HTC 2008 Annual Report Download - page 110

Financial Information | 85
84 | 2008 Annual Report
In April 2008, the 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%
equity interest in Vitamin D Inc. for NT$40,986
thousand, (US$1,250 thousand), enabling the
Company to exercise significant influence over this
investee. Thus, the Company accounts for this
investment by the equity method. In September
2008, Vitamin D Inc. issued 2,375 thousand
convertible preferred shares, but the Company did
not buy any of these shares. Thus, the
Company’s ownership percentage declined from
27% to 26%, and there was a capital surplus -
long-term equity investments of NT$1,689
thousand (US$52 thousand).
On its equity-method investments, the Company
had a loss of NT$6,151 thousand (US$188
thousand) for the year ended December 31, 2008.
The financial statements of equity-method
investees had been examined by the Company’s
independent auditors.
15.PROPERTIES
Properties as of December 31, 2006, 2007 and
2008 were as follows:
2006
2007
2008
Carrying Value
Carrying Value
Cost
Accumulated
Depreciation
Carrying Value
NT$
NT$
NT$
NT$
NT$
US$
(Note 3)
Land
$
610,293
$
610,293
$
3,568,124
$
-
$
3,568,124
$
108,784
Buildings and structures
735,785
1,831,765
2,856,815
525,185
2,331,630
71,086
Machinery and equipment
1,170,572
1,339,950
4,579,241
3,086,203
1,493,038
45,519
Molding equipment
-
11,113
194,320
179,994
14,326
437
Computer equipment
73,830
97,374
350,118
229,329
120,789
3,683
Transportation equipment
1,167
703
4,605
3,012
1,593
49
Furniture and fixtures
51,056
98,092
462,157
154,811
307,346
9,370
Leased assets
3,927
3,141
5,336
2,356
2,980
91
Leasehold improvements
49,797
79,306
188,182
62,947
125,235
3,818
Prepayments for construction-in-progress and
equipment-in-transit
473,971
149,225
951,289
-
951,289
29,003
$
3,170,398
$
4,220,962
$
13,160,187
$
4,243,837
$
8,916,350
$
271,840
In August 2008, the Company acquired from
Runtop Inc. land and building, with areas of
approximately 10.6 thousand square meters
and 40 thousand square meters, respectively,
for NT$900,000 thousand (US$27,439 thousand) to
have more office space and to build parking lots,
dormitory, etc.
In December 2008, the Company bought the
land - about 8.3 thousand square meters - from
Yulon Motors Ltd. for NT$3,335,000 thousand
(US$101,677 thousand) to build the Taipei R&D
headquarters in Xindian City. Of the purchase
price, 80% had been paid and 80% of
ownership of the land had been transferred to
the Company as of December 31, 2008. Yulon
Motors Ltd. should transfer the remaining 20%
of ownership of the land before December 20,
2009, and the Company should pay the
remaining 20% after completing the land
transfer registration.
In December 2008, the Company’s board of
directors resolved to participate in the third
auction held by Taiwan Financial Asset Service
Corporation (“TFASC”) and acquired the land -
about 16.5 thousand square meters - from
Hualon Corporation for NT$355,620 thousand
(US$10,842 thousand). Of the purchase price,
NT$71,130 thousand (US$2,169 thousand) had
been paid by the end of 2008, and the remaining
NT$284,490 thousand (US$8,673 thousand)
was paid on January 7, 2009.
16.SHORT-TERM BORROWINGS
Short-term borrowings as of December 31, 2008
were as follows:
2006
2007
2008
NT$
NT$
NT$
US$
(Note 3)
Working capital loans, annual
interest at 2.80%~4.40%
$
-
$
-
$
75,000
$
2,286
$
-
$
-
$
75,000
$
2,286
17.ACCRUED EXPENSES
Accrued expenses as of December 31, 2006, 2007
and 2008 were as follows:
2006
2007
2008
NT$
NT$
NT$
US$
(Note 3)
Bonus to employees
$
451,000
$
-
$
6,164,889
$
187,954
Marketing
983,088
3,190,918
5,790,466
176,539
Salaries & bonuses
828,071
989,143
1,220,533
37,211
Services
53,074
148,815
520,383
15,865
Export expenses
200,083
139,512
460,724
14,047
Research materials
128,505
193,859
539,071
16,435
Meals and welfare
57,598
58,287
101,563
3,096
Repairs and maintenance
23,759
33,686
82,096
2,503
Insurance
42,403
47,460
74,061
2,258
Research and development
-
-
65,600
2,000
Pension for contribution plan
26,781
33,870
49,630
1,513
Travel
58,027
40,777
32,507
991
Others
82,689
250,082
247,247
7,538
$
2,935,078
$
5,126,409
$
15,348,770
$
467,950
As discussed in Note 4 to the financial statements, the
Company adopted Interpretation 96-052 - “Accounting
for Bonuses to Employees, Directors and
Supervisors.” As a result, the Company accrued an
employee bonus payable of NT$6,164,889 thousand
(US$187,954 thousand). Based on a resolution
passed by the Company’s board of directors in
February 2008, the employee bonus payable should
be appropriated at 18% of net income less employee
bonus expenses.
Also, in the stockholders’ meetings of 2006, 2007 and
2008, the stockholders approved the appropriation
from the net earnings of 2005, 2006 and 2007, and
the employee bonuses were NT$451,000 thousand,
NT$2,000,000 thousand and NT$1,210,000 thousand
(US$36,890 thousand), respectively. Only employee
bonus payable of NT$451,000 thousand had not been
paid on December 31, 2006.
The Company accrued marketing expenses on the
basis of related agreements and other factors that
would significantly affect the accruals.