Acer 2010 Annual Report Download - page 59

ACER INCORPORATED 2010 ANNUAL REPORT
114
FINANCIAL STANDING
115
December 31, 2009 December 31, 2010
Number of
Shares
Book
Value
Market
Price
Number of
Shares
Book
Value
Market
Price
NT$ NT$ NT$ NT$
Common stock 21,787 1,050,341 2,095,930 21,809 1,050,341 1,964,990
GDRs 4,982 2,472,257 2,393,831 4,987 2,472,257 2,266,441
3,522,598 4,489,761 3,522,598 4,231,431
Movements of the Company’s treasury stock were as follows (expressed in thousands of shares or units):
2009
Description Beginning Balance Additions Disposal Ending Balance
Common Stock 21,571 216 - 21,787
GDRs 4,933 49 - 4,982
2010
Description Beginning Balance Additions Disposal Ending Balance
Common Stock 21,787 22 - 21,809
GDRs 4,982 5 - 4,987
(c) Capital surplus
December 31, 2009 December 31, 2010
NT$ NT$ US$
Share premium:
Paid-in capital in excess of par value 1,784,258 2,262,989 77,686
Surplus from merger 29,800,881 29,800,881 1,023,030
Premium on common stock issued from conversion of
convertible bonds 4,552,585 4,552,585 156,285
Forfeited interest from conversion of convertible bonds 1,006,210 1,006,210 34,542
Surplus related to treasury stock transactions by
subsidiary companies 501,671 620,089 21,287
Others:
Employee stock options 360,630 632,175 21,702
Conversion right of convertible bonds - 295,494 10,144
Surplus from equity-method investments 487,883 408,492 14,023
38,494,118 39,578,915 1,358,699
According to the ROC Company Act, any realized capital surplus could be transferred to common stock
as stock dividends after deducting accumulated decit, if any. Realized capital surplus includes share
premium and donations from shareholders. Distribution of stock dividends from realized capital surplus
is subject to certain restrictions imposed by the governmental authorities.
(d) Legal reserve, unappropriated earnings, and dividend policy
The Company’s articles of incorporation stipulate that at least 10% of annual net income after deducting
accumulated deficit, if any, must be retained as legal reserve until such retention equals the amount
of authorized common stock. In addition, a special reserve in accordance with applicable laws and
regulations shall be set aside. The remaining balance of annual net income, if any, can be distributed as
follows:
． at least 5% as employee bonuses; employees entitled to stock bonus may include subsidiaries’
employees that meet certain criteria set by the board of directors;
． 1% as remuneration to directors and supervisors; and
． the remainder, after retaining a certain portion for business considerations, as dividends to
stockholders.
Since the Company operates in an industry experiencing rapid change and development, distribution
of earnings shall be made in view of the year’s earnings, the overall economic environment, the related
laws and decrees, and the Company’s long-term development and steady financial position. The
Company has adopted a steady dividend policy, in which a cash dividend comprises at least 10% of the
total dividend distribution.
According to the ROC Company Act, the legal reserve can be used to offset an accumulated decit and
may be distributed in the following manner: (i) when it reaches an amount equal to one-half of the paid-
in capital, it can be transferred to common stock at the amount of one-half of legal reserve; and (ii) when
it reaches an amount exceeding one-half of the authorized common stock, dividends and bonuses can be
distributed from the excess portion of the legal reserve.
Pursuant to regulations promulgated by the Financial Supervisory Commission, and effective from the
distribution of earnings for scal year 1999 onwards, a special reserve equivalent to the total amount
of items that are accounted for as deductions to the stockholders’ equity shall be set aside from current
earnings, and not distributed. This special reserve shall be made available for appropriation to the extent
of reversal of deductions to stockholders’ equity in subsequent periods. As of December 31, 2009 and
2010, the Company appropriated a special reserve of NT$1,991,615 and NT$0, respectively, that is equal
to the sum of excess of the book value over the market price of the treasury stock and other deduction
items of shareholder’s equity.
The appropriation of 2008 and 2009 earnings was approved by the shareholders at meetings on June 18,
2009, and June 18, 2010, respectively. The resolved appropriations of employee bonus and remuneration
to directors and supervisors and dividends per share were as follows:
2008 2009
NT$ NT$
Dividends per share
Cash dividends $ 2.00 3.10
Stock Dividends 0.10 0.01
$ 2.10 3.11
Employee bonus – stock $ 900,000 200,000
Employee bonus – cash 600,000 800,000
Remuneration to directors and supervisors 85,763 122,096
$ 1,585,763 1,122,096