HTC 2010 Annual Report Download - page 56

110 2 0 1 0 H T C A N N U A L R E P O R T 111
FINANCIAL INFORMATION
4. INDEPENDENT AUDITORS’ REPORT
The Board of Directors and Stockholders
HTC Corporation
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 are the responsibility of the Company’s management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with the Rules Governing the Audit of Financial Statements by Certified Public Accountants
and auditing standards generally accepted in the Republic of China. Those rules and standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of HTC Corporation
as of December 31, 2009 and 2010, and the results of its operations and its cash flows for the years then ended, in conformity with the
Guidelines Governing the Preparation of Financial Reports by Securities Issuers, requirements of the Business Accounting Law and
Guidelines Governing Business Accounting relevant to financial accounting standards, and accounting principles generally accepted in
the Republic of China.
We have also audited the consolidated financial statements of HTC Corporation and subsidiaries as of and for the years ended
December 31, 2009 and 2010, and expressed an unqualified opinion on those statements in our report dated January 18, 2011.
Our audits also comprehended the translation of the 2010 New Taiwan dollar amounts into U.S. dollar amounts and, in our opinion,
such translation has been made in conformity with the basis stated in Note 3. Such U.S. dollar amounts are presented solely for the
convenience of readers.
January 18, 2011
Notice to Readers
The accompanying financial statements are intended only to present the financial position, results of operations and cash flows in accordance with accounting principles and
practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such financial statements are those
generally accepted and applied in the Republic of China.
For the convenience of readers, the auditors’ report and the accompanying financial statements have been translated into English from the original Chinese version prepared
and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any dierence in the interpretation of the two versions,
the Chinese-language auditors’ report and financial statements shall prevail. Also, as stated in Note 2 to the financial statements, the additional footnote disclosures that are not
required under generally accepted accounting principles were not tra
(5) Average Inventory Turnover Days=365 / Average Inventory Turnover.
(6) Fixed Assets Turnover=Net Sales / Net Fixed Assets.
(7) Total Assets Turnover=Net Sales / Total Assets.
d. Profitability Analysis
(1)
Return on Total Assets=(Net Income + Interest Expenses * (1 - Eective
Tax Rate) / Average Total Assets.
(2) Return on Equity=Net Income / Average Shareholders' Equity.
(3) Net Margin=Net Income / Net Sales.
(4) Earnings Per Share=(Net Income - Preferred Stock Dividend) / Weighted
Average Number of Shares Outstanding.
e. Cash Flow
(1)
Cash Flow Ratio=Net Cash Provided by Operating Activities / Current
Liabilities.
(2) Cash Flow Adequacy Ratio=Five-year Sum of Cash from Operations /
Five-year Sum of Capital Expenditures, Inventory Additions, and Cash
Dividend.
(3) Cash Flow Reinvestment Ratio=(Cash Provided by Operating Activities
-Cash Dividends) / (Gross Fixed Assets + Investments + Other Assets +
Working Capital).
f. Leverage
(1)
Operating Leverage=(Net Sales - Variable Cost) / Income from Operations.
(2) Financial Leverage=Income from Operations / (Income from Operations –
Interest Expenses)
3. 2010 SUPERVISOR’S REPORT
HTC CORPORATION
SUPERVISORS AUDIT REPORT
The Board of Directors has prepared the Company’s
2010 Business Report, Financial Statements and Earnings
Distribution Proposal. HTC Corporation’s Financial Statements
have been audited and certified by Yang, Ming-Hsien, CPA,
and Wang Tze-Chun, CPA, of Deloitte & Touche and an audit
report relating to the Financial Statements has been issued.
The Business Report, Financial Statements and Earnings
Distribution Proposal have been reviewed and considered to be
complied with relevant rules by the undersigned, the supervisor
of HTC Corporation. According to Article 219 of the Company
Law, I hereby submit this report.
HTC CORPORATION
SUPERVISOR
Way-Chih Investment Co., Ltd.
Representative: Shao-Lun Lee
April 30, 2011