Asus 2009 Annual Report Download - page 177

173
ASUSTeK COMPUTER INC. AND SUBSIDIARIES
Notes to Financial Statements
(Continued)
The Company classified ECB 1 under current liabilities beginning March 31, 2008, since the
maturity date of convertible bonds was on January 15, 2009.
B. The Company issued redeemable domestic unsecured convertible bonds with a zero-coupon rate
and a face value of $12,000,000 on November 7, 2006. In accordance with SFAS No. 36, the
Company separated the embedded derivative debt and non-derivative debt components as
follows:
The main debt component at issuance $ 10,653,600
The embedded derivative debt at issuance 1,346,400
The total amount of the convertible bonds at issuance $ 12,000,000
The main issuance terms of the domestic unsecured convertible bonds are as follows:
(a) Duration of issuance: 5 years (from November 7, 2006, to November 7, 2011.)
(b) Conversion period: Each bondholder has the right to convert all or from time to time any
portion of its convertible bonds into common shares during the conversion period (up to 31
days after the original issued date to 10 days before the maturity date).
(c) Conversion price and adjustment: The conversion price is NT105.4 dollars per common
share initially. The conversion price will be adjusted upon the occurrence of an increase in
the number of common shares. The Company adjusted the conversion price to NT74.8
dollars on August 24, 2009. Furthermore, the conversion price was reset to NT68.7
dollars on October 1, 2009, in accordance 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 or
exceeds 50% of the conversion price, or the outstanding balance of the bonds is less than
10% of the original issuance.
(e) Put option: Each bondholder has the right to put the convertible bonds at par value after the
3rd and 4th year.
The information on the above bonds payable is as follows:
2009/12/31 2008/12/31
Aggregate principal amount $ 12,000,000 12,000,000
Accumulated converted amount (7,000) (7,000)
Accumulated redeemed amount (8,226,400) (733,900)
Discount on bonds payable (156,967) (722,828)
3,609,633 10,536,272