HTC 2008 Annual Report Download - page 102

Financial Information | 69
68 | 2008 Annual Report
1.ORGANIZATION AND OPERATIONS
HTC Corporation (“HTC,” formerly High Tech
Computer Corporation until June 13, 2008) was
incorporated on May 15, 1997 under the Company
Law of the Republic of China to design,
manufacture and sell smart 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 5,654, 6,427
and 9,353 employees as of December 31, 2006,
2007 and 2008, respectively.
2.SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The consolidated financial statements have been
prepared in conformity with the Guidelines
Governing the Preparation of Financial Reports by
Securities Issuers, and accounting principles
generally accepted in the Republic of China
(“ROC”). Under these guidelines, and principles,
certain estimates and assumptions have been
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 differ from these estimates.
The consolidated financial statements were
originally presented in more than one set of
Chinese reports. For readers’ convenience, the
accompanying financial statements have been
translated into English from the original Chinese
version prepared and used in the ROC. If
inconsistencies arise between the English version
and the Chinese version or if differences arise in
the interpretations between the two versions, the
Chinese version of the 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 Bureau for their oversight
purposes.
The Company’s significant accounting policies are
summarized as follows:
Principles of Consolidation
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,
2006, 2007 and 2008 were as follows:
% of Ownership
Investor
Investee
Main Businesses
2006
2007
2008
Remark
HTC Corporation
H.T.C. (B.V.I.) Corp.
Global investing activities
100.00
100.00
100.00
Incorporated in August 2000
BandRich Inc.
Design, manufacture and sale
of electronic devices
50.66
50.66
50.66
Incorporated in April 2006
HTC HK, Limited
Global investing activities
100.00
100.00
100.00
Incorporated in August 2006
Communication Global Certification Inc.
Testing and certification
services
-
100.00
100.00
Invested in January 2007
High Tech Computer Asia Pacific Pte. Ltd.
Global investing activities
-
100.00
100.00
Incorporated in July 2007
HTC Investment Corporation
General investing activities
-
-
100.00
Incorporated in July 2008
PT. High Tech Computer Indonesia
Marketing, distribution and
after-sales service
-
1.00
1.00
Incorporated in December 2007
H.T.C. (B.V.I.) Corp.
HTEK
Marketing and engineering
support activities
100.00
-
-
Incorporated in August 2000 and
liquidated in 2007
HTC America Inc.
Marketing , repair and
after-sales services
100.00
100.00
100.00
Incorporated in January 2003
HTC EUROPE CO., LTD.
〃
100.00
100.00
100.00
Incorporated in July 2003
High Tech Computer Corp. (Suzhou)
Manufacture and sale of smart
handheld devices
100.00
100.00
100.00
Incorporated in January 2003
Exedea Inc.
Distribution and sales
100.00
100.00
100.00
Incorporated in December 2004
and invested in July 2005
HTC NIPPON Corporation
Marketing, distribution and
after-sales service
100.00
100.00
100.00
Incorporated in March 2006
HTC BRASIL
〃
-
99.99
99.99
Incorporated in October 2006
HTC Corporation (Shanghai WGQ)
Repair and after-sales service
-
100.00
100.00
Incorporated in July 2007
One & Company Design, Inc.
Design, research and
development of application
software
-
-
100.00
Incorporated in October 2008
HTC HK, Limited
HTC Belgium BVBA/SPRL
Marketing, distribution and
after-sales service
100.00
100.00
100.00
Incorporated in October 2006
HTC Belgium
BVBA/SPRL
HTC Italia SRL
Marketing, distribution and
after-sales service
-
100.00
100.00
Incorporated in February 2007
High Tech Computer Asia
Pacific Pte. Ltd.
High Tech Computer Singapore Pte. Ltd.
Marketing, distribution and
after-sales service
-
100.00
100.00
Incorporated in July 2007
High Tech Computer (H.K.) Limited
〃
-
100.00
100.00
Incorporated in August 2007
HTC (Australia and New Zealand) Pty. Ltd.
〃
-
100.00
100.00
Incorporated in August 2007
HTC Philippines Corp.
〃
-
99.99
99.99
Incorporated in December 2007
PT. High Tech Computer Indonesia
〃
-
99.00
99.00
Incorporated in December 2007
HTC (Thailand) Ltd.
〃
-
-
100.00
Incorporated in November 2007
and invested in September 2008
HTC India Private Ltd.
〃
-
-
99.00
Incorporated in January 2008
HTC Electronics (Shanghai) Co., Ltd.
Design, manufacture and sale
of smart handheld devices
-
-
100.00
Incorporated in January 2007
and invested in July 2008
High Tech Computer
Singapore Pte. Ltd.
HTC India Private Ltd.
Marketing, distribution and
after-sales service
-
-
1.00
Incorporated in January 2008