HTC 2011 Annual Report Download - page 87

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Related Party Relationship with the Company
HTC America Holding Inc. Subsidiary of HTC EUROPE CO., LTD.
ABAXIA SAS Subsidiary of HTC France Corporation
HTC America Inc. Subsidiary of HTC America Holding Inc.
One & Company Design Inc. Subsidiary of HTC America Holding Inc.
HTC America Innovation Inc. Subsidiary of HTC America Holding, Inc.
HTC BLR Subsidiary of ABAXIA SAS
Saffron Digital Ltd. Subsidiary of Saffron Media Group Ltd.
Saffron Digital Inc. Subsidiary of Saffron Media Group Ltd.
HTC Communication Canada, Ltd. Subsidiary of HTC. Netherlands B.V.
HTC Luxembourg S.a.r.l. Subsidiary of HTC. Netherlands B.V.
HTC America Content Services, Inc. Subsidiary of HTC America Holding Inc.
HTC Norway AS Subsidiary of HTC. Netherlands B.V.
HTC RUS LLC Subsidiary of HTC. Netherlands B.V.
HTC Communication Sweden AB Subsidiary of HTC. Netherlands B.V.
Dashwire, Inc. Subsidiary of HTC America Holding Inc.
HTC Investment One (BVI) Corp. Subsidiary
Inquisitive Minds, Inc. Subsidiary of HTC America Holding Inc.
Beats Electronics, LLC Subsidiary of HTC America Holding Inc.
HTC Communication Technologies (SH) Subsidiary of High Tech Computer Asia Pacific Pte. Ltd.
Employees' Welfare Committee Employees' Welfare Committee of HTC Corporation
HTC Cultural and Educational Foundation A nonprofit organization with over one third of its total funds donated by the Company
HTC Social Welfare and Charity Foundation A nonprofit organization with over one third of its total funds donated by the Company
(Concluded)
2. Major transactions with related parties are summarized below
(1) Purchases of Inventories and Services
2010 2011
Amount % to Total
Net Purchases Amount % to Total
Net Purchases
Related Party NT$ NT$ US$ (Note 3)
HTC Electronics (Shanghai) Co., Ltd. $298,526 - $1,217,889 $40,222 1
Chander Electronics Corp. 270,931 - 172,540 5,699 -
High Tech Computer Corp. (Suzhou) 39,876 - - - -
$609,333 - $1,390,429 $45,921 1
Terms of payment and purchasing prices for both related and third parties were similar.
(2) Sales and Services Provided
2010 2011
Amount % to Total
Revenues Amount % to Total
Revenues
Related Party NT$ NT$ US$ (Note 3)
HTC America Inc. $86,510,154 32 $201,020,041 $6,638,926 44
HTC Communication Co., Ltd. 2,565,782 1 20,728,859 684,595 5
Employees' Welfare Committee 34,138 - 52,540 1,735 -
Exedea Inc. 1,126,078 - - - -
Others 232,547 - 44,309 1,464 -
$90,468,699 33 $221,845,749 $7,326,720 49
The selling prices for products sold to related parties were similar to those sold to third parties, except those for HTC America Inc., HTC Communication
Co., Ltd. and Employees' Welfare Committee. The collection terms for products sold to related parties were similar to those for sales to third parties.
(3) Accounts Receivable
December 31
2010 2011
Amount % to Total
Accounts Receivable Amount % to Total
Accounts Receivable
Related Party NT$ NT$ US$ (Note 3)
HTC America Inc. $26,738,921 42 $29,333,501 $968,774 44
HTC Communication Co., Ltd. 1,388,612 2 3,600,517 118,911 6
Others 58,858 - 43,251 1,429 -
$28,186,391 44 $32,977,269 $1,089,114 50
(3) Cash flow risk
The Company's operating funds are deemed sufficient to meet the cash flow demand; thus, liquidity risk is not considered significant.
Under the regulations of the Securities and Futures Bureau, the derivative contracts that subsidiaries entered into are briefly disclosed as
follows:
Saffron Digital Ltd.
Saffron Digital Ltd. ("Saffron") entered into derivative contracts to manage exposures due to exchange rate fluctuations. Saffron's
derivative contracts did not meet the criteria for hedge accounting and thus were not classified as a financial asset or a financial liability
held for trading. The fair values of these derivatives were determined using valuation techniques incorporating estimates, and changes in
fair value of these derivatives were recognized directly in profit or loss for the period.
The Company acquired Saffron in January 2011. Saffron had settled the forward exchange contracts as of December 31, 2011, and the
realized settlement loss on these contracts was NT$1,074 thousand (US$35 thousand).
(25) RELATED-PARTY TRANSACTIONS
1. The names and relationships of related parties are as follows:
Related Party Relationship with the Company
Xander International Corp. Chairperson is an immediate relative of the Company's chairperson
VIA Technologies, Inc. Same chairperson
Chander Electronics Corp. Same chairperson
Way-Lien Technology Co., Ltd Significant stockholder of the Company
WTI Investment International, Ltd. Its significant stockholder in substance is the Company's chairperson
VIABASE CO., LTD. Chairperson of its parent company is the same as that of the Company
S3 Graphics Co., Ltd. A wholly owned subsidiary of VIABASE CO., LTD. and WTI Investment International, Ltd.
H.T.C. (B.V.I.) Corp. Subsidiary
BandRich Inc. Originally a subsidiary of the Company until July 2010 because of losing significant influence
Communication Global Certification Inc. Subsidiary
High Tech Computer Asia Pacific Pte. Ltd. Subsidiary
HTC Investment Corporation Subsidiary
HTC I Investment Corporation Subsidiary
Huada Digital Corporation Subsidiary
High Tech Computer Corp. (Suzhou) Subsidiary of H.T.C. (B.V.I.) Corp.
Exedea Inc. Subsidiary of H.T.C. (B.V.I.) Corp.
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 Philippines Corporation Subsidiary of High Tech Computer Asia Pacific Pte. Ltd.
PT. High Tech Computer Indonesia Subsidiary of High Tech Computer Asia Pacific Pte. Ltd.
HTC (Thailand) Limited Subsidiary of High Tech Computer Asia Pacific Pte. Ltd.
HTC India Private Limited Subsidiary of High Tech Computer Asia Pacific Pte. Ltd.
HTC Malaysia Sdn. Bhd. Subsidiary of High Tech Computer Asia Pacific Pte. Ltd.
HTC Innovation Limited Subsidiary of High Tech Computer Asia Pacific Pte. Ltd.
HTC Communication Co., Ltd. Subsidiary of High Tech Computer Asia Pacific Pte. Ltd.
HTC HK, Limited Subsidiary of High Tech Computer Asia Pacific Pte. Ltd.
HTC Holding Cooperatief U.A. Subsidiary of High Tech Computer Asia Pacific Pte. Ltd.
HTC Corporation (Shanghai WGQ) Subsidiary of HTC HK, Limited.
HTC Electronics (Shanghai) Co., Ltd. Subsidiary of HTC HK, Limited.
HTC Netherlands B.V. Subsidiary of HTC Holding Cooperatief U.A.
HTC EUROPE CO., LTD. Subsidiary of HTC. Netherlands B.V.
HTC BRASIL Subsidiary of HTC. Netherlands B.V.
HTC Belgium BVBA/SPRL Subsidiary of HTC. Netherlands B.V.
HTC NIPPON Corporation Subsidiary of HTC. Netherlands B.V.
HTC FRANCE CORPORATION Subsidiary of HTC. Netherlands B.V.
HTC South Eastern Europe Limited Liability Company Subsidiary of HTC. Netherlands B.V.
HTC Nordic ApS Subsidiary of HTC. Netherlands B.V.
HTC Italia SRL Subsidiary of HTC. Netherlands B.V.
HTC Germany GmbH. Subsidiary of HTC. Netherlands B.V.
HTC Iberia S.L. Subsidiary of HTC. Netherlands B.V.
HTC Poland sp. z o.o. Subsidiary of HTC. Netherlands B.V.
Saffron Media Group Ltd. Subsidiary of HTC. Netherlands B.V.
(Continued)
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