HTC 2010 Annual Report Download - page 89

176 2 0 1 0 H T C A N N U A L R E P O R T 177
FINANCIAL INFORMATION
In July 2009, the Company acquired 4.37% equity interest
in SoundHound Inc. (formerly Melodis Corporation until May
2010) for US$2,000 thousand (NT$58,260 thousand).
In December 2010, the Company acquired 1.60% equity interest
in NETQIN MOBILE Inc. for US$2,500 thousand (NT$72,825
thousand).
In May 2010, the Company acquired 11.11% equity interest in
GSUO Inc. for US$5,000 thousand (NT$145,650 thousand).
In April 2006, the Company acquired 92% equity interest in
BandRich Inc. for NT$135,000 thousand and accounted for
this investment by the equity method. In May 2006 and July
2010, BandRich Inc. issued common shares and the Company
did not buy any shares. The Company’s ownership percentage
declined from 92% to 18.08% and lost its significant influence.
As a result, the Company transferred this investment to
“financial assets carried at cost” using book value at the time of
its ownership percentage changed in July 2010.
In March 2004, the Company merged with IA Style, Inc. and
acquired 1.82% equity interest in Answer Online, Inc. as a result
of the merger. In addition, the Company determined that the
recoverable amount of this investment in 2010 was less than
its carrying amount and thus recognized an impairment loss of
NT$1,192 thousand (US$41 thousand).
In December 2010, the Company acquired 10.00% equity
interest in Luminous Optical Technology Co., Ltd. for
NT$183,000 thousand (US$6,282 thousand).
In July 2010, the Company invested Felicis Ventures II LP for
US$750 thousand (NT$23,220 thousand). However, because
the registration of this investment had not been completed
as of December 31, 2010, the investment was temporarily
accounted for under “prepayments for long-term investments.”
In August 2010, the Company invested WI Harper Fund VII for
US$900 thousand (NT$28,134 thousand). However, because
the registration of this investment had not been completed
as of December 31, 2010, the investment was temporarily
accounted for under “prepayments for long-term investments.”
These unquoted equity instruments were not carried at fair
value because their fair value could not be reliably measured;
thus, the Company accounted for these investments by the
cost method.
13. INVESTMENTS ACCOUNTED FOR BY THE EQUITY
METHOD
The investment accounted for by the equity method as of
December 31, 2009 and 2010 was as follows:
2009 2010
Carrying Value
Ownership
Percentage Original Cost Carrying Value
Ownership
Percentage
NT$ NT$ US$(Note 3) NT$ US$(Note 3)
Vitamin D Inc. $ - 25.59 $ - $ - $ - $ - -
Prepayments for long-term investments 245,000 - - - -
$ 245,000 $ - $ - $ - $ -
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 27.27% equity interest in Vitamin D Inc.
for NT$40,986 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, January 2009 and June 2009, Vitamin D Inc. issued new convertible
preferred shares, but the Company did not buy any of these shares. The Company’s ownership percentage thus declined from 27.27%
to 25.59%, and there was a capital surplus - long-term equity investments of NT$1,689 thousand, NT$671 thousand in 2008 and 2009,
respectively. In addition, the Company determined that the recoverable amount of this investment in 2009 was less than its carrying
amount and thus recognized an impairment loss of NT$30,944 thousand. Vitamin D was dissolved in August 2010.
In December 2009, the Company invested in Huada Digital Corporation for NT$245,000 thousand. Because the registration of the
investment was not completed on December 31, 2009, the investment was temporarily accounted for as “prepayments for long-term
investments.”
On its equity-method investments, the Company had a loss of NT$3,891 thousand in 2009.
The financial statements of equity-method investees for the year ended December 31, 2009 had been examined by the Company’s
independent auditors.
14. PROPERTIES
Properties as of December 31, 2009 and 2010 were as follows:
2009 2010
Carrying Value Cost Accumulated Depreciation Carrying Value
NT$ NT$ NT$ NT$ US$(Note 3)
Land $ 4,719,538 $ 5,862,076 $ - $ 5,862,076 $ 201,238
Buildings and structures 3,550.890 5,005,642 812,785 4,192,857 143,936
Machinery and equipment 1,121,526 7,236,349 4,201,382 3,034,967 104,187
Molding equipment 11,620 172,632 172,632 - -
Computer equipment 136,161 474,299 310,657 163,642 5,618
Transportation equipment 1,338 7,378 2,669 4,709 162
Furniture and fixtures 226,285 245,041 175,352 69,689 2,392
Leased assets 2,986 5,934 4,536 1,398 48
Leasehold improvements 98,802 305,073 121,220 183,853 6,311
Prepayments for
construction-in- progress
and equipment-in-transit 30,664 511,138 - 511,138 17,547
$ 9.899,808 $ 19,825,562 $ 5,801,233 $ 14,024,329 $ 481,439
In December 2008, the Company bought land - about 8.3 thousand square meters - from Yulon Motors Ltd. for NT$3,335,000
thousand to build the Taipei R&D headquarters in Xindian City. The Company had paid 80% and 20% of the purchase price and
completed the transfer registration of the relative portion of land in December 2008 and January 2010, respectively.
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 oce space in Xindian. The transaction price had been paid except for NT$20,200 thousand (US$693
thousand), which was accounted for as payable for purchase of equipment.
Prepayments for construction-in-progress and equipment-in-transit were prepayments for the construction of Taipei R&D headquarters
and miscellaneous equipments.
There were no interests capitalized for the years ended December 31, 2009 and 2010, respectively.