HTC 2007 Annual Report Download - page 84

AN OVERVIEW OFTHE COMPANY'S FINANCIAL STATUS
163162
Bureau (SFB, formerly the "Securities and
Futures Commission" before July 1, 2004) for
their oversight purposes.
The Company's significant accounting policies
are summarized as follows:
> Pr i n c i p l e s o f Conso li d a t i on
The revised ROC Statement of Financial
Accounting Standards No. 7 - "Consolidated
Financial Statements" took effect on January 1,
2005. This revised standard requires the
consolidation of all investees in which HTC has
a controlling interest. Thus, the accompanying
consolidated financial statements include the
accounts of all the direct and indirect
subsidiaries of HTC and the accounts of
investees that are not majority owned by HTC
but in which HTC has controlling interests.
All significant intercompany balances and
transactions were eliminated upon
consolidation. Minority interest was presented
separately in the financial statements.
The consolidated entities as of December 31, 2005, 2006 and 2007 were as follows:
% of Ownership
Investor Investee Main Businesses 2005 2006 2007 Remark
High Tech Computer Corp. H.T.C. (B.V.I.) Corp. Global investingactivities 100 100 100 Incorporated in August 2000
BandRich Inc. Design, manufacture and sale of electronic devices - 51 51 Incorporated in April 2006
HTC HK, Limited Global investing activities - 100 100 Incorporated in August 2006
Communication Global Certification Inc. Testing and certification services - - 100 Invested in January 2007
HTC Asia Pacific Pte. Ltd. Global investing activities - - 100 Incorporated in July 2007
H.T.C. (B.V.I.) Corp. HTEK Marketing and engineering support activities 100 100 -Incorporated in August 2000
and liquidated in 2007
HTC America Inc. Marketing , repair and after-sales services 100 100 100 Incorporated in January 2003
HTC EUROPE CO., LTD. 100 100 100 Incorporated in July 2003
High Tech Computer Corp. (Suzhou) Manufacture and sale of converged handheld devices 100 100 100 Incorporated in January 2003
Exedea Inc. Distribution and sales - 100 100 Incorporated in December 2004
and invested in July 2005
HTC NIPPON Corporation Marketing, distribution and after-sales service - 100 100 Incorporated in March 2006
HTC BRASIL - - 100 Incorporated in October 2006
High Tech Computer Corp.(WGQ) Repair and after-sales service - - 100 Incorporated in July 2007
HTC HK, Limited HTC Belgium BVBA/SPRL Marketing, distribution and after-sales service - 100 100 Incorporated in October 2006
HTC Belgium BVBA/SPRL HTC Italia SRL - - 100 Incorporated in February 2007
HTC Asia Pacific Pte. Ltd. HTC Singapore Pte. Ltd. - - 100 Incorporated in July 2007
HTC (H.K.) Limited - - 100 Incorporated in August 2007
HTC (Australia and New Zealand) Pty. Ltd. - - 100 Incorporated in August 2007
HTC Philippines Corp. - - 100 Incorporated in December 2007
PT. HTC Indonesia - - 100 Incorporated in October 2007
In January 2007, the Co m pany wholly acquired the shares issued by Co mm unication G lobal Certification Inc. for N T$280,000 thousand ( U S $8,634 thousand ) in cash. The net assets acquired were as follows:
VI
1. ORGANIZATION AND OPERATIONS
High Tech Computer Corp. (HTC) was incorporated
on May 15, 1997 under the Company Law of the
Republic of China to design, manufacture and sell
converged handheld devices. In 1998, HTC had an
initial public offering and, in March 2002, had its
stock listed on the Taiwan Stock Exchange. On
November 19, 2003, HTC started trading Global
Depositary Receipts on the Luxembourg Stock
Exchange.
For HTC to have synergies with companies in similar
industries, lower operating costs and expenses, and
enhance competitiveness and research and
development capabilities, HTC's Board of Directors
proposed on October 31, 2003 to merge HTC with IA
Style, Inc. The effective merger date was March 1,
2004.
HTC and its consolidated subsidiaries, hereinafter
referred to as the "Company," had 4,664, 5,654 and
7,179 employees as of December 31, 2005, 2006
and 2007, respectively.
2. SIGNI F ICANT ACCOUNTING POLICIES
> B a s i s o f Pr e s e n t a t i on
The accompanying financial statements have
been prepared in conformity with the Guidelines
Governing the Preparation of Financial Reports
by Securities Issuers, Business Accounting Law,
Guidelines Governing Business Accounting, and
accounting principles generally accepted in the
Republic of China (ROC). In preparing financial
statements in conformity with these guidelines
and principles, the Company is required to make
certain estimates and assumptions that could
affect the amounts of allowance for doubtful
accounts, allowance for inventory devaluation,
property depreciation, royalty, accrued pension
cost, and warranty liability. Actual results could
differ from these estimates.
The accompanying financial statements were
originally presented in more than one set of
Chinese reports. For the convenience of
readers, the accompanying financial statements
have been translated into English from the
original Chinese version prepared and used in
the ROC. If there is any conflict between the
English version and the original Chinese version
or any difference in the interpretation of the two
versions, the Chinese-language financial
statements shall prevail. However, the
accompanying financial statements do not
include the English translation of the additional
footnote disclosures that are not required under
ROC generally accepted accounting principles
but are required by the Securities and Futures
H I G H T E C H C O M P U T E R C O R P. A N D S U B S I D I A R I E S
NOTES TO CONSOLIDATED F INANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2005, 2006 AND 2007
(In Thousands, Unless Stated Otherwise)