HTC 2011 Annual Report Download - page 89

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The Company donated NT$305,500 thousand in 2010 and NT$388,050 thousand (US$12,816 thousand) in 2011 to help disadvantaged
minorities, teenagers and other people in need. Of these donations, NT$5,500 thousand in 2010 and NT$88,050 thousand (US$2,908
thousand) in 2011 went to unrelated parties (Note 16 has more information).
(18) Property Transactions
a. S3 Graphics Co, Ltd. ("S3 Graphics") owns patents on key graphics technologies, which can strengthen the Company's patent portfolio
and counteract the patent rights of competitors and potential licensors around the globe. In their meeting on July 6, 2011, the Board of
Directors resolved to invest in S3 Graphics, and in November 2011, the Company obtained all patents owned by S3 Graphics through the
purchase of all the shares of S3 Graphics from VIABASE CO., LTD. and WTI Investment International, Ltd. by increasing the capital of
HTC Investment One (BVI) Corporation by an amount of US$300,000 thousand.
b. In 2011, the Company bought building equipment from Chander Electronics Corp. for NT$6,555 thousand (US$216 thousand).
c. In November 2010, the Company bought land and building for NT$404,000 thousand from a related party, VIA Technologies, Inc. to
have more office space in Xindian.
(19) Endorsement/Guarantee Provided
Note 27 has more information.
(
20
) Patent Litigation
Note 29 has more information.
3. Compensation of Directors, Supervisors and Management Personnel
2010 2011
NT$ NT$ US$ (Note 3)
Salaries $85,045 $106,673 $3,523
Incentives 216,618 67,282 2,222
Special compensation 3 - -
Bonus 1,386,441 (Note) (Note)
$1,688,107 $173,955 $5,745
Note: The appropriation of the 2011 earnings is not shown because the Board of Directors had not yet made the related proposal.
The Company's disclosure of the compensation of directors, supervisors and management personnel for 2010 and 2011 was in compliance with
Order VI-0970053275 issued by the Financial Supervisory Commission under the Executive Yuan.
The compensation of directors, supervisors and management personnel for the year ended December 31, 2010 included bonuses appropriated
from the earnings of 2010, which were approved by the stockholders in their annual meeting in 2011.
(26) PLEDGED ASSETS
As of December 31, 2010 and 2011, the Company had provided time deposits of NT$63,900 thousand (US$2,110 thousand) to the National Tax
Administration of Northern Taiwan Province as part of the requirements for the Company to get a certificate stating that it had no pending income tax.
(27) COMMITMENTS AND CONTINGENCIES
1. As of December 31, 2011, unused letters of credit amounted to US$1,951 thousand.
2. The Company provided a US$15,000 thousand guarantee for HTC Electronics (Shanghai) Co., Ltd.'s bank loans. The Company terminated the
guarantee in April 2011.
3. Under the unit purchase agreement between the Company and Beats Electronics, LLC, the founding members of Beats Electronics, LLC shall
have a put right to sell the Company all of the interests by years. In addition, the Company shall have a call right to make a purchase of all the
founding members' interests. The put right and call right are terminated automatically upon the consummation of a qualified IPO.
2010 2011
Amount % to Total
Service Expenses Amount % to Total
Service Expenses
Related Party NT$ NT$ US$ (Note 3)
HTC HK, Limited $881 - $691,116 $22,825 3
HTC India Private Limited 149,498 1 450,601 14,882 2
HTC Innovation Limited 188,065 1 343,031 11,329 2
ABAXIA SAS 56,751 - 281,221 9,288 1
One & Company Design, Inc. 160,473 1 269,350 8,896 1
Saffron Digital Ltd. - - 251,774 8,315 1
HTC（Thailand）Limited 70,248 1 239,050 7,895 1
Communication Global Certification Inc. 163,565 1 237,324 7,838 1
HTC Malaysia Sdn. Bhd. 76,639 - 232,818 7,689 1
HTC BRASIL 175,816 1 169,549 5,599 -
HTC NIPPON Corporation 106,811 1 156,130 5,156 -
High Tech Computer（H.K.）Limited 192,255 2 70,068 2,314 -
HTC America Inc. 2,276,534 16 - - -
Others 16,080 - 96,637 3,192 -
$4,557,276 31 $7,088,127 $234,094 27
(Concluded)
(13) Rental Revenues
2010 2011
Amount % to Total
Other Revenues Amount % to Total
Other Revenues
Related Party NT$ NT$ US$ (Note 3)
Chander Electronics Corp. - - $920 $30 100
(14) Other Revenues
2010 2011
Amount % to Total
Other Revenues Amount % to Total
Other Revenues
Related Party NT$ NT$ US$ (Note 3)
BandRich Inc. $200 - - - -
(15) Leasing - Lessee
Operating expenses - rental expenses
2010 2011
Amount % to Total
Other Revenues Amount % to Total
Other Revenues
Related Party NT$ NT$ US$ (Note 3)
VIA Technologies Inc. $12,212 16 $5,209 $172 2
The Company leased offices and parking space owned by VIA Technologies, Inc. under operating lease agreements. The term of the lease
agreement is from May 10, 2008 to March 31, 2012 and the rental payment was determined at the prevailing rates in the surrounding area.
(16) Trademark and Technology License Agreement
Beats Electronice, LLC
In order to enhance the product diversity, the Company entered into a trademark and technology license agreement with Beats Electronics,
LLC. The agreement took effect in August 2011 and will end in December 2016. The royalty expense for 2011 was NT$24,176 thousand
(US$798 thousand), and the prepayment for royalty was NT$157,498 thousand (US$5,202 thousand) as of December 31, 2011.
(17) Donation
2010 2011
Amount % to Total
Donation Expenses Amount % to Total
Donation Expenses
Related Party NT$ NT$ US$ (Note 3)
HTC Cultural and Educational Foundation $150,000 49 $150,000 $4,954 39
HTC Social Welfare and Charity Foundation 150,000 49 150,000 4,954 39
$300,000 98 $300,000 $9,908 78
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FINANCIAL INFORMATION
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