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321
2357
ASUSTeK Computer Inc.
2009 ANNUAL REPORT
Taiwan Stock Exchange Market Observation Post System：http://newmops.twse.com.tw
ï‚—ASUS annual report is available at http://taiwan.asus.com.tw/investor.aspx
Printed on March 22, 2010

Table of contents

  • Page 1
    2357 ASUSTeK Computer Inc. 2009 ANNUAL REPORT ï,-Taiwan Stock Exchange Market Observation Post System：http://newmops.twse.com.tw ï,-ASUS annual report is available at http://taiwan.asus.com.tw/investor.aspx Printed on March 22, 2010 321

  • Page 2
    ... : KPMG Address : 68F, TAIPEI 101 TOWER, No. 7, Sec. 5, Xinyi Road, Taipei City Tel. : 886(2)8101-6666 E-mail : http://www.kpmg.com.tw V. EXCHANGEABLE BOND EXCHANGE MARKETPLACE Marketable security: GDR London Stock Exchange: http://www.londonstockexchange.com VI. COMPANY WEBSITE http://www.asus.com...

  • Page 3
    ..., president, and financial or accounting manager of the company who had worked for the independent auditor or the related party in the most recent years ...7. Information on Net Change in Shareholding and Net Change in Shares Pledged by Directors, Supervisors, Department Heads, and Shareholders of...

  • Page 4
    ...to investment plans in current year and the next year... 199 6. Risk management ...200 7. Other important matters ...203 VIII Special disclosures ...204 1. Related party ...204 2. Subscription of marketable securities privately in the most recent years ...204 3. The stock shares of the company held...

  • Page 5
    ... quarter of 2009, the global economic recession slowed down and the information industry gradually showed hope. Although the operating profit of ASUSTeK and shipment quantity increased significantly for the second half of last year compared to the first half of last year, the 2009 Brand consolidated...

  • Page 6
    ... care for the environment of the user. Based on past experiences, we discovered that "hit rate" is most important after a new product is introduced. ASUSTeK's tactic for this year is clear, that is, concentrating on popular consumer computer market to seize the market share. The four new notebooks...

  • Page 7
    .... ASUS was in control of advanced product technology and marketing. The market demand for advanced motherboard was growing this year. The profit of 486 in this month exceeded the profit of 386 for the first time that meant the 486 advanced products had become the major product of the company...

  • Page 8
    ...was able to have this advanced mother board promoted. Increased the paid-in capital to NT$199 million with cash for an amount of NT$49 million. Invested to have SMT production line setup. China Credit Information Service Ltd. had the company' s business performance ranked in the 7th place of the TOP...

  • Page 9
    ...' s business performance ranked in the 1st place of The TOP-500 Manufacturers in 1995. SEC had the company authorized as Class II stock listing company. Increased the paid-in capital to NT$1.2 billion with retained earnings. ASUS went public at Taiwan Stock Exchange Corporation officially. Sales...

  • Page 10
    ...Credit Information Service Ltd. ranked the company in the third place as the best assets-management business of "1999 Taiwan TOP 500." China Credit Information Service Ltd. ranked the company in the fourth place as the most productive employees of "1999 Taiwan TOP 500." Increased the paid-in capital...

  • Page 11
    ... of 9,073 pings for use. Readers of PC Magazine had awarded ASUS with the "Product of the Year Award" for the motherboard, NB, CD-ROM, and VGA in 2001. Far Eastern Economic Review ranked the quality service/product of ASUS in the fourth place. Sales revenue of the year amounted to NT$77.9 billion...

  • Page 12
    ... 2004 December 2004 December 2004 December 2004 Setup TPC product line (thermal conduction, power, and chassis) to provide consumers with comprehensive system solution. ASUS W1 NB with built-in TV card and powerful multimedia software was market launched. The outstanding hair-like pattern design...

  • Page 13
    ... leading position of ASUS in computer world. Business Weekly awarded ASUS with InfoTech 100 for eight consecutive years. ASUS that was known for creating trust and sentiment was awarded with the "2005 Top-10 Taiwan Brand Value." ASUS ATEC was awarded with the "7th Management of Technology Award" by...

  • Page 14
    ...% from the year of 2003. ASUS Eee PC was market launched in Taiwan for the satisfaction of consumers. ASUS Eee PC was popular worldwide and was sold at the rate of one Eee PC per five-second. Oekom, an international reputable institute for environmental protection valuation, ranked ASUS in the first...

  • Page 15
    ...this year. ASUS has Eee PC S101, the stat-of-the-art; market launched this month targeting on global business commuters and fashion Yapese. ASUS Eee Family promoted new products, all-in-one touch-panel screen computer Eee Top ET16 series with 15.6" touch big screen. The computer can be operated with...

  • Page 16
    ... of green products manufacturer by CNN and TIME Magazine. ASUSTeK introduced brand new ASUS UL Series demonstrating Turbo 33 duo-core effect, 12-hour long-lasting power, 1" super-thin notebook, broke the myth of permanence and efficiency conflict, and setup a brand new standard of mobile computation...

  • Page 17
    ... keyboard was awarded with the gold medal of iF design in Germany. ASUS EeePCâ„¢ seashell, excellent superlight US series and UX30 notebook, EddKeyboard PC, fashionable CG 5290, super thin blue burner SBC-04D1S-U, and professional and compact P30 notebook seven in total were awarded with the product...

  • Page 18
    III. Corporate governance report I. Corporate Organization (I) Organization Chart 14

  • Page 19
    ... control global networking linking and safety control mechanism. CSC Provide customers with comprehensive service and total solutions. Corporate Quality Assurance Center Establish, improve, and maintain ISO9000, GreenASUS (green products) and SERASUS (responsibility for social environment) system...

  • Page 20
    ....04 Name Relation Jonathan 2nd Tsang, consanguinity Supervisor L.H. Yang Chairman Jonney Shih 2nd Supervisor L.H. Yang consanguinity Director Jerry Shen 2008.06 3 2002.05 None None None Director 1,712,599 0.05 2,084,163 0.05 0 0 0 H.C. Hung 2008.06 3 2002.05 Manager of ACER Department...

  • Page 21
    ... ASUS SERVICE CANADA and Director of KINSUS CORPORATION. Director of ASUSTeK who had resigned on March 1, 2010. Note 6: Chairman of the following companies: ASUS IBERICA S.L., eCareme Technologies, Inc., ASUS COMPUTER GmbH, ASUS COMPUTER Benelux B.V., ASUS POLSKA SP.z.o.o., ASUS Marketing Services...

  • Page 22
    ... public company 1 2 3 4 5 6 7 8 9 10 Name Jonney Shih Jonathan Tsang Jerry Shen H.C. Hung 0 0 0 0 0 0 0 2 1 0 Ivan Ho Tony Chen Eric Chen Tze-Kaing Yang Chung-Jen Cheng L.H. Yang Note: Directors and supervisors who have qualified the following conditions two years before...

  • Page 23
    ... 28, 2009 Oct 28, 2009 Oct 28, 2009 Sponsor Course Accounting Research and Development Foundation in Taiwan The legal obligation, responsive measures, and practice analysis for "inside trade" of the public offering company' s staff 4. State the name and shareholdings ratio of the directors and...

  • Page 24
    ... other companies Title Name Relation Chief Branding Officer Jonney Shih 04.30.1994 97,230,543 2.29 Deputy Chief Branding Officer Jonathan Tsang 01.12.1999 Electrical Engineering Graduate Institute, 6,509,803 0.15 Note 2 0 0 0 0 MBA of Houston University President of Youngmen Computer Co...

  • Page 25
    ...), , AGAiT Technology Corp., Asustek Holdings, Asus INTL, Asus Holland B.V., Asus Computer Corporation, Central Tec, South Tec, Deep Delight, ASUSCHANNEL, Channel Pilot Limited, Mobostar, and Unimax Holdings Director of the following companies: ASKEY, SHINEWAVE INTERNATIONAL INC., ASUS TECHNOLOGY...

  • Page 26
    ...28, 2009 Oct 28, 2009 The legal obligation, responsive measures, and practice analysis for "inside trade" of the public offering company' s staff Oct 28, 2009 Oct 28, 2009 Title Name Jonney Shih Jonathan Tsang Jerry Shen H.C. Hung Tony Chen S.Y. Shian Samson Hu Joe Hsieh Chief Branding Officer...

  • Page 27
    ... the invested company other than the Companies in company' s the subsidiary financial statements Chairman Jonney Shih Vice Chairman Jonathan Tsang Director 0 65,909 thousand 0 0 0.53% 0.53% 0 0 0 65,909 thousand 16,745 20,075 thousand thousand 37,995 thousand Jerry Shen Director H.C. Hung...

  • Page 28
    ...Business expense (C) Ratio of A+B+C to Net income The company financial statements Companies in the consolidated financial statements Title The company Companies in the consolidated financial statements Name The company The company Companies in the consolidated financial statements...000 Total ＊...

  • Page 29
    ... statements Remuneration from the Companies invested Companies in in the company other the than the consolidat The consolidated company' s ed company financial subsidiary financial statements Chief Branding Officer Jonney Shih Deputy Chief Branding Officer Jonathan Tsang President Jerry Shen...

  • Page 30
    ... �i�i��n� Stock Dividend Total Cash Dividend (estimated amount) Ratio of total amount to net income (%) Title Name Chief Branding Officer Jonney Shih Deputy Chief Branding Officer Jonathan Tsang President Jerry Shen V.P. H.C. Hung V.P. Tony Chen Managers V.P. S.Y. Shian...

  • Page 31
    ... (I) Board of Directors Board of Directors The attendance of Directors for the 8 Title Name (A) Board Meeting in 2009: Proxy Frequency of attendance (%) (B/A) 100.00 Remarks Attendance (B) Chairman Jonney Shih 8 0 Vice Jonathan 7 1 87.50 Chairman Tsang Director Jerry Shen 8 0 100.00 Director...

  • Page 32
    ... 8th year The 2008 "International Control System Declaration" proposal Jul 8, 2009 10th board meeting of the 8th year Discussed the bank' s "General financing agreement" renewal proposal 2. Operation of audit committee: Not applicable since the Company did not have an audit committee setup. 28

  • Page 33
    ... a communication channel with the related party 4. Publication of information (1) The company has a website setup to disclose financial 1. The company has a website (http://www.asus.com) setup to disclose No deviation information and business management financial information and business management...

  • Page 34
    ... of Board Meeting by Public Company" for the reference of the competent authority. 4. The company has repair and maintenance stations and consumer' s hot line setup nationwide for protecting the interest of consumers. The company has an agreement signed with each customer before providing services...

  • Page 35
    ... ASUS' s responsibility for social environment, in addition to the original environmental management including air, sewage, waste, hazard substance, noise, and energy-saving measures and control includes labor safety and health risk evaluation and measures, labor' s interest promotion, balanced work...

  • Page 36
    ...to support employee' s occupational development. ASUS has taken part of social charity activity from time to time to fulfill corporate social responsibility in addition to providing basic protection. ASUS has based its long-term orientation and goal on "shortening digital gap," "upgrading innovative...

  • Page 37
    ... in order to help upgrade information availability in remote areas and shorten digital divide. ASUSTeK promoted the "Computer Recycling Project of Hope" to combine environmental protection and social charity; also, to substantiate enterprises' social responsibility. Please refer to the website at...

  • Page 38
    ...for children who need help. ASUS Foundation donated ASUS Bamboo Notebook for rummage sales. (3) Take care of senior citizens in remote community. Work with Hondao Senior Citizen' s Welfare Foundation and Taiwan Cycling & Health R&D Center to host the "Community Digital Exercise Group, Senior Citizen...

  • Page 39
    ... rank among the international brands in competition. Please visit the website of ASUS at http://csr.asus.com/english/ for the updated information of corporate social responsibility. Please refer to the following website for ASUS' s 2008 business operation report (Chinese) (English) http://csr.asus...

  • Page 40
    ...' Meeting or by the board of directors in the most recent years and up to the date of the annual report printed: 1. The important resolutions of the general shareholder meeting: Time 06.16.2009 Subjects 1. The company' s 2008 financial statements were resolved in the board meeting and audited by...

  • Page 41
    ... stock share and the distribution of cash dividend for the capitalization from retained earnings in 2008 was scheduled on August 24, 2009. 1. Recognized the company' s financial statements and consolidated financial statements in the first half year of 2009. 2. It was resolved to retain the service...

  • Page 42
    ... reached by the board of directors and the objections are recorded or declared in writing in the most recent years and up to the date of the annual report printed: None (XII) The resignation or discharge of personnel who are responsible for financial statements in the most recent years and up to...

  • Page 43
    ... 15% less than the auditing fee paid in 2008. V. CPA's information: (I) Former CPAs Date of change Aug 26, 2009 Reasons and explanation In response to the company' s integrated business management and of changes development Client State whether the Status appointment is terminated or rejected by...

  • Page 44
    ..., and financial or accounting manager of the company who had worked for the independent auditor or the related party in the most recent year, the name, title, and the term with the independent auditor or the related party must be disclosed: None VII. Information on Net Change in Shareholding and Net...

  • Page 45
    2009 Title Name Net Change in Shareholding (175,285) 111,579 78,620 0 Net Change in Share Pledged 0 As of February 22 (Note 2) Net Change in Shareholding 0 0 0 0 Net Change in Share Pledged 0 V.P. V.P. Finance & Accounting Officer Samson Hu Benson Lin David Chang Note 1: The parties involved in ...

  • Page 46
    .... IX. Investments of Directors, Supervisors, Managers and directly or indirectly controlled business on the reinvested business and the total shareholding ratio: Total Shareholding Ratio Baseline date: 12.31.2009, Unit: Share; % Investment of the Company Shares ASUS TECHNOLOGY INCORPORATION PEGATRON...

  • Page 47
    ...-Chi Technology Co., Ltd. ASUS COMPUTER INTERNATIONAL Asus Holland B. V. ASUS INTERNATIONAL LTD Asustek Holdings Limited ASUSCHANNEL Corp. Azurewave (Cayman) Holding Inc. (be liquidated) CHANNEL PILOT LIMITED ASUS TECHNOLOGY PTE. LIMITED Asus Middle East FZCO ASUS COMPUTER GmbH ASUS COMPUTER Benelux...

  • Page 48
    Reinvestment Investment of the Company Shares % Investments from Directors, Supervisors, Managers and directly or Indirectly Controlled Business Shares % 3,000 500 30,000 800 3,700,000 39,160,172 82,525,738 2,883,359 50,000 50,000 20,050,000 71,030,000 ...

  • Page 49
    ..., Managers and directly or Indirectly Controlled Business Shares % 12,835,000 10,000 11,422,000 6,500,000 5,000,000 3,000,000 50,000 100.00 100.00 100.00 100.00 100.00 100.00 100.00 22.22 100.00 100.00 Total Investment Shares % ENERTRONIX HOLDING LIMITED ENERTRONIX INTERNATIONAL LIMITED ASUS...

  • Page 50
    Reinvestment Investment of the Company Shares % Investments from Directors, Supervisors, Managers and directly or Indirectly Controlled Business Shares % 472,000 4,886,720 5,662,500 1,883,485 2,952,351 248,547 7,500,000 660,197,567 211,600,026 50,000 349,000,000 ...

  • Page 51
    ...100.00 100.00 Total Investment Shares % - 100.00 - 100.00 LINKTEK PRECISION (SUZHOU) CO., LIMITED TOPTEK PRECISION INDUSTRY CO., LIMITED ASAP INTERNATIONAL CO., LIMITED AMA Technology Corporation AMA Holdings Limited EXTECH LTD. METAL TRADINGS LTD. FENGSHUO TRADING (TONGZHOU) CO., LTD. Grandtech...

  • Page 52
    ... 100.00 20.00 Total Investment Shares % ASLINK (H.K.) PRECISION CO., LTD. ASIAROCK TECHNOLOGY LIMITED Leader Insight Holdings Ltd. ASROCK EUROPE B.V. CalRock Holdings, LLC. Firstplace International Ltd. ASRock America, Inc. Lumens Europe BVBA Lumens Integration Inc. Lumens Digit Image Inc.(SAMOA...

  • Page 53
    Reinvestment Investment of the Company Shares % Investments from Directors, Supervisors, Managers and directly or Indirectly Controlled Business Shares % 503,741 4,000,000 19,600,000 275,525 426,587 190,359 700,377 101,000 1.00 49.00 49.00 0.01 0.00 0.05 0.04 0.02 Total Investment Shares 503,741...

  • Page 54
    ...Stock Subscription I. Capital and shares (1) History of capitalization 1. Type of shares February 22, 2010 / Unit: Shares Type of Shares Order common stock Note: Listed stock 2. Stock capital Authorized shares Month / Year 1990.03 1990.11 1991.12 1993.04 1993.09 Par value (NT$) 10 10 10 10 10 Shares...

  • Page 55
    Authorized shares Month / Year Par value (NT$) Shares (1,000) Amount ($1,000) Issued shares Shares (1,000) Amount ($1,000) Source of capital Remarks Approval date and approval no. of Non-monetary capitalization by the SEC, capital Ministry of Finance 2003.07.08 SFE Ruling － Tai-Tsai-Cheng (1) No...

  • Page 56
    ... Distributed (The par value of each share is NT$10) ...Total 2. Preferred Stock Shares: None (4) Roster of Major Shareholders Roster of Major Shareholders As of February 22, 2010 Shareholding Shareholder' s Name ASUS' s Certificate of Depository with CitiBank Ted Hsu Wayne Hsieh Jonney Shih...

  • Page 57
    ... price per share of the year / Cash dividend per share Note 7: Cash dividend yield rate = Cash dividend per share / Closing price per share of the year Note 8: Subject to the approval of the annual shareholders meeting. Note 9: The data collected up to February 28, 2010 were included in the report...

  • Page 58
    ... profit distribution is allocated from 2009 retained earnings available for distribution. (7) Impact of the proposed stock dividend in shareholders meeting on business performances and EPS: Not Applicable Note: The Company did not have financial forecast proposed up to the date of the annual report...

  • Page 59
    ... estimated is deemed as changes in accounting estimation and debited or credited to the profit and loss account upon in the distributing year. 3. Dividend distribution of employees in 2009 resolved by the board of directors (1)Distribution amount of cash dividend and stock dividend to employees and...

  • Page 60
    ... of Treasury stock: Term of call Purpose of call Call period Call price Type and volume of stock shares called Amount of call Stock shares written off and transferred Shareholdings Ratio of shareholdings to total shares issued 1st time in 2009 For protecting the company' s credit and shareholder...

  • Page 61
    ...certified mail. Inform GreTai in writing to have it published; also, the convertible bonds are "called" at face value on the due date. Restrictive clauses Rating institute, rating date, corporate bond rating Converted NT$7,000,000 (up to the date of the report printed) Other rights (exchanged or 57

  • Page 62
    ...bond helps avoid profit erosion and minimize the dilution of shareholder' s equity and ERP ssuance and conversion, exchange or resulted from the substantial increase of stock shares; subscription measures; the influence of therefore, it is to the best interest of shareholders. issuance conditions on...

  • Page 63
    IV. Issuance of global depository receipts: GDR Date of issuance (process) Item Date of issuance (process) Location of issuance and trade Total amount Unit Price Total issuance Source of common stock recognition Total marketable security shares recognized Rights and obligations of GDR holders ...

  • Page 64
    ...transferred, and new stock shares are issued in recent years and up to the date of the annual report printed, the information of the merger and the merged or acquired company must be disclosed: None VII. Fund implementation plan Up to the last quarter before the printing of the financial statements...

  • Page 65
    ... TV transmission graphic card c. Intelligent phone GPS d. Ultra Mobile PC e. High-speed router / exchanger / firewall / VPN f. New-generation advanced server g. Professional LED display h. WiMAX broadband products i. EeePC touch, long-lasting computer j. Eee Top PC、Eee Box PC、Eee Keyboard PC...

  • Page 66
    ..., LCD, etc.), electronic parts (motherboard, VGA, etc.), and computer peripherals (computer case, mouse, keyboard, etc.). Down-stream industry includes the business of table-top computer and notebook computer. 3. Product development trends (1) USB3.0 AUSU 3.0 transmission technology reaches 5Gb per...

  • Page 67
    ... brand name in market. (III) Research and Development ASUS has striven in R&D since the day of incorporation to control self-developed technology for the R&D, production, and marketing of advanced MB, Graphics Cards, Notebook, Eee PC, Server, mobile phone and to develop 4C (computer, communication...

  • Page 68
    ... energy-saving motherboard f. GPS smart phone g. EeeTop new generation All-in-one computer h. EeePC touch panel and long-lasting simple computer i. Eee Keyboard PC home computer j. New Eee series playstation (IV) Long-term and short-term development plan 1. Short-term development plan ASUSTeK...

  • Page 69
    ... in: Open platform products including motherboard, drawing card, play station, LCD, and network server; system products including notebook and Eee PCâ„¢ Eee series; and handheld products including smart navigation phone for consumer' s innovative design. 2. Long-term development plan ASUS has become...

  • Page 70
    ...products in market. ASUS notebook aims high in market share this year on the way to the Top-Four list in 2010 and then the Top-Three list in 2011. (3) Short-term development of IT industry: On the arrival of Cloud Computing era, ASUSTeK plans to introduce a series of Cloud Computing related services...

  • Page 71
    ... in 2009 evidencing ASUSTeK' s endless effort in power saving and environmental protection. Moreover, ASUSTeK expects have a more flexible and efficient organizational operation with three business groups formed including: System business group, open platform business, and handheld business in order...

  • Page 72
    ...of motherboard and notebook computer in the sense of production. c. ASUSTeK dedicates itself to the tasks of environmental protection, power saving, and earth ongoing concern. Several innovative products are launched at CES and Cebit international exhibitions this year with the core green technology...

  • Page 73
    ... developed regions in Europe. ASUSTeK has deployed market for motherboard for years and with a great success achieved in the year of 2008. In fact, ASUSTeK has cornered the highest market share for motherboard in Europe. In terms of notebook computer, ASUSTeK is ranked number one in Taiwan, number...

  • Page 74
    ... and international with good quality and reputation built; moreover, they have been in business with ASUS for years in a good term with raw materials supplied to ASUS that help the company to stay competitive. (IV) Major Customers with over 10% net sales and Suppliers with over 10% total purchases...

  • Page 75
    ...The 2010Q1 financial statements audited by the CPA were not yet available up to the print of annual report on March 22, 2010. Note 2: Causes of increase and decrease - for business operation (V) Production/Sales Quantities and Value over the Past Two Year: N/A (VI) Sales quantities and value of the...

  • Page 76
    ... validation process. 2. ASUS will introduce energy management system forcefully to save energy and reduce green house gas emission. 3. ASUS will continue to invest in green design, green procurement, green production, and green marketing for fulfilling corporate social responsibility to the earth...

  • Page 77
    ... "Deft Notebook Computer" in the "Deft Notebook Computer Contest" with the merits of "practical deign," "comfortable keyboard," and "5.1-hour permanence" by Money Magazine and CNNMoney.com. ASUS U6V and Eee PC 1000HE are the canons of green technology products. Please visit ASUS' s website for more...

  • Page 78
    ... to the environmental protection of ASUS. The green design and recycling system plan of ASUS is to establish "green design and green recycling management platform" including establishing international environmental protection regulations information control system, green product easy-dismounting and...

  • Page 79
    ... of recycled products on environment. Developed the first WEEE easy to dismounting and recycling Green Design system in Taiwan in order to comply with the 3R recycling ratio of European Community, construct green recycling IT platform, and monitor and control recycling information. Conduct product...

  • Page 80
    ... to help the management upgrade managing ability systematically and exercise management effectiveness. Plan core value training courses to help staff generate ASUS DNA and upgrade staff' s work skills and performance. Management competency and core value training courses arranged in the year of 2009...

  • Page 81
    ... help staff learn at work and to reinforce personal knowledge and skill. In order to help staff conduct on-job training systematically and upgrade training effect, ASUSTeK encourages the management to plan annual competency training programs for staff in the learning plan. The 2010 learning plan is...

  • Page 82
    ... interest Chapter 4 Gifts, business entertainment, and social standard Chapter 5 Public information Chapter 6 Fair trade, advertisement, and competition Chapter 7 Community watch Chapter 8 Punishment Chapter 9 Others (IV) Working environment and worker' s safety protection: 1. Establishment of Labor...

  • Page 83
    ...global chemicals control system completed. 9. Charity activities ASUSTeK has focused on "shortening digital divide," "upgrading innovation ability," "incubating science and technology talents," "encouraging cooperation between industry and academia," and "promoting environmental protection and power...

  • Page 84
    ... court of the headquarters with job opportunities for minority. ASUSTeK included "Children Are Us" on the payroll as a way to care for and feedback the society. (V) Retirement plan In response to the company' s having the business operation dividend into brand name business and OEM/ODM since 2008...

  • Page 85
    VI. Financial Information I. Condensed balance sheet, income statement, and auditor's opinions over the last five years (I) Summarized Balance Sheets Unit: NT$ thousands Year Item Current Assets Funds & investments Fixed assets Intangible Assets Other Assets Total Assets Before allocation Current ...

  • Page 86
    ... five years. Note 4: ASUSTeK had acquired Askey by stock exchange and had the said acquisition processed with equity combination method; therefore, financial statements of 2005 were recompiled under the circumstance. Note 5: ASUS has adopted the principles under Accounting Research and Development...

  • Page 87
    ... (times) Operating ability Account payable turnover (times) Average days in sales Fixed assts turnover (times) Total assets turnover (times) Ratio of return on total assets (%) Ratio of return on shareholders' equity (%) Profitability capital stock (%) Profit ratio (%) Earnings per share ($) Cash...

  • Page 88
    ... from the year before due to the effort of the management in controlling inventory level, reducing total amount of inventory, and causing net cash inflow from operating activity to go up. Note 1: ASUS has adopted the principles under Accounting Research and Development Foundation in Taiwan (97) Kee...

  • Page 89
    ...business operation) = Cost of goods sold/ Average accounts payable (including accounts payable and notes payable derived from business operation) (5) Average days in sales = 365 / Inventory turnover (6) Fixed assts turnover = Net sales / Net fixed assets (7) Total assets turnover = Net sales / Total...

  • Page 90
    ...the classification of operating cost and operating expense involves estimation or discretional judgment, it must be made reasonably and consistently. Note 10: Some accounts and amounts in the financial statements of 2008 were adjusted in response to the presentation of 2009 financial statements. The...

  • Page 91
    ... in the most recent years ASUSTek Computer Inc. SUPERVISORS' REPORT ASUS SUPERVISORS' REPORT We have examined the accompanying financial statements and consolidated financial statements as of 2009 that are composed by the Board of Directors, business report, and distribution of retained earnings...

  • Page 92
    ASUSTek Computer Inc. SUPERVISORS' REPORT ASUS SUPERVISORS' REPORT We have examined the accompanying financial statements and consolidated financial statements as of 2009 that are composed by the Board of Directors, business report, and distribution of retained earnings. In our opinion, it is in ...

  • Page 93
    ASUSTek Computer Inc. SUPERVISORS' REPORT ASUS SUPERVISORS' REPORT We have examined the accompanying financial statements and consolidated financial statements as of 2009 that are composed by the Board of Directors, business report, and distribution of retained earnings. In our opinion, it is in ...

  • Page 94
    ... for details. V. Consolidated financial statements of the parent company and subsidiary in the most recent years: Please refer to Page 131-196 for details. VI. Financial difficulties faced by the company and the related party in the most recent years and up to the date of the annual report printed...

  • Page 95
    91

  • Page 96
    92

  • Page 97
    ...in banks (note 4(1)) Financial assets measured at fair value through profit or loss - current (note 4(2)) Available-for-sale financial assets - current (note 4(2)) Financial assets carried at cost - current (note 4(2)) Notes and accounts receivable, net (note 4(3)) Notes and accounts receivable, net...

  • Page 98
    ASUSTeK COMPUTER INC. Statements of Income For the years ended December 31, 2009 and 2008 (expressed in thousands of New Taiwan dollars, except earnings per share amounts) 2009 Amount Sales revenue (note 5) Less: sales returns and allowances Net sales Cost of sales (notes 4(4), 5 and 10) Gross ...

  • Page 99
    ... payable Changes in unrealized gains or losses on financial assets Net income for the year ended December 31, 2008 Balance on December 31, 2008 Balance on January 1, 2009 Appropriations and distributions of 2008 earnings Legal reserve Dividends transferred to common stock Cash dividends Employee...

  • Page 100
    ASUSTeK COMPUTER INC. Statements of Cash Flows For the years ended December 31, 2009 and 2008 (expressed in thousands of New Taiwan dollars) 2009 Cash flows from operating activities: Net income $ Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and ...

  • Page 101
    ... of New Taiwan dollars unless otherwise specified) 1. Organization ASUSTeK Computer Inc. (the Company) was established on April 2, 1990. The Company' s common shares were listed on the Taiwan Stock Exchange (TSE). Its main activities are to produce, design and sell notebook PCs, main boards, CD...

  • Page 102
    ... COMPUTER INC. Notes to Financial Statements (3) Foreign currency transactions and translation of financial statements in foreign currencies Transactions involving non-derivative financial instruments denominated in foreign currencies are recorded in New Taiwan dollars at the rates of exchange...

  • Page 103
    ...at fair value with changes in fair value recognized in profit and loss. Stocks of listed companies, convertible bonds and closed-end funds are measured at closing prices on the balance sheet date. Open-end funds are measured at the unit price of the net assets on the balance sheet date. B. Financial...

  • Page 104
    ... cost or net realizable value. Net realizable value by item is determined based on the estimated selling price in the ordinary course of business, less estimated costs of completion and costs incurred in order to make the sale. (8) Long-term equity investments Long-term investments are accounted for...

  • Page 105
    ... used in operations are all transferred to idle assets or other assets, and depreciated. (10) Intangible assets and deferred expenses Intangible assets represent computer software, which is amortized using the straight-line method over 3 years. Deferred expenses represent office decorations, which...

  • Page 106
    6 ASUSTEK COMPUTER INC. Notes to Financial Statements (11) Convertible bonds payable According to R.O.C. SFAS No. 36 "Financial Instruments: Disclosure and Presentation" and Interpretation (95) 078 by the Accounting Research and Development Foundation (ARDF), convertible bonds with a put option ...

  • Page 107
    ... and recognized in the financial statements, if any, are accounted for as changes in accounting estimates and recognized as profit or loss. The Group adopts R.O.C. SFAS No. 39 to account for the transfer of equity instruments from shareholders and the Group to the Group' s employees. (15) Income...

  • Page 108
    8 ASUSTEK COMPUTER INC. Notes to Financial Statements Deferred income tax assets or liabilities are classified as current or non-current based on the classification of items that resulted in the deferred item or based on the timing of the expected reversal, for certain transactions not directly ...

  • Page 109
    ASUSTEK COMPUTER INC. Notes to Financial Statements (18) Spin-off transactions The Company resolved to spin off its OEM businesses on January 1, 2008. The Company transferred its computer and non-computer OEM businesses to its spun-off subsidiaries PEGATRON and UNIHAN and obtained their issued ...

  • Page 110
    10 ASUSTEK COMPUTER INC. Notes to Financial Statements (2) Financial instruments The financial instruments held by the Company as of December 31, 2009 and 2008 were as follows: 2009/12/31 Financial assets measured at fair value through profit or loss: Open-end funds Stocks of listed companies ...

  • Page 111
    11 ASUSTEK COMPUTER INC. Notes to Financial Statements A. Forward foreign currency exchange contracts: The forward foreign currency exchange contracts were intended mainly to hedge foreign currency risk from operating activities. As of December 31, 2009 and 2008, the Company did not meet the ...

  • Page 112
    ... of sales due to a write-down (reversal) of inventory cost to its net realizable value, for the years ended December 31, 2009 and 2008, respectively. (5) Long-term equity investments 2009/12/31 Investee Company PEGATRON ASUS INTERNATIONAL LIMITED (AIL) Askey Computer Corp. (Askey) ASUSTEK HOLDINGS...

  • Page 113
    ASUSTEK COMPUTER INC. Notes to Financial Statements A. In order to enhance competitiveness and boost productivity, the Company' s shareholders resolved, on October 30, 2007, to restructure the Company' s businesses into own-brand and OEM. The date of the spin-off was January 1, 2008. Pursuant to ...

  • Page 114
    ASUSTEK COMPUTER INC. Notes to Financial Statements D. The Company received cash dividends in 2009 and 2008 amounting to $4,987,395 and $3,822,301, respectively, stated as a deduction from long-term equity investment. E. The unrealized gains (losses) on financial assets resulting from long-term ...

  • Page 115
    ASUSTEK COMPUTER INC. Notes to Financial Statements (7) Bonds payable A. The Company issued the first Euro unsecured convertible bonds (ECB 1) on the Luxembourg Stock Exchange on January 15, 2004, with a zero-coupon rate, a duration of five years, and a face value of US$320,000,000. The details of ...

  • Page 116
    ASUSTEK COMPUTER INC. Notes to Financial Statements (d) Call option: The Company could redeem the convertible bonds at par value at any time during the period from December 8, 2006, to September 28, 2011, under the following conditions: the closing price of the common shares on each of 30 ...

  • Page 117
    ... capital has a par value of $10 per share. The Company issued Global Depositary Receipts (GDRs), and the GDRs are now listed on the London Stock Exchange. The GDRs (originally 21,000,000 units issued and changed to 4,200,000 units from January 2, 2008) represent 21,000,000 shares of the Company...

  • Page 118
    ASUSTEK COMPUTER INC. Notes to Financial Statements Pursuant to the Securities and Exchange Act, the total shares of treasury stock shall not exceed 10% of the number of shares issued, and the total purchase cost shall not exceed the sum of the retained earnings, additional paid-in capital-premiums...

  • Page 119
    ... financial statements, if any, are accounted for as changes in accounting estimates and recognized in profit or loss in the year of actual distribution. (10) Income taxes A. The Company was certified to meet the definition of "Business Operation Headquarters" as defined by the "Statute for Upgrading...

  • Page 120
    ASUSTEK COMPUTER INC. Notes to Financial Statements 2009/1/1~12/31 Current income tax expense The 10% additional income tax on unappropriated earnings Investment tax credits Deferred income tax expense (benefit): Decrease (increase) in unrealized sales profit on inter-affiliate accounts Increase in...

  • Page 121
    ASUSTEK COMPUTER INC. Notes to Financial Statements D. The components of deferred income tax assets (liabilities) as of December 31, 2009 and 2008, were as follows: 2009/12/31 Deferred income tax assets: Unrealized sales profit Inventory provisions Unrealized accrued expense Others Deferred income ...

  • Page 122
    ASUSTEK COMPUTER INC. Notes to Financial Statements F. Imputation credit account and creditable ratio 2009/12/31 Unappropriated retained earnings for 1997 and prior years Unappropriated retained earnings for 1998 and thereafter ICA balance 2008/12/31 $ 2,858,766 3,298,939 72,439,752 75,738,691 ...

  • Page 123
    ASUSTEK COMPUTER INC. Notes to Financial Statements 2009/1/1~12/31 Before After income tax income tax Effects of dilutive potential common stock: Convertible bonds payable 75,339 Employees' bonuses that could be declared in the form of stock bonus and have not been approved by the stockholders' ...

  • Page 124
    ... are the same as those used by financial market traders when quoting their prices. (c) Financial assets carried at cost: Those are investments in companies whose shares are not publicly listed and have no available market prices. (d) The fair value of convertible bonds payable is not available, and...

  • Page 125
    ... the market risk of foreign currency exchange rate changes does not have material impact on the Company. (ii) The open-end funds and stocks of listed companies held by the Company are classified as financial assets measured at fair value through profit or loss and available-for-sale financial assets...

  • Page 126
    ASUSTEK COMPUTER INC. Notes to Financial Statements (ii) The open-end funds and stocks of listed companies held by the Company have public quoted prices and could be sold at the approximate market price. As to the forward exchange contracts, there are no significant financing risks due to expected ...

  • Page 127
    ... (ShangHai) Limited NORTH TEC ASIA (SHANGHAI) LIMITED DIGITEK GLOBAL HOLDINGS LIMITED BOARDTEK (H.K.) TRADING LIMITED PEGATRON Czech s.r.o. ASLINK PRECISION CO., LTD. ASLINK (H.K.) PRECISION CO., LIMITED (ASLINK H.K.) ASAP INTERNATIONAL CO., LIMITED ASIAROCK TECHNOLOGY LIMITED STRATEGY Technology Co...

  • Page 128
    ...ASUSTEK COMPUTER INC. Notes to Financial Statements Related Party ASUSALPHA Computer Inc. The directors, supervisors and major management Relationship with the Company Investee evaluated under the equity method (merged with PEGATRON on April 1, 2008) The directors, supervisors and major management...

  • Page 129
    ASUSTEK COMPUTER INC. Notes to Financial Statements Purchase terms are open account 30 to 60 days or 7 to 90 days from receipt of goods for related parties and were similar to those for third-party customers. The purchase amount mentioned above does not include purchase of raw materials on behalf ...

  • Page 130
    ... of 2009. The Company purchased International United Technology (Taiwan) from ASUSPOWER INVESTMENT, ASUS INVESTMENT and ASUSTEK INVESTMENT for $56,072, $55,307 and $10,850, respectively, on May 12, 2008. After acquiring the stock, the Company owned 56.73% of International United Technology (Taiwan...

  • Page 131
    ASUSTEK COMPUTER INC. Notes to Financial Statements G. Salaries and remuneration of key management The salaries and remuneration the Company paid to the directors, supervisors and major management in 2009 and 2008 were as follows: 2009/1/1~12/31 (Estimated) Salaries Incentives Distribution of ...

  • Page 132
    ... at a discount to market price. The Company prepaid $3,217,000, recorded as other assets - others. (4) The Company entered into operating lease contracts for its offices and parking spaces. Future lease payments under those leases are as follows: Year 2010 2011 2012 2013 8. Significant Disaster Loss...

  • Page 133
    ASUSTEK COMPUTER INC. Notes to Financial Statements 10. Others (1) Personnel expenses, depreciation, and amortization for the years ended December 31, 2009 and 2008, were as follows: 2009/1/1~12/31 Operating expenses Total 2008/1/1~12/31 Operating expenses Total Cost of sales Personnel expenses ...

  • Page 134
    34 ASUSTEK COMPUTER INC. Notes to Financial Statements Destination area Asia Pacific United States and Canada Europe Africa 2008 $ 213,630,267 2,170,317 244,216 288,099 $ 216,332,899 2007 209,371,978 15,042,211 5,835,153 305,689 230,555,031 D. Major clients Sales to individual customers ...

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    131

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    132

  • Page 137
    ...Current liabilities: Short-term debt and short-term notes and bills payable (notes 4(12)) $ Notes and accounts payable (note 5) Income tax payable Accrued expenses and other current liabilities (note 4(17)) Financial liabilities measured at fair value through profit or loss - current (notes 4(2) and...

  • Page 138
    ASUSTeK COMPUTER INC. AND SUBSIDIARIES Consolidated Statements of Income For the years ended December 31, 2009 and 2008 (expressed in thousands of New Taiwan dollars, except earnings per share amounts) 2009 Amount Net sales (note 5) Cost of sales (notes 5 and 10) Gross profit Operating expenses: (...

  • Page 139
    ... investee company' s stockholders' equity Dividends on shares held in trust paid to employees Change in unrealized gains or losses on financial assets Purchase of treasury stock Treasury stock retirement Net consolidated income for the year ended December 31, 2009 Change in minority interest Balance...

  • Page 140
    ASUSTeK COMPUTER INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows For the years ended December 31, 2009 and 2008 (expressed in thousands of New Taiwan dollars) 2009 Cash flows from operating activities: Net income Adjustments to reconcile net income to net cash provided by operating ...

  • Page 141
    ... of New Taiwan dollars unless otherwise specified) 1. Organization ASUSTeK Computer Inc. (the Company) was established on April 2, 1990. The Company' s common shares were listed on the Taiwan Stock Exchange (TSE). Its main activities are to produce, design and sell notebook PCs, main boards, CD...

  • Page 142
    ... 100% 100% 100% Name of subsidiary ASUS COMPUTER INTERNATIONAL ASUS TECHNOLOGY INCORPORATION Nature of business Sales and repair service center in North America Trading electronic appliances, communication appliances, data software, electronic material and office equipment Designing, manufacturing...

  • Page 143
    ... and digital cameras Computer security systems, messenger management systems, and automation systems R&D; providing related technology and aftersales service Providing management consulting service Manufacturing and selling communication products Investment in overseas companies Investment in...

  • Page 144
    ASUSTeK COMPUTER INC. AND SUBSIDIARIES Notes to Financial Statements Name of subsidiary ASKEY TECHNOLOGY (SHANGHAI) LTD. Openbase Limited Goodsmart International Ltd. Leading Profit Co., Ltd. UNI Leader International Ltd. ASKEY TECHNOLOGY (JIANGSU) LTD. (ASKEY JIANGSU) ASON TECHNOLOGY (SUZHOU) LTD....

  • Page 145
    5 ASUSTeK COMPUTER INC. AND SUBSIDIARIES Notes to Financial Statements Name of subsidiary DEEP DELIGHT LIMITED CHANNEL PILOT LIMITED UNIMAX HOLDINGS LIMITED ASUS COMPUTER CORPORATION ASUS TECHNOLOGY PTE. LIMITED (ASTP) Asus Middle East FZCO ASUS EGYPT L.L.C. ASUS COMPUTER GmbH ASUS COMPUTER Benelux...

  • Page 146
    ...to Financial Statements Name of subsidiary ASUS Technology (Suzhou) Co., Ltd. Nature of business Researching and developing LCDs, computers, main boards and the peripherals of related multimedia and network communication products, and providing aftersales service Sales and repair service center in...

  • Page 147
    ... Sales and repair service center in North America Investing activities Designing and developing computer parts Selling computer peripherals, office automation equipment, and digital cameras; retailing/ wholesaling of food products; and leasing Investing activities Manufacturing electronic parts...

  • Page 148
    ... LTD. STRATEGY Technology Co., Ltd. KINSUS INVESTMENT CO., LTD. KINSUS CORP. (USA) Nature of business Manufacturing medical equipment Investing and trading activities Sales and repair service center in North America Design service and sales Sales and repair service center in Japan Sales and repair...

  • Page 149
    ... computer communication products and peripherals Manufacturing and wholesaling electronic parts Researching, manufacturing and selling projectors, projection screens and related products, and after-sales service Investing and trading activities Investing and trading activities Investing and trading...

  • Page 150
    ... financial holding activities Investing and trading activities Developing, manufacturing and selling new electronic components, circuit boards and related products, and after-sales service Trading activities Manufacturing, developing and selling power supply units, computer cases, computer systems...

  • Page 151
    ... selling computer parts and peripherals of digital automatic data processors, multimedia computer system accessories, power supply units, network switches, and modems Selling main boards, computer peripherals, notebooks, servers and software, and providing after-sales service Investing and trading...

  • Page 152
    ... Notes to Financial Statements Name of subsidiary CORE-TEK (SHANGHAI) LIMITED Nature of business Researching and producing notebook parts, designing nonmetal tooling, electronic specific equipment and related products, repairing and producing precision equipment, and providing after-sales service...

  • Page 153
    ...% 100% 100% Sales and repair service center in (Note 1) New Zealand (Note 1) Investing and trading activities Investing and trading activities Manufacturing, developing and selling mobile phones, computers, routers, DTV and electronic components, and providing after-sales service Manufacturing and...

  • Page 154
    ... to Financial Statements Name of subsidiary ASUS UNITED TECHNOLOGY (GUANG ZHOU) CO., LTD. EAST TEC ASIA LIMITED AMA CORPORATION NxNet Systems Holdings Corporation NxNet Systems, Inc. (China) NxNet Systems, Inc. (Taiwan) NxNet Systems, Inc. Nature of business Selling main boards, servers, computer...

  • Page 155
    ... Foreign currency transactions and translation of financial statements in foreign currencies Transactions involving non-derivative financial instruments denominated in foreign currencies are recorded in New Taiwan dollars at the rates of exchange in effect when the transactions occurred. Translation...

  • Page 156
    ... measured at fair value with changes in fair value recognized in profit and loss. Stocks of listed companies, convertible bonds and closed-end funds are measured at closing prices on the balance sheet date. Open-end funds are measured at the unit price of the net assets on the balance sheet date...

  • Page 157
    ASUSTeK COMPUTER INC. AND SUBSIDIARIES Notes to Financial Statements B. Financial assets carried at cost Equity investments without reliable market prices, including emerging and other unlisted stocks, are measured at cost. If objective evidence of impairment exists, the Group recognizes impairment...

  • Page 158
    ASUSTeK COMPUTER INC. AND SUBSIDIARIES Notes to Financial Statements (b) Cash flow hedge: Changes in the fair value of a hedging instrument designated as a cash flow hedge are recognized directly in equity. If a hedge of a forecasted transaction subsequently results in the recognition of an asset ...

  • Page 159
    ... Group has control over a joint venture investment and accounts the investment under equity method. The Group prepares consolidated financial statements using the proportionate consolidation method on balance sheet date. If an investee company accounted for under the equity method issues new shares...

  • Page 160
    ...represents office decoration tooling, which is amortized using the straight-line method over 9 months to 10 years. (14) Accrued product warranty liability When the sales of the products attached with a warranty clause are recognized, warranty liabilities are accrued and current expenses are recorded...

  • Page 161
    ASUSTeK COMPUTER INC. AND SUBSIDIARIES Notes to Financial Statements (15) Convertible bonds payable According to R.O.C. SFAS No. 36 "Financial Instruments: Disclosure and Presentation" and Interpretation (95) 078 by the Accounting Research and Development Foundation (ARDF), convertible bonds with a...

  • Page 162
    ASUSTeK COMPUTER INC. AND SUBSIDIARIES Notes to Financial Statements According to ROC SFAS No. 18 "Accounting for Pensions", the Company and domestic subsidiaries have their pension plan actuarially valued at year-end and recognizes the net periodic pension costs, including service cost, net ...

  • Page 163
    ... and equipment and production technology, development and research expenses, and human resource training expenses are recognized in the year in which the credit arises. The 10% additional income tax on unappropriated earnings of the Company and domestic subsidiaries is recorded as current income...

  • Page 164
    ASUSTeK COMPUTER INC. AND SUBSIDIARIES Notes to Financial Statements When treasury stock is retired, the weighted-average cost of the retired treasury stock is written off against the par value of the shares and the paid-in capital derived from the issuance of shares in excess of par value. If the ...

  • Page 165
    ... follows: 2009/12/31 Financial assets measured at fair value through profit or loss－current: Open-end funds Corporate bonds Forward foreign currency exchange contracts Stocks of listed companies Currency swap contracts Re-purchase bonds Depositary receipts Credit linked notes Financial liabilities...

  • Page 166
    ASUSTeK COMPUTER INC. AND SUBSIDIARIES Notes to Financial Statements 2009/12/31 Non-current: Stocks of listed companies Government Bonds Financial assets carried at cost: Current: Stocks of unlisted companies Non-current: Stocks of unlisted companies Beneficiary certificates Financial assets held ...

  • Page 167
    ... fair value of derivative instruments amounted to $(411,265) and $(999,050) for the years ended December 31, 2009 and 2008, respectively. B. Available-for-sale financial assets: The Group assessed and compared the book value and collectable amount of available-for-sale financial assets and recorded...

  • Page 168
    ASUSTeK COMPUTER INC. AND SUBSIDIARIES Notes to Financial Statements The Group had expected the risk of changes in the foreign currency cash flow from forecasted transactions due to changes in market rate for the year ended December 31, 2009. As the risk was evaluated to be significant, and the ...

  • Page 169
    ..., KINSUS had sold accounts receivable as follows: Write-off of accounts receivable Purchaser 2009/12/31 Mega International Commercial Bank $ 313,090 2008/12/31 233,717 Receipt in advance 2009/12/31 2008/12/31 192,404 Collateral None Limits for sales of accounts receivable Note Note: As of December...

  • Page 170
    ASUSTeK COMPUTER INC. AND SUBSIDIARIES Notes to Financial Statements (6) Long-term equity investments 2009/12/31 Investee Company YORKEY OPTICAL INTERNATIONAL (CAYMAN) LTD. INDEED HOLDINGS LIMITED AVY Precision Technology Inc. WILSON HOLDINGS LIMITED EVER PINE INTERNATIONAL LTD. (BVI) ASHINE ...

  • Page 171
    ...in operation; therefore, the Group recognized the net fair value as the recoverable amount for these assets. After evaluating and comparing the carrying value of idle assets and the expected recoverable amount, the Group recognized impairment loss thereon of $798,614 and $116,460 for the years ended...

  • Page 172
    ... indication of cash flow in future years for non-current asset held for sales which are currently not used for operation; therefore, the Group recognized the net fair value as the recoverable amount. B. The Company obtained control over Ability Enterprise from a share swap and adopted R.O.C. SFAS No...

  • Page 173
    ... for one of the land use rights and recognized it as investment - land use right. (12)Short-term loans and short-term notes bills payable 2009/12/31 Unsecured loans Secured loans Letter of credit Short-term notes and bills payable Range of interest rates $ 11,863,692 589,408 49,933 $ 12,503,033 0.44...

  • Page 174
    ASUSTeK COMPUTER INC. AND SUBSIDIARIES Notes to Financial Statements Bank Mega International Commercial Bank Usage and redemption duration 2009.12.16~2016.12.15, payable in 20 quarterly installments, commencing the date of borrowing with an extension of two years. 2005.01.31~2012.01.31, payable in...

  • Page 175
    ASUSTeK COMPUTER INC. AND SUBSIDIARIES Notes to Financial Statements Bank Usage and redemption duration 2009/12/31 2008/12/31 Industrial and Commercial Bank of China Limited The Shanghai Commercial &Savings Bank, Ltd. The Shanghai Commercial &Savings Bank, Ltd. The Shanghai Commercial &...

  • Page 176
    .... (14)Bonds payable A. The Company issued the first Euro unsecured convertible bonds (ECB 1) on the Luxembourg Stock Exchange on January 15, 2004, with a zero-coupon rate, a duration of five years, and a face value of US$320,000,000. The details of ECB 1 are as follows: 2009/12/31 Aggregate...

  • Page 177
    ... with certain conversion terms. (d) Call option: The Group could redeem the convertible bonds at par value at any time during the period from December 8, 2006, to September 28, 2011, under the following conditions: the closing price of the common shares on each of 30 consecutive trading days reaches...

  • Page 178
    ASUSTeK COMPUTER INC. AND SUBSIDIARIES Notes to Financial Statements 2009/12/31 Less: Convertible bonds payable -redeemable within one year Corporate bonds payable - net Debt-component embedded derivative: － call/put option and conversion price reset option － conversion rights (3,609,633) - ...

  • Page 179
    ... Notes to Financial Statements December 31, 2009 Benefit obligation: Vested benefit obligation Non-vested benefit obligation Accumulated benefit obligation Projected future employee compensation increases Projected benefit obligation Fair value of plan assets Funded status Net unrecognized...

  • Page 180
    ... stock were as follows: 2009/1/1~2009/12/31 Amount Shares (in thousands) Beginning of the year Addition Retirement Ending of the year 26,125 (26,125) $ 873,459 (873,459) - $ Pursuant to the Securities and Exchange Act, the total shares of treasury stock shall not exceed 10% of the number of shares...

  • Page 181
    ASUSTeK COMPUTER INC. AND SUBSIDIARIES Notes to Financial Statements C. Additional paid-in capital Pursuant to the Company Act, additional paid-in capital can only be used to offset a deficit or to increase common stock. Cash dividends cannot be declared out of additional paid-in capital. According...

  • Page 182
    ... financial statements, if any, are accounted for as changes in accounting estimates and recognized in profit or loss in the year of actual distribution. (17) Income taxes A. The Company was certified to meet the definition of "Business Operation Headquarters" as defined by the "Statute for Upgrading...

  • Page 183
    ASUSTeK COMPUTER INC. AND SUBSIDIARIES Notes to Financial Statements 2009/1/1~12/31 Current income tax expense The 10% additional income tax on unappropriated earnings Investment tax credits Deferred income tax expense (benefit): Decrease (increase) in inventory valuation loss Deferred tax effect ...

  • Page 184
    ... Notes to Financial Statements D. The components of deferred income tax assets (liabilities) as of December 31, 2009 and 2008, were as follows: 2009/12/31 Deferred income tax assets: Unrealized sales profit Inventory provisions Unrealized accrued expense Loss carryforward Investment tax credits...

  • Page 185
    ASUSTeK COMPUTER INC. AND SUBSIDIARIES Notes to Financial Statements (b) Ability Enterprise disagreed with the tax office' s income tax assessments for the years 2004, 2005 and 2006 regarding investment tax credits. Ability Enterprise has filed formal tax appeals. (c) TWINHAN Technology Co., Ltd (...

  • Page 186
    ... subsidiaries Year incurred 2003~2009 2007~2009 2003~2009 Unused tax credits $ 74,031 57,469 348,893 480,393 Expiry year 2013~2019 2017~2019 2011~2019 $ I. Other tax benefits applicable to the Group were as follows: Name of company PEGATRON KINSUS Item Five -year tax exemption period Investment in...

  • Page 187
    ASUSTeK COMPUTER INC. AND SUBSIDIARIES Notes to Financial Statements 2009/1/1~12/31 After Before income tax income tax Weighted-average number of shares outstanding 4,242,156 Effects of dilutive potential common stock: Convertible bonds payable 75,339 Employees' bonuses that could be declared in ...

  • Page 188
    ... used by financial market traders when quoting their prices. (c) Financial assets carried at cost and financial assets held to maturity: Those are investments in companies whose shares are not publicly listed and beneficiary certificates, and have no available market prices. (d) The fair value of...

  • Page 189
    ASUSTeK COMPUTER INC. AND SUBSIDIARIES Notes to Financial Statements C. The fair value of financial assets and financial liabilities evaluated by the Group using public quotes or an assessment method was as follows: 2009/12/31 Public Assessment quote value value Financial assets: Financial assets ...

  • Page 190
    ... payable. (ii) The open-end funds & stocks of listed companies held by the Company have publicly quoted prices and could be sold at the approximate market price. As to the forward exchange contracts, there are no significant financing risks due to expected sufficient capital. Management believes...

  • Page 191
    ASUSTeK COMPUTER INC. AND SUBSIDIARIES Notes to Financial Statements (d) Cash flow risk arising from variation in interest rates The Group' s long-term loans bear floating interest rates. Changes in the prevailing market rate will affect the effective interest rate on long-term loans and cause ...

  • Page 192
    ... 4,154,168 - Purchase terms are open account 45 to 120 days, 90 days from receipt of goods, or within 1 to 6 months for related parties. C. Notes/accounts receivable (payable) 2009/12/31 Amount Notes and accounts receivable: Summary Notes and accounts payable: Asint Technology SHANGHAI INDEED Avy...

  • Page 193
    ASUSTeK COMPUTER INC. AND SUBSIDIARIES Notes to Financial Statements D. Sale of long-term investment 2009/1/1~12/31 Related party Avy Precision Item Long-term investment under the equity method - ASHINE PRECISION $ Sales price Book value Disposal gain (note) 177,466 143,812 33,654 Note: ...

  • Page 194
    ASUSTeK COMPUTER INC. AND SUBSIDIARIES Notes to Financial Statements F. Salaries and remuneration of key management The salaries and remuneration the Group paid to the directors, supervisors and major management in 2009 and 2008 were as follows: 2009/1/1~12/31 (Estimated) Salaries Incentives ...

  • Page 195
    ASUSTeK COMPUTER INC. AND SUBSIDIARIES Notes to Financial Statements 7. Commitments and Contingencies (1) As of December 31, 2009, the Group' s outstanding letters of credit were as follows (foreign currencies are expressed in thousands): Currency USD GBP EUR JPY NTD $ Amount 44,639 9 497 3,112,833...

  • Page 196
    ASUSTeK COMPUTER INC. AND SUBSIDIARIES Notes to Financial Statements have entered into a settlement agreement in September 2009 to close the case. F. AVerMedia Technologies Inc. filed an attachment for damage loss against Lumens Digital Optics Inc. with Taiwan HsinChu District court on January 3, ...

  • Page 197
    ...-term equity investment in Pegatron) to the Company's wholly owned existing subsidiary Pegatron International Investment Co., Ltd. Pegatron International Investment Co., Ltd. will issue new shares to the Company and the shareholders of the Company as consideration. The Company will have a capital...

  • Page 198
    ASUSTeK COMPUTER INC. AND SUBSIDIARIES Notes to Financial Statements 10. Others (1) Personnel expenses, depreciation, and amortization for the years ended December 31, 2009 and 2008, were as follows: 2009/1/1~12/31 Operating expenses 2008/1/1~12/31 Operating expenses Cost of sales Personnel ...

  • Page 199
    ...impact on the accompanying consolidated financial statements. 12. Segment Information A. Industrial information The Group is engaged in a single industry and is mainly engaged in the design, production and sale of main boards. B. Geographic information 2009 Asia Pacific (Taiwan not included) 298,708...

  • Page 200
    ... COMPUTER INC. AND SUBSIDIARIES Notes to Financial Statements 2008 Asia Pacific (Taiwan not included ) 288,604,157 144,513,742 433,117,899 8,999,244 Taiwan Revenue from third parties Revenue from the parent company and subsidiaries Total revenues Segment income (loss) Interest expense Investment...

  • Page 201
    ...: Accounts payable for the inventory purchased was increased due to the economic recovery in 2009Q4. II. Business performance (I) Comparison of business performance Unit: NT$ thousands Item Total operating income Minus: Sales return and discount Net operating income Operating cost Gross profit...

  • Page 202
    ... profit Operating expense Operating income Non-operating income and gain Interest income Investment income (Equity Method) Dividend income Gain from exchange Gain from reversal of bad debts Gain from financial asset valuation Gain from financial liability valuation Other income Total non-operating...

  • Page 203
    ... ratio change Analysis of financial ratio change: Current ratio, Cash adequacy ratio, and Cash reinvestment ratio were increased in 2009 from 2008. Root cause: Net cash inflow from operating activity was up due to the effort of the management in controlling inventory level and reducing total amount...

  • Page 204
    ... information products developed. 1. Products development planned in 2008: (1) Digital control wireless transmission technology dual core CPU MB (2) Advanced 3D image display and wireless TV transmission graphic card (3) Intelligent phone GPS (4) Ultra Mobile PC (5) High-speed router / exchanger...

  • Page 205
    ... LED display (8) WiMAX broadband products (9) EeePC touch, long-lasting computer (10) Eee Top PC, Eee Box PC, and Eee Keyboard PC 2. R&D budget in 2009: NT$5.3 billion (IV) The impact of domestic and international policies and law change on the company' s finance and the responsive measures...

  • Page 206
    ... significant risks and responsive measures: N/A (XIV) Risk management policy, structure and function 1. Risk management policy ASUSTeK has the Risk Control & Contingency Policy stipulated to secure the ongoing concern of the enterprise and to fulfill corporate social responsibility to stakeholders...

  • Page 207
    ... helping protect ASUSTeK brand value for an amount equivalent to NTD13 billion, which was computed at 25% of the brand value of ASUSTeK. The core members for strategic planning and enforcement of risk management include [Ongoing Concern Office] Director, Deputy Director, and [Risk Management Center...

  • Page 208
    ... best result through reciprocal support in technology, production, marketing, and sales. (5) Directors, supervisors, and president of the related party: Please refer to Page 218-225. 2. Business operation of the related party: Please refer to Page 226-233. (II) Consolidated financial statements of...

  • Page 209
    ... INVESTMENT 100% Int'l United DELIGHT DEEP T EC ASIA LT D 100% 100% 100% 100% 100% 100% Asus Computer Corp. 100% CHANNEL P ILOT LIMITED 100% UNIMAX HOLDINGS LIMIT ED AzureWave AZUREWAVE(CAYMAN) eMes Technologies, HOLDING INC. (SHUZHOU) Inc. Note： liquidated CO., LT D. 100% ASUS...

  • Page 210
    ... (2) Asustek Computer Inc. 100% Askey AZUREWAVE(CAYMAN) 100% AzureWave Technologies, HOLDING INC. Note：liquidated 8.64% AGAiT T echnology Corp. 9.13% 100% Hua-Min Computer Corp. Inc. Investment 100% Enertronix, Inc. Co., Ltd. 2.52% Mobostar T echnology Ltd. International International Co...

  • Page 211
    ...% PEGAT RON USA ASUSPOWER ASUST EK ASUS INVESTMENT INVESTMENT INVESTMENT INC. INC. INC. 92.45% POWT EK MAGNIFICENT BRIGHTNESS 100% BOARDT EK HOLDINGS LTD.(Cayman) HOLDINGS LTD 100% PROT EK GLOBAL ASLINK 100% 100% 100% PRECISION CO., LT D 100% DIGIT EK GLOBAL HOLDINGS LTD 100% NORT...

  • Page 212
    ... 100% KINSUS INVESTMENT (SAMOA)LTD 100% KINSUS CO., LT D. 100% 100% 100% 100% Lumens Intergration Inc. 100% Lumens Digit Image Inc. 100% Lumens Europe BVBA 94% CHIEH-HSIN INTERNATIONAL ASUS CO., LT D (USA) ASIAROCK LEADER SERVICE TECHNOLOGY INSIGHT CANADA LIMITED HOLDINGS LTD INC...

  • Page 213
    ...BVI) INC. AMA TECHNOLOGY HOLDINGS CORP. LIMIT ED LIMIT ED LT D. INTERNATIONAL INC. Investment Co., Ltd. 209 100% KAEDAR HOLDINGS UNITED NEW 90.51% SLIT EK HOLDINGS COMPUTER (SUZHOU) CO., LTD. 100% CASET EK (Shanghai) Limited Inc. Technologies, 100% Core-T ek AzureWave LIMIT ED LT D 100...

  • Page 214
    ... center in North America Designing, manufacturing, processing and selling 118,200 storage products 62,758 Sales and repair service center in Europe 1,600 Investing and trading activities Trading electronic appliances, communication 190,000 appliances, data software, electronic material and office...

  • Page 215
    ..., main boards, medium-sized computers, high-class personal computers, servers, and computer peripherals; importing/exporting, 311,148 wholesaling and integrating mobile communication equipment; and providing technology consulting and after-sales services 1,736 Sales and repair service center in...

  • Page 216
    NAME OF CORPORATION ADDRESS Hsinchu Science Park CAPITAL MAJOR BUSINESS / PRODUCTION ITEMS 87.06.16 DATE OF ESTABLISHMENT Database service, wired communication, manufacturing mechanical equipment, and 250,000 manufacturing, selling and developing ink-jet printing technology (Note 1) International ...

  • Page 217
    ... and audio-video product 15,995 Sales and repair service center in North America Pegatron Corporation PEGATRON USA, INC ASUSPOWER INVESTMENT CO., LTD. ASUS INVESTMENT CO., LTD. ASUSTEK INVESTMENT CO., LTD. ADVANSUS COMPUTER CO., LTD Unihan Corporation Unihan Holding Ltd. CASETEK HOLDINGS LIMITED...

  • Page 218
    ...-sales service 241,525 Investing and financial holding activities Manufacturing and selling computer parts and peripherals of digital automatic data processors, 176,025 multimedia computer system accessories, power supply units, network switches, and modems 1,600 Investing and trading activities...

  • Page 219
    ... HOLDINGS LIMITED(CAYMAN) BOARDTEK HOLDINGS LIMITED Boardtek Computer (Suzhou) Co., Ltd. 1,666,224 Investing and trading activities Developing, manufacturing and selling new 1,941,837 electronic components, circuit boards and related products, and after-sales service BOARDTEK (H.K.) HOLDINGS...

  • Page 220
    ... Investing and trading activities Manufacturing electronic parts, wholesaling and 4,460,000 retailing electronic components, and providing business management consultant service Developing and designing new technology and 15,995 products; analyzing marketing strategy and developing new customers...

  • Page 221
    .... VIEWQUEST TECHNOLOGIES INTERNATIONAL INC. Ability International Investment Co., Ltd. Note 1: ASUSTeK had International United Co., Ltd. setup in SAMOA WESTERN in 2002; however, ASUSTeK had not transferred out any fund up to December 31, 2009. Note 2: The paid-in capital involved foreign currency...

  • Page 222
    ... Chairman Director & President Director Supervisor Chairman Director & President Director NAME OF PERPRESENTATIVE Asustek Computer Inc.（Representative：Jonathan Tsang） Asustek Computer Inc.（Representative：Jonney Shih） Asustek Computer Inc.（Representative：Jerry Shen） Asustek Computer...

  • Page 223
    ... Chairman Director Director Chairman Director Director Director Director Director Director Director 6,500,000 100% UNIMAX ELECTRONICS INC. UNIMAX HOLDINGS LIMITED（Representative：Justin Lin） CHANNEL PILOT LTD. ASUS TECHNOLOGY PTE LTD. ASUS TECHNOLOGY (HONG KONG) LIMITED ASUSTEK COMPUTER...

  • Page 224
    ...Jonney Shih） ASUS TECHNOLOGY PTE LTD.（Representative：Victor Kao） AGAiTech Holding Ltd. MOBOSTAR TECHNOLOGY LTD. GREAT EXTEND INVESTMENT CORP. AGAiT Technology Corporation（Representative：Jerry Shen） DEEP DELIGHT LTD（Representative：Jonney Shih） International United Technology...

  • Page 225
    ... OF CORPORATION TITLE Chairman NAME OF PERPRESENTATIVE Magic International Company Limited(Representative：Cheng-Kuei Lin*) Askey Technology (Shanghai) Limited President Askey Technology (Jiangsu) Limited Director & President ASHINE TECHNOLOGY (SUZHOU) LTD. ASON TECHNOLOGY (SUZHOU) LTD Han-Wen...

  • Page 226
    ... ELECTRONICS CORP. Director Supervisor Chairman ASUSPOWER INVESTMENT CO., Director Director LTD. Supervisor Chairman Director Asus Investment Co., Ltd. Director Supervisor Chairman Director Asustek Investment Co., Ltd. Director Supervisor Chairman Director Director Director AzureWave Technologies...

  • Page 227
    ... Supervisor Chairman & President Director EzWAVE Technology Inc. Director Supervisor ASFLY TRAVEL SERVICE LIMITED Chairman HUA-YUAN Investment Limited Chairman PEGA INTERNATIONAL Chairman LIMITED PEGATRON HOLDING LIMITED Director UNIHAN HOLDING LIMITED Director Pegatron USA President Asuspower Corp...

  • Page 228
    ...CALROCK HOLDINGS LLC. Chairman FIRSTPLACE INT' L Ltd. Director ASROCK AMERICA INC. Chairman Director Ability International Investment Co., Ltd. Director Supervisor ABILITY ENTERPRISE (BVI) CO.,LTD. ASSOCIATION INTERNATIONAL LIMITED JADE TECHNOLOGIES LTD.（Representative：Hung-Lin Shih*） EMINENT...

  • Page 229
    ...TECHNOLOGY (JIANGXI) CO., LIMITED. KAEDER TRADING LTD KAEDER HOLDINGS LIMITED TITLE Executive Director Director Director Director Director NAME OF PERPRESENTATIVE ASAP INTERNATIONAL CO., LIMITED. (Representative: Cheng-Wei Wu*) Casetek Holdings Limited (Representative: Eric Chang) Casetek Holdings...

  • Page 230
    ... International Investment Co., Ltd. ASUS INTERNATIONAL LIMITED CHANNEL PILOT LIMITED ASUS TECHNOLOGY PTE. LIMITED ASUS TECHNOLOGY (HONG KONG) LIMITED ASUS COMPUTER Benelux B.V. ASUS COMPUTER GmbH ASUS FRANCE SARL ASUSTEK (UK) LIMITED ASUS KOREA Co., Ltd ASUSTEK COMPUTER (SINGAPORE) PTE, Ltd. ASUS...

  • Page 231
    ... UNIMAX ELECTRONICS INC. ASUSTEK HOLDINGS LIMITED SOUTH TEC ASIA LIMITED CENTRAL TEC ASIA LIMITED ASUS COMPUTER (SHANGHAI) CO., LTD. ASUS Technology Holland B.V. ASUS Hungary Services Limited Liability Company ASUS PORTUGAL, SOCIEDADE UNIPESSOAL LDA. ASUS SWITZERLAND GmbH SHINEWAVE INTERNATIONAL INC...

  • Page 232
    ...-Cheng Venture Capital Corp. Askey Computer Corporation Askey International Corp. Dynalink International Corp. Magic International Co., Ltd. Askey (Vietnam) Company Limited Double Tech Ltd. Big Profit Limited Famous Star Investments Limited Askey Technology (Jiangsu) Limited ASON TECHNOLOGY (SUZHOU...

  • Page 233
    ..., Inc. Enertronix International Limited Enertronix Holding Limited Shandong Enertronix Electronic Co., Ltd. Enertronix (HuiZhou) Co., Ltd. PEGATRON CORPORATION Pegatron USA, Inc ASUSPOWER INVESTMENT CO., LTD. ASUS INVESTMENT CO., LTD. ASUSTEK INVESTMENT CO., LTD. ADVANSUS COMPUTER CO., LTD UNIHAN...

  • Page 234
    ...SERVICE LIMITED HUA-YUAN Investment Limited ASUSPOWER CORPORATION PEGATRON MEXICO, S.A. DE C.V. PEGATRON HOLDING LTD. MAINTEK COMPUTER (SUZHOU) CO., LTD. MAGNIFICENT BRIGHTNESS LIMITED PROTEK GLOBAL HOLDINGS LTD. PROTEK (SHANGHAI) LIMITED NORTH TEC ASIA LIMITED ASAP TECHNOLOGY (JIANGXI) CO., LIMITED...

  • Page 235
    ...72 - 231 ASUS HOLLAND HOLDING B.V. PEGATRON Czech s.r.o. BOARDTEK HOLDINGS LIMITED(Cayman) BOARDTEK HOLDINGS LIMITED BOARDTEK COMPUTER (SUZHOU) CO., LTD. BOARDTEK (H.K.) TRADING LIMITED ASLINK PRECISION CO.,LTD. ASLINK (H.K.) PRECISION CO.,LIMITED ASAP INTERNATIONAL CO., LIMITED Ability Technology...

  • Page 236
    ...) Note 1 - 232 ASRock America, Inc. STARLINK ELECTRONICS CORP. STRATEGY Technology Co., Ltd. KINSUS Interconnect Technology Corporation KINSUS CORP. (USA) KINSUS HOLDING (SAMOA) LIMITED KINSUS HOLDING (CAYMAN) LIMITED KINSUS INTERCONNECT TECH.(SUZHOU) CORP. PEGAVISION CORPORATION KINSUS INVESTMENT...

  • Page 237
    ...ENTERPRISE (BVI)CO., 820,064 LTD. ACTION PIONEER 63,980 INTERNATIONAL LTD. ASSOCIATION INTERNATIONAL 38,388 LTD. VIEWQUEST TECHNOLOGIES 212,094 (BVI) INC. VIEWQUEST TECHNOLOGIES 47,985 INTERNATIONAL INC. Ability International Investment Co., 573,133 Ltd. Note 1: It' s not applied to company limited.

  • Page 238
    ... Transaction Regulation No. 20, No. 32, No. 171, and NO. 174. 7. We hereby declared that the Declaration of Internal Control was approved by the Board of Directors on March 12, 2010 unanimously by the directors at the meeting ASUSTeK Computer Inc. Chairman: Jonney Shih President: Jerry Shen 234

  • Page 239
    ASUSTek Computer Inc. Chairman 235