Acer 2007 Annual Report Download - page 105

Download and view the complete annual report

Please find page 105 of the 2007 Acer annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 117

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117

102
7. Commitments and Contingencies
(a) Royalties
The Company renewed its patent cross license agreement with IBM in October 2003. The license
period is 5 years. The agreement mainly states that both parties have the right to make use of
either party’s global technological patents to manufacture and sell personal computer products.
The Company agrees to make fixed payments periodically to IBM, and the Company will
not have any additional obligation for the use of IBM patents other than the fixed amounts of
payments agreed upon.
In June 2004, the Company and Lucent Technologies Inc. renewed the Patent Cross License
agreement. The license period is from April 1, 2004, to December 31, 2010. During the
aforementioned period, the Company only pays the amounts according to the contract when
manufacturing and selling computer products for which Lucent holds related patents. No
additional royalties are required. The essence of the license agreement authorizes both parties
to use each other’s worldwide computer-related patents for manufacturing and selling personal
computer products.
(5) Advances to/from related parties
The Consolidated Companies paid certain expenses on behalf of related parties.
Additionally, related parties paid certain expenses and accounts payable on behalf of the
Consolidated Companies. As of December 31, 2006 and 2007, the Consolidated
Companies had aggregate receivables from related parties of NT$89,937 and NT$59,403,
respectively, and payables to related parties of NT$573,586 and NT$609,717, respectively,
resulting from these transactions.
6. Pledged Assets
Assets pledged for various purposes were as follows:
Book value of pledged assets
at December 31,
Pledged assets Pledged to secure 2006 2007
NT$ NT$ US$
Cash in bank and time deposits Contract bidding and project
fulfillment
389,274 398,459 12,285
Accounts receivable Stand-by letters of credit 601,548 - -
Inventories Stand-by letters of credit 259,043 - -
Property, plant and equipment,
and property not used in
operations
Credit lines of bank loans 2,199,370 1,692,140 52,170
3,449,235 2,090,599 64,455
As of December 31, 2006 and 2007, a portion of the above pledged time deposits amounting to
NT$159,974 and NT$123,461, respectively, were classified as “other financial assets Ё
noncurrent” in the accompanying consolidated balance sheets. The remaining balance was
classified as “restricted assetsЁcurrent”.
Refer to note 10(b) for a description of restricted assets related to an escow account deposited for
a business acquisition.
6. Pledged Assets
Assets pledged for various purposes were as follows: