HTC 2008 Annual Report Download - page 91

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Financial Information
| 47
46 |
2008 Annual Report
uses estimates and assumptions that are
consistent with information that market participants
would use in setting a price for these securities.
Methodology Used to Determine the Fair
Values of Financial Instruments
Quoted Market Prices
Measurement Method
December 31
December 31
2006
2007
2008
2006
2007
2008
NT$
NT$
NT$
US$
NT$
NT$
NT$
US$
(Note 3)
(Note 3)
Assets
Available-for-sale financial assets - noncurrent
$
1,733
$
784
$
339
$
10
$
-
$
-
$
-
$
-
Financial assets carried at cost
-
-
-
-
1,192
501,192
501,192
15,280
Bond investments not quoted in an active market
-
-
-
-
-
33,030
-
-
Investments accounted for by the equity method
-
-
-
-
821,556
2,397,133
4,659,360
142,054
Liabilities
Financial liabilities at fair value through profit or loss
76,470
96,256
514,083
15,673
-
-
-
-
There was no loss or gain recognized for the years
ended December 31, 2006, 2007 and 2008 on the
fair value changes of derivatives with fair values
estimated using valuation techniques. However,
on the changes in fair value of available-for-sale
financial assets, the Company recognized an
unrealized gain of NT$849 thousand, an
unrealized loss of NT$949 thousand and another
unrealized loss of NT$445 thousand (US$14
thousand) under stockholders’ equity in the years
ended December 31, 2006, 2007 and 2008,
respectively.
As of December 31, 2006, 2007 and 2008,
financial assets exposed to cash flow interest rate
risk amounted to NT$30,258,400 thousand,
NT$46,258,680 thousand and NT$60,051,748
thousand (US$1,830,846 thousand), respectively.
As of December 31, 2007, financial assets
exposed to fair value interest rate risk was
NT$33,030 thousand.
Financial Risks
>Market Risk
The Company uses derivative contracts for
hedging purposes, i.e., to reduce any adverse
effect of exchange rate fluctuations of accounts
receivable/payable. The gains or losses on these
contracts almost offset the gains or losses on the
hedged items. Thus, market risk is not material.
>Credit Risk
The Company deals only with banks with good
credit standing based on the banks’ reputation and
takes into account past experience with them.
Moreover, the Company has a series of control
procedures for derivative transactions.
Management believes its exposure to
counter-parties’ default on contracts is low.
>Cash Flow Risk
The Company has sufficient working capital to
settle derivative contracts. However, there are no
future cash requirements for contract settlement.
25.RELATED-PARTY TRANSACTIONS
The related parties were as follows:
Related Party
Relationship with the Company
First International Computer, Inc. (FIC)
Chairperson is an immediate relative of the Company’s chairperson
Xander International Corp.
Chairperson is an immediate relative of the Company’s chairperson
VIA Technologies, Inc.
Same chairperson
Chander Electronics Corp.
Same chairperson
Comserve Network Netherlands B.V.
Main director is an immediate relative of the Company’s chairperson
H.T.C. (B.V.I.) Corp.
Subsidiary
BandRich Inc.
Subsidiary
Communication Global Certification Inc.
Subsidiary
High Tech Computer Asia Pacific Pte. Ltd.
Subsidiary
HTC America Inc. (formerly HTC USA Inc. until August 2, 2006)
Subsidiary of H.T.C. (B.V.I.) Corp.
HTC Europe Co., Ltd.
Subsidiary of H.T.C. (B.V.I.) Corp.
High Tech Computer Corp. (Suzhou)
Subsidiary of H.T.C. (B.V.I.) Corp.
HTC Corporation (Shanghai WGQ)
Subsidiary of H.T.C. (B.V.I.) Corp.
HTC Brasil
Subsidiary of H.T.C. (B.V.I.) Corp.
Exedea Inc.
Subsidiary of H.T.C. (B.V.I.) Corp.
HTC Nippon Corporation
Subsidiary of H.T.C. (B.V.I.) Corp.
HTC Belgium BVBA/SPRL
Subsidiary of HTC HK, Limited.
High Tech Computer Singapore Pte. Ltd.
Subsidiary of High Tech Computer Asia Pacific Pte. Ltd.
High Tech Computer (H.K.) Limited
Subsidiary of High Tech Computer Asia Pacific Pte. Ltd.
HTC (Australia and New Zealand) Pty. Ltd.
Subsidiary of High Tech Computer Asia Pacific Pte. Ltd.
HTC India Private Limited
Subsidiary of High Tech Computer Asia Pacific Pte. Ltd.
HTC (Thailand.) Ltd.
Subsidiary of High Tech Computer Asia Pacific Pte. Ltd.
HTC Electronics (Shanghai)
Subsidiary of High Tech Computer Asia Pacific Pte. Ltd.
One & Company Design, Inc.
Subsidiary of H.T.C. (B.V.I.) Corp.
Employees’ Welfare Committee
Employees’ Welfare Committee of HTC Corporation
HTC Education Foundation for Social Welfare Charity
a non-profit organization of which the funds donated from the Company
exceeds one third of the non-profit organization’s total funds
High Tech Computer Foundation
a non-profit organization of which the funds donated from the Company
exceeds one third of the non-profit organization’s total funds