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321
2357
ASUSTeK Computer Inc.
2011 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 April 27, 2012

Table of contents

  • Page 1
    2357 ASUSTeK Computer Inc. 2011 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 April 27, 2012 321

  • Page 2
    ..., Taiwan Address : 27F., No.333, Sec. 1, Keelung Rd., Xinyi Dist., Taipei City 110 Tel. : 886(2)2729-6666 E-mail : http://www.pwc.com/tw V. EXCHANGEABLE BOND EXCHANGE MARKETPLACE Marketable security: GDR London Stock Exchange: http://www.londonstockexchange.com VI. COMPANY WEBSITE http://www.asus...

  • 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
    VI. Financial information ...1. Condensed balance sheet and income statement over the last five years ...2. Financial analysis in the past five years ...3. Supervisor's report in the most recent years ...4. Financial statements in the most recent years ...5. Consolidated financial statements in the ...

  • Page 5
    ...mobile internet for tablet PC, to share exciting digital content. The advantage of dual function as SMART phone and tablet PC in one Padfone is bringing consumers with more flexibility and brand-new mobile experience. ASUS won the 2012 iF Gold Award from Germany in February with its exquisite design...

  • Page 6
    ...attentive operating interface upgrades the user experience of business projects to a whole new level. Other products such as the eye-catching ZENBOOK, the award-winning ASUS deformation plate EeePad, Sabertooth P67 TUF Motherboard, ET Series All-in-One PC, Asus CG Desktop Series Desktop, Asus Eee PC...

  • Page 7
    ... multiple marketing and sales talents recruited by the company. The sales of high unit price EISA 486 product were satisfactory and the said product had helped the company generate millions of dollars of profit. INTEL (USA) provided the company with O/A credit quota for over five times. Increased...

  • 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
    ... Research awarded the company with "Product of the Year Award" and "Enterprise of the Year Award." China Credit Information Service Ltd. had the company'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...

  • Page 10
    ... 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 to NT$11.449 billion with retained earnings. Presented ASUS super thin NB...

  • 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
    ... 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 was awarded with multiple global awards. Presented the small and with big screen ASUS J101 phone. The industrial design team received...

  • Page 13
    ... in MIS Best Choice by Institute for Information Industry: Barebones and server were ranked in the first place and advanced NB was ranked in the second place. ASUS presented the first 3.5G NB in Taiwan that led consumers entering new mobile phone era. ASUS were awarded with 39 citations in the 15th...

  • Page 14
    ...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 15
    .... The tough Japanese market was conquered by the easy-to-learn and easy-to-use Eee PC! According to the survey in November of the most creditable 3C survey company, Business Computer News (BCN), EeePC was the champion in sales of Notebook and the most popular product of the year by the Japanese...

  • Page 16
    ... 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. ASUSTeK was awarded for innovation in energy-saving effort. ASUS computer...

  • Page 17
    ...personal electronics, computer hardware, home network, and digital audio evidencing ASUS's leading role in digital life. ASUS was awarded with eight awards at iF Product Design in Germany, the biggest winner of the year. The winning products included Rampage III Extreme motherboard, Eee Note, Eee PC...

  • Page 18
    ... of the top 100 Taiwan products. ASUS was ranked as the top 3 international brands of Taiwan for the 9th year, whereas the market value of the brand is valued at NT1.637 billion. ASUS released the latest ZENBOOK ™ super-slim notebook in global synchronization. Chairman Jonney Shi first released the...

  • Page 19
    on the Intel® 7 motherboards to be launched so that the motherboards can fully bring its tough potential into full play. 15

  • Page 20
    III. Corporate governance report I. Corporate Organization (I) Organization Chart Effective date: 2011.12.31 16

  • Page 21
    ..., ASUS Design Center, Firmware R&D Center, EM & Wireless Communication R&D Div. and Power R&D. Develop the common R&D technology need by each business unit. Management Headquarters Arrange the planning and enforcement of the company's finance, accounting, regulatory, administration, and public works...

  • Page 22
    ...None None None None Director Joe Hsieh 2011.06 3 2011.06 Corporate Vice President EMBA of National Chengchi University 0 Engineer of Won-Chuan Co. Ltd. Institute of Computer Engineering of 0 Boston University Engineer of ASUS (USA) Ph.D of Business Management, National Supervisor Tze-Kaing...

  • Page 23
    ..., AAEON TECHNOLOGY INC., Hua-Cheng Venture Capital Corp., Hua-Min Investment Co., Ltd. and ACI. Note 4: Chairman of SHINEWAVE INTERNATIONAL INC Note 5: Chairman of the following companies: ASUS CLOUD CORPORATION, ASUS COMPUTER GmbH, ASUS POLSKA SP.z.o.o., ASUS SWIZERLAND GmbHï¼›Director of ACI...

  • Page 24
    ... finance, national exam & accounting, or law, finance, business accounting, or certified specialists or technicians business Independence (Note) Also an independent director of other public company 1 2 3 4 5 6 7 8 9 10 Name Jonney Shih Jonathan Tsang Jerry Shen H.C. Hung Eric Chen Tze...

  • Page 25
    ... Name Date Elected Shares Shares held by other persons in their name Shares % Current Executives who are spouses position or second consanguinity with other companies Title Name Relation President of Open Jonathan 2nd Platform Tsang consanguinity Business Group Chief Branding Officer Jonney...

  • Page 26
    ... 6: Director of ASUS CLOUD CORPORATION. Note 7: Director of the following companies: ASUS TECHNOLOGY PTE. LTD., ASUS TECHNOLOGY (HONG KONG) LIMITED, ASUS KOREA CO. and Asus Middle East FZCO. Note 8: Supervisor of the following companies: Hua-Min Investment Co., Ltd. and Hua-Cheng Venture Capital...

  • Page 27
    ... None Director Eric Chen Director S.Y. Shian Director Joe Hsieh 23 Name of Directors A+B+C+D Companies in the consolidated financial statements (I) H.C. Hung Eric Chen, S.Y. Shian, Joe Hsieh Jonney Shih, Jonathan Tsang, Jerry Shen Remuneration Bracket Remuneration to directors The company...

  • Page 28
    ... 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 Remuneration from the invested company other than the company's Companies...

  • Page 29
    ... than the consolidat The consolidated company's ed company financial subsidiary financial statements statements Chief Branding Officer Jonney Shih President of Open Platform Business Group Jonathan Tsang Chief Executive Officer Jerry Shen Corporate V.P. S.Y. Shian 32,136 thousand 0 0 0 0.88...

  • Page 30
    ... of dividend Name Total Stock Dividend Cash Dividend (estimated amount) Ratio of total amount to net income (%) Title Chief Branding Officer Jonney Shih President of Open Platform Business Jonathan Tsang Group Chief Executive Officer Jerry Shen Corporate V.P. S.Y. Shian Managers Corporate...

  • Page 31
    III. Corporate governance (I) Board of Directors Board of Directors The attendance of Directors for the 6 (A) Board Meeting in 2011: Title Chairman Vice Chairman Director Director Director Director Director Name Jonney Shih Jonathan Tsang Jerry Shen H.C. Hung Eric Chen S.Y. Shian Joe Hsieh ...

  • Page 32
    ... supervisors stated in the board meeting, the date, term, the content of the case, the resolution reached, and the company's response to the supervisor's opinion must be stated in details: None. 2. Operation of audit committee: Not applicable since the Company did not have an audit committee setup...

  • Page 33
    ....asus.com) setup to disclose business management financial information and business management (relationship with investors) and to explain the corporate governance of the company to the investors in the shareholders meeting and public offering meeting. (2) The company has adopted other 2. Designate...

  • Page 34
    ... has an agreement signed with each customer before providing services and products to them. 5. The company obeys law, maintains a good labor relation, provides job opportunity, builds up brand name, expands exporting business, and fulfills corporate social responsibility. 6. The company is to have...

  • Page 35
    ... the company. 4. The proportion of dividend payout to directors and senior managers in short-term performance and the payout time for some changing salary and remuneration should be determined with consideration of industry characteristics and the business nature. 2. Operations of ASUS Compensation...

  • Page 36
    ... also, drafts up energy saving and carbon reduction and greenhouse greenhouse gas emission information that can be looked up on the gas reduction strategy. corporate sustainability report and ASUS CSR website. ASUS products have undergone ecological design to enhance energy use efficiency for...

  • Page 37
    ... to the business sustainability report and website of ASUS at http://csr.asus.com/chinese/index.aspx#120 7. Please detail if ASUS products or corporate social responsibility report is certified by any institutions: The 2010 Corporate Sustainable Report announced in 2011 was certified by GRI (Global...

  • Page 38
    ...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 and leisure, free of discrimination, free of sexual...

  • Page 39
    ...-strait digital art and music culture communication for promoting digital art. In extension of the sponsoring model with Museum of Contemporary Arts Taipei in 2011, ASUS lent relevant products to the artists and organizers of MOCA free of charge. A total of 11 domestic and international contemporary...

  • Page 40
    ... category of social team for the consecutive 7th year. The team also participated in public cheerleading competition in Japan, Thailand, United States, Finland, and Germany, who have won two gold, three silver and one bronze medal in the past. (4) Child care Help Rainbow Paradise Association arrange...

  • Page 41
    ..., to upgrade students' digital learning ability. b. Donate ASUS notebook computers for the reconstruction of the flooded area due to the Morakot typhoon (August 8); also, help promote shortening digital care program in the disaster area. The donated objects include information marketing association...

  • Page 42
    ...Asus provided discounts on tablet PCs, while Dlink donated networking equipments to successfully promote this public welfare program. (2) Overseas a. Work with the secretariat of the ADOC and local non-profit organization to donate computers in the following nations and help setup 12 digital centers...

  • Page 43
    ... the issues of digital gap and promotion of green technology using green energy-saving as well as sharing cultural interaction and interesting stories with local villagers to the world in real time through the website, ASUS notebook in films, photos and text records of volunteer services. This year...

  • Page 44
    ... for Educational Communications and Technology. ASUS's fulfillment of corporate social responsibility: 1. Awarded by Taipei City Government with "Gold Award for Energy Saving" for the first place of Business Group A in 2010. 2. Rated as the "Energy Saving and Carbon Reduction" outstanding unit by...

  • Page 45
    ...global change issues. 5. Published the "2010 Corporate Sustainability Report" in 2011 that is verified with DNV（Det Norske Veritas）and in compliance of GRI GRI Application Level Statement A. 6. Participated in the "Enterprise Citizen" contest held by CommonWealth Magazine in 2011 and was awarded...

  • Page 46
    ...' 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 June 9, 2011 Subjects 1. The company's 2010 financial statements were resolved in the board meeting and audited by...

  • Page 47
    ...Board of Directors: Time June 9, 2011 June 30, 2011 Subjects 1.Elected Jonney Shih as Chairman and Jonathan Tsang as Vice Chairman. 2. Approved the for the company appointment of audit officer. 1 Report on IFRS implementation progress(2011Q2). 2. Adopted the benchmark day for ASUS 2010 Issuing new...

  • Page 48
    ...2012 Q2) and the 2012 Q1 Number of Account reporting 2. Shareholder proposal to admissibility report for general shareholder meeting in current year. 3. Recognized 2011 Asus Earning distribution. 4. Adopted the director re-election case. 5. Adopted the lifting of non-competition restrictions for new...

  • Page 49
    ..., and the CPA firm's related party accounted for over a quarter of the total auditing fees, the auditing amount and non-auditing amount; also, the non-auditing service must be disclosed: Non-auditing fees CPA firm CPA Auditing fees System design Industrial Human and commercial resources registration...

  • Page 50
    ... of the standards: None VI. If the chairman, president, 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...

  • Page 51
    ... Shareholding 2011 Title Name Net Change in Shareholding 15,509,057 (Note 3) 346,623 Net Change in Share Pledged 0 As of April 14 (Note 2) Net Change in Shareholding 0 Net Change in Share Pledged 0 Chairman & Chief Branding Officer Vice Chairman & President of Open Platform Business Group Director...

  • Page 52
    ... in their name Shares 0 % 0 Shares ASUS's Certificate of Depository with CitiBank (Taiwan) Jonney Shih Governemnt of Singapore Investment Commissioned to Citibank (Taiwan) T.H. Tung ChungHwa Post Co., Ltd. Standard Chartered managed Van Gardner emerging market stock index fund account Chase Bank...

  • Page 53
    ... Directors, Supervisors, Managers and directly or indirectly controlled business on the reinvested business and the total shareholding ratio: Total Shareholding Ratio Baseline date: 12.31.2011, Unit: Share; % Investment of the Company Shares ASUS TECHNOLOGY INCORPORATION Askey Computer Corporation...

  • Page 54
    Reinvestment Investment of the Company Shares % Investments from Directors, Supervisors, Managers and directly or Indirectly Controlled Business Shares % 100.00 100.00 100.00 100.00 Total Investment Shares % - 100.00 - 100.00 - 100.00 - 100.00 ASUS Technology (Suzhou) Co. Ltd. ASUSTEK COMPUTER...

  • Page 55
    Reinvestment Investment of the Company Shares % Investments from Directors, Supervisors, Managers and directly or Indirectly Controlled Business Shares % 51,210,000 33,500,000 3,700,000 39,160,172 102,525,738 2,883,359 50,000 20,050,000 91,030,000 50,...

  • Page 56
    ... Investment of the Company Shares % Investments from Directors, Supervisors, Managers and directly or Indirectly Controlled Business Shares % 3,000,000 50,000 5,000,000 100.00 100.00 22.22 5.32 Total Investment Shares % ASUS COMPUTER CORPORATION MOBOSTAR TECHNOLOGY LIMITED Potix Corporation...

  • Page 57
    .... Stock Subscription I. Capital and shares (1) History of capitalization 1. Type of shares April 27, 2012 / 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 58
    ...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...,800,000 2,998,184 29,981,838 Stock shares $736,629,610 2006.04 2006.08 2007...

  • Page 59
    ...% 2.67% 59.48% 100.00% 800,001-1,000,000 Over 1,000,001 Total 2. Preferred Stock Shares: None (4) Roster of Major Shareholders Roster of Major Shareholders As of April 14, 2012 Shareholding Shareholder's Name ASUS's Certificate of Depository with CitiBank Shareholding 31,599,227 Shareholding Ratio...

  • Page 60
    ...Note 9) - Note 1: List the highest and lowest market price per share; also, calculate the average market price per share in accordance with the trade amount and shares. Note 2: Please base the information on the shares issued at yearned and the resolution for stock distribution in shareholders 56

  • Page 61
    ...per share of the year / Cash dividend per share Note 8: Cash dividend yield rate = Cash dividend per share / Closing price per share of the year Note 9: Subject to the approval of the annual shareholders meeting. Note 10: The data collected up to March 31, 2012 were included in the report printed on...

  • Page 62
    ... parent company. The board of directors is then proposed the distribution of the net balance in shareholders meeting for approval. 2. Accounting process applied to the estimation base of dividend to employee and remuneration to directors and supervisors, outstanding shares computing base for stock...

  • Page 63
    ...is deem as changes in accounting estimation and booked as gain or loss of the year upon distribution. 3. Dividend distribution of employees in 2011 resolved by the board of directors (1)Distribution amount of cash dividend and stock dividend to employees and remuneration to directors and supervisors...

  • Page 64
    ...Type of corporate bond Date of issuance (process) Face value Location of issuance and trade Issuing price Total amount Interest rate Term Guarantee institute Trustee Underwriter Attorney CPA The 1st domestic convertible bond November 7, 2006 NT$100 thousand Taiwan, GreTai securities market Issued at...

  • Page 65
    ...) by 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 NT$7,000,000 (up to the date of the report printed) Converted (exchanged or subscribed...

  • Page 66
    ...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 May 30, 1997 London US$235, 830,000 US$11.23 / GDR 21,000,000 GDRS One GDR stands for one common stock share of ASUS Note 1: The Company...

  • Page 67
    ... and depository agreement Max. 2011 Market price per unit (US$) As of April 27, 2012 Min. Average Max. Min. Average May 30, 1997 6,319,844 GDRS (December 31, 2011) It is to be amortized in three years on average after issuance according to Article 243 of Company Law Please refer to Attachment...

  • Page 68
    ...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, outstanding...

  • Page 69
    ... in 2011. In terms of sales generated from branded products, 23.2 million pieces motherboards and 19.6 million notebooks were sold. 1. Product lines of the company a. Desktop / server b. 3D AutoCAD c. Advanced sound blaster d. NB e. Eee Pad f. EeePC computer and Eee series Eee PC g. PadFone h. LED...

  • Page 70
    ....), 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 Cloud Computing is to provide data access and/or application service...

  • Page 71
    ... 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 72
    ..., and Cloud Computing. The product development cover two platforms with advanced digital technology and user's life experienced blend in: Open platform products including motherboard, drawing card, play station, LCD, and network server; system products including notebook and Eee PCâ„¢ Eee series and...

  • Page 73
    ...era of cloud computing with open mind, building a versatile solution for the new generation of cloud computing. II. Market analysis and the conditions of sales and production (1) Market analysis 1. Sales regions Unit: NT$ thousands Year 2010 2011 Item Subtotal Total Subtotal Total Domestic operating...

  • Page 74
    ... rise of mobile computing, lightweight and thin become the way to go for notebook computer. ASUS computer development has been focusing on effectiveness and energy saving since 2008 and with a low power-consumption and Super Hybrid Engine (SHE) technology developed alone as the best solution to the...

  • Page 75
    ... to support the two business groups with the most competitive product lines and sales channels. ASUS is dedicating itself to provide consumers with better products and services; also, to upgrade the brand value in the mind of consumers, finally, to turn consumer's brand recognition into market share...

  • Page 76
    ...R&D and production of notebook computer, Eee PCâ„¢, Eee Box, LED backlight screen, and motherboard that shall help gain leverage in business opportunity and market under the surge of green environmental protection. (2) Disadvantages The significant fluctuation of exchange rate in both directions has...

  • Page 77
    ... market share. In terms of notebook computer, ASUSTeK is ranked number one in Taiwan, number three in Europe, number two in China, number one in Eastern Europe, and number three in Western Europe; also, is ranked world number five worldwide. In terms of global network service, fifty-five official...

  • Page 78
    ...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 of the last two fiscal years 1. Major Suppliers of the last two fiscal years Unit: NT...

  • Page 79
    ... and Value over the Past Two Year: N/A (VI) Sales quantities and value of the last two fiscal years: Unit: Piece (unit); NT$ thousands year Major product Computer system 3C products Others Total Domestic Sales QTY Amount 2010 Export Sales QTY Amount Domestic Sales QTY Amount 2011 Export Sales QTY...

  • Page 80
    ... setup to monitor and to respond to global environmental protection regulations including RoHs, WEEE, ErP, battery and packing material application and waste management in order to comply with the requirements for products shipped to the world directly and indirectly. ASUS has RoHS test equipment...

  • Page 81
    ... as laptop computer (NB), PDAs, monitors, EeePC, and VGA in addition to continuous parts inventory and moving towards the objective of halogen free for all product lines. Asus developed the first Halogen Free Full-HD (1920x1080) LED Monitor (VW247H-HF) and the world's first Halogen-free Motherboard...

  • Page 82
    ... power consumption, Super Hybrid Engine (SHE) for enhancing endurance and the superb technology relied by the monitors with easy recycling and energy saving, have urged Asus to constantly improve product efficiency, winning the Excellence in Efficient Product Design from the 2011 Energy Star Awards...

  • Page 83
    ... model setup in education and training and with excellent internal tradition formed. The talents cultivation and development is illustrated as follows: 1. Personal learning & growth plan ASUS has promoted the "Learning & Growth Plan" forcefully to help the management assist employees developing...

  • Page 84
    ... and exercise management effectiveness. Plan core value training courses to help staff generate ASUS DNA and upgrade staff's work skills and performance. Individual received 7 hours of training in average in 2011 with the following courses: Course Type Classroom E-learning Total Course 226...

  • Page 85
    ... mission assigned and personal development added it with the participating in the projects, coaching, internship, job enlargement, and job enrichment to upgrade employee's competence. Let employees learn from daily operation systematically and apply the learned skills to work. Directors have 565 on...

  • Page 86
    ... reference. The mail box at [email protected] is for the complaints filing of employees. Human Resources Office and Legal Center also re-wrote the Code of Ethical Conduct for Employee into 9 case studies (Chinese and English Version) on the internal announcement of the website homepage in addition to...

  • Page 87
    ... and training and health inspection to ensure the health of workers responsible for special working process. (V) Retirement plan In response to the company's having the business operation dividend into brand name business and OEM/ODM since 2008, the seniority of the workers with ROC nationality was...

  • Page 88
    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 89
    ...The financial information of the last five years is reviewed by CPA. Note 3: The 2012Q1 financial statements have not yet been audited by CPA up to the date of the report printed on April 27, 2012. Note 4: ASUS has adopted the principles under Accounting Research and Development Foundation in Taiwan...

  • Page 90
    ... (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 91
    ...the accounts payable balance generated from stock preparation was higher. Fixed assets turnover (times): Due to the current revenue growth, the fixed assets net values were amortized and depreciated to reveal minor decline. Ratio of return on total assets: Due to the increase in net operating profit...

  • Page 92
    ... expense x (1-tax rate)] / Average total assets (2) Return on shareholder's equity = Net income (loss) / Net average shareholders' equity (3) Ratio to issued capital stock = Net income before tax / Issued capital stock (4) Profit ratio = Net income (loss) / Net sales (5) Earnings per share = (Net...

  • Page 93
    ...classification of operating cost and operating expense involves estimation or discretional judgment, it must be made reasonably and consistently. Note 9: Some accounts and amounts in the financial statements of 2010 were adjusted in response to the presentation of 2011 financial statements. The said...

  • Page 94
    III. Supervisors' report in the most recent years (I) Review report of the supervisors of ASUSTeK Computer Inc. ASUSTek Computer Inc. SUPERVISORS' REPORT The Board of Director has prepared the Company's 2011 business report and financial statements. All of the above have been reviewed and ...

  • Page 95
    ... for details. V. Consolidated financial statements of the parent company and subsidiary in the most recent years: Please refer to Page 130-194 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 96
    ... Board of Directors and Shareholders of ASUSTEK COMPUTER INC.: We have audited the accompanying balance sheets of ASUSTEK COMPUTER INC. as of December 31, 2011 and 2010, the related statements of income, of changes in stockholders' equity and of cash flows for the years then ended. These financial...

  • Page 97
    ...issued new shares to the Company and its shareholders as consideration. Further, the Company had a capital reduction of 85%. We have also audited the consolidated financial statements of ASUSTEK COMPUTER INC. and its subsidiaries (not presented herein) as of and for the years ended December 31, 2011...

  • Page 98
    ... Computer software Other Assets Leased assets Refundable deposits Deferred expenses Other assets - others TOTAL ASSETS LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Financial liabilities at fair value through profit or loss - current Notes and accounts payable Notes and accounts payable...

  • Page 99
    ASUSTEK COMPUTER INC. STATEMENTS OF INCOME FOR THE YEARS ENDED DECEMBER 31, 2011 AND 2010 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT EARNINGS PER SHARE DATA) FOR THE YEARS ENDED DECEMBER 31, 2011 2010 AMOUNT % AMOUNT Items Operating revenues Sales revenue Sales returns and allowances Net...

  • Page 100
    ... Dividends on shares held in trust paid to employees Foreign currency translation adjustments Effect of changes in valuation of available-for-sale financial assets Purchase of treasury stock Transfer of treasury stock Retirement of treasury stock Net income for 2010 Balance at December 31, 2010 2011...

  • Page 101
    ...by operating activities Depreciation, amortization and impairment Cash dividends received from long-term investee companies accounted for under the equity method Investment income accounted for under the equity method Changes in assets and liabilities Financial assets at fair value through profit or...

  • Page 102
    ... 1. HISTORY AND ORGANIZATION (1) ASUSTEK COMPUTER INC. (ASUS or the Company) was established on April 2, 1990. The Company's common shares are listed on the Taiwan Stock Exchange (TSE) on November 14, 1996. Its main activities are to produce, design and sell notebook PCs, main boards, software, add...

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

  • Page 104
    ... at amortized cost except for financial liabilities at fair value through profit or loss, which are measured at fair value. (4) Notes and accounts receivable and other receivables A. Notes and accounts receivable are claims resulting from the sale of goods or services. Other receivables are those...

  • Page 105
    ... investees over which the Company has control are accounted for under the equity method. The Company prepares consolidated financial statements on a quarterly basis. (7) Property, plant and equipment, leased assets and idle assets A. Property, plant and equipment are stated at cost. Cost associated...

  • Page 106
    ... represent computer software, which are amortized using the straight-line method over 3 years. Deferred expenses represent office decorations, which are amortized using the straight-line method over 2~5 years. (9) Impairment of non-financial assets A. The Company assesses all applicable assets...

  • Page 107
    ...). B. When the Company's treasury stock is retired, the treasury stock account should be credited, and the capital surplus-premium on stock account and capital stock account should be debited proportionately according to the share ratio. An excess of the carrying value of treasury stock over the sum...

  • Page 108
    ...) 127 issued by the ARDF, the Company calculates the number of shares of employees' stock bonus based on the closing price of the Company's common stock at the previous day of the stockholders' meeting held in the year following the financial reporting year, and after taking into account the effects...

  • Page 109
    ... in accounting principle had no significant effect on the net income for the year ended December 31, 2011. (2) Operating segments Effective January 1, 2011, the Company adopted the SFAS No. 41, "Segment Reporting", replacing the original SFAS No. 20, "Disclosure of Segment Financial Information". In...

  • Page 110
    ...The main purpose of the Company's trading derivatives was to hedge foreign currency risk from operating activities. As of December 31, 2011 and 2010, the Company did not meet the criteria for hedge accounting, so the Company recognized them at fair value. C. For convertible bonds information, please...

  • Page 111
    ... value of available-for-sale financial assets and the recoverable amount, the Company recognized impairment loss amounting to $12,000 and $0 for the years ended December 31, 2011 and 2010, respectively. (4) Financial assets carried at cost Items Current: Unlisted and non-OTC stocks Others Non...

  • Page 112
    ... some inventories with allowance for decline in value had been sold during the years ended December 31, 2011 and 2010, respectively. (7) Long-term equity investments A. Details of long-term equity investments accounted for under the equity method are as follows: 2011/12/31 Carrying amount 22,374,681...

  • Page 113
    ...-term equity investments. E. The change of long-term equity investments accounted for under the equity method are as follows: (A) On June 1, 2010, the Company transferred the OEM assets and business (the Company's long-term equity investment in PEGA) to PII. PII then issued new shares to the Company...

  • Page 114
    ... 4,269,103 After evaluating and comparing the carrying value of property, plant and equipment and its recoverable amount, the Company recognized impairment loss amounting to $335,171 and $0 for the years ended December 31, 2011 and 2010, respectively. (9) Leased assets 2011/12/31 Initial cost Land...

  • Page 115
    ... of capitalization from retained earnings. (F) 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 consecutive trading...

  • Page 116
    ...Law. (13) Common stock A. As of December 31, 2011, the Company's authorized capital was $47,500,000, consisting of 4,750,000,000 shares of common stock (including 50,000,000 shares which were reserved for employee stock options), and the outstanding capital was $7,527,603 with a par value of $10 (in...

  • Page 117
    ... 31, 2011, the Company issued Global Depositary Receipts (GDRs), of which 6,320,000 units of the GDRs are now listed on the London Stock Exchange. Per unit of GDR represents 5 shares of the Company's common stock and total GDRs represent 31,599,000 shares of the Company's common stock. The terms of...

  • Page 118
    .... The Company recognized employees' bonuses of $708,379 and $710,625, and directors' and supervisors' remuneration of $141,676 and $142,125 for the years ended December 31, 2011 and 2010, respectively. The number of shares of the dividend distribution is based on the closing price of the...

  • Page 119
    ... of the Company's OEM business. However, the Company subsequently disposed those shares in the open market after they were purchased. C. Pursuant to the Securities and Exchange Act, the number of shares bought back as treasury stock should not exceed 10% of the number of the Company's issued and...

  • Page 120
    ...of change in exchange rate Tax-exempt cash dividends Others Income tax expense ( ( ( ( $ C. The components of deferred income tax assets (liabilities) are as follows: 2011/12/31 Deferred income tax assets: Unrealized sales profit Unrealized purchase discounts Allowance for decline in value of...

  • Page 121
    ... $716,266 for the years 1996 and 1998. The Company disagreed with the assessment and filed formal tax appeals. The additional income tax liability for these assessments was recognized in current income tax. E. Imputation credit account and creditable ratio ICA balance Creditable ratio for earnings...

  • Page 122
    ...12/31 Weighted average Amount Before tax Basic earnings per share: Net income Dilutive effect of common stock equivalents: Convertible bonds Employees' bonus Net income attributable to common stockholders plus dilutive effect of common stock equivalents $ 18,839,035 $ 16,418,436 2,650,963 $ 7.11...

  • Page 123
    ... UNITED TECHNOLOGY CO., LTD. (TAIWAN) (IUT) HUA-CHENG VENTURE CAPITAL CORP. (HCVC) HUA-MIN INVESTMENT CO., LTD. (HMI) AGAIT TECHNOLOGY CORPORATION (AGA) ENERTRONIX, INC. (EN) CHANNEL PILOT LIMITED (CHANNEL) ASUS TECHNOLOGY PTE. LIMITED (ASTP) ASUS TECHNOLOGY (HONG KONG) LIMITED (ACHK) ASUS COMPUTER...

  • Page 124
    ...ASIA LIMITED (CTEC) ASUS COMPUTER (SHANGHAI) CO., LTD. (ACS) ASUS HUNGARY SERVICES LIMITED LIABILITY COMPANY (ACHU) ASUS PORTUGAL, SOCIEDADE UNIPESSOAL LDA. (ACPT) ASUS SWITZERLAND GMBH (ACCH) EMES (SUZHOU) CO., LTD. (EMES) GREAT EXTEND INVESTMENT CORP. (GEI) INTERNATIONAL UNITED TECHNOLOGY CO., LTD...

  • Page 125
    ...) AAEON TECHNOLOGY SINGAPORE PTE. LTD. (AAEONSG) AAEON TECHNOLOGY (SUZHOU) INC. (AAEONSZ) ONYX HEALTHCARE USA, INC. (ONYXHU) ACBZ IMPORTACAO E COMERCIO LTDA. (ACBZ) ASUSTEK COMPUTER (CHONGQING) CO., LTD. (ACCQ) BIG PROFIT LIMITED (BP) FAMOUS STAR INVESTMENTS LIMITED (FSI) ASKEY TECHNOLOGY (JIANGSU...

  • Page 126
    ... LTD. (ASAPHK) SHANGHAI INDEED TECHNOLOGY CO., LTD. (SHINDEED) PEGATRON INTERNATIONAL INVESTMENT CO., LTD. (PII) Directors, supervisors, and key management of the Company Others (related parties with non-significant transactions) Subsidiary of investee company accounted for under the equity method...

  • Page 127
    .... Note 8: ECAREME TECHNOLOGIES, INC. changed its name to ASUS CLOUD CORPORATION on November 18, 2011. Note 9: FULLTEK GLOBAL HOLDINGS LTD. changed its name to WAVEFACE HOLDING COMPANY LIMITED on October 26, 2011. (2) Significant transactions and balances with related parties A. Sales 2011/1/1~12/31...

  • Page 128
    ...PIOTEKHK PIOTEK Others $ $ Purchase terms are open account 30 to 60 days or ...companies (non-financing) Others F. Property transactions $ 2011/12/31 Amount 16 % - $ 2010/12/31 Amount 198 % - The Company acquired some equipment from PEGA, CASE, and CORE totaling to $219,662 for the year ended...

  • Page 129
    ... and service execution fees Directors' and supervisors' remuneration and employees' bonuses Note: The other information will be available in the annual report for the stockholders' meeting. 6. PLEDGED ASSETS Book Value Pledged assets Item 2011/12/31 2010/12/31 Guarantee deposits Pledged time...

  • Page 130
    ...Sates International Trade Commission (ITC) against the Company's suppliers and its customers. In 2011, B Company and Supplier S have reached a settlement and the court has made a judgment and this case was closed. C. In February 2011, a US patentee, GO Company, filed a lawsuit with the United States...

  • Page 131
    ...The fair values of financial assets at fair value through profit or loss and available-for-sale financial assets are based on quoted market prices in an active market. If the market for a financial instrument is not active, an entity establishes fair value by using a valuation technique. The Company...

  • Page 132
    ... and listed and OTC stocks held by the Company are classified as financial assets at fair value through profit or loss and available-for-sale financial assets. As these assets are measured at fair value, the Company has risk exposure related to changes in fair value in an equity securities market...

  • Page 133
    ... equity securities. The customers of the Company have good credit and profit records. The Company evaluates the financial condition of these customers in order to reduce credit risk of accounts receivable. C. Liquidity risk (A) The Company adjusts its funding mainly through corporate bonds, cash and...

  • Page 134
    Independent Auditors' Report To the Board of Directors and Shareholders of ASUSTEK COMPUTER INC.: We have audited the accompanying consolidated balance sheets of ASUSTEK COMPUTER INC. and its subsidiaries as of December 31, 2011 and 2010, the related consolidated statements of income, of changes in...

  • Page 135
    ...INC. spun off the OEM assets and business (ASUSTEK COMPUTER INC.'s long-term equity investment in PEGATRON CORPORATION) to PEGATRON INTERNATIONAL INVESTMENT CO. on June 1, 2010. PEGATRON INTERNATIONAL INVESTMENT CO. then issued new shares to the Company and its shareholders as consideration. Further...

  • Page 136
    ASUSTEK COMPUTER INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2011 AND 2010 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS) ASSETS Current Assets Cash and cash equivalents Financial assets at fair value through profit or loss - current Available-for-sale financial assets - current ...

  • Page 137
    ASUSTEK COMPUTER INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2011 AND 2010 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS) LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Short-term loans Financial liabilities at fair value through profit or loss current Derivative ...

  • Page 138
    ...administrative Research and development Total operating expenses Operating income Non-operating income and gains Interest income Investment income accounted for under the equity method Dividends Gain on disposal of investments Foreign currency exchange gain, net Gain on valuation of financial assets...

  • Page 139
    ASUSTEK COMPUTER INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY FOR THE YEARS ENDED DECEMBER 31, 2011 AND 2010 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS) Retained Earnings Common stock Legal reserve Additional paid-in capital Undistributed earnings ...

  • Page 140
    ... and impairment Cash dividends received from long-term investee companies accounted for under the equity method Investment income accounted for under the equity method Gain on disposal of investments Changes in assets and liabilities Financial assets at fair value through profit or loss - current...

  • Page 141
    ... NEW TAIWAN DOLLARS) 2011 2010 Supplemental disclosures of cash flow information Cash paid during the year for interest Cash paid during the year for income tax Investing and financing activities that result in non-cash flow: Bonds payable - payable in one year Long-term loans - payable in one year...

  • Page 142
    ... 1. HISTORY AND ORGANIZATION (1) ASUSTEK COMPUTER INC. (ASUS or the Company) was established on April 2, 1990. The Company's common shares are listed on the Taiwan Stock Exchange (TSE) on November 14, 1996. Its main activities are to produce, design and sell notebook PCs, main boards, software, add...

  • Page 143
    ... ASUS Subsidiary ASUS COMPUTER INTERNATIONAL (ACI) ASUS TECHNOLOGY INCORPORATION (ASUTC) Main activities Sales and repair service center in North America Trading electronic appliances, communication appliances, data software, electronic material and office equipment AXUS MICROSYSTEMS INC. Designing...

  • Page 144
    ... Investor ASUS Subsidiary Main activities 2011/12/31 2010/12/31 - Remark Note 1 ASUS ASUS ASUS ASUS ASUS ASUS PEGATRON CORPORATION Designing, manufacturing, (PEGA) maintaining and selling computer peripherals and audio-video products Investing activities PEGATRON INTERNATIONAL INVESTMENT CO...

  • Page 145
    ...and data software, information processing and supply 9.08 9.80 HMI GROUP HMI GROUP SHUO-YANG TECHNOLOGY Manufacturing and selling INC. (AAEON) computer peripherals, electronic parts, precision equipment, wireless communication equipment and data software ASMEDIA TECHNOLOGY Designing products and...

  • Page 146
    ... new electronic parts Manufacturing, developing and selling computer peripheral Selling computer peripheral devices Selling computer peripheral devices Trading and investing activities Trading and investing activities Selling computer peripheral devices Selling computer peripheral devices Investing...

  • Page 147
    ... Sales and service center in Polska Sales and repair service center in India Investing and trading activities 77.78 51.47 51.47 - DEEP DELIGHT LIMITED (DDL) CHANNEL PILOT LIMITED (CHANNEL) UNIMAX HOLDINGS LIMITED (UHL) ASUS COMPUTER CORPORATION (ACBVI) ASUS TECHNOLOGY PTE. LIMITED (ASTP) ASUS...

  • Page 148
    ... Sales center in India Selling and researching notebooks, main boards, medium-sized computers, highend personal computers, servers, and computer peripherals; importing/exporting, wholesaling and integrating mobile communication equipment; and providing technology consulting and after-sales services...

  • Page 149
    ... 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 150
    ... Design service and sales Sales and repair service center in Japan Sales and repair service center in Mexico Travel agency Investing activities Installing, repairing and selling electronic products Trading of computer peripherals Investing activities Trading activities Trading of electronic parts...

  • Page 151
    ... 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 PEGA GROUP PEGA GROUP...

  • Page 152
    ... financial holding activities Investing and trading activities Developing, manufacturing and selling new electronic components, circuit boards and related products, and after-sales service Trading activitues Manufacturing, developing and selling power supply units, computer cases, computer systems...

  • Page 153
    ..., computer parts, application systems, and providing after-sales service Investing and trading activities Investing and trading activities Investing and trading activities Researching and producing notebook parts, designing nonmetal tooling, electronic specific equipment and related products...

  • Page 154
    ... of electronic parts PEGA GROUP PEGA GROUP PEGA GROUP Investing activities - - Note 1 Note 1 Note 1 PEGA GROUP PEGA GROUP PEGA GROUP PEGA GROUP HANNEX INTERNATIONAL Investing activities LIMITED (HANNEX) Designing, researching, and AZUREWAVE selling computer products TECHNOLOGY (SHENZHEN...

  • Page 155
    ... and trading activities Manufacturing, developing and selling mobile phones, computers, routers, DTV and electronic components, and providing after-sales service Manufacturing and selling earphone parts Selling recycled resources and repairing electrical appliances and products Investing and trading...

  • Page 156
    ... changed its name to ASUS CLOUD CORPORATION on November 18, 2011. Note 7: FULLTEK GLOBAL HOLDINGS LTD. changed its name to WAVEFACE HOLDING COMPANY LIMITED on October 26, 2011. (A) On June 1, 2010, the Company transferred further its OEM assets and business (the Company's long-term equity investment...

  • Page 157
    ... Group accounts for purchases and sales of financial assets on the trade date, or the date when the Group commits to purchase or sell the asset. At initial recognition, financial assets are recognized at fair value plus, in the case of investments that are not reported at fair value through profit...

  • Page 158
    ...changes in fair value recognized in profit or loss. Stocks of listed companies, convertible bonds and closed-end funds are measured at closing prices at the balance sheet date. Open-end funds are measured at the unit price of the net assets at the balance sheet date. (B) Available-for-sale financial...

  • Page 159
    ...% or if the Group owns less than 20% of the investee's capital but have significant influence on the investee's operations. If an investee company accounted for under the equity method issues new shares and the Company does not purchase new shares proportionately, then the investment percentage, and...

  • Page 160
    ... using the straight-line method over 1~5 years. (11) Impairment of non-financial assets A. The Group assesses all applicable assets subject to SFAS No. 35 for indication of impairment at the balance sheet date. If any indication of impairment exists, the Group then compares the carrying amount...

  • Page 161
    ...of long-term liability. (13) Accrued product warranty liability When a warranty clause is attached to the sale of a product, a warranty liability is accrued based on historical return rates and repair costs, failure rates and warranty periods. Service warranty expense is included in the current year...

  • Page 162
    ...). B. When the Company's treasury stock is retired, the treasury stock account should be credited, and the capital surplus-premium on stock account and capital stock account should be debited proportionately according to the share ratio. An excess of the carrying value of treasury stock over the sum...

  • Page 163
    ... the number of shares of employees' stock bonus based on the closing price of the Company's common stock at the previous day of the stockholders' meeting held in the year following the financial reporting year, and after taking into account the effects of ex-rights and ex-dividends. The Group adopts...

  • Page 164
    ...This change in accounting principle had no significant effect on the net income for the year ended December 31, 2011. (2) Operating segments Effective January 1, 2011, the Group adopted SFAS No. 41, "Segment Reporting", replacing the original SFAS No. 20, "Disclosure of Segment Financial Information...

  • Page 165
    ...) at fair value through profit or loss Items Current: Financial assets at fair value through profit or loss: Open-end funds Listed and OTC stocks Convertible bonds Forward exchange contracts Currency options contracts Currency swap contracts Financial liabilities at fair value through profit or loss...

  • Page 166
    ...2012.1 USD The main purpose of the Group's trading derivatives was to hedge foreign currency risk from operating activities. As of December 31, 2011 and 2010, the Group did not meet the criteria for hedge accounting, so the Group recognized them at fair value. C. For convertible bonds information...

  • Page 167
    ... value of available-for-sale financial assets and the recoverable amount, the Group recognized impairment loss amounting to $37,636 and $64,616 for the years ended December 31, 2011 and 2010, respectively. (4) Financial assets carried at cost Items Current: Unlisted and non-OTC stocks Others Non...

  • Page 168
    ... expected transactions due to changes in market rate for the years ended December 31, 2011 and 2010. The risk was evaluated to be significant, and the Group entered into forward exchange contracts for hedging. As of December 31, 2011, the fair value of the derivative financial instruments for cash...

  • Page 169
    ... 2011.10~2012.6 GBP EUR RUB SEK AUD NOK CHF JPY 28,900 426,300 116,400 55,000 - 2010.9~2011.3 2010.9~2011.3 2010.10~2011.4 2010.11~2011.4 - For unrealized gain or loss on cash flow hedging, the amount of gain (loss) recognized directly in equity was $1,153,815 and ($105,706) for the years ended...

  • Page 170
    ... some inventories with allowance for decline in value had been sold during the years ended December 31, 2010, respectively. (8) Long-term equity investments A. Details of long-term equity investments accounted for under the equity method are as follows: 2011/12/31 Percentage Carrying of amount...

  • Page 171
    ...comparing the carrying value of property, plant, and equipment and its recoverable amount, the Group recognized impairment loss amounting to $395,048 and $140,489 for the years ended December 31, 2011... 2011, ASKEY disposed certain land and buildings with book value totalling $132,402 for a total ...

  • Page 172
    ... acquired the shares of AAEON at the price of $57.5 (in dollars) per share in January and May, 2011, for a total of 100% ownership. The acquisition transactions are accounted for by the purchase method. The business combination effective date was set on June 1, 2011. SYT is the surviving company and...

  • Page 173
    ... bonds payable - redeemable within one year Total $ ( ( $ 2011/12/31 - $ Debt-component embedded derivative: －conversion rights $ 104,525 2010/1/1~12/31 151,382 81,039 (A) The Company issued the redeemable domestic unsecured convertible bonds on November 7, 2006. The main issuance terms are...

  • Page 174
    ... 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...

  • Page 175
    ... from the Labor Affairs Bureau, Taipei, for the suspension of the monthly contributions to the pension funds for foreign employees under the Labor Standards Law. C. The pension cost for the years ended December 31, 2011 and 2010 consisted of the following: Defined benefit pension plan Defined...

  • Page 176
    ... ex-right (ex-dividend) record date. D. As of December 31, 2011, the Company issued Global Depositary Receipts (GDRs), of which 6,320,000 units of the GDRs are now listed on the London Stock Exchange. Per unit of GDR represents 5 shares of the Company's common stock and total GDRs represent 31,599...

  • Page 177
    ... same as that proposed by the Board of Directors on April 20, 2011. (B) There was no difference between the actual amounts of employees' bonuses and directors' and supervisors' remuneration for 2010 and 2009 with the amounts accrued as expenses in the 2010 and 2009 financial statements. ~45~ 173

  • Page 178
    ... of the Company's OEM business. However, the Company subsequently disposed those shares in the open market after they were purchased. C. Pursuant to the Securities and Exchange Act, the number of shares bought back as treasury stock should not exceed 10% of the number of the Company's issued and...

  • Page 179
    ... sales profit on inter-affiliate accounts Decrease (increase) in unrealized purchase discounts Increase in unrealized accrued expenses Decrease in allowance for decline in value of inventories Increase in investment income under the equity method Effect of change in income tax rate Net change...

  • Page 180
    ... of change in exchange rate Tax-exempt cash dividends Others Income tax expense ( ( ( ( ( $ C. The components of deferred income tax assets (liabilities) are as follows: 2011/12/31 Deferred income tax assets: Unrealized sales profit Unrealized purchase discounts Allowance for decline in value of...

  • Page 181
    ...As of December 31, 2011, the details of the unused investment tax credits are as follows: Company name Askey and its subsidiaries Other consolidated subsidiaries Unused tax credits $ 277,772 101,354 $ 379,126 Year of expiration 2012~2013 2012~2013 H. As of December 31,2011,the details of the tax...

  • Page 182
    (22) Earnings per share 2011/1/1~12/31 Weighted average outstanding common shares (in thousands) 753,776 $ Amount Before tax After tax Basic earnings per share: Net income Dilutive effect of common stock equivalents: Convertible bonds Employees' bonus Net income attributable to common stockholders ...

  • Page 183
    ... TRADE INTERNATIONAL LTD. (SHINETI) AVY HIGH TECH LIMITED (AVYHTL) PENTAX VQ CO., LTD. (PENTAX) YORKEY OPTICAL TECHNOLOGY LTD. (SAMOA) (YORKEY) TAISHIBA INTERNATIONAL CO., LTD. (TAISHIBA) Relationship with the Company Investee company accounted for under the equity method Investee company accounted...

  • Page 184
    Related Party ASAPHK PEGA UNIHAN CASE KAEDARKS CORE PJ ASFLY ASUSP MAIN POW PCZ PIOTEK (Note 5) PIOTEKHK (Note 5) ASIAROCK AMAP ASLINKHK ASROCK ADVANSUS PIL TOPSZ Relationship with the Company Non-related party of the Company (Note 3) (Note 4) Investee company accounted for under the equity method ...

  • Page 185
    ... ABILITY PRO AVYSZ Directors, supervisors and key management of the Group Others (related parties with non-significant transactions) Relationship with the Company Subsidiary of investee company accounted for under the equity method (Note 3) Subsidiary of investee company accounted for under the...

  • Page 186
    ...33 $ % 22 1 23 Purchase terms are open account 45 to 120 days, 45 to 90 days or within 1 to 6 months from receipt of goods, which are ...The Group acquired some equipment from PEGA, CASE and CORE totaling to $219,662 for the years ended December 31, 2010. G. Notes and accounts payable 2011/12...

  • Page 187
    ...Compensation of key management 2011/1/1~12/31 (Estimated) $ 129,919 212,069 232,251 $ 574,239 2010/1/1~12/31 (Actual) $ 129,083 199,364 232,700 $ 561,147 Salaries Bonuses and service execution fees Directors' and supervisors' remuneration and employees' bonuses Note: The other information will be...

  • Page 188
    ...Sates International Trade Commission (ITC) against the Company's suppliers and its customers. In 2011, B Company and Supplier S have reached a settlement and the court has made a judgment and this case was closed. C. In February 2011, a US patentee, GO Company, filed a lawsuit with the United States...

  • Page 189
    ... as the Group's total shares in UPI will account for 53% after combining with the original indirect investment. 10. OTHERS (1) Financial statement presentation Certain accounts in the 2010 consolidated financial statements were reclassified to conform with the 2011 consolidated financial statement...

  • Page 190
    ... fair values of financial assets at fair value through profit or loss and available-for-sale financial assets are based on quoted market prices in an active market. If the market for a financial instrument is not active, an entity establishes fair value by using a valuation technique. The Group uses...

  • Page 191
    ... funds and listed and OTC stocks held by the Group are classified as financial assets at fair value through profit or loss and available-for-sale financial assets. As these assets are measured at fair value, the Group has risk exposure related to changes in fair value in an equity securities market...

  • Page 192
    ... and equity securities. The customers of the Group have good credit and profit records. The Group evaluates the financial condition of these customers in order to reduce credit risk of accounts receivable. C. Liquidity risk (A) The Group adjusts its funding mainly through corporate bonds, cash and...

  • Page 193
    ... long-term risk, ASKEY disposed of the shares of WJWS on June 30, 2011, and the ending balance was $0. 11. OPERATING SEGMENTS INFORMATION (1) General information The businesses of the Group are mainly divided into three parts: 3C brand business, 3C OEM business (out of the Group's businesses from...

  • Page 194
    ... January 1, 2013, a public company whose stock is listed on the Taiwan Stock Exchange Corporation or traded in the GreTai Securities Market should prepare financial statements in accordance with the International Financial Reporting Standards ("IFRSs"), International Accounting Standards ("IASs...

  • Page 195
    ...of each exemption and option on the Company under IFRS 1 - First-time Adoption of International Financial Reporting Standards f.Evaluation of needed information system adjustments g.Evaluation of needed internal control adjustments h.Establish IFRSs accounting policies i. Selection of exemptions and...

  • Page 196
    ... be measured at fair value (or at the non-controlling interest's proportionate share of the acquired corporation's identifiable net assets). C. Consolidated financial statements In accordance with current accounting standards in R.O.C., in case the parent company changes its share ownership of the...

  • Page 197
    ... written off totally by the investor company when the investment is sold, so that the gains or losses from the disposal of the long-term investment can be accounted for. (B) In accordance with current accounting standards in R.O.C., if an investee company issues new shares and original shareholders...

  • Page 198
    Some of the above differences may not have a material effect on the Group in transition to IFRSs due to the exemption rules in IFRS 1, "First-time Adoption of International Financial Reporting Standards", adopted by the Company. ~66~ 194

  • Page 199
    ... (I) Comparison of business performance Unit: NT$ thousands Item Total operating income Minus: Sales return and discount Net operating income Operating cost 2011 $327,013,339 (9,343,564) 317,669,775 (296,351,674) 2010 $299,768,014 (3,016,885) 296,751,129 (279,426,109) 195 195 Amount change 27,245...

  • Page 200
    ... Analysis of financial ratio change: 1. Operating income and operating cost: Due to the launch of new products, the sales reached anticipation while both revenues and operating costs grew. 2. Operating expense: Expenses went up due to the increase of sales revenue this year. 3. Non-operating income...

  • Page 201
    ... 2010 Financial ratio change Cash reinvestment ratio 0.42ï¼... Analysis of financial ratio change: 1. Decrease of cash flow ratio this year: The annual revenue growth, the accounts receivable generated from sales of goods and net inventory were increased. The net cash inflow from operating activity...

  • Page 202
    ... PTE. LIMITED, ASUS TECHNOLOGY INCORPORATION, ASUS COMPUTER INTERNATIONAL, ASUSTEK (SHANGHAI) CO. LTD. and ASUSTEK Computer (Chongqing) CO., LTD. COMPUTER VI. Risk analysis and evaluation in recent years and up to the date of the annual report printed: (I) The impact of interest rate, exchange rate...

  • Page 203
    ... the company and add it with market movement to have unique and innovative information products developed. 1. Products development planned in 2012: (1) Digital control wireless transmission technology dual core CPU MB (2) Advanced 3D image display and wireless TV transmission graphic card (3) Multi...

  • Page 204
    ... International Trade Commission (ITC) against the Company's suppliers and its customers. In 2011, B Company and Supplier S have reached a settlement and the court has made a judgment and this case was closed. (3) In February 2011, a US patentee, GO Company, filed a lawsuit with the United States...

  • Page 205
    ... Company, and providing a safe, hazardous-free work environment for the employees at the same time. Although the implementation of the policy may not increase company profit, it contains absolute necessity in terms of maintaining the business livelihood of enterprise sustainability. The Risk Control...

  • Page 206
    ... The management of the Risk Control & Contingency Commission is responsible for risk control and procedure improvement. (6) Follow up the outcomes of risk control. The enforcement of the aforementioned stable procedure helps secure the company's brand image, enterprise reputation, and value creation...

  • Page 207
    ... computer-related product design, production, processing, and sales. Some related parties are in the business of investment. In general, the collaboration within the organization is to generate the best result through reciprocal support in technology, production, marketing, and sales. (5) Directors...

  • Page 208
    .... 100% Askey Computer Corp. Hua-Min COMP UTER INTERNATIONAL AXUS Hua-Cheng Investment MICROSYSTEMS Venture Capital ASUS CLOUD CORP. INC. B.V. Co., Ltd. INC. Corp. INC. 4.45% AAEON GREAT EXTEND TECHNOLOGY 100% eMes (SHUZHOU) CO., LT D. Company Lim ited 9% ASUS Czech Service s.r.o. LT...

  • Page 209
    ... Chart (2011.12.31) - (2) Asustek Computer Inc. 100% ASUS INTERNATIONAL LIMIT ED 100% DEEP DELIGHT LIMIT ED Corp. LIMITED 100% Asus Computer LIMIT ED P ILOT CHANNEL 100% UNIMAX HOLDINGS 100% 205 0.07% ASUS EGYPT TECHNOLOGY ELECTRONICS 20% ASUS Middle East FZC P TE. LIMITED ASUS 100...

  • Page 210
    ASUS Organization Chart (2011.12.31) - (3) Asustek Computer Inc. 100% Askey Computer TECHNOLOGY 47% AAEON INC. Corp. 100% MAGIC INTERNATIONAL 100% Askey International ELECTRONICS, DEVELOPMENT 100% TECHNOLOGY TECHNOLOGY (EUROPE) B.V. 100% AAEON SYSTEM, INC. TECHNOLOGY 100% ONYX INVESTMENT ...

  • Page 211
    ...software, electronic material and office equipment Designing, manufacturing, processing and selling 118,200 storage products 53,337 Sales and repair service center in Europe 1,514 Investing and trading activities 200,000 Network service 1,145,000 Venture capital investing activities 141,957 Software...

  • Page 212
    ... Database service, wired communication, manufacturing mechanical equipment, and 201,000 manufacturing, selling and developing ink-jet printing technology International trading 208 680,000 Investing activities 1,514 Investing and trading activities 300,000 Designing and selling computer peripherals...

  • Page 213
    ... INC. ASUS INTERNATIONAL LTD. DEEP DELIGHT LTD CHANNEL PILOT LIMITED UNIMAX HOLDINGS LIMITED Unimax Electronics Inc. 3 Investing and trading activities Repairing computers, electronic components and 78,804 related products, and providing after-sales service 160,060 Software R&D Designing and...

  • Page 214
    ... Selling notebooks, main boards, medium-sized computers, high-class personal computers, servers, and computer peripherals; importing/exporting, 319,457 wholesaling and integrating mobile communication equipment; and providing technology consulting and after-sales services 2 Sales and service center...

  • Page 215
    NAME OF CORPORATION ADDRESS CAPITAL DATE OF ESTABLISHMENT MAJOR BUSINESS / PRODUCTION ITEMS ASUSTEK Computer (Chongqing) CO., LTD. 100.05.09 China Selling and researching notebooks, main boards, medium-sized computers, highend personal computers, servers, and computer peripherals; 1,530,757 ...

  • Page 216
    ... － 11.86% 2.14% － Askey Computer Corporation Enteronix, Inc. AGAiT Technology Corporation Hua-Cheng Venture Capital Corp. Hua-Min Investment Co., Ltd. AXUS MICROSYSTEMS INC. ASUS CLOUD CORPORATION (Original name: eCareme Technologies, Inc.) ASMEDIA TECHNOLOGY INC. (Note: Re-election on...

  • Page 217
    ... Director Director Chairman Director Asustek Computer Inc.（Representative：Mark Lee） China International Investment Co., Ltd. （Representative：JP Hsieh） Asustek Computer Inc.（Representative：H.C. Hung） Asustek Computer Inc.（Representative：Jonney Shih） Mercuries Data Systems...

  • Page 218
    ...） ASUS TECHNOLOGY PTE LTD.（Representative：Li,Yu-Lin） ASUS COMPUTER Czech Republic Director s.r.o. Chairman ASUS EGYPT L.L.C. Director Director ASUS CZECH SERVICE S. R. O. Director ASUS Hungary Services Limited Director Liability Company ASUS PORTUGAL, SOCIEDADE Director UNIPESSOAL LDA ASUS...

  • Page 219
    ...Jonney Shih） International United Technology Co., Ltd. (Representative：Jerry Shen) Director Director Director Director Director Director Director Director Director Director Director 100,000 100% 1,000,000 100% － 100% International United Technology Co., Ltd. Director GREAT EXTEND INVESTMENT...

  • Page 220
    ... Chairman Director NAME OF PERPRESENTATIVE Magicom International Corp.(Representative：Christine Wu) Magicom International Corp.(Representative：Mark Lee) Magicom International Corp.(Representative：Tina Chu) Magicom International Corp.(Representative：Chi-Hsish Chang*) ASON TECHNOLOGY (SUZHOU...

  • Page 221
    ... CLOUD CORPORATION Hua-Cheng Venture Capital Corp. SHINEWAVE INTERNATIONAL INC. eMES (SHUZHOU) CO., LTD. ASMEDIA TECHNOLOGY INC. GREAT EXTEND INVESTMENT CORP. Askey Computer Corp. Askey International Corp. Dynalink International Corp. Magic International Co., Ltd. Askey (Vietnam) Co., Ltd Big Profit...

  • Page 222
    ...Ason Technology (Suzhou) Ltd Ashine Technology (Suzhou) Ltd. International United Technology Co., Ltd. International United Technology Co., Ltd.(Samoa) Hua-Min Investment Co., Ltd. MOBOSTAR TECHNOLOGY Ltd. AGAiT Technology Corporation AGAiTech Holding Ltd. AGAIT TECHNOLOGY (H.K.) CORPORATION LIMITED...

  • Page 223
    ... PTE. LTD. AAEON TECHNOLOGY (SUZHOU) INC. ONYX HEALTHCARE USA, INC. ASUSTEK HOLDINGS LIMITED 219 CENTRAL TEC ASIA LIMITED WAVEFACE HOLDING COMPANY LIMITED NEXT SYSTEM LIMITED ASUS COMPUTER (SHANGHAI) CO., LTD. WAVEFACE INC. ASUSTOR INC. ASUS INTERNATIONAL LIMITED DEEP DELIGHT LIMITED CHANNEL...

  • Page 224
    ... - 220 ASUS TECHNOLOGY PTE. LTD.(ASTP) ASUS COMPUTER GmbH ASUS COMPUTER Benelux B.V. ASUS FRANCE SARL ASUSTEK (UK) LIMITED ASUS TECHNOLOGY (HONG KONG) LIMITED ASUS KOREA Co., Ltd ASUSTEK COMPUTER (S) PTE, Ltd. ASUS Polska Sp. z o.o. ASUS Technology Private Limited ASUS Technology Holland B.V. ASUS...

  • Page 225
    ... 1,150 1,493 - 221 ASUS SERVICE AUSTRALIA PTY LIMITED ASUS AUSTRALIA PTY LIMITED ASUSTEK Computer (Chongqing) CO., LTD. ACBZ IMPORTACAO E COMERCIO LTDA. ASUS INDIA PRIVATE LIMITED ASUS Hungary Services Limited Liability Company ASUS PORTUGAL, SOCIEDADE UNIPESSOAL LDA. ASUS SWITZERLAND GmbH Note...

  • Page 226
    ... the realization of the aforementioned three objectives. Due to the change of environment and condition, the effectiveness of an internal control system could change at any time. Our internal control system is designed with self-monitoring mechanism; therefore, we are able to have corrective actions...

  • Page 227
    ASUSTek Computer Inc. Chairman