HTC 2007 Annual Report Download - page 64

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123122
AN OVERVIEW OFTHE COMPANY'S FINANCIAL STATUS
11.PREPAYMENTS
Prepayments as of December 31, 2005, 2006 and
2007 referred to the following items:
2005 2006 2007
NT$ NT$ NT$ US$(Note 3)
Royalty (Note 28) $ 274,489 $1,631,513 $1,232,901 $ 38,017
Software and hardware maintenance
22,984 80,517 76,732 2,366
Service 83,352 50,606 32,241 994
Travel 16,034 47,298 6,542 202
Molding equipment 57,700 40,088 158,280 4,881
Materials purchases 2,820 1,479 1,838 57
Others 16,882 29,618 28,793 888
$ 474,261 $1,881,119 $1,537,327 $ 47,405
12.
F
INANCIAL ASSETS CARRIED
AT COST
Financial assets carried at cost as of December 31,
2005, 2006 and 2007 were as follows:
2005 2006 2007
NT$ NT$ NT$ US$(Note 3)
Hua-Chuang Automobile Information
Technical Center Co., Ltd.
$ - $ - $500,000 $15,418
Answer Online, Inc. 1,192 1,192 1,192 37
$ 1,192 $ 1,192 $501,192 $15,455
•In January 2007, the Co
m
pany acquired 10% equity
interest in
H
ua-Chuang Auto
m
obile Infor
m
ation Technical
Center Co.,
L
td. for
N
T$500,000 thousand
(
U
S
$15,418
thousand
)
. The Co
m
pany also signed a joint venture
agree
m
ent with Yulon
G
roup, the
m
ain stockholder of
H
ua-
Chuang.
U
nder the agree
m
ent, the Co
m
pany and Yulon
G
roup
m
ay, between January 1, 2010 and
D
ece
m
ber 31,
2011, sub
m
it written requests to each other for Yulon
G
roup to buy back
N
T$300,000 thousand at original price,
so
m
e of
H
ua-Chuang
'
s shares bought by the Co
m
pany.
•In March 2004, the Co
m
pany
m
erged with IA
S
tyle, Inc.
(
N
ote 1
)
and acquired 1.82% equity interest in Answer
O
nline, Inc. as a result of the
m
erger.
•These unquoted equity instru
m
ents were not carried at fair
value because their fair value could not be reliably
m
easured; thus, the Co
m
pany accounted for these
invest
m
ents by the cost
m
ethod.
13.BOND INVESTMENTS WITH NO
ACTIVE MARKET
As of December 31, 2007, the Company had the
following investment in bonds not quoted in an active
market:
NT$ US$(Note 3)
Bond investment $ 33,030 $ 1,019
Less current portion (33,030) (1,019)
$ - $ -
•The above 12-
m
onth bond invest
m
ent, with 6% annual
interest, was acquired by the Co
m
pany for
N
T$33,030
thousand
(
U
S
$1,000 thousand
)
. The unquoted debt
instru
m
ent was not carried at fair value because its fair
value could not be reliably
m
easured.
VI
7.AVAILABLE-
F
OR-SALE
F
INANCIAL ASSETS
Available-for-sale financial assets as of December
31, 2005, 2006 and 2007 consisted of an investment
in VIA Technologies, Inc., as follows:
2005 2006 2007
NT$ NT$ NT$ US$(Note 3)
VIA Technologies, Inc. $ 836 $ 1,733 $ 784 $ 24
•The Co
m
pany
'
s original invest
m
ent in VIA Technologies,
Inc. was
N
T$1,971 thousand,
m
ade in
D
ece
m
ber 1999.
8.NOTES AND ACCOUNTS RECEIVABLE
Notes and accounts receivable as of December 31,
2005, 2006 and 2007 were as follows:
2005 2006 2007
NT$ NT$ NT$ US$(Note 3)
Notes receivable $ 99,087 $ 58,930 $ 3,058 $ 94
Accounts receivable 14,221,725 18,320,329 19,215,152 592,511
Less allowance for doubtful
accounts (8,910) (2,350) (271,285) (8,365)
$14,311,902 $18,376,909 $18,946,925 $ 584,240
9.OTHER CURRENT
F
INANCIAL ASSETS
Other current financial assets as of December 31,
2005, 2006 and 2007 were as follows:
2005 2006 2007
NT$ NT$ NT$ US$(Note 3)
Other receivables from related parties
$ 3,004 $ 130,990 $ 171,901 $ 5,301
Interest receivables 15,566 24,854 50,444 1,555
Other receivables 20,230 22,676 47,625 1,469
Agency payments 16,194 189,977 14,081 434
$ 54,994 $ 368,497 $ 284,051 $ 8,759
•
O
ther receivables fro
m
related parties were agency
pay
m
ents fro
m
related parties.
•Agency pay
m
ents were pri
m
arily royalty and other
prepay
m
ents on behalf of vendors and custo
m
ers.
•
O
ther receivables were pri
m
arily overseas value-added tax
receivables fro
m
custo
m
ers, co
m
pensation fro
m
service
charges, prepay
m
ent for e
m
ployees
'
travel expenses and
proceeds of sales of properties.
10.INVENTORIES
Inventories as of December 31, 2005, 2006 and
2007 were as follows:
2005 2006 2007
NT$ NT$ NT$ US$(Note 3)
Finished goods $ 625,943 $ 753,426 $ 405,952 $ 12,518
Work-in-process 1,801,220 1,207,886 1,641,460 50,615
Raw materials 2,997,117 3,914,242 4,988,289 153,817
5,424,280 5,875,554 7,035,701 216,950
Less valuation allowance (586,727) (891,663) (916,288) (28,254)
$ 4,837,553 $ 4,983,891 $ 6,119,413 $ 188,696
FINANCEI INDEPENDENT AUDITORS' REPORT
l