Asus 2011 Annual Report Download - page 117

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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 31,599,000
shares of the Company’s common stock. The terms of GDR are as follows:
(A) Voting rights
GDR holders may, pursuant to the Depositary Agreement and the relevant laws and
regulations of the R.O.C., exercise the voting rights pertaining to the underlying common
shares represented by the GDRs.
(B) Dividends, stock warrants and other rights
GDR holders and common shares holders are all entitled to receive dividends. The
Depositary may issue new GDRs in proportion to GDRs holding ratios or raise the number
of shares of common stock represented by each unit of GDR or sell stock dividends on
behalf of GDR holders and distribute selling income to them in proportion to their GDRs
holding ratios.
(14) Additional paid-in capital
The Company Act requires that capital reserve arising from paid-in capital in excess of par value
on issuance of common stock and donations can be used to cover accumulated deficit, or to
increase capital or payment of cash in proportion to ownership percentage when the Company has
no accumulated deficit. Besides, the Securities and Exchange Act requires that the capital reserve
can be capitalized once a year and the amount shall not exceed 10% of the paid-in capital.
(15) Retained earnings
A. According to the Company’s articles of incorporation, annual net income after covering prior
years’ losses, if any, should be distributed as follows: 10% as legal reserve, an appropriate
amount as special reserve according to relevant regulation or as required by the government,
10% of capital stock as capital interest, no less than 1% as employees’ bonuses, and no more
than 1% as directors’ and supervisors’ bonuses. When the employees’ bonuses are distributed
in stock, the recipients must include the employees of subsidiaries. After the distribution of
earnings, the remaining earnings, if any, may be appropriated according to a resolution
adopted in the stockholders’ meeting.
B. The Company is facing a rapidly changing industrial environment, with the life cycle of the
industry in the growth phase. In light of the long-term financial plan of the Company and the
demand for cash by the stockholders, the Company should distribute cash dividends of not less
than 10% of the total dividends declared.
C. Except for covering accumulated deficit, increasing capital or payment of cash, the legal
reserve shall not be used for any other purpose. The amount capitalized or the cash payment
shall not exceed 25% of the paid-in capital.
D. The appropriation of 2010 and 2009 earnings had been resolved at the stockholders’ meeting
on June 9, 2011 and April 22, 2010, respectively. Details are summarized as follows: