HTC 2007 Annual Report Download - page 95

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AN OVERVIEW OFTHE COMPANY'S FINANCIAL STATUS
185184
Had HTC recognized the employees' bonuses of
NT$531,000 thousand as expenses in 2005, the
pro forma earnings per share in 2005 would
have decreased from NT$33.26 to NT$31.76,
which were not adjusted retroactively for the
effect of stock dividend distribution in later
years.
Had HTC recognized the employees' bonuses of
NT$2,105,000 thousand as expenses in 2006,
the pro forma earnings per share in 2006 would
have decreased from NT$57.85 to NT$53.03,
which were not adjusted retroactively for the
effect of stock dividend distribution in the
following year.
As of January 18, 2008, the date of the
accompanying independent auditors' report, the
appropriation of the 2007 earnings had not been
proposed by the Board of Directors. Information
on earnings appropriation can be accessed
online through the Market Observation Post
System on the Web site of the Taiwan Stock
Exchange.
21. TREASURY STOCK
On December 12, 2006, HTC s board of directors
passed a resolution to buy back 5,000 thousand
company shares from the open market. The
repurchase period was between December 13, 2006
and January 19, 2007, and the repurchase price
ranged from NT$601 to NT$800 per share. If the
Company s share price was lower than this price
range, the Company might continue to buy back its
shares.
During the repurchase period, HTC bought back
3,624 thousand shares, which were approved to be
retired by the Company s board of directors in April
2007, for NT$1,991,755 thousand (US$61,417
thousand). Other information on the treasury stock
transactions was as follows:
(
In thousands of shares
)
As of As of
January December
Purpose 1, 2007 Increase Decrease 31, 2007
For maintaining the Company's
credit and stockholders' equity 374 3,250 3,624 -
•Based on the
S
ecurities and Exchange Act of the
R
O
C, the
nu
m
ber of reacquired shares should not exceed 10% of the
Co
m
pany s issued and outstanding stocks, and the total
purchase a
m
ount should not exceed the su
m
of the
retained earnings, additional paid-in capital in excess of
par, and realized capital reserve. In addition, the Co
m
pany
should not pledge its treasury shares nor exercise voting
rights on the shares before their reissuance.
VI
> C
a
p
i
t
a
l
Surp
l
us
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 HTC did not subscribe for 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
i
a
t
i
on o
f
R
e
t
a
i
n
e
d E
a
rn
i
ngs
a
nd D
i
v
i
d
e
nd
Po
li
c
y
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, HTC 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. HTC's dividend policy stipulates that
only up to 95% of total dividends may be
distributed as cash dividends.
FINANCEI CONSOLIDATED REPORT
l