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ACER INCORPORATED
2010 ANNUAL REPORT
124
FINANCIAL STANDING
125
(d) Management service fee
The Consolidated Companies paid iDSoftCapital Inc. management service fees amounting to NT$49,333
and NT$31,542 for the years ended December 31, 2009 and 2010, respectively.
(e) Advances to/from related parties
The Consolidated Companies paid certain expenses on behalf of related parties. Additionally, related
parties paid non-recurring engineering and other operating expenses, and accounts payable on behalf
of the Consolidated Companies. As of December 31, 2009 and 2010, the Consolidated Companies had
aggregate receivables from related parties of NT$21,507 and NT$46,914, respectively, and payables to
related parties of NT$92,187 and NT$537,267, respectively, resulting from these transactions.
(3) Compensation to executive ofcers
For the years ended December 31, 2009 and 2010, compensation paid to the Consolidated Companies’
executive ofcers including directors, supervisors, president and vice-presidents was as follows:
2009 2010
Amount Amount
NT$ NT$ US$
Salaries 339,997 279,974 9,611
Cash awards and special allowances 175,655 356,201 12,228
Business service charges 1,080 1,080 37
Employee bonuses 443,855 690,920 23,719
960,587 1,328,175 45,595
The aforementioned compensation included the accruals for employee bonus and remuneration to directors
and supervisors as discussed in note 4(21).
6. Pledged Assets
Carrying amount
at December 31,
Pledged assets Pledged to secure 2009 2010
NT$ NT$ US$
Cash in bank and time deposits
Contract bidding, project fulllment,
security for letter of credit, and others 61,939 61,937 2,126
As of December 31, 2009 and 2010, the above pledged cash in bank and time deposits were classied as “restricted
deposits” and “other nancial assets” in the accompanying consolidated balance sheets.
7. Commitments and Contingencies
(1) Royalties
(a) The Consolidated Companies have entered into a patent cross license agreement with International
Business Machines Corporation (“IBM”). According to the agreement, the Consolidated Companies
made xed payments periodically to IBM.
(b) The Consolidated Companies and Lucent Technologies Inc. (“Lucent”) entered into a Patent Cross
License agreement. This license agreement in essence authorizes both parties to use each other’s
worldwide computer-related patents for manufacturing and selling personal computer products. The
Consolidated Companies agree to make fixed payments periodically to Lucent, and the Consolidated
Companies will not have any additional obligation for the use of Lucent patents other than the agreed
upon xed amounts of payments.
(c) On June 6, 2008, the Consolidated Companies entered into a Patent Cross License agreement with
Hewlett Packard Development Company (“HP”). The previous patent infringement was settled out of
court, and the Consolidated Companies agreed to make xed amounts of payments periodically to HP.
The Consolidated Companies will not have any additional obligation for the use of HP patents other than
the agreed upon xed amounts of payments.
(d) The Consolidated Companies have entered into software and royalty license agreements with Microsoft,
MPEG-LA and other companies. The Consolidated Companies have fullled their obligations according
to the contracts.
(2) As of December 31, 2009 and 2010, the Company’s outstanding stand-by letters of credit totaling
NT$269,987 and NT$195,563, respectively, for purposes of bids and contracts.
(3) The Consolidated Companies have entered into several operating lease agreements for warehouses, land and
ofce buildings. Future minimum lease payments were as follows:
Year NT$ US$
2011 457,182 15,694
2012 324,196 11,129
2013 264,341 9,075
2014 170,519 5,854
2015 and thereafter 516,388 17,727
1,732,626 59,479
(4) As of December 31, 2009 and 2010, the Company had provided promissory notes amounting to
NT$28,552,820 and NT$39,931,666, respectively, as collaterals for factored accounts receivable and for
obtaining credit facilities from nancial institutions.
8. Signicant Loss from Casualty: None