HTC 2008 Annual Report Download

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TSE: 2498

Table of contents

  • Page 1
    TS E: 2 4 9 8

  • Page 2
    ... & Touche Auditors: M ing- Hsien Yang, Kwan- Chung Lai Address: 12F, No. 156, M in Sheng East Rd., Sec. 3, Taipei 105, Taiwan, R.O.C. Tel: +886- 2- 2545- 9988 www.deloitte.com.tw > Over seas St ock Exchange Infor mat ion Trading: Luxembourg Stock Exchange www.bourse.lu > HTC Websit e www.htc.com

  • Page 3

  • Page 4
    C O N TEN TS I. LETTER TO SH A REH O LD ERS ...5 II. C O M PA N Y PRO FILE ...1 1 III. BU SIN ESS O PERATIO N S ...2 7 IV. C O RPO RATE G O VERN A N C E ...4 9 V. C A PTIA L A N D SH A RES ...6 9 VI. FIN A N C IA L STATU S, O PERATIN G RESU LTS A N D RISK M A N A G EM EN T .1 0 1 VII. A ...

  • Page 5
    I. LETTER TO SH A REH O LD ERS

  • Page 6
    ...year below 10% of total corporate revenues. Such helped raise the HTC consolidated gross profit ratio to 33.5% in 2008 - a 1.1 percentage point growth over the 32.4% (adjusted) achieved in 2007. Investments in building the value and image of the HTC brand as well as continued R&D and innovation work...

  • Page 7
    ... mobile telecommunications experience. Outstanding products and responsive service are the twin engines driving the HTC brand to global market success and creating a "rising star" set to benefit shareholders, consumers and employees together. > 2008 Investments in R&D and production further enhance...

  • Page 8
    II. C O M PA N Y PRO FILE

  • Page 9
    ..., the company now has a world-class product line under the HTC brand name designed and developed to meet high demands for quality and innovation from telecommunications service providers and distributors in Europe, the Americas and Asia. Apart from exceptional R&D, HTC has excellent manufacturing...

  • Page 10
    ...of telecommunications. Current HTC CEO & President Peter Chou saw the increasingly important role that mobile telecommunications products would play in daily life and predicted would no longer be simple devices used to send and receive voice and text communications; they now offered information and...

  • Page 11
    ... Phone, Touch Phone, PDA Phone and Smartphone categories. HTC launched its flagship line HTC Touch Diamond to an excited reception in London in May 2008. The Touch Diamond product line delivers an entirely new mobile Internet experience using the latest generation TouchFLO 3D touch screen interface...

  • Page 12
    D. M anagement T eam > Cher Wang Chairman No. 1 2 Name Peter Chou Fred Liu Position Chief Executive Officer & President Chief Operation Officer & Senior Executive Vice President Chief Financial Officer & Spokesman Executive Vice President Vice President Vice President Vice President Vice ...

  • Page 13
    ... Ltd. > Member of the Compensation Committee CALEB OU-YANG > Supervisor BOARD OF DIRECTORS¡G Cher Wang¡D HT Cho¡D Wen-Chi Chen¡D Chen-Kuo Lin¡D Josef Felder BOARD OF SUPERVISORS¡G Po-Cheng Ko¡D Shao-Lun Lee¡D Caleb Ou-Yang 20 2 O O 8 HTC AN N UAL REPO R T II. CO M P AN Y PRO FILE 21

  • Page 14
    ... Center is to see that manufactured products meet or exceed customer expectations with regard to quality, delivery time, and service. risk management, and general and cost accounting work. al Au d it > Talent Management Develops and manages HTC's human resources; promotes a positive corporate...

  • Page 15
    ... public corporations in the Asia-Pacific region. In 2008, HTC was also honored by not one but two prestigious Taiwan Business Awards - for Best Innovation Management Award and International Achievement Award. It was the first time in the six year history of the Taiwan Business Awards that a company...

  • Page 16
    III. BU SIN ESS O PERATIO N S

  • Page 17
    ... operating software to support leading edge mobile phone applications. Nokia, after acquiring Symbian in 2008, is Mobile telecommunications have, in recent years, advanced beyond 2G voice communication technology standards to embrace new 3G standards, centered on supporting mobile Internet services...

  • Page 18
    ... its overall share of overall unit sales slide. The joint promotion by Google, HTC and T-Mobile USA of the first mobile phone based on the Android system has invigorated the potential for the platform's success in the global market. In light of current investments by other production costs in order...

  • Page 19
    ..., and the largest telecom service provider in the United States, Verizon - now carry HTC brand line products. HTC further works with channel partners to augment marketing and sales networks. Efforts to target emerging markets for smart phones have already developed successful sales businesses in the...

  • Page 20
    ... sale of HTC mobile phones designed on the Windows E. Analysis of Business Results Innovation, streamlined business operations and the ability to respond quickly to market opportunities and challenges have won for HTC another exceptional year of growth. Despite worsening global economic conditions...

  • Page 21
    ... brand awareness. The Touch Diamond line of converged phones, launched in 2008, includes the HTC Touch Diamond and HTC Touch Pro. Products in the line promise and deliver an exciting new mobile Internet experience and the latest generation TouchFLO 3D user interface. Sales of Touch Diamond products...

  • Page 22
    ... record of innovative success, HTC will continue to launch leading edge, new generation products. The corporation will continue to build its converged phones on Windows Mobile and Android platforms. Apart from enhancing 3G wireless data transfer rates, HTC is making progress on developing TD-SCDMA...

  • Page 23
    ... business operations. Corporate governance has risen significantly, with strong positive effects realized in terms of risk management and the transparency of financial information disclosures. Developments in this area include: 2. Remuneration Committee Created As requested by board directors, HTC...

  • Page 24
    ... Chief Operating Officer Paul Hsu; HTC Executive Vice President Jason Juang; and Microsoft Corporate Vice President, Mobile Communications Product Group, Todd Warren joined forces in Beijing, China to promote the most outstanding mobile telecommunications product launched this year - the HTC Touch...

  • Page 25
    ... in March 2008 agreeing to joint execution of a three-year plan to implement character development education programs in 100 schools. The plan leverages support from a tightly woven network of county education authorities, schools, communities and families. Apart from programs already ongoing...

  • Page 26
    ... communications technologies. Royalty payments shall be made based on production quantity, with the value of such defined in the agreement. (1) Patent authorization related to CDMA R& D, production and sales; (2) Royalty payments shall be made in accordance with agreement terms. Terms & Conditions...

  • Page 27
    IV. C O RPO RATE G O VERN A N C E

  • Page 28
    ... COMPANY'S DIVISIONS AND BRANCH UNITS, AS FOLLOWS: (1 ) Directors and Supervisors: > Directors' and Supervisors' Information (I) Unit: Share ; % Title Chairman Name Cher Wang Date Elected Term Expires Date First Elected Shareholding When Elected shares % 13,940,207 3.22% Current Shareholding...

  • Page 29
    ... of Institutional Shareholders Cher Wang Name of Institutional Shareholders Way-Chih Investment Co., LTD. > Major Shareholder(s) to The Company Listed in The Above Table Is on The Right Hand Column: Not applicable > Directors' and Supervisors' Information(II) Conditions Meet one of the...

  • Page 30
    ... Information Technical Center Co., Ltd. > Chairman (Representative), HTC Investment Corporation > Supervisor (Representative), PT. High Tech Computer Indonesia > Director (Representative), HTC India Private Limited > Director (Representative), HTC Malaysia Sdn. Bhd. None Chief Operation Officer...

  • Page 31
    ... Engineering, Feng Chia University. > Chief Executive Officer, Dopod International Corp. > Chairman (Representative), HTC Innovation Limited > Director (Representative), HTC Communication Co., Ltd. None > Director (Representative), Communication Global Certification Inc. > Chairman(Representative...

  • Page 32
    ... Controller, LITE-ON None None None None Chief Information Officer Chief Innovation Officer Chief Marketing Officer General Counsel Eric Chou 01/16/2008 10,000 0.00% 0 0.00% 0 0.00% > Royal Roads University > Senior Director, Semiconductor Manufacturing International Corporation (SMIC...

  • Page 33
    ... managerial officers or employees) up to the date of printing of the annual report. Note 7: * The 2008 net income NTD28,635,349 (Financial Statements), NTD28,552,526 (Consolidated Financial Statements) in the most recent fiscal year. Compensation information disclosed in this statement differs...

  • Page 34
    ... Name Scale of remunerations to managers of the Company Under NT$2,000,000 NT$ 2,000,000~5,000,000 HTC (Remuneration paid does not include cash and stock dividends from 2008 profit sharing) Jason Mackenzie, Florian Seiche, James Chen Jason Juang, Cliff Chiang, CS Wang, David Chen, David Wang...

  • Page 35
    ...Information Officer (note2) Chief Innovation Officer Chief Marketing Officer General Counsel Director (note8) Director (note7) Director (note5) Director * Total Employee Name Peter Chou Fred Liu Stock Cash Profit Sharing Total Employee Profit Sharing Paid to Management Team as a percentage of 2008...

  • Page 36
    ...investor conferences on a regular, quarterly basis to allow investors timely access to information on company operations and performance in each quarter. In December 2008 the HTC Investor Relations Website was revised. A special corporate governance page was added along with disclosures of financial...

  • Page 37
    ..., while observing the Transaction Operating Procedure for HTC Corporation's Designated Company, Enterprise Group and Related Person and other related regulations such as those governing internal controls. In matters governed by contract, the terms and conditions for pricing and payment methods have...

  • Page 38
    ... and operational results that have already been publicly released, helping investors better understand HTC financial and business information. Further, because HTC is one of Taiwan's main domestic listed companies, analysts in research departments at more than ten international securities firms...

  • Page 39
    ...To Organization 2008.02.27 Winkler Partners Training/Speech Responsibilities and Restrictions on Directors, Supervisors, and Managers in a Public Company Hours 2 Chief Operation Officer & Senior Executive Vice 2009.02.26 2009.04.30 2009.04.30 Deloitte & Touche Taiwan Understanding the impacts...

  • Page 40
    ...Counsel Grace Lei 2008.02.27 2009.02.26 (5) Other important information helpful to understanding the company's corporate governance may also be disclosed Due to a number of factors, including the shift in HTC's principal business operations in recent years to own-brand manufacturing, the growing...

  • Page 41
    ... capitalization proposal, HTC completed the following actions in HTC Corporation Chairman: Cher Wang President: Peter Chou 2008: an amendment registration to reflect its capitalization of earnings; distributions of cash and stock dividends; and distributions of employee bonus shares and cash...

  • Page 42
    ... year up to the date of printing of the annual report, of Persons Connected with The Company's Financial Report (Including The Chairman of The Board of Directors, General Manager, Principal Accounting Officer, and Chief Internal Auditor): Item Type of personnel changed Date of board meeting Name...

  • Page 43
    ...WHERE THE COMPANY'S CHAIRPERSON, GENERAL MANAGER, OR ANY MANAGERIAL OFFICER IN CHARGE OF FINANCE OR ACCOUNTING MATTERS HAS IN THE MOST ECENT YEAR HELD A POSITION AT THE ACCOUNTING FIRM OF ITS CERTIFIED PUBLIC ACCOUNTANT OR AT AN AFFILIATED ENTERPRISE OF SUCH ACCOUNTING FIRM, THE NAME AND POSITION OF...

  • Page 44
    ... Name (note 1) Peter Chou Peter Chou Transfer (note 2) Favor Favor Date of Transaction 12/12/2008 12/12/2008 Party to Transaction Ping Chou An Chou Relationship of other party in Transaction to Company, Director, Supervisor and Shareholder holding 10% or more of the total number of shares issued...

  • Page 45
    ... functionality a part of cell phones and the way they are used. In areas such as mobile computing and communications devices, HTC's drive for innovation and its added-value designs, world-class manufacturing, and global distribution and logistics capabilities have made it a leading innovator at the...

  • Page 46
    ... regulations and customer requirements. Product reliability is enhanced and certification times reduced when green materials are part of the process from the initial design stages. The supply chain management platform was overhauled in 2008, giving it a simpler and more convenient user interface and...

  • Page 47
    ...the use of nickel plating, contributing to clean manufacturing processes and helping reduce the problem of some users' skin allergy to nickel. (5) HTC Foundation In 2008, HTC and HTC Social Welfare & Charity Foundation or HTC Education Foundation, to which it donates each year, engaged in community...

  • Page 48
    V. C A PTIA L A N D SH A RES

  • Page 49
    ... December 2008 Letter No. Financial-Supervisory-Securities-III0970068202 of the Securities and Futures Bureau of the Financial Supervisory Commission Executive Yuan 04/30/2009 Unit: Share Authorized Capital Type of Stock Common stock Outstanding shares 745,393,856 Unissued Shares 254,606,144 Total...

  • Page 50
    ... ratios based on the dividend policy set forth in paragraph 2 of this Article and Name of principal shareholders Euro Pacific Growth Fund Special Account under custodial administration of Chase Manhattan Bank Way-Chih Investment Co., LTD. Way-Lien Technology Inc. Cher Wang Hon-Mou Investment Co...

  • Page 51
    ...shares represented Rights & obligations of GDR holders Trustee Depositary bank Custodian bank GDRS outstanding Apportionment of expenses for the issuance & maintenance Terms & conditions in the deposit agreement & custody agreement Closing price per GDR 2008 Note: The total number of units issued...

  • Page 52
    ... the current fiscal year up to the date of printing of the annual report, HTC did not have unexpired employee subscription warrants issued by the company; therefore it is inapplicable. > The annual report shall disclose the names of toplevel company executives holding employee share subscription...

  • Page 53
    VI. FIN A N C IA L STATU S, O PERATIN G RESU LTS A N D RISK M A N A G EM EN T

  • Page 54
    ...in non ODM business sales, reflected in increased accrued marketing costs and accrued warranty liabilities necessary to enhance the perceived value and image of HTC products in the market. The reclassification of employee bonus as expensed costs resulted in a new accrued expense item (employee bonus...

  • Page 55
    .... PDA Phone products saw a negative cost price variance for the period due to HTC's launch of new models in the category, the costs of components and assembly for which are relatively high. PDA Phone was the most important product group for HTC in terms of sales for the period. As such, its share of...

  • Page 56
    .../ upgrade of equipment and facilities is essential to raising productivity and reducing overall costs of doing business, and to supporting HTC's share of the market and operating profit margin. of which will be market development, repair and after sales service as well as the support of China-based...

  • Page 57
    ...leading edge in the smart phone sector. HTC will enhance product differentiation to support profit margins, avoid price-based competition, and earn stronger sales performances. The successful launches of HTC Touch and Touch Diamond signal the importance of the mass market in mobile phone design work...

  • Page 58
    ... technology. Apart from regularly launching new touch screen mobile phone models, the corporation was the first maker in the world to launch an Android-based mobile phone and the first ever to launch a GSM/Wimax mobile phone. HTC will continue to develop products incorporating the latest application...

  • Page 59
    ... risks posed by HTC plant expansion work, and response measures: Responding to global market demand for mobile smart phone devices, in addition to continuously reviewing and improving production processes to enhance capacity, quality and cost savings, HTC invested in an existing production plant at...

  • Page 60
    VII. A FFILIATE IN FO RM ATIO N A N D O TH ER SPEC IA L N O TES

  • Page 61
    ...FO RM ATIO N A N D O TH ER SPEC IA L N O TES 1. AFFILIATES HTC Affiliated Companies Chart (As of 2008.12.31) : er S er ( 10 i ng a po 0% re P H TC...HT I PP Parent Company Subsidiary Subsidiary Subsidiary Mutually Invested Companies: None 116 2 O O 8 HTC AN N UAL REPO R T VII. AFFILIATE IN FO RM ...

  • Page 62
    ... services related businesses Marketing , repair and after-sales services NT$ 266,500 Product design and the manufacturing, wholesaling and retailing of electronic parts and components High Tech Computer(H.K.) Limited 2007.08.03 Unit 808-09A, 8th Floor, AIA Tower, 183 Electric Road, North Point...

  • Page 63
    ... business of H.T.C. (B.V.I.) Corp., HTC HK, Limited and High Tech Computer Asia Pacific Pte. Ltd. is global investing activities. b. BandRich Inc. engages in product design and the manufacturing, wholesaling and retailing of electronic parts and components. c. Communications Global Certification...

  • Page 64
    ... HTC (Australia and New Zealand) Pty. Ltd. Director PT. High Tech Computer Indonesia Director Director Supervisor 185,625 shares 99.00% Authorized capital is translated at the exchange rate at the time the capital contribution was effected. The balance sheet foreign exchange rate is based...

  • Page 65
    ...manufacturing. The main applications for those products are personal calendar and name card management, multimedia entertainment, meeting records, pending project reminders, the sending/receiving of e-mail, real-time information searches, financial transactions, data base management, medical history...

  • Page 66
    ... designed to give employees more informal group leisure-time activities. Staff Training Hours & Expenditures during 2008 (by category): Category Total Training Hours Technical Management Personal Development TOTAL Orientation Training (for New Staff) Effectiveness Enhancement 29,870 10,893...

  • Page 67
    ... trust between labor and management. The company also emphasizes internal communication, providing numerous channels for suggestions and responses such as a complaint hotline, written complaint box, e-mail complaint box, labor-management meetings, and regular surveys of employee opinion that have...

  • Page 68

  • Page 69
    ... ABBREVIATED BALANCE SHEETS AND INCOME STATEMENTS FOR THE PAST FIVE FISCAL YEARS ...4 2. FINANCIAL ANALYSIS ...6 3. 2008 SUPERVISOR'S REPORT ...8 4. INDEPENDENT AUDITORS' REPORT ...9 5. CONSOLIDATED REPORT ...5 7 6. THE COMPANY SHOULD DISCLOSE THE FINANCIAL IMPACT TO THE COMPANY IF THE COMPANY AND...

  • Page 70
    ... financial reporting requirements, write-downs of inventories or reversal of write-downs and product warranty costs registered during the period 2004 to 2007 have been reclassified as cost of revenues items. Note 2: Included employee bonus expenses (3) . The Name of the Certified Public Accountant...

  • Page 71
    ... in research and development. HTC purchased land located in Xindian City, Taipei County for NT$3.335 billion on which buildings will be raised to house HTC's Taipei R&D Center. Also, to improve the working environment for HTC employees, the company 6 | 2008 Annual Report Financial Information | 7

  • Page 72
    ... accompanying balance sheets of HTC Corporation (the "Company," formerly High Tech Computer Corporation) as of December 31, 2006, 2007 and 2008, and the related statements of income, changes in stockholders' equity, and cash flows for the years then ended, all expressed in New Taiwan dollars. These...

  • Page 73
    ... High Tech Computer Corporation) BALANCE SHEETS DECEMBER 31, 2006, 2007 AND 2008 (In Thousands, Except Par Value) ASSETS 2006 NT$ 2007 NT$ NT$ 2008 US$ (Note 3) LIABILITIES AND STOCKHOLDERS' EQUITY 2006 NT$ 2007 NT$ NT$ 2008 US$ (Note 3) CURRENT ASSETS Cash (Note 5) Bond investments...

  • Page 74
    HTC CORPORATION (Formerly High Tech Computer Corporation) STATEMENTS OF INCOME YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008 (In Thousands, Except Earnings Per Share) 2006 NT$ 2007 NT$ NT$ 2008 US$ (Note 3) Before Income Tax NT$ 2006 After Income Tax NT$ Before Income Tax NT$ 2007 After Income ...

  • Page 75
    ...Formerly High Tech Computer Corporation) STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008 (In Thousands) New Taiwan Dollars BALANCE, JANUARY 1, 2006 Adjustments due to accounting changes (Note 4) Appropriation of the 2005 net earnings Legal reserve Special...

  • Page 76
    ... active market Amortization (Gain) loss on disposal of properties, net Losses (gains) on equity-method investments Deferred income tax assets Prepaid pension costs Net changes in operating assets and liabilities Financial instruments at fair value through profit or loss Notes and accounts receivable...

  • Page 77
    ...balance sheet date are determined as follows: publicly traded stocks - at closing prices; open-end mutual funds - at net asset values; bonds - at prices quoted by the Taiwan GreTai Securities Market; and financial assets and financial liabilities without quoted prices in an active market - at values...

  • Page 78
    ... quoted prices in an active market and with fair values that cannot be reliably measured, such as non-publicly traded stocks and stocks traded in the emerging stock market, are measured at their original cost. Investments in which the Company holds 20 percent or more of the investees' voting shares...

  • Page 79
    .... For long term equity investments for which the Company has significant influence but with no control, the carrying amount (including goodwill) of each investment is compared with its own recoverable amount for the purpose of impairment testing. 22 | 2008 Annual Report Financial Information | 23

  • Page 80
    ... balance sheet date, foreign-currency monetary assets and liabilities are revalued using prevailing exchange rates and the exchange differences are recognized in profit or loss. Stock-Based Employee Compensation Plans Income Tax Employee stock options granted between January 1, The Company applies...

  • Page 81
    ... and for the year ended December 31, 2008. 3.TRANSLATION INTO U.S. DOLLARS The financial statements are stated in New Taiwan dollars. The translation of the 2008 New Taiwan dollar amounts into U.S. dollar amounts are included solely for the convenience of readers, using the noon buying rate of NT$32...

  • Page 82
    ...,925 $ 9.OTHER CURRENT FINANCIAL ASSETS Other current financial assets as of December 31, 2006, 2007 and 2008 were as follows: 2006 NT$ 2007 NT$ NT$ 2008 US$ (Note 3) The Company had derivative transactions in 2006, 2007 and 2008 to manage exposures related to exchange rate fluctuations. However...

  • Page 83
    ... the agreement, the Company Equity method H.T.C. (B.V.I.) Corp. BandRich Inc. HTC HK, Limited Communication Global Certification Inc. High Tech Computer Asia Pacific Pte. Ltd. Vitamin D Inc. HTC Investment Corporation PT. High Tech Computer Indonesia Prepayments for long-term investments $ 422,788...

  • Page 84
    ... accounted for this investment by the equity method. In May 2006, BandRich Inc. issued 12,000 thousand shares of common stock at a price of NT$12.50 per share of which the Company didn't purchase. The Company's ownership percentage declined from 92% to 51% and resulted in capital surplus - long term...

  • Page 85
    ... in the income statement. The pension fund contributions were NT$89,723 2006 NT$ 2007 NT$ NT$ 2008 US$ (Note 3) management's evaluation of the products under warranty and recognized as warranty liability. Service cost Interest cost Projected return on plan assets Amortization of unrecognized...

  • Page 86
    ...capitalized, which however is limited to a certain percentage of buy one newly issued common share of the Company. The exercise price is the closing price of the Company's common shares on the option issuance date. The option holders can exercise 36 | 2008 Annual Report Financial Information | 37

  • Page 87
    ...53.03, which were not adjusted retroactively for the effect of 20.TREASURY STOCK On October 7, 2008, the Company's board of directors passed a resolution to buy back 10,000 thousand Company shares from the open market. Based on the Company Law of the ROC and the The additional paid-in capital was...

  • Page 88
    Based on the Securities and Exchange Act of the ROC, the number of reacquired shares should not exceed 10% of the Company's issued and outstanding stocks, and the total purchase amount should not exceed the sum of the retained earnings, additional paid-in capital in excess of par, and realized ...

  • Page 89
    ... based on management's evaluation of the amount of tax credits that can be carried forward for four years, based on the Company's financial forecasts. The number of shares is estimated by dividing the entire amount of the bonus by the closing price of 42 | 2008 Annual Report Financial Information...

  • Page 90
    ... of financial instruments at fair value through profit or loss and available-for-sale financial assets are based on quoted market prices in an active market, and their fair values can be reliably measured. If the securities do not have The Company market prices, fair value is measured on the basis...

  • Page 91
    ...effect of exchange rate fluctuations of accounts receivable/payable. The gains or losses on these Exedea Inc. HTC Nippon Corporation HTC Belgium BVBA/SPRL High Tech Computer Singapore Pte. Ltd. High Tech Computer (H.K.) Limited HTC (Australia and New Zealand) Pty. Ltd. HTC India Private Limited HTC...

  • Page 92
    ...$ 2,363,737 $ 72,065 The selling prices and collection terms for products sold to related parties were similar to those sold to third parties, except those for HTC America Inc., HTC Europe Co., Ltd., Exedea Inc. and Employees' Welfare Committee. 48 | 2008 Annual Report Financial Information | 49

  • Page 93
    ... NT$ 2007 % to Total Prepayment NT$ Amount US$ (Note 3) Communication Global Certification Inc. HTC Nippon Corporation One & Company Design, Inc. HTC India Private Limited HTC Belgium BVBA/SPRL High Tech Computer Singapore Pte. Ltd. HTC America Inc. HTC Europe Co., Ltd. HTC Corporation (Shanghai WGQ...

  • Page 94
    ...2008 Related Party % to Total Service Expenses Donation Amount Expenses NT$ HTC Europe Co., Ltd. HTC America Inc. HTC Belgium BVBA/SPRL HTC Nippon Corporation HTC BRASIL High Tech Computer Singapore Pte. Ltd. Communication Global Certification Inc. HTC India Private Limited HTC (Australia and New...

  • Page 95
    ...'s board of directors resolved to buy a land near the Company in Taoyuan for NT$791,910 thousand (US$24,144 parking lots, dormitory, etc. Both parties agreed to pay and transfer the ownership of the land at the same time before January 31, 2009. 54 | 2008 Annual Report Financial Information...

  • Page 96
    .... balance sheets of HTC Corporation (formerly High Tech Computer Corporation) and subsidiaries (collectively, the "Company") as of December 31, 2006, Export Sales Export sales in 2006, 2007 and 2008 were as follows: and 2008, and the results of their operations and their cash flows for the years...

  • Page 97
    HTC CORPORATION (Formerly High Tech Computer Corporation) AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2006, 2007 AND 2008 (In Thousands, Except Par Value) 2006 ASSETS CURRENT ASSETS Cash (Note 5) Bond investments not quoted in an active market (Notes 2 and 13) Notes receivable, net (...

  • Page 98
    HTC CORPORATION (Formerly High Tech Computer Corporation) AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008 (In Thousands, Except Earnings Per Share) 2006 2007 2008 US$ (Note 3) 2006 Before Income Tax After Income Tax Before Income Tax NT$ NT$ NT$ ...

  • Page 99
    HTC CORPORATION (Formerly High Tech Computer Corporation) AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008 (In Thousands) New Taiwan Dollars BALANCE, JANUARY 1, 2006 Adjustments due to accounting changes (Note 4) Appropriation...

  • Page 100
    ... Employee bonuses Cash dividends Net income in 2008 Translation adjustments on long-term equity investments Unrealized loss on financial instruments Adjustment due to changes in ownership percentage in investees Purchase of treasury stock BALANCE, DECEMBER 31, 2008 (Concluded) Capital Stock Issued...

  • Page 101
    ... in an active market Amortization (Gain) loss on disposal of properties and deferred charges, net Loss on equity-method investments Deferred income tax assets Prepaid pension cost Net changes in operating assets and liabilities Financial instruments at fair value through profit or loss Notes and...

  • Page 102
    ... 2003, HTC started trading Global Depositary Receipts on the Luxembourg Stock Exchange. used for the allowance for doubtful accounts, allowance for loss on inventories, depreciation of Properties, royalty, pension cost, allowance for product warranties, bonuses to employees, etc. Actual results may...

  • Page 103
    ... the balance sheet date are determined as follows: publicly traded stocks - at closing prices; open-end mutual funds - at net asset A values; bonds - at prices quoted by the Taiwan GreTai Securities Market; and financial assets and financial liabilities without quoted prices in an active market - at...

  • Page 104
    ... receivable and represents amounts agreed between the Company and the customers for goods sold in the normal course of business, net of sales discounts and volume rebates. For trade receivables due within one year from the balance sheet date, as the nominal value of the consideration to be received...

  • Page 105
    ... losses of the The Company accrues marketing expenses on the basis of agreements, management's judgment, and any known factors that would significantly affect the defined benefit plan are recognized as part of the net yearic pension cost for the year. 74 | 2008 Annual Report Financial Information...

  • Page 106
    ... to parent company and those of its subsidiaries. Stock-Based Employee Compensation Plans proportionately according to the share ratio. The At the balance sheet date, foreign-currency nonmonetary assets (such as equity instruments) and liabilities that are measured at fair value are difference...

  • Page 107
    ...adoption of this interpretation resulted in a decrease of The consolidated financial statements are stated in New Taiwan dollars. The translation of the 2008 New Taiwan dollar amounts into U.S. dollar amounts are included solely for the convenience of readers, using the noon buying rate of NT$32.80...

  • Page 108
    ... Forward exchange contracts Sell Sell Buy Sell Sell Sell Cash as of December 31, 2006, 2007 and 2008 was as following: Financial assets and liabilities at fair value through profit or loss as of December 31, 2006, 2007 and 2006 NT$ 2007 NT$ NT$ 2008 US$ (Note 3) Cash on hand Cash in banks Time...

  • Page 109
    ... CURRENT FINANCIAL ASSETS year ended December 31, 2008, the Company reclassified "provision for loss on inventories" In January 2007, the Company acquired 10% equity interest in Hua-Chuang Automobile Information Technical Center Co., Ltd. for NT$500,000 thousand. The Company also Bond investment...

  • Page 110
    ...Company made a new investment of US$350 thousand and transferred its bond investment of US$1,000 thousand to convertible preferred stocks issued by Vitamin D Inc. As a result, the Company acquired 27% long-term equity investments of NT$1,689 thousand (US$52 thousand). In December 2008, the Company...

  • Page 111
    ..., total units The Company's net pension costs under the defined benefit plan in 2006, 2007 and 2008 were as follows: Other current liabilities as of December 31, 2006, 2007 and 2008 were as follows: customer to resolve this issue. Agency receipts were primarily overseas value-added tax, employees...

  • Page 112
    ... stock transactions) and donations may be capitalized, which however is limited to a certain percentage of the Company's paid-in capital. Also, the capital surplus from long-term investments may not be used buy one newly issued common share of the Company. The exercise price is the closing price...

  • Page 113
    ... to be retired by the Company's board of directors in April 2007, for NT$1,991,755 thousand. Based on the Securities and Exchange Act of the ROC, the number of reacquired shares should not exceed 10% of the Company's issued and outstanding stocks, and the total purchase amount should not exceed the...

  • Page 114
    ...Inc. Communication Global Certification Inc. HTC America Inc. HTC EUROPE CO., LTD. HTC NIPPON Corporation HTC BRASIL One & Company Design, Inc. HTC Corporation (Shanghai WGQ) HTC Belgium BAVA/SPRL High Tech Computer Singapore Pte. Ltd. High Tech Computer (H.K.) Limited HTC (Australia and New Zealand...

  • Page 115
    ... investment research and development tax credits can be carried forward for four years. The total Valuation allowance is based on management's evaluation of the amount of tax credits that can be carried forward for four years, based on the Company's financial forecasts. credits used in each year...

  • Page 116
    ... price of the shares at the balance sheet date. Such dilutive effects of the potential shares needs to be included in the calculation of diluted EPS until the stockholders resolve the number of shares to be distributed to employees at their meeting in the following year. The related EPS information...

  • Page 117
    ... and Assumptions Used in Determining Fair Values of Financial Instruments The fair values of financial instruments at fair value through profit or loss and available-for-sale financial assets are based on quoted market prices in an active market, and their fair values can be The Company deals only...

  • Page 118
    ... prices for both related and third parties were similar. >Other Receivables >Sales and Services Provided December 31 2006 % to Total Related Party Amount NT$ Employees ' Welfare Committee Xander International Corp. First International Computer, Inc. (FIC) VIA Technologies, Inc. Comserve Network...

  • Page 119
    ... Related Party Amount NT$ Payables Xander International Corp. $ 24 - $ 94 - $ - $ - VIA Technologies Inc. $ - - $ - - $ 3,661 $ 112 2 >Service Warranty Expense The Company leased offices and parking space owned by VIA Technologies, Inc. at one-year 2006 % to Total Warranty...

  • Page 120
    ...Shanghai) indirectly. > Patent Agreements To enhance the quality of its products and > Compensation of Directors, Supervisors manufacturing technologies, the Company has patent agreements as follows: and Management Personnel > Investment Transaction In July 2008, HTC acquired 100% equity interest...

  • Page 121
    ... based on the closing price for exchange- or OTC-listed securities on the balance sheet date. Major Customers Revenue is measured at fair value as the transaction Sales to major customers were as follows: price agreed between HTC and buyers (considering trade discounts and volume discounts). As HTC...

  • Page 122
    ... the company's success, HTC strives to treat each employee fairly and with dignity. HTC is also committed to complying with the labor laws of each country it operates in. As well, each employee is responsible for complying with all applicable external and internal laws. 108 | 2008 Annual Report...

  • Page 123
    ... be used only for the purpose of executing work for HTC. "Confidential Information" shall mean all business, technical, operational or other information that is not generally known to the public and that an employee develops, has access to, and becomes acquainted with during the term of employment...

  • Page 124
    ... to HTC or to invest exceeding five percent of total market value in such a company. Employees are also prohibited from use so-called "Inside Information" to gain personal profit or to influence the independent judgment of business entities, such as investment in competitors, customers, venders...