.

We engage mainly in factory assembly and R&D in office setting that are free of any polluting activities. But to ensure worker health and safety in the work environment and prevent environmental pollution, we still conduct internal and external audits to keep the risk of hazards to the minimum. We also undertake process improvement and process change to ensure a safe, cozy and pollution-free work environment.

2009 Environmental Expenditures (In NTD)

Total expenditures Purpose

Pollution prevention

Waste disposal

Air pollution controlWater pollution controlNoise and vibration pollution controlSoil and ground water pollution control

General waste disposalHazardous waste disposal

Breakdown


22


4.7 Green Products

Smart robot

TGR-W1

TGR-W1 is the best embodiment of smart robot that can perform the functions of greeting guests, guide, making introduction, security and socializing.

Notebook Computer

X320

X320 with its 13.4 inch screen having the golden ratio of 16:9 is only 1.98cm thick with 6mm at the thinnest part. It features an 8-cell battery that could last as long as 10 hours, while weighing only 1.3 kg in total, an advantage unparalleled by other notebooks.

Industrial Computer

WindBox II (MS-9A25)

MS-9A25 features light, fan-less, mini-size. Made with

industrial-grade motherboard, high quality and high

stability are the main appeal of this product.

Motherboard

P55-GD65

Xtreme Speed motherboard P55-GD65 offers the functions of APS (Active Phase Switching), real-time detection, and module phase switch, and more than 93% power saving.

Graphics Card

N275GTX Lightning

N275GTX Lightning is built to military specifications and features 10-phase PWM power supply that leads the same class of products on the market. It comes with an 8-cm dual fan to rapidly dissipate the generated heat and keep the operation stable.

23


4.8 Promotion of Energy Conservation

Our operations consume principally water and electricity, while the consumption of other resources, including gasoline and diesel for cars and natural gas for cafeteria cooking amounts to less than 10% of water and electricity consumption. Thus our energy conservation efforts focus on the reduction of water and electricity consumption as described below:

Electricity Conservation

1. Zone power control: Each production line in the plant is installed with a meter to control the air conditioning, lighting, and power use in the zone. The same power control scheme is used for public chiller room and nitrogen air compressor room.

2. Lighting adjustment: The lighting throughout the plant is checked to determine the required luminosity, and extra light tubes in office area and public area are removed to save electricity.

3. Adjusting the outlet water temperature of chiller: We have adjusted the outlet water temperature of chiller to 7 degree from 6.5 degree.

4. Onsite control of air conditioners: User units would carry out onsite control of air conditioner to avoid unnecessary waste resulting from the uniform setting of temperature. The thermostatic and hydrostatic areas in the warehouse are reduced in view of the use situation.

Maintain lighting needed for operation to cut down the use of light tubes.

AIO & BB

AE-1900

Built in with Intel Atom, AE-1900 supports Windows XP operating system while consuming little power and offering stability. Its 18.5-inch screen makes it particularly suitable for use by students, children and elderly people.

AIO & BB

AE-2220

AE-2220 offers a 21.5-inch touch control screen. Its 500GB hard drive coupled with Windows 7 operating system and high-performance audio-video functions makes it particularly suitable for use by professionals or for home entertainment purpose.

Graphics Card

R4890 Cyclone

R4890 Cyclone is the flagship graphics card product of MSI in 2009. It leads the industry by using a huge 10-cm fan, coupled with special cyclonic blade design, pure-cooper base amount and aluminum fins, offering consumers brand new experience in style and performance.


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5. Installing split-type air conditioners in some R&D areas: As air conditioning system is not required in some R&D areas after the staff has left for the day, the chillers in those areas are turned off after work.

6. Changing the method of central air conditioning system control: Currently blower coil pipes of the central air conditioning system are separately controlled with a three-speed switch. We plan to switch to the use of temperature controller.

7. Cutting down the working hours of air handling unit of the air conditioning system in some areas.

8. Installing solar panel and solar water heater in some areas of the plant.

Water Conservation

1. Mobile water pumps: Use collected rainwater for landscape watering.

2. Stepped-up patrol inspection: Increase the patrol inspection of water systems to reduce water loss.

3. Recycling and reutilization plan: The MSI Shenzhen began to experiment with water recycling in 2009. The project is still in trial operation and not fully implemented yet.

Fuel Oil Conservation

1. Controlling the opening hours of boiler in living area: Use IC card to control the use of hot water so as to reduce the use of fuel oil.

2. Air compressor heat recovery system: The heat generated by the air compressor is recycled for heating to reduce the use of fuel oil.

Rainwater replacing tap water for landscape watering to achieve water conservation while creating a green work environment

Water consumption, 2007-2009 Electricity consumption, 2007-2009

0

500000

1000000

1500000

2000000

MSI MSI Shenzhen MSI KunshanMSI MSI Shenzhen MSI Kunshan

Through the implementation of energy conservation measures, we were able to reduce the consumption of water by 1,508,754 tonnes and electricity by 102,561,530 kWh in 2009.

Use air compressor heat recovery system

25


5 Social PolicyGlobal climate change has affected every facet of our lives. Agriculture,

transportation, economy, trade, finance, security, health and even international relations fall under the influence of climate change. Thus environmental protection and being eco-friendly are no longer an option, but the obligation of an enterprise.

As a corporate citizen, we do not have the public power or mandate of government agencies. But we can start with our own supply chain management. Thus we drafted “Corporate Social Responsibility Requirements” in 2009, urging our suppliers to ensure a safe work environment for their employees, treat their employees with respect and dignity, and ensure that their processes and products are environmentally responsible. We hope that supply chain collaboration will allow us to provide our customers and consumers with more eco-friendly and more human rights conscious products and services.

5.1 Our CustomersAfter more than two decades of efforts, MSI has become a world

leading and top three motherboard and graphics card manufacturer. This honor is the result of our longstanding efforts in seeking quality perfection, continuous innovation and R&D, introducing market leading products, and providing localized and timely customer services. This is also why our products have received market recognition and are popular among consumers.

Customer satisfaction is built upon quality products and good services, while products, services and customers are keys to the sustained operation of MSI. The sale of a product is not the end of a transaction. Our ultimate goal is total customer satisfaction. Thus aside from embarking on R&D to roll out better and better green products, we endeavor to provide prompt and efficient services satisfactory to customers.

5.1.1 Customer Service and Customer Satisfaction

Our customer service covers all MSI products, including motherboard, graphics card, server, notebook, barebone, and consumer electronics.

Service

080 service hotline

Online technical support

Contents

Technical support, checking repair status, general customer service

Technical support, checking repair status, online service request, satisfaction survey

Our products are sold through agents and distributors. In general, after-sale service for agents takes 14 days. Repair typically takes 1 day for consumers or distributors, which, under special circumstances, could be extended to 7 days with the consent of customer.

Starting in 2006, consumers in Taiwan can drop off MSI products for repair at the nearby convenience store and receive the repaired product at an address they designate. As of 2009, we have served 16,210 customers through the convenience store venue.

Number of Customers Served through Convenience

Store Drop-Off in Taiwan Area, 2006 ~ 2009

0

1000

2000

3000

4000

5000

6000

7000

8000

2007 2008 2009

Agent

Consumer/ DistributorAbout 1 day

Sent back to manufacturerAbout 7 days

Generally 14 days according to the after-sale service agreement

Agent sends product for repair

MSI receives the product

Repair process

MSI makes delivery

Consumer sends a product for repair

Service center receives the product

Service center makes repair

Service center delivers the product

MSI receives the product

Repair process

MSI returns the product


26


In other parts of the world, we have service centers and contracted service centers to provide localized technical support. Consumers can also make product inquiry and inquiry of repair status through local customer service hotline and online repair service.

Customer Satisfaction

We conduct annual OEM customer satisfaction survey for our MB, VGA, EPS and SPD products. The survey focuses on product quality, product development, consumer support, prices and time of delivery. Based on the survey results, we will compare the advantages of MSI products with those of competitors and produce an analysis report. Items that customers are dissatisfied with as found in the survey will be forwarded to responsible units to look into and make improvement. CQS will follow up on the improvement actions taken to make sure all deficiencies are remedied.

For end consumers, we would ask them to fill out a written survey under the assistance of customer service personnel when they make a purchase or send a product for repair. Consumers can also express their opinion or make comment on our products by phone or via the online customer service system.

5.2 Our EmployeesWe believe only outstanding and happy employees and a pleasant

workplace can create maximum profit for the company and attain the ultimate goal of “Green Homeland and Beautiful Life.” Thus achieving the four tenets of MSI - “Excellent Product, Superior Quality, Perfect Service, and Customer Satisfaction”and providing our employees with a healthy, safe and pleasant work environmenthave become the goals we work towards persistently. We offer our employee wages and benefits better than what are required by law and continue to improve the quality of work environment through upgraded software and hardware facilities. We wish to reward our employees with a diverse and balanced work environment conducive to the enhancement of professional knowhow and personal growth while they work hard and create profit for the company. We believe such an approach will bring progress to the company and create a benign cycle where the company and the employees stride forward synchronously.

5.2.1 Workforce

Workforce Structure

As of year-end 2009, MSI had 15,587 employees worldwideOf the total workforce, 9,545 or 61% were male, including 790 managerial officers.6,042 or 39% were female, including 162 managerial officers, we had about the same number and percentage of female managers as those in 2008. We also had 31 foreign employees, accounting for 1.9% of total workforce.

In 2009, we had about the same number and percentage of female managers as those in 2008. Female managers accounted for 21% of all managerial officers.

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MSI Workforce Worldwide by Gender, 2007 ~ 2009

Number of Managers Worldwide by Gender, 2007 ~ 2009

Male Female

(Persons)

FemaleMale

2009 Workforce Composition 2009 Workforce by Age

Manufacturing and R&D

Sales, management and administration

2009 Workforce by Education Monthly Employee Turnover in 2009

0

20

40

60

80

100

Employee Turnover

Our employee turnover at various plants in the first half of 2009 was relatively low as the world was still struggling to pull out of a financial storm. But as the global economy rebounded, our employee turnover also rose. As the global demands recover, worker shortage will become a challenge we must address in 2010. It will also be an important key to whether we are able to regain profitability.

Equal Employment Opportunity

When we recruit employees, we only consider the capability and moral characters of the candidate without differential treatment or discrimination because of a candidate’s gender, religion, race, or political affiliation. We also declare explicitly in our “Employee Recruitment Guidelines” that “We will not engage in differential treatment based on race, social class, nationality, religion, handicap, gender, sexual orientation, union membership or political affiliation.”


28


Performance Management

To achieve effective use of human resources, boost the personal performance of employees and achieve the targets set by the company, MSI Taiwan, MSI (Shenzhen) and MSI (Kunshan) simultaneously implemented a new performance management system in 2009. This new performance system aims to link up personal performance with organizational targets, allows employees and their supervisors to check and follow up personal work performance and receive reminder at any time. To ensure that the set targets are reasonable and the progress status is within grasp, the new performance system also allows BU or LOB executives to have a ready grasp of the performance of employees at various locations, and based on which, make manpower assignment and arrangement. This system will greatly improve our administrative efficiency and response capability, reduce the cost and time delay in manpower control, thereby effectively enhancing the overall performance of the company.

Business Integrity and No Improper Advantage

All MSI employees are required to comply with the laws, codes and government orders of the country in which they work as well as MSI’s code of conduct for employees. Employees are not allowed to receive gifts from customers or suppliers, unless it is in consistence with local customs (ex. In Taiwan, it is typical tor customers or suppliers to send gifts on festival holidays, such as Dragon Boat Festival, Mid-Autumn Festival and Chinese New Years). To prevent improper acceptance of gifts and provide our employees with uniform guidelines, we specify the scope of gifts that employees may receive from suppliers or customers and require documentation of gifts received. Such transparent, uniform and standard handling process helps us uphold business integrity and maintain a friendly relationship with our customers.

Child Labor Avoidance and Contracted Labor Management

We may be under the pressure of labor shortage from time to time when there is a mass production target or delivery deadline to meet. But under the premise of “people first” and “respecting human rights”,

we explicitly prohibit the use of child labor and forced labor. To prevent the situation of fake or borrowed ID, we would undergo employee ID inspection and set up rules and requirements for the nature of work that employees age 16 ~ 18 may engage in, prohibit workers under age 18 to engage in hazardous work, and avoid assigning workers under age 18 to night shift. In 2009, underage workers age 16-18 comprised 5% of our workforce.

We work with local schools in China to offer internship program for their students that helps local students to learn and gain work experience while alleviating the financial burden of their family and learning to be financially independent. In 2009, we had around 3,000 students who participated in the internship program as contracted worker.

Employee Communication and Freedom of Association

The MSI Shenzhen and MSI Kunshan plants have union established, where employee representatives hold meeting with management twice a year to discuss issues of concern, employee welfare and the working of union.

All employees are free to decide whether to join the union and elect labor representatives. Currently about 4,000 employees at our plants in China have joined the union.

1. Labor-management meeting.

2. Employee communication session

3. E-mail.4. Employee complaint

hotline5. Employee discussion

zone6. The Safety & Health

committee of Labor

1. Four times a year2. Once a year3. All year round4. All year round5. All year round6. Four times a year

1. Labor-management issues2. Employee benefits

MSI Taiwan

MSI Shenzhen

MSI Kunshan

1. Union 1. Four times a year 1. Routine operation of union and member recruitment

2. Employee meeting3. E-mail4. Complaint hotline5. Employee interview

2. From time to time3. All year round4. All year round5. From time to time

2. Discussion of management measures

3. Labor-management issues 4. Employee benefits and

activities

Communication channel

Communication frequency

Issues

29


Prevention of Sexual Harassment and Handling Procedure

We have set up an internal sexual harassment complaint mailbox and hotline that are managed by assigned staff. We have also drafted the “Sexual Harassment Prevention Measures and Complaint and Disciplinary Procedure.” All sexual harassment cases are reported to the most senior officer of Human Resources. When a complaint is filed, a seven-person panel consisting of 3 management representatives and 4 labor representatives (women must comprise the majority of the team) must be formed in seven days to conduct investigation and review, and come up with a decision and disciplinary action in three weeks thereafter to uphold gender equality at work and human dignity.

5.2.2 Employee Development

Education and Training

All MSI employees are offered a variety of learning channels and resources to study and develop, including on-the-job training, outside training, seminars, speechs, and in-house e-learning system. In 2009, 15,529 person-times received a total of 336,461 hours of training, averaging 21.7 hours per employee.

Average Hours of Training Per Employee, 2007 ~ 2009

0

50000

100000

150000

200000

250000

300000

350000

400000

15

20

25

Total person-times Total hoursAverage hours per employee

MSI Training System

Curriculums

Orientation

Consensus Training

Basic Technical Training

Management Knowhow TrainingOn-job training

Quality Education Training

Occupational Health, Safety and Environment Training

Self-motivation

Project Training

Purpose

To help new employees understand the corporate organization and culture; carried out on the day a new employee reports to work in principle.

To help new employees understand the internal management policies and basic operating procedures; carried out in two months after a new employee reports to work in principle.

To provide new employees with basic training of knowledge and skills needed for the job; carried out in three months after a new employee reports to work in principle.

To foster the management capabilities of worker or supervisor. To hone the professional knowledge and skills of employees relating to their jobs.

To raise employee awareness to quality and cultivate and improve their knowledge, skills and attitude towards quality.

To provide employees with training that raises their awareness to work safety, occupational health and environmental protection.

To help employees achieve personal growth and improvement in line with their willingness to learn.

Training programs offered in line with company policy or specific needs.

Our training is conducted through in-house training with in-house resource, in-house training with outside resource, and outside training. In-house training with in-house resource is conducted with colleagues as instructor or using internal resource to hire free instructor to help save costs and encourage self-fortification. In-house training with outside resource is a training class arranged by a department and taught by outside expert or scholar for the purpose of enhancing the professional competence of employees. Outside training is where an employee receives training at an outside consulting firm, training institute, school or government agency under the recommendation of his or her superior or by his or her own request.


30


MSI University

Given the highly competitive nature of the electronic industry, talent development, key technology R&D, and management capabilities become the three key factors critical to the development of an enterprise. We realize that having an outstanding workforce is closely associated with the future development of MSI. Thus we embarked on the preparation for MSI University in 2009. The preparation entails planning for the establishment of professional colleges in line with the needs of respective business division, and a leadership college that cultivates managers of various levels with required management and leadership capabilities. Under the support and assistance of management, the technical management college at the Kunshan plant has started school in August 2009, offering a series of courses for workers and supervisors. Professional courses on R&D, sales and marketing, and leadership will subsequently be offered at all three campuses.

The establishment of MSI University signifies the simultaneous launch of systemic personnel cultivation programs in Taiwan and China. While employees enhance their personal work competence through learning, they will reflect the learning results in work. For MSI, it will lead to the improvement of overall organizational performance and bring about the learning atmosphere within the organization and the creation of positive corporate culture. The ultimate goals of MSI University are to achieve resources integration, internalize and retain knowledge and experience within the organization, cultivate and retain outstanding personnel, and attract outside talents.

MSI UniversityTaipei Campus Baoan Campus

Kunshan Campus

By organizational functions By development needs

5.2.3 Wages and Benefits

Equal Pay and Vacation System

Our payroll system is designed based on personal education and experience, company performance and ability to pay, job grade and title, and personal performance review, and adjusted in reference to the pay adjustment of government agencies and industry wage level. Employees receive equal pay for equal work regardless of gender. The wage level of employees is not influenced by gender, race, religion or political affiliation.

Employee wages consist of direct pay and indirect pay. Direct pay includes base pay, supervisory differential, and bonus (mid-year bonus and year-end bonus). Indirect pay includes travel subsidies, money gifts for the occasions of wedding, childbirth, festival holidays and birthday, condolence payment in case of hospitalization for injury or illness, or funeral of family members, and group activities. In concurrence with the amendment of Labor Pension Act, we have adopted the new pension system since July 1, 2005, according to which the company will contribute 6% of the wages of an employee into his or her personal retirement account each month.

Besides legal holidays, an employee is entitled to seven days of vacation a year once he or she has reported to work for three months (to be granted pro rata according to the date of employment), and all employees are eligible for matrimonial leave, maternity leave, funeral leave, paternity leave, paid sick leave, and flexi-leave. In addition, employees are offered two days of fully paid “family rest day” during normal work days, hoping that employees have the chance to take some time away from work and enjoy normal family life, strike a balance between work and family and get fully rested.

Non-toxic cockroach bait DIY activity – learning environmentally friendly solution while fellowshipping with coworkers

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Care and Concern for Employees

We implemented the “Employee Assistance Program” (EAP) in 2009. The EAP covers five areas – Law and Life, Money Management and Tax, Health and Wellness, Psychological Counseling, and Management Counseling, under which, employees and their families with questions on family and marriage, tax, health and career development can seek the assistance of professionals and consultants. By extending our concern for the wellbeing of our employees to their families, we hope to provide our employees with a total care program that helps them achieve balanced development of body and mind.

Employee Assistance Program (EAP)

Law and Life Money Management

and Tax

Health and Wellness

Management Counseling

Psychological Counseling

EAP and people managementTeam leader skillsManagement case discussionEmployee recommended issues

Female health issuesMale health issuesSecond opinion on medical treatmentBaby/infant health careEldercare

Transaction disputeCar accident compensationFamily and marriageInheritance issues

Tax issuesWealth management issuesDebt issuesCareer and work

Family and marriageChildcare and parentingRelationship issuesInterpersonal relationship

Employee Welfare Committee

We establish an Employee Welfare Committee in accordance with the internal Employee Welfare Regulations. The company contributes 0.05% of its annual revenue and each employee contributes 0.5% of their wages to the budget of the Committee, including money gifts for three festival holidays, employee birthday, employee travel subsidies and Year-end gifts. The Committee is composed of worker representatives who are in charge of planning and implementing programs and activities relating to employee welfare.

Wide Variety of Activities

We have built the facilities of employee cafeteria, reading room, billiard room, dance studio, exercise machines or gym, basketball court, tennis court, and Internet café. The Employee Welfare Committee of the plant would also subsidize all kinds of group activities that benefit the body and mind of employees. We also hold company-wide travel, arts and cultural activities, or movie nights every year in the hope to enrich the lives of employees and help them enjoy a wholesome and balanced work and family life.

Fun family outing

Company-wide activities: Including year-end banquet and one-day trip; zmore than 18,000 employees and families attended the events.

Arts and cultural activities and speech: We held 14 company-wide zspeech and movie night activities; more than 1,800 employees attended the activities.

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Group activities: We have 29 employee groups set up, which enjoy zmore than 1,500 members. Each group meets or holds activity 1 ~ 4 times a week to give members the opportunity to move their body, use their brain, or play with their hands. In 2009, employee groups held more than 1,500 classes.

Sports contests: The employee groups take turns sponsoring zbasketball, table tennis, bowling, soft ball and badminton contests. In 2009, 16 sports contests participated by more than 1,000 employees were held.

Wide variety of leisure activities for employees

Wide variety of leisure facilitiest

MSI Taiwan

MSI Shenzhen

MSI Kunshan

Tennis court

Basketball court

Badminton court

Billiard room

Internet café

Reading room

Karaoke room

Exercise machines or

gym

5.2.4 Health, Safety and Risk Management

MSI Taiwan, MSI Shenzhen and MSI Kunshan have all passed ISO 14001 and OHSAS 18001 certification. We ensure the normal functioning of our system through daily check, internal audit, external audit and fire drill to achieve the dual purposes of maintaining the health of employees and

providing a comfortable and safe work environment.

Organization and Responsibility

All three MSI plants (MSI Taiwan, MSI Shenzhen and MSI Kunshan) have an ESH unit in place. The ESH unit in Taiwan is responsible for the central planning of the annual health, safety and risk management program of all three plants, while the execution and maintenance of routine operations are handled by the professional personnel at respective plant. The ESH personnel at the three plants hold an inter-plant ESH meeting once every month. The meeting entails routine report on the status of safety, health and environmental operations at each plant, discussion of ESH issues, and proposition of improvement actions. Such regular meetings have helped reduce the incidence of occupational injury and boost employee satisfaction.

Trends of Disabling Injury Frequency Rate (DIFR) and Disabling Injury Severity Rate

(DISR), 2007 ~ 2009

0

20

40

60

80

100

DIFR DISR

Education, training and practice enhance the safety awareness and emergency response

capability of personnel

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Workplace Injury

The plants hired more new workers in 2008 to meet the needs of increased capacity and some new workers had not developed enough safety consciousness, hence resulting in a rising trend in work injuries. To address workplace injury issue, we start from improving the work process flows by posting detailed operating steps and reminders at each production line and painting the floors of workshops to mark the separate lanes for pedestrians and vehicles. We also install bells on forklift and stackers to alert passing pedestrians, and install mirrors at each turn of the plant to minimize latent hazards in the work environment.

The measures we have implemented evidently work as shown in the significant improvement in the incidence of occupational injury with disabling injury frequency rate dropping from 0.79 to 0.43 and disabling injury severity rate dropping from 6 to 3. We will continue to improve workplace safety as we endeavor towards to goal of zero-accident workplace.

Emergency Response

To minimize workplace risks and keep injury and fatality to the minimum when accident does happen, we take fire drill and chemical leak drill in turns each year. The drill takes into account the nature of our operations and associated latent risks, and covers dormitory area. The

purposes of the drills are:

1. to enable personnel understand the latent risk of accident and imbue them with the basic concept of emergency response;

2. to familiarize personnel with the use of in-house fire extinguishers and fire escape equipment;

3. to explain the composition of fire safety and emergency response team to make sure the emergency response organization fully functions and is able to effectively evacuate the crowd in case of an accident; and

4. to familiarize personnel with the escape routes and emergency rendezvous points to reduce the incidence of stampede during emergency evacuation.

We give foremost consideration to personal safety. Our concern is not limited to company employees. We give equal consideration and equal treatment to company contractors. Thus aside from company employees, contractors are also required to participate in emergency response training and fire drill. Through education, training and practice, we make sure that all people working in the plant have heightened awareness to safety and emergency response capability.

Monitoring and Testing

Employees typically spend more than 8 hours a day at workplace, and their health is inevitably influenced by the conditions of environmental they work in. Thus we conduct testing of lightning arrester, noise, environment, waste water, drinking water, cooking fumes and food to ensure the personal safety and health of employees with objective scientific tests.

Environmental testing

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To step up the management of electrical safety, we install infrared thermometers to test the high and low voltage of electrical devices in the plant and promptly undergo inspection or replacement once voltage irregularity is found to keep the hazard of electrical equipment to the minimum.

All MSI plants come with cafeteria, coffee bar and bakery to provide employees with convenient services. All such contractors must pass qualification screening and are subject to constant onsite audit and occasional environmental testing. Food samples are sent to an impartial third party for testing from time to time to ensure its safety and sanitation. We also conduct cafeteria food satisfaction survey every year to make sure the food prepared by cafeteria contractor is “nutritious”, “wholesome”, and in addition, “tasty”, for enjoyable food and healthy food can coexist.

Delicious, wholesome and nutritionally balanced cafeteria food

Clean and cozy dining environment

2009 Environmental Testing Items and Results

Test item

Lightning arrester

Boundary noise

Workshop environment

Wastewater

Drinking water

Cooking fumes

Cafeteria food sample

Plant tested Result

Normal

Normal

Normal

Normal

Normal

Normal

Normal

MSIS, MSIK

MSIT, MSIS, MSIK

MSIS, MSIK

MSIS, MSIK

MSIT, MSIS, MSIK

MSIT, MSIS, MSIK

MSIT, MSIS, MSIK

Personal Safety Gear Management

We explicitly declare in the “MSI Environmental, Safety, Health and Corporate Social Responsibility Policy” that we will “step up the discovery of latent risks and reduce risks to tolerable levels.” To achieve such goal, ESH representatives selected by respective units together with the in-house ESH personnel would conduct latent risk assessment with respect to operational characteristics and process every year, and based on the risk level, examine the purchase, registration, pickup and use of personal safety gear to ensure the work safety of personnel. We also conduct patrol inspection and annual internal and external audits to ensure the correct use of personal safety gear during work.

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5.2.5 Employee Health

All plants have an infirmary staffed by professional and qualified doctors and nurses to provide professional healthcare services. Besides general outpatient care, the infirmary also provides the services of blood drawing for testing and health counseling, and helps employees and their

families with refill prescriptions to pick up medications.

Health Care and Health Promotion

To care for the health of our employees, the physical examination of employees paid for by the company covers more items than those required by law. We offered employees with preventive physical exam program the first time in 2009 in the hope to ensure the health of employees through early discovery and early treatment.

We sponsor a series of health care and health checkup activities, including psychological counseling, office health stretch exercise, Pap smear, bone density exam, and flu shot. We have also sponsored a number of blood donation drives to show our care to the health and life of other people.

H1N1 Epidemic Control

When there was a global outbreak of H1N1 flu epidemic, our human resources, general affairs, ESH units and infirmary promptly form an emergency response team and establish a reporting system. The team updated the disease information on a daily basis, carried out education among employees, and published health reminders. The team also made anti-septic liquid available at main entrances and exits for employees to manage their own personal hygiene.

During the epidemic period, all plant visitors were required to have their body temperature measured and fill out a form to determine whether they came from an epidemic area. All visitors were also required to wear a mask when they entered the plant. To prevent the risk brought about by employees returning from epidemic area, we would track daily the list of returning personnel and the flights they took to keep track of their health status.

JanuaryFebruary

March

April

May

June

July

August

September

October

November

December

Hepatitis B vaccination 200 persons

Routine check up for women of childbearing age

General health checkup

Health checkup for underage workers

Bone density exam

Seasonal flu shot

H1N1 vaccination

H1N1 vaccination

Annual health checkup for employees who joined MSI in the last two years

Occupational health checkup

Blood donation drive

Blood donation drive

Pap smear

persons

persons

persons

persons

persons

persons

persons

persons

persons

persons

persons

persons

MSI Taiwan MSI Shenzhen MSI Kunshan

Employees lining up to donate blood

Employees received the CPR training

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5.3 Suppliers5.3.1 Supplier Policy

We firmly believe that fulfilling corporate social responsibility is critical to the sustained operation of an enterprise. Besides implementing and promoting Electronic Industry Code of Conduct (EICC) and “Corporate Social Responsibility” inside MSI, we also hope that our suppliers would provide a safe work environment for their employees and treat their employees with respect and dignity, and ensure that their processes and products are environmentally responsible. Thus we drafted “Corporate Social Responsibility Requirements for Suppliers” in 2009, hoping that close supply chain collaboration will bring more benefits to customers, the environment and society as a whole.

Micro-Star International Co., Ltd.Corporate Social Responsibility Requirements

Micro-Star International Co., Ltd. (“MSI”) firmly believes that fulfilling its economic, environmental and social responsibility is an important key to the sustained operation of an enterprise. Thus MSI hopes that enterprises, customers and suppliers that it does business with proactively and vigorously promote internal compliance with the following economic, environmental and social responsibility requirements to advance the welfare of their customers, employees, suppliers, community, and other stakeholders.

1. Supplier undertakes not to use child labor or hire employees who work under coercion or threat.

2. Supplier undertakes that all of its employees are treated with respect and dignity that it will not engage in any practice that constitutes inhuman treatment or any form of psychological or physical maltreatment, harassment, or discrimination against its employees. Supplier undertakes that the work hours, wages and benefits of its employees comply with the local laws and regulations, and that its employees enjoy the right of free association, the right to elect representatives and the right to collective bargaining.

3. Supplier undertakes to provide its employees with a healthy, safe and cozy work environment.

4. Supplier warrants that it will periodically identify hazards in the work environment, assess the risks and reduce the risks to the minimum through preventive and corrective actions.

5. Supplier undertakes to provide its employees with clean and sanitary dormitory and cafeteria, including clean, sanitary equipment, drinking water, food and storage equipment.

6. Supplier undertakes to obtain environment-related permits from the local environment, and carry out periodic maintenance, update and report to keep such permits valid.

7. Supplier undertakes to implement pollution control and energy conservation on a continual basis and that its treatment of waste water, solid waste, hazardous substances, and polluted air complies with the regulatory requirements.

8. Supplier warrants that its products comply with the international environmental requirements, do not contain banned/restricted substances and comply with the MSI “Green Product Control Specifications.”

9. Supplier undertakes to move towards the adoption of a corporate social responsibility management system and periodically identify and understand applicable domestic and foreign laws and regulations as well as customer requirements.

10. Supplier undertakes that it will establish risk identification and risk management process or procedures to properly reduce risks or to carry out risk control.

11. Supplier undertakes that it will establish goals, objectives and implementation plan for corporate social responsibility and periodically evaluate the effect of plan execution.

12. Supplier undertakes to periodically communicate its corporate social responsibility goals, objectives and implementation plan with its customers, suppliers and employees.

13. Supplier undertakes to uphold business integrity and explicitly prohibit the acceptance of any form of improper advantage, and prohibit the acts of corruption, blackmail or embezzlement.

14. Supplier undertakes to establish a mechanism that will keep the identities of the person reporting improper practice and the person being reported confidential.

15. Supplier undertakes to respect and protect intellectual property rights and engage in fair trade, advertising and competition.

16. Supplier undertakes to disclose information on its organizational structure, operating status, business activities, and financial performance according to customary business practice.

17. Supplier undertakes to participate in public interest activities within the extent of its capacity to promote social harmony and progress.

5.3.2 Supplier Management

To ensure that all MSI suppliers are in compliance with work and environmental safety related requirements, treat their employees with due respect and dignity, their products and processes are environmentally responsible, and that the quality, delivery, price and service of suppliers conform to MSI requirements, and to avoid the latent risk of disruption to our operations due to internal unscrupulousness or operational omission on the part of supplier, we conduct supplier questionnaire survey to enhance the understanding of our suppliers. We also build a green product management platform for better material management and hold the first supplier conference in 2009 to enhance communication and mutual understanding and ensure the smooth working of the supply chain, thereby lowering any potential impact on and risk to our operations.

Supplier Risk Control: Questionnaire Survey and Analysis

Starting in 2009, we ask our suppliers to sign a Supplier EICC Agreement and embark on supplier questionnaire survey. The signing of Supplier EICC Agreement is to make sure a supplier’s labor management, internal operations and ESH systems comply with the EICC requirements and has the supplier committed to continuous improvement and maintaining the quality and timeliness of delivery. The supplier questionnaire survey enables us to understand better the operating conditions of suppliers and provide necessary assistance to them, if necessary.

We conduct analysis and risk rating based on the information provided in the returned supplier questionnaires. For suppliers receiving low risk rating, we would continue to work with them. For medium-risk suppliers, we would ask them to take remedial actions or undergo education and training within a given time period. We will put high-risk suppliers under management, audit and reassessment. So far we have conducted questionnaire survey of close to 100 key suppliers.

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5.3.3 Contractor Management

Providing our employees with a safe and cozy work environment is our responsibility. But we should also demand that our contractors do the same to truly fulfill the responsibility of a corporate citizen and embrace corporate ethics. All MSI contractors must comply with our operating requirements before they are contracted for the work or allowed to perform work inside a MSI plant.

To ensure operational safety, the contractor must apply to the plant ESH unit for a special operation permit when the contract work involves firing, elevated operation, specific electrical work, hoisting, caging or confined space. The ESH unit would review the qualifications of the operators and post notice on environmental, safety and health matters at the worksite. Sign-off is also required when the work is completed. All files on the special operation are documented and saved for future reference.

Supervision and Evaluation

If there is concern for imminent danger or major violation of ESH regulations during the work, the contractor will be asked to stop the work immediately and will resume work only after the unit contracting out the work and ESH unit of the plant have jointly accepted the remedial actions taken by it. The whole process will be documented under the contractor’s

record as reference in future contracting and contractor evaluation.

Work Quality Assessment

After a contract work is completed, the unit contracting out the work will fill out a Contractor Work Completion Assessment Sheet to grade the work quality and ESH compliance of the contractor. Contractors that receive a score of 85 points or high are graded Class A vendor; contractors with a score of 84 ~ 65 points are graded Class B vendor, and contractors with a score under 65 points are graded Class C vendor. The original of the assessment sheet is turned over to the ESH unit for keeping as reference

for future selection of contractor.

Penalty

Any employee can report contractor’s violation of MSI ESH rules to the ESH unit. The ESH unit will, in view of the situation, deduct payment, or ask the contractor to stop work, or in case of serious violation, remove the contractor from the approved vendor list.

Professional, qualified contractor washed the exterior of plant building

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6 Public Welfare“Hope is like a road,

There was no road there to start with,

But as more and more people walk along the same route, a road takes shape.”----Lu Xun

Under the impact of global financial storm, we experienced the first ever decline in revenue and profit in the history of the company in 2009. It has been our tradition to participate in and avidly support public welfare activities. But in the face of such harsh challenge, we did mull over the question: “Do we really have extra strength and energy to help others?” As we firmly believe that success brings not just happiness and wealth, but also more obligations, and we believe in the sage teaching of “honor old people as we do our own parents and care for other’s children as our own”, we did not cut our public welfare budget, but instead, increased the spending in 2009. We hope that our actions will set a good example and inspire more enterprises to follow suit as we strive to help each other to sail safely through this round of economic crisis.

Besides possessing outstanding work competences, we also desire our employees to be a “better person” who make contribution to themselves, others, the society, and even the world. Thus at MSI Taiwan and MSI Shenzhen, we have organized respectively the “MSI Love Volunteer Corps” and “MSIS Volunteer Brigade” to give employees full support in getting involved in social and public welfare activities. While helping others, volunteers could witness their own growth and progress, and the positive influence of their actions on their own family, the company and the society. Volunteer work is one of our ways to act on the vision of “Green Homeland and Beautiful Life.”

6.1 Community Giveback

Giveback to the Local Community

We have adopted the trees along some road sections in Zhonghe for more than 10 years in the hope to help improve the air quality of surrounding environment and the living quality of the local residents and address the noise problem in the area. We are also a long-term sponsor of the voluntary police squad and fire brigade in Zhonghe district and the local Bureau of Environmental Protection, providing them with supplies as a token of our gratitude to the local government agencies. Without their assistance, we will not be able to have a safe and cozy work environment.

Humanitarian Aid in the Aftermath of Typhoon Morakot

Typhoon Morakot ravaged southern Taiwan in 2009, leaving several hundred people dead and tens of billions of dollars in damages. We held a senior management meeting right after the news of disaster came out to discuss what we could do to help. Without affecting the rescue work of the government and relevant agencies, several of our senior executive officers visited the disaster-hit areas many times to get a handle on the situation and contact the local government to discuss possible aids. Soon after that, we donated NT$11,660,000 as funds to aid the victims and help them rebuild their homeland.

Industry-Academia Cooperation to Help the Present and the Future of School Children

Taiwan has been losing many blue-collar jobs as enterprises in Taiwan moved their factories en masse to China and Southeast Asia. The governments do provide subsidies to low-income families. The money might meet the basic needs of daily life of those families, but not enough for the education of their kids.

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We hoped to provide assistance to the children of low-income family so they can go to school without worrying about tuition. Thus we decided a two-prong approach by offering “grant” and “extracurricular opportunities” that we would help pay tuition, and in addition, provide more free learning opportunities.

Collaborating with Taipei County’s Bureau of Education, we have been sponsoring free lunch for 669 kids of low-income families to make sure children get balanced and sufficient nourishment so they can grow and develop healthily.

The “Little Sun Children’s Computer and English Camp” is a program we sponsor to help kids of low-income families after many rounds of discussion with Taipei County’s Bureau of Education and Bureau of Social Affairs. The program lasted more than three months and had 8 sessions. Under the program, low-income family children under the assistance of the Bureau of Social Affairs or referred by school were led by students of Chihlee Institute of Technology and Huafan University to attend a two days and one night computer and English camp. The children shared their thoughts at the end of the activity: “It was such a pleasant and happy two days. I didn’t like English to start with. But after the patient tutoring of those big brothers and sisters, I found out that English is not hard at all!”

We believe education has far-reaching influence on a person’s life. Education could have a bearing on a person’s employability and hence his or her financial security. Education could also influence the cultivation and development of a person’s character. The education of a child could potentially affect a family, while the education of many children could affect the development and future of a society. Thus we started to set up a grant program at many elementary schools, junior highs, high schools and colleges in Taipei County in 2009 in the hope to give kids of low-income families more opportunities to learn.

Our grant recipients include 89 grade 1 to grade 12 students from Taipei Municipal Jianguo High School, Taipei Municipal ZhongShan Girls’ Senior High School, National Chung Ho Senior High School, National Panchiao Senior High School, National HsinChuang Senior High School, Chongcing Junior High School and Tucheng Junior High School and 39 college students. We hope more than NT$3 million of financial aid from MSI will support them to finish school without interruption and eventually help them obtain a better future.

Environmental Volunteers – Yangtai Mountain Cleaning Activity

Guangdong Yangtai Mountain is known for its rich and enchanting natural landscape and a popular scenic spot in Shenzhen. Because of the crowd of visitors who tend to toss garbage everywhere, the scenes of trash scattering along the trails are common when you visit Yangtai Mountain. So MSI Shenzhen decided to hold a Yangtai Mountain hiking and cleaning activity where participants would help clean up the environment while they have an exercise outing.

MSI Shenzhen employees patiently picked up trash scattered around the mountain

On the day of the activity, more than one hundred volunteers from MSI Shenzhen brought their own trash bag and picked up waste paper, plastic bags, and empty bottles discarded by tourists in the bushes and around trees as they climbed up the trail. Participants who brought sickle also trimmed the weeds at the trail entrance. At the end of the day, participants had the chance to limber up and appreciate the beautiful sceneries of Yangtai Mountain, made a contribution to environmental protection, and set a good example of a good corporate citizen.

MSI grant recipients

The local residents of Kunshan waited in patience to receive counseling

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40


we promptly agreed to donate nine computers needed for the program. One member of the Yuan Ze activity team commented: “We are surprised that MSI made so fast a decision and donate all brand new computers, instead of second-hands. We didn’t anticipate such swift action.”

Yuan Ze volunteers visited an elementary school in Katmandu, Nepal in June 2009 to start a 26-day “Reduce the Digital divide” program. The program included computer teaching, assistance in building a library, and cultural exchange between Taiwan and Nepal. At the conclusion of the program, the computers were left to the local teachers and students. MSI also asked its agent in Nepal to check on the activity and offer assistance to the maintenance and operation of computer afterwards.

MSI vs. Chung Yuan vs. Cambodia “Unceasing Love and Second-hand Computer Raising” Project

We collaborated with Chung Yuan Christian University on this “second-hand computer raising” project in the hope that 4,000 students and teachers of Wat Bo Elementary School in Cambodia would have more opportunity to learn how to operate a computer and use computer.

With 20 computers donated by MSI, the school is able to set up the first computer classroom in the local community that allows students to learn the basic computer skills and teachers to learn advanced computer skills. We are glad the collaboration between business and school this time allows us to extend the reach of our community giveback efforts to another corner of the world and give help to those who most need it.

Nepalese teachers learned attentively how to operate a MSI netbook

MSI representative Mr. Chien Wayne (left) accepted a letter of appreciation from Chief Secretary Dr. Wu Chiao-Ming of Chung Yuan

Christian University (right)

“Learn from Lei Feng” Community Service Activity

“Do you know what is psychological counseling?” This question unfolded the community service activity taken place at the square of Bingxi Town Xibei Elementary School. At 8:00AM on March 5, 2009, the MSI Kunshan community service team set itself up at the square to provide free psychological counseling, social security counseling, legal assistance and simple electrical appliance repair services to the local residents.

The weather was not cooperative on that day. Local residents with umbrellas in hand waited patiently in drizzles to wait for their turn. In the three hours of activity, family relations, disease counseling, dating and relationship issues were the most frequently asked questions. Local residents gave members of the community service team unreserved praises. One resident commented: “The people from this company really make you feel good. They give you help, but also bring you warmth like a family member.” This was the first time MSI Kunshan held such community service. The activity was a relatively short one. But we are glad that it has received the support and assistance of Kunshan government. More so, we are glad that the local residents could feel warmth from the society while getting help from us.

MSI vs. Yuan Ze vs. Nepal “Reducing the Digital divide” Activity

The belief in the teaching of “honor old people as we do our own parents and care for other’s children as our own” is the force that drives MSI to participate in public welfare activities. We also believe that the implementation of this idea should not be limited to our countrymen or people in the same ethnic group as ourselves. Within our capacity, we like to help socially disadvantaged people, wherever they are. Yuan Ze University has been doing the work of teaching computer or building computer software infrastructure in developing countries for several years. In 2009, because of the financial storm, they could not find companies to donate computer software and hardware this year. After learning the objectives of the Volunteer Corps and the target recipients of their assistance program,

Under the leadership of senior management, the “MSI Charity Volunteer Corps” is organized

Volunteers gathered together after work to discuss the teaching program and the production of props

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6.2 Corporate Volunteer

The financial storm led to record high unemployment in Taiwan and caused more havoc to low-income families. Under the call of MSI top management, we decided to make use of our core competency – outstanding personnel and professional knowledge in computer to organize the “MSI Love Volunteer Corps” that takes “reduce the digital divide” as its primary mission and provide children of low-income families free computer lessons.

Through the help of representatives of the Chinese Youth Peace Corps, it was decided that the MSI volunteers would provide computing instruction for a period of 10 weeks, to 30 aboriginal children in Grades 3 to 6 from Hsintien Elementary School and Ch’ing-t’an Elementary School.

To ensure efficient use of resources and avoid unnecessary waste, the volunteers carried out a search to see which surplus materials were available within the company. These included T-shirts, stationery, toys, environmentally-friendly shopping bags, stickers, mugs etc. that had been prepared for various company activities. The volunteers racked their brains to find ways to make the computing classes as interesting and exciting as possible for the children. This often involved showing a side to themselves that their colleagues would not normally see; for example, they might integrate songs (accompanied by guitar) into the classes, tell jokes, or finish the class with a dance. The goal in all of these efforts was to attract and retain the interest of the children. To

ensure that the instruction provided was of a high quality, with rich content, the volunteers would take a packed evening meal to Conference Room to prepare for the next weekmselves th off duty. Teaching squad leader Adam recalls how tongue-tied he was during the first training session. With an embarrassed laugh, he notes that having the experience of getting up in front of a class to teach has helped to improve his verbal communication skills, giving him an unexpected reward from his participation in the volunteering activity.

As the volunteers became more adept and professional at teaching, the students reported to class earlier and earlier each week. Before 9:30AM, everybody was set to go…….. Once the class been cancelled because H1N1 epidemic had reached peak in Taiwan. After that, before the class began, all staff must take the steps of measuring body temperature, hand disinfection, and wearing mask to ensure the health of the students and the volunteers.

Students attentively received the instructions of volunteers

Student parent’s thank-you letter

A student’s graphic design

The teaching and learning continued despite the inconvenience caused by wearing mask

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Results

At the end of the program, the students all learned the basic computer knowledge and word processing. But the most surprising change is that the most mischievous student received the best grade and never missed a class. “I think mainly because we believe all kids have potential and all kids have the ability to learn”, comments the volunteer in charge of this activity. What to do when a student is absent-minded? We encourage; what to do when a student refuses to work? We encourage; what to do when a student plays video game in class? We encourage again and again.

In the last week of the program, all volunteers felt both relief and the reluctance to end. September 26, 2009 was the last week of the computer class. On that day, volunteers said to the students “So long” instead of “See you next week.”

Feedback

During the activity, we received thank-you calls and letters from many parents. Some parents wrote on the weekly student notebook: “Thank you for holding this activity. This is really special for us!” Getting a thank-you note from parents is not the purpose of this activity, still we feel heart-warming upon receiving the recognition and become more determined to carry on such volunteer activities. Internally, the biggest change is that MSI colleagues become chummier with each other and learn to cherish and appreciate more.

Ten weeks, two hours a week of computer teaching is just the starting point of MSI Love Volunteer Corps. We will continue to contribute our efforts to the people on this land and hope that such efforts will be seeds sown in the land that will flower and bear fruits.


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Supplemental information 1: Contact Window

This report is issued in Chinese and English version, both can be downloaded from MSI’s website. We welcome any comment about this report, and are very interested in receiving feedback from our readers. Please send comments to below contact person.

MSI


Rene Kao

Address: No.69, Lide Street, Jhonghe City, Taipei County, Taiwan

Tel：+886 2 3234-5599 Ext：2613

Email：[email protected]

Supplemental Information 2: GRI G3 Content Index

GRI G3 Content IndexCategories Activities Page Note

1.Strategy and Analysis

1.1 CEO Statement p4

1.2 Key impacts, risks and opportunities P8, P17

2.Organizational Profile

2.1 Name of the reporting organization P5

2.2 Products and/or services P7

2.3 Operational structure P9

2.4 Headquarter location P5

2.5 Countries in operation P6

2.6 Nature of ownership P5

2.7 Markets served P6, P7

2.8 Scale of the organization P9

2.9 Significant organizational changes P9

2.10 Awards received P13

3.Report Parameters

3.1 Report period P2

3.2 Previous report P2

3.3 Reporting cycle P2

3.4 Contact point for questions P43

3.5 Content definition P2

3.6 Boundary of the report P2

3.7 Limitations on the report’s scope P2

3.8 JVs, subsidiaries, and outsourcing Not disclosure

3.9 Data measurement techniques Not disclosure

3.10 Effects of information re-statement Not disclosure

3.11 Changes from previous reports P2

3.12 Standard disclosures P43

3.13 External assurance Not disclosure

4.Governance, Commitments, and Engagement

4.1 Governance structure P9

4.2 Indication Whether chairperson is also executive officer

P4

2010 Corporate Social Responsibility Report Public Welfare

44

4.3 Independent members at the board P8

4.4 Mechanisms for Shareholders/employee participation

P3

4.5 Executive remuneration and performance

Not disclosure

4.6 Process to avoid conflict of interest at the board

Not disclosure

4.7 Process to determine board expertise on sustainability

Not disclosure

4.8 Mission and value statements P4

4.9 Procedures for board governance on management of economic, environmental, and social performance

Not disclosure

4.10 Processes for evaluation of the board’s economic, environmental, and social performance

Not disclosure

4.11 Precautionary approach principle Not disclosure

4.12 External charters/principle Not disclosure

4.13 Association memberships P13

4.14 List of stakeholders P3

4.15 Stakeholder identification P3

4.16 Approaches to stakeholder engagement P3

4.17 Topics raised by stakeholders P3

Economic

EC1 Direct economic value P5, P7

EC2 Financial implications due to climate change

P17

EC3 Benefit plan Not disclosure

EC4 Financial government assistance Not disclosure

EC5 Entry level Wage (Add) Not disclosure

EC6 Local suppliers Not disclosure

EC7 Local recruitment P28

EC8 Infrastructure investment and services for public benefit

P38, P39

EC9 Indirect economic impacts Environmental (Add)

Not disclosure

Environmental

Disclosure on management approach P14-20

EN1 Volume of materials used Not disclosure

EN2 Recycled materials P20

EN3 Direct primary energy consumption P19

EN4 Indirect primary energy consumption P24

EN5 Energy conservation (Add) P23

EN6 Initiatives for energy-efficiency and renewable energy

P19

EN7 Initiatives for reducing indirect energy (Add)

P23

EN8 Water Withdrawal P24

EN9 Effect of water withdrawal (Add) Not disclosure

EN10 Water recycled (Add) Not disclosure

EN11 Land assets in sensitive areas Not disclosure

EN12 Impacts on biodiversity Not disclosure

EN13 Habitats protected or restored (Add) Not disclosure

EN14 Strategies for biodiversity (Add) Not disclosure

EN15 Endangered species (Add) Not disclosure

EN16 Greenhouse gas emissions P18

EN17 Other greenhouse gas emissions P18

EN18 Initiatives to reduce greenhouse gases (Add)

P23

EN19 Ozone-depleting substance emission P18

EN20 NOX, SOX and other air emissions P18

EN21 Water discharge Not disclosure

EN22 Waste by disposal method P20

EN23 Significant spills P20

EN24 Movements of hazardous Waste (Add) P20

EN25 Habitats affected by discharge and runoff (Add)

Not disclosure

EN26 Environmental impact mitigation P23

EN27 Packaging materials P17

EN28 Non-compliance sanctions P20

EN29 Environmental impact of transport (Add) Not disclosure

EN30 Environmental protection expenditure (Add)

P20

(1) Social: Labor Practices and Decent Work

Disclosure on management approach P26-P25

LA1 Breakdown of Workforce P26


45

LA2 Employee turnover P27

LA3 Benefits to full-time employees (Add) P30

LA4 Employees with collective bargaining agreements

Not disclosure

LA5 Minimum notice periods Not disclosure

LA6 Workforce in joint health committee (Add)

P28

LA7 Occupational injuries and absenteeism P32

LA8 Training on serious diseases P35

LA9 Trade union agreements on health (Add) Not disclosure

LA10 Training per employee P28

LA11 Programs for lifelong learning (Add) P29

LA12 Career development (Add) P29

LA13 Composition of governance bodies Not disclosure

LA14 Gender pay disparity P30

(2) Social: Human Rights


HR1 Human rights clauses investment Not disclosure

HR2 Supplier screening on human rights P36

HR3 Training on human rights (Add) P36

HR4 Discrimination P27

HR5 Association and collective bargaining P28

HR6 Child labor P27

HR7 Forced labor P27

HR8 Training for security personnel (Add) Not disclosure

HR9 Violations of rights of indigenous people (Add)

Not disclosure

(3) Social: Society

Disclosure on management approach P9

S01 Impact on communities Not disclosure

S02 Corruption risks Not disclosure

S03 Anti-corruption training Not disclosure

S04 Actions against corruption P27

S05 Lobbying P9

S06 Political donations (Add) P9

S07 Anti-competitive behavior (Add) Not disclosure

S08 Regulatory non-compliance sanctions P20

(4) Social: Product Responsibility


PR1 Health and safety impacts along product life cycle

Not disclosure

PR2 Non-compliance with health and safety standards (Add)

Not disclosure

PR3 Production information P17, P21-P22

PR4 Non-compliance with product information standards (Add)

Not disclosure

PR5 Customer satisfaction (Add) P25

PR6 Communication programs Not disclosure

PR7 Non-compliance in marketing practices (Add)

Not disclosure

PR8 Complaints regarding customer privacy (Add)

Not disclosure

PR9 Product non-compliance Not disclosure

MICRO-STAR INT’L CO., LTDNo.69 Lide Street, Jhonghe City, Taipei County, TaiwanTel: (02)3234-5599 Fax: (02)3234-5488www.msi.com

Documents

2010_CSR Cover.eps - MSI · PDF fileMICRO-STAR INTERNATIONAL CORPORATE SOCIAL RESPONSIBILITY REPORT 2010 Beautiful life and Green Homeland