Acer 2008 Annual Report Download - page 58

Acer Incorporated 2008 Annual Report112
Financial Standing
Acer Incorporated 2008 Annual Report 113
(d) Other expenses
In 2007 and 2008, the Consolidated Companies paid iD Soft Capital Inc. management service fees
amounting to NT$69,333 and NT$61,633, respectively.
(e) 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, 2007 and 2008, the Consolidated Companies had aggregate receivables from related
parties of NT$59,403 and NT$45,173, respectively, and payables to related parties of NT$609,717 and
NT$189,964, respectively, resulting from these transactions.
(3) Main management compensation
As of December 31, 2007 and 2008, the gross compensation of the Consolidated Companies’ main
management was as follows:
2007 2008
Amount Amount
NT$ NT$ US$
Salaries 178,334 249,243 7,595
Cash awards and special allowances 69,669 134,574 4,101
Business expense 6,520 1,989 60
Employee bonus 482,825 360,581 10,987
737,348 746,387 22,743
The estimated employee bonus and directors’ and supervisors’ remuneration discussed in note 4(20)
includes the above amounts.
6. Pledged Assets
Assets pledged for various purposes were as follows:
Book value of pledged assets
at December 31,
Pledged assets Pledged to secure 2007 2008
NT$ NT$ US$
Cash in bank and time deposits Contract bidding and project
fulllment
398,459 109,586 3,339
Property, plant and equipment,
and property not in use
Credit lines of bank loans 1,692,140 4,902 149
2,090,599 114,488 3,488
As of December 31, 2007 and 2008, the above pledged cash in bank and time deposits were classied as “other
nancial assets” and “restricted assets ‒ current” in the accompanying consolidated balance sheets.
In 2007, the Consolidated Companies intended to acquire Packard Bell B.V., a company in Europe, with cash.
As of December 31, 2007, the Consolidated Companies had deposited NT$1,958,585 to an escrow account for
the purpose of business acquisition. The escrow deposit was recorded in “restricted assets – current” in the
accompanying consolidated balance sheets. The business combination was completed on March 14, 2008.
7. Commitments and Contingencies
(1) Royalties
(a) The Company has entered into a patent cross license agreement with IBM. 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 xed payments periodically to IBM,
and the Company will not have any additional obligation for the use of IBM patents other than the xed
amounts of payments agreed upon.
(b) The Company and Lucent Technologies Inc. entered into a Patent Cross License agreement. The license
agreement in essence authorizes both parties to use each other’s worldwide computer-related patents for
manufacturing and selling personal computer products. The Company agrees to make fixed payments
periodically to Lucent, and the Company will not have any additional obligation for the use of Lucent
patents other than the xed amounts of payments agreed upon.
(c) On June 6, 2008, the Company entered into a Patent Cross License agreement with Hewlett Packard
Development Company (HP). The previous patent infringement was settled out of court, and the Company
agreed to make xed payments periodically to HP. The Company will not have any additional obligation
for the use of HP patents other than the xed amounts of payments agreed upon.
(2) Others
As of December 31, 2007 and 2008, the Company had provided outstanding stand-by letters of credit totaling
NT$133,085 and NT$133,304, respectively, for bidding on sales contracts and for customs duty contract
implementation.
(3) The Consolidated Companies have entered into several operating lease agreements for warehouses, land and
ofce buildings. Future minimum lease payments were as follows:
Year NT$ US$
2009 528,674 16,109
2010 305,084 9,296
2011 126,589 3,857
2012 72,843 2,220
2012 and thereafter 114,930 3,502
1,148,120 34,984