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131130
AN OVERVIEW OFTHE COMPANY'S FINANCIAL STATUS
and the outstanding GDRs represented 10,707
thousand common shares or 1.87% of the
Company's common shares.
> C
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Surp
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The additional paid-in capital was NT$3,064,356
thousand as of January 1, 2005. Then, two
transactions resulted in the following increases
in additional paid-in capital: (a) NT$1,346,515
thousand from the conversion of bonds payable
into 12,452 thousand shares in the first and
second quarters of 2005; and (b) NT$36,627
thousand (US$1,129 thousand) from the
retirement of treasury stock in April 2007. As a
result, the additional paid-in capital as of
December 31, 2007 was NT$4,374,244
thousand (US$134,883 thousand). Under the
Company Law, the Company may transfer the
capital surplus to common stock if there is no
accumulated deficit.
When the Company did not subscribe for the
new shares issued by BandRich Inc., an
adjustment of NT$15,845 thousand was made
to the investment's carrying value and capital
surplus.
The additional paid-in capital from a merger
(Note 1), which took effect on March 1, 2004,
was NT$25,972 thousand. Then, because of
treasury stock retirement in April 2007, the
additional paid-in capital from a merger
decreased to NT$25,756 thousand (US$794
thousand).
> Appropr
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Based on the Company Law of the ROC and the
Company's Articles of Incorporation, 10% of the
Company's annual net income less any deficit
should first be appropriated as legal reserve
until this reserve equals its capital. From the
remainder, there should be appropriations of not
more than 1% as remuneration to directors and
supervisors and at least 5% as bonuses to
employees.
The appropriation of retained earnings should
be proposed by the board of directors and
approved by the stockholders in their annual
meeting.
As part of a high-technology industry and a
growing enterprise, the Company considers its
operating environment, industry developments,
and long-term interests of stockholders as well
as its programs to maintain operating efficiency
and meet its capital expenditure budget and
financial goals in determining the stock or cash
dividends to be paid. The Company's dividend
VI
the holders can exercise their right for at up to
70% of the granted option units. After four years
from the grant date, the option holders are
eligible to exercise their rights on all the options
owned. The exercise period is five years. As of
December 31, 2007, the Company had issued
to employees 3,000 thousand units of stock
options, which were increased to 7,011
thousand units by taking into account the effect
of stock dividends and the issuance of additional
common stocks. After the employees' choosing
to give up the stock options in 2007, there were
no employee stock options outstanding. The
remaining employee stock options which were
not issued, amounting to 4,000 thousand units,
expired on December 25, 2003.
> G
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The Company issued 14,400 thousand common
shares corresponding to 3,600 thousand units of
Global Depositary Receipts (GDRs). For this
GDR issuance, the Company's stockholders,
including Via Technologies, Inc., also issued
12,878.4 thousand common shares,
corresponding to 3,219.6 thousand GDR units.
Thus, the entire offering consisted of 6,819.6
thousand GDR units. Each GDR represents four
common shares, with par value of NT$131.1.
For this common share issuance, net of related
expenses, NT$1,696,855 thousand was
accounted for as capital surplus. This share
issuance for cash was completed and registered
on November 19, 2003.
The holders of these GDRs have the same
rights and obligations as the stockholders of the
Company. However, the distribution of the
offering and sales of GDRs and the shares
represented thereby in certain jurisdictions may
be restricted by law. In addition, the GDRs
offered and the shares represented are not
transferable, except in accordance with the
restrictions described in the GDR offering
circular and related laws applied in Taiwan.
Through the depositary custodian in Taiwan,
GDR holders are entitled to exercise these
rights:
a. To vote; and
b. To receive dividends and participate in new
share issuance for cash subscription.
Taking into account the effect of stock dividends,
the GDRs increased to 7,833.3 thousand units
(31,333.2 thousand shares). The holders of
these GDRs requested the Company to redeem
the GDRs to get the Company's common
shares. As of December 31, 2007, there were
5,156.6 thousand units of GDRs redeemed,
representing 20,627 thousand common shares,
FINANCEI INDEPENDENT AUDITORS' REPORT
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