HTC 2010 Annual Report Download

Download and view the complete annual report

Please find the complete 2010 HTC annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 101

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101

2010 HTC
A N N U A L R E P O R T

Table of contents

  • Page 1
    2010 HTC A N N U A L R E P O R T

  • Page 2
    CONTENTS I II Letter to HtC sHareHoLders Company profiLe 004 010 024 040 072 078 III BUsiness operations IV Corporate GovernanCe V CapitaL and sHares VI finanCiaL statUs, operatinG resULts and risK manaGement VII affiLiate information and otHer speCiaL notes VIII finanCiaL information 088 102

  • Page 3
    2 0 1 0 H tC a n n Ua L r e p o r t 01 4 Letter to HtC sHareHoLders 5

  • Page 4
    ... year". Usbased technology news website Cnet.com picked the HtC evo 4G (the world's first 3G/4G android phone) as its "Best phone of Ctia 2010". our ï¬,agship model for 2010, the HtC desire Hd, went further still, setting a new benchmark for other smartphones to follow. desire Hd packs a Qualcomm...

  • Page 5
    ... based services. the exciting new app "Locations" lets users preload maps into their HtC devices for "no wait" navigation assistance. HtCsense.com, launched in 2010, is a new series of connected services that allows HtC users to manage device information and settings such as contacts, text messages...

  • Page 6
    2 0 1 0 H tC a n n Ua L r e p o r t 02 10 Company profiLe 11

  • Page 7
    ... we all communicate and share information. these are the ideas shaping HtC's mobile phone design today; and they will continue to infuse brand-driven ideals and innovative new design concepts into our products long into the future. t HtC holds the attention of global business and technology media...

  • Page 8
    ... products and services, and further enhance global operations management to segue HtC's rise as the world's number one smartphone brand. HtC is listed on the taiwan stock exchange (tWse) under the ticker number 2498. Company History HTC has undergone three revolutionary changes since it was founded...

  • Page 9
    ... connected services geared to making smartphones even more accessible and user friendly. desire Hd's generous 4.3" screen, dolby mobile and srs surround sound deliver crystal clear viewing and fast data transfer speeds. HtC models built on microsoft's new Windows phone 7 platform, including the HtC...

  • Page 10
    ... management team Name peter Chou fred Liu Position Chief executive officer & president Corporate senior executive vice president and president of engineering and operations Chief financial officer Chief operating officer Chief engineering officer Chief marketing officer Chief product officer...

  • Page 11
    ... Global Sales > Information Technology responsible for it planning, security and maintenance, disaster recovery and assessment/implementation of work process computerization > Manufacturing Operation Center responsible for manufacturing and production capacity management > Customer Service & Quality...

  • Page 12
    .... Key HTC operation centers include: Human resources employees represent one of HtC's most valuable assets. the company has in recent years actively recruited outstanding talent into its ranks - particularly in the areas of product design, user interface, brand promotion, and sales and marketing...

  • Page 13
    2 0 1 0 H tC a n n Ua L r e p o r t 03 24 BUsiness operations 25

  • Page 14
    ..., panels and batteries, among others, as well as software developers that write operating systems, applications and other programs. the quality of each input impacts directly on final product quality and indelibly affects the user experience. Companies like HtC - the middle link in the chain of...

  • Page 15
    ... extensive software app offerings. android's 22.7% of worldwide smartphone sales in 2010 (Gartner estimate) gives the android os a market share second only to symbian. HtC is the world's leading manufacturer of both android and Windows mobile smartphones. its leading r&d, innovation and operations...

  • Page 16
    ... product designs and features tailored to fit the way their customers live, work and play. Global sales and after-sales service networks support and extend the market success of each new HtC model in order to fulfill its brand promise to both consumers and shareholders. the americas and europe...

  • Page 17
    ... is selling very well in the youth and young adult market segments. HtC has sustained its average sales price (asp) while rapidly expanding business volumes through a successful product portfolio strategy. in Us dollar terms, HtC's 2010 asp of Us$350 was a slight 0.6% below asp of Us$352 the year...

  • Page 18
    ...excitement into users' mobile lifestyle. 2010 marked the first year HtC sold products in China under its own brand name. in addition to years of global marketing experience, we brought the same innovative spirit and service quality to this vast market and positioned ourselves for high future growth...

  • Page 19
    ... onLive gives HtC users access to online game services and makes the HtC flyer the first tablet in the world that supports cloud-based mobile gaming. HtC continuously innovates . apart from constant investments to work the full potential of android, Windows mobile and Brew operating systems, we've...

  • Page 20
    ... use Cdma technology to manufacture and sell units; royalty payment based on agreement. smartphones total note: production capacity represents the normal capacity of current production equipment after making adjustments for necessary production stoppages, non-work holidays, etc. Sales Unit: 1,000...

  • Page 21
    2 0 1 0 H tC a n n Ua L r e p o r t 04 40 Corporate GovernanCe 41

  • Page 22
    ... University. > Chairman, Board of tunghai University. > minister, ministry of finance, executive yuan. > independent director, taiwan High speed rail Corporation. > Chairman, taiwan external trade development Council. (taitra) > Chairman, taiwan asset management Corporation. > professor, department...

  • Page 23
    ... five years work experience an instructor (or higher) in a department of commerce, law, finance, accounting, or other academic departments related to the business of the company in a public or private junior college, college or university name Chairman Cher Wang director Ht Cho director Wen-Chi...

  • Page 24
    ...% principal work experience and academic qualifications positions held concurrently in any other company managers with spouses or relatives within seconddegree of Kinship title name relation shareholding (note) title name date elected shares % Chief executive officer & president peter Chou 2004...

  • Page 25
    ... department of industrial design, shih Chien University > design engineer, premier image technology Corporation > master of accounting, nCCU > manager, tsmC > BU Controller, Lite-on positions held concurrently in any other company > director (representative), Communication Global Certification inc...

  • Page 26
    ... manager and assistant General managers as employee bonus (including stock and cash bonuses). estimated amounts of 2010 employee bonus are calculated based on 2009 actual distribution ratio; distribution list for 2010 has not been decided yet. note 5: number of shares represented by employee stock...

  • Page 27
    ...; distribution list for 2010 has not been decided yet. only those who served as HtC's manager in 2010 or those who have worked for HtC until 31 december 2010 and were promoted to manager before the date of printing of this annual report are disclosed in this statement. note 2 : applicable scope of...

  • Page 28
    ... of this annual report, distribution list of employee bonus has not been decided yet. estimated amounts of 2010 employee bonus are calculated based on 2009 actual distribution ratio. total remuneration for year 2009, related to amount of stock bonus, is calculated based on the closing price (nt$432...

  • Page 29
    ... committees of the Board of directors HtC has both Chinese and english websites. investor information pages provide information on financial and business issues and corporate governance, while product information pages provide information relating to our products and services. HtC has english and...

  • Page 30
    ...sheet included in the HtC phone package, customer service contact numbers in all countries, a taiwan customer service center contact information card, information on its official website, live customer chat service, customer service e-mail, home pickup and delivery service, a customer service center...

  • Page 31
    ...information on Csr-related activities and performance through its annual report. HtC Corporation HtC does not produce a corporate social responsibility report. Statement on Internal Control date: 1/21/2011 the Company states the following with regard to its internal control system for 2010, based...

  • Page 32
    ... shares. 1. adopted resolution to acquire real property from a related party, via technologies, inc. Board of directors meeting Board of directors meeting year 2011 Board of directors meeting Board of directors meeting Board of directors meeting 2010.11.22 accounting firm deloitte & touche name...

  • Page 33
    ... tze-Chun Wang. Condition Concerned person accountant appointer voluntarily ended the engagement declined further engagement none yes accounting principles or practices financial report disclosure audit scope or procedure other (I) Changes in shareholdings of Directors, Supervisors, Managers, and...

  • Page 34
    ... persons, shall be disclosed. VIII. Total number of shares and total equity stake held in the same enterprise by the Company, its Directors and Supervisors, Managers directly or indirectly 2010.12.31 Unit: share; dollar; ï¼... investments by HtC Long-term investments (note) H.t.C(B.v.i) Corp. HtC...

  • Page 35
    ... to high-risk groups, and assists employees with prevention and management of any such conditions through accurate understanding and lifestyle changes. in addition, with facilities such as the health center, library, fitness center, massage rooms/stations, and multi-sport playing field, HtC also...

  • Page 36
    ... to begin operating in september 2011. Charitable activities in addition to environmental protection, health and safety, energy management, and providing a safe and healthy working environment for its workers, HtC continues to engage in other public service activities such as caring for the...

  • Page 37
    2 0 1 0 H tC a n n Ua L r e p o r t 05 72 CapitaL and sHares 73

  • Page 38
    ...,089,545 in cash dividend. it translates to approximately nt$ 0.5 stock dividends and nt$ 37 cash dividends per share (based on the number of outstanding shares as of book closure date, excluding share repurchases, for the 2011 annual shareholders' meeting). the Board of directors may make necessary...

  • Page 39
    ... Board of directors to continue buy-back of shares if the stock price falls under ntd 565. Buy-back shares from stock exchange note 0 share (0%) ntd 0 n/a V. Employee share warrants (1) during the current fiscal year up to the date of printing of this annual report, HtC has not issued any employee...

  • Page 40
    2 0 1 0 H tC a n n Ua L r e p o r t 06 78 finanCiaL statUs, operatinG resULts and risK manaGement 79

  • Page 41
    ...billion to buy back 9,786,000 treasury shares for distribution to employees as performance incentive bonuses. at the close of 2010, HtC's total shareholders' equity stood at nt$74.7 billion, a rise of nt$9.0 billion or 14% over year-end 2009. III. Cash Flows (1) Analysis of change in cash ï¬,ow for...

  • Page 42
    ... to enhance product quality, product value, user experience, customer service, cost structure, and business effectiveness. the focus of future HtC investment activities will be mobile content, communications, mobile and information security, location-based services, entertainment and user interface...

  • Page 43
    ... business opportunities. HtC will continue to use its resources to develop new technologies and enhance the holistic user experience in order to deliver products and services that fit market demand. 6. Effect of changes in the company's corporate image on the company's crisis management...

  • Page 44
    ... HtC products with regard to hardware, software and product safety enhance production quality provide after-sales service and enhance the quality of such internal audit Global product division design Quality & engineering service division manufacturing operation Center Customer service and Quality...

  • Page 45
    2 0 1 0 H tC a n n Ua L r e p o r t 07 88 affiLiate information and otHer speCiaL notes 89

  • Page 46
    ... & Company Design, Inc. Exedea Inc. HTC America Holding Inc. 100.00% 100.00% 100.00% HTC America Innovation Inc. 100.00% 100.00% High Tech Computer (H.K.) Limited HTC (Australia and New Zealand) PTY LTD. HTC Philippines Corp. PT. High Tech Computer Indonesia 100.00% HTC EUROPE CO., LTD. 100...

  • Page 47
    ... by the businesses operated by all affiliates: principally engaged in design, manufacture and marketing of pda phones, smart phones and handheld devices, as well as the provision of related technologies and after-sales services. pt. High tech Computer indonesia HtC india private Limited 2007.12...

  • Page 48
    ... pt. High tech Computer indonesia director director supervisor supervisor director director HtC india private Limited HtC (thailand) Limited HtC malaysia sdn. Bhd. director director HtC innovation Limited HtC Communication Co., Ltd. HtC HK, Limited Chairman Chairman director HtC Corporation...

  • Page 49
    ... and Manufacturing Processes for Primary Product Lines: HtC's primary products are converged devices designed on android, Windows mobile and Brew operating systems (os). HtC products support voice communication, mobile internet, multimedia, global positioning service (Gps), personal data assistant...

  • Page 50
    ... to a large number of students each year. We participate actively in job fairs and recruitment events in taiwan and abroad as part of our ongoing, organized effort to tap the best talent available. 2. Employee Development HtC operates a workplace environment highly conducive to learning and...

  • Page 51
    ...5 and 10-year long service records. internal transfer assistance: in order to help enhance employees' professional experience / career planning, HtC provides assistance to facilitate employee transfers within the company. 5. Compensation and Retirement Benefits HtC employees earn market-competitive...

  • Page 52
    2 0 1 0 H tC a n n Ua L r e p o r t 08 102 finanCiaL information 103

  • Page 53
    ... financial reporting requirements, write-downs of inventories or reversal of write-downs and product warranty costs registered during the period 2006 to 2007 have been reclassified as cost of revenues items. Note 2: Excluded employee bonus expenses 104 2010 HTC ANNUAL REPORT FINANCIAL INFORMATION...

  • Page 54
    ... saw interest expense fall for the year to NT$46,000 and times interest earned rise 403% over year-end 2009. 2. Operating Performance Analysis Fixed asset turnover, total asset turnover, and average collection turnover were all higher due to strong revenue growth. Days sales outstanding fell from...

  • Page 55
    ... Reflecting strong business growth, net cash flows from operating activities grew 48% over 2009 levels to NT$40.8 billion. Current liabilities also rose 103%, resulting in a 37% reduction in our 2010 cash flow ratio. During 2010 HTC continued expanding production capacity and office space to meet...

  • Page 56
    ...report. We have audited the accompanying balance sheets of HTC Corporation (the "Company") as of December 31, 2009 and 2010 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 financial statements...

  • Page 57
    ... CORPORATION BALANCE SHEETS DECEMBER 31, 2009 AND 2010 (In Thousands, Except Par Value) ASSETS CURRENT ASSETS Cash and cash equivalents (Notes 2 and 4) Financial assets at fair value through profit or loss (Notes 2, 5 and 23) Available-for-sale financial assets - current (Notes 2 and 6) Accounts...

  • Page 58
    HTC CORPORATION STATEMENTS OF INCOME YEARS ENDED DECEMBER 31, 2009 AND 2010 (In Thousands, Except Earnings Per Share) 2009 NT$ REVENUES (Notes 2 and 24) COST OF REVENUES (Notes 9, 20 and 24) GROSS PROFIT UNREALIZED PROFIT FROM INTERCOMPANY TRANSACTIONS REALIZED PROFIT FROM INTERCOMPANY ...

  • Page 59
    HTC CORPORATION STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY YEARS ENDED DECEMBER 31, 2009 AND 2010 (In Thousands) Capital Stock Issued and Outstanding Common Stock $ 7,553,938 From Share Issuance in Excess of Pars $ 4,374,244 Long-term Equity Investments 17,534 Capital Surplus Capital Stock ...

  • Page 60
    ... on sale of investments, net Impairment losses Deferred income tax assets Net changes in operating assets and liabilities Financial instruments at fair value through profit or loss Accounts receivable Accounts receivable from related parties Other current financial assets Inventories Prepayments...

  • Page 61
    ...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 62
    ... or losses in the year of disposal. Accrued Marketing Expenses 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. 122 2010 HTC ANNUAL REPORT FINANCIAL INFORMATION...

  • Page 63
    ... and b. Recognized in profit and loss if the changes in fair value is recognized in profit or loss. On time deposits, interest rates ranged from 0.10% to 1.03% and from 0.14% to 1.50%, as of December 31, 2009 and 2010, respectively. The Company applies intra-year and inter-year allocations for its...

  • Page 64
    ...was recognized as cost of sales for the years ended December 31, 2009 and 2010, respectively. In 2010, the Company bought the corporate bonds issued by Nan Ya Plastics Corporation and maturing in 2013 with an effective interest rate of 0.90%. 126 2010 HTC ANNUAL REPORT FINANCIAL INFORMATION 127

  • Page 65
    .... In July 2010 the Company lost its significant influence and accounted for this investment by the cost method (Note 12 has more information). Carrying Value NT$ Equity method H.T.C. (B.V.I.) Corp. BandRich Inc. HTC HK, Limited Communication Global Certification Inc. High Tech Computer Asia Pacific...

  • Page 66
    ... consolidated financial statements as of and for the years ended December In December 2009, the Company acquired 100% equity interest in Huada Digital Corporation for NT$245,000 thousand and accounted for this investment by the equity method. 31, 2009 and 2010. All significant intercompany balances...

  • Page 67
    ... 31, 2010 was NT$10,777,623 thousand (US$369,984 thousand). Capital Surplus Based on the Statement of Financial Accounting Standards No. 18 - "Accounting for Pensions," issued by the Accounting Research and Development Foundation of the ROC, pension cost under a defined benefit pension plan should...

  • Page 68
    ...by the Board of Directors. Information on earnings appropriation can be accessed online through the Market Observation Post System website. As part of a high-technology industry and a growing enterprise, the Company considers its operating environment, industry developments, and long-term interests...

  • Page 69
    ...) bad debt expenses Capitalized expense Unrealized warranty expense Unrealized marketing expenses Unrealized valuation gains on financial instruments Unrealized contingent losses of purchase orders (Realized) unrealized profit from intercompany transactions Other Total income Less: Tax-exempt income...

  • Page 70
    ... the average number of shares outstanding was adjusted retroactively for the effect of stock dividend distribution in 2010. The Accounting Research and Development Foundation issued Interpretation 2007-052 that requires companies to recognize bonuses paid to employees, directors and supervisors...

  • Page 71
    ... loss of NT$26 thousand and an unrealized gain of NT$773 thousand (US$27 thousand) under stockholders' equity for the changes in fair value of available-for-sale financial assets for the years ended December 31, 2009 and 2010, respectively. 140 2010 HTC ANNUAL REPORT FINANCIAL INFORMATION...

  • Page 72
    ... NT$ 298,526 270,931 39,876 609,333 $ Amount US$ (Note 3) $ 10,248 9,301 1,369 20,918 2010 % to Total Net Purchases Purchases of Inventories and Services Terms of payment and purchasing prices for both related and third parties were similar. 142 2010 HTC ANNUAL REPORT FINANCIAL INFORMATION 143

  • Page 73
    Sales and Services Provided Other Receivables 2009 Related Party Amount NT$ HTC America Inc. HTC Communication Co., Ltd. Exedea Inc. HTC Europe Co., Ltd. Employees' Welfare Committee High Tech Computer (H.K.) Limited High Tech Computer Singapore Pte. Ltd. BandRich Inc. Others $ $ 1,118,794 1,844,...

  • Page 74
    ...Related Party Amount NT$ % to Total Other Payables Warranty expense resulted from authorizing the above related parties to provide after-sales service. Commission Expenses HTC America Inc. HTC America Innovation Inc. HTC EUROPE CO, LTD. High Tech Computer Asia Pacific Pte. Ltd. HTC Corporation...

  • Page 75
    ... Related Party Amount NT$ HTC America Inc. HTC (Australia and New Zealand) Pty. Ltd. High Tech Computer Asia Pacific Pte. Ltd. HTC America Innovation Inc. High Tech Computer (H.K.) Limited HTC Innovation Limited HTC Brasil Communication Global Certification Inc. One & Company Design, Inc. HTC India...

  • Page 76
    ... Description The compensation of directors, supervisors and management personnel for the year ended December 31, 2009 included the bonuses appropriated from the earnings of 2009, which had been approved by stockholders in their annual meeting in 2010. b. Any time when the Company is not using any...

  • Page 77
    ... 31, 2009 and 2010, and the related consolidated statements of income, changes in stockholders' equity and cash flows for the years then ended, all expressed in New Taiwan dollars. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is...

  • Page 78
    HTC CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2009 AND 2010 (In Thousands, Except Par Value) ASSETS CURRENT ASSETS Cash and cash equivalents (Notes 2 and 4) Financial assets at fair value through profit or loss (Notes 2, 5 and 25) Available-for-sale financial assets - ...

  • Page 79
    HTC CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME YEARS ENDED DECEMBER 31, 2009 AND 2010 (In Thousands, Except Earnings Per Share) 2009 NT$ REVENUES (Notes 2 and 26) COST OF REVENUES (Notes 9, 22 and 26) GROSS PROFIT OPERATING EXPENSES (Notes 22 and 26) Selling and marketing ...

  • Page 80
    HTC CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY YEARS ENDED DECEMBER 31, 2009 AND 2010 (In Thousands) New Taiwan Dollars BALANCE, JANUARY 1, 2009 Appropriation of the 2008 net earnings Legal reserve Stock dividends Cash dividends Transfer of employee ...

  • Page 81
    HTC CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY YEARS ENDED DECEMBER 31, 2009 AND 2010 (In Thousands) U.S. Dollars BALANCE, JANUARY 1, 2010 Appropriation of the 2009 net earnings Stock dividends Cash dividends Transfer of employee bonuses to common stock...

  • Page 82
    ... to expenses ( Gains on sale of investments, net Impairment losses ( Deferred income tax assets Net changes in operating assets and liabilities Financial instruments at fair value through profit or loss ( Notes and accounts receivable Other current financial assets Inventories Prepayments ( ( Other...

  • Page 83
    ... & Company Design, Inc. Design, research and development of application software Marketing, repair and after-sales services - Principles of Consolidation High Tech Computer High Tech Computer Singapore Asia Pacific Pte. Ltd. Pte. Ltd. 100 The accompanying consolidated financial statements include...

  • Page 84
    ... & Company Design, Inc. Design, research and development of application software International holding 100 HTC HK, Limited 100 " - HTC Holding Cooperatief U.A. High Tech Computer HTC India Private Ltd. Singapore Pte. Ltd. International holding Marketing, repair and after-sales services 99...

  • Page 85
    ...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 86
    ... of Curtailment or settlement gains or losses on the defined benefit plan are recognized as part of the net pension cost for the year. year in which employees render services. Pension Plan under cost of revenues when sales are recognized. 170 2010 HTC ANNUAL REPORT FINANCIAL INFORMATION 171

  • Page 87
    ... stockholders' equity; and b. Recognized in profit and loss if the changes in fair value is recognized in profit or loss. Cash on hand Cash in banks Time deposits $ NT$ 5,412 $ 2,129,500 62,503,378 When the Company's treasury stock is retired, the treasury stock account should be credited, and the...

  • Page 88
    ... more information. The write-down of inventories to their net realizable value amounted to NT$1,853,579 thousand and NT$2,686,168 thousand (US$92,213 thousand) and was recognized as cost of sales for the years ended December 31, 2009 and 2010, 12. FINANCIAL ASSETS CARRIED AT COST Financial assets...

  • Page 89
    ... as of December 31, 2010, the investment was temporarily accounted for under "prepayments for long-term investments." On its equity-method investments, the Company had a loss of NT$3,891 thousand in 2009. The financial statements of equity-method investees for the year ended December 31, 2009 had...

  • Page 90
    ...issued by the Accounting $ 6,250 $ $ - The Company provides warranty service for one to two years depending on the contract with customers. The warranty liability is estimated based on management's evaluation of the products under warranty, past warranty experience, and pertinent factors. Research...

  • Page 91
    ... and approved by the stockholders in their annual meeting. As part of a high-technology industry and a growing enterprise, the Company considers its operating environment, industry developments, and long-term interests of stockholders as well 180 2010 HTC ANNUAL REPORT FINANCIAL INFORMATION 181

  • Page 92
    ... returns of Communication Global Certification Inc. and HTC Investment Corporation through 2008 had been examined On October 29, 2010, the Company's board of directors passed a resolution to buy back 10,000 thousand and 10,000 thousand by the tax authorities. 182 2010 HTC ANNUAL REPORT FINANCIAL...

  • Page 93
    ...) NT$ HTC Corporation BandRich Inc. Communication Global Certification Inc. HTC Investment Corporation HTC I Investment Corporation High Tech Computer Asia Pacific Pte. Ltd. HTC America Inc. HTC EUROPE CO., LTD. Exedea Inc. HTC NIPPON Corporation HTC BRASIL One & Company Design, Inc. HTC Corporation...

  • Page 94
    ... of the taxable income in current year. Before January 1, 2010, the investment and research and development tax credits can be carried forward for four years based on the related regulations of Income Tax Act in the ROC. The total credits used in each year cannot exceed half of the estimated income...

  • Page 95
    ... resolve the number of shares to be distributed to employees at their meeting in the following year. The related EPS information for the years ended December 31, 2009 and 2010 were as follows: a. Nonderivative financial instruments December 31 2009 Carrying Amount NT$ Assets Fair Value NT$ NT...

  • Page 96
    ... NT$ 270,931 Amount US$ (Note 3) 9,301 2010 % to Total Net Purchases - Financial Risks Terms of payment and purchasing prices for both related and third parties were similar. a. Market risk Sales and Services Provided The Company uses derivative contracts for hedging purposes, i.e., to reduce...

  • Page 97
    ...2010 % to Total Other Payables 5 The Company leased offices and parking space owned by VIA Technologies, Inc. at one-year renewable operating lease agreements, and the rental payment was determined at the prevailing rates in the surrounding area. 192 2010 HTC ANNUAL REPORT FINANCIAL INFORMATION...

  • Page 98
    ... to use embedded operating system; royalty payment based on agreement. In November 2010, the Company bought land and building for NT$404,000 thousand (US$13,869 thousand) from a related party, VIA Technologies, Inc. to have more office space in Xindian. The transaction price had been paid...

  • Page 99
    ... mainly manufactures and sells smart handheld devices. Foreign Operations Because sales to unaffiliated customers and identifiable assets of foreign segments were less than 10 percent of that of the Company, the Company was exempt from disclosing information on foreign operations. Export Revenues...

  • Page 100
    ... and marketing plans, procurement plans, product roadmaps, product design records, product test plans and reports, product software and source codes, product pricing, product appearance, product specifications, tooling specifications, personnel information, financial information, customer lists...

  • Page 101
    ... similar to HTC or to invest exceeding five percent of total market value in such company. Employees are also prohibited from using so-called "Insider Information" to gain personal profit or to influence the normal operation of other businesses, such as investment in competitors, customers, venders...