HTC 2012 Annual Report Download - page 110

In August 2010, HTC made an investment in WI Harper Fund VII through HTC BVI. As of December 31, 2012, HTC’s
investment had amounted to US$2,790 thousand (NT$81,270 thousand).
In December 2010, HTC invested US$2,500 thousand in NETQIN MOBILE Inc. through HTC BVI. In January 2012, because
the fair value of this investment could be reliably measured and on the basis of the investment holding purpose, HTC
transferred this investment to "available for sale financial assets - current."
In December 2010, HTC made an investment in Luminous Optical Technology Co., Ltd. ("Luminous") through HTC Investment
Corporation and HTC I Investment Corporation. As of December 31, 2012, HTC's investment in Luminous had amounted to
NT$183,000 thousand, and its ownership percentage was 10.02%.
In February 2011, HTC invested US$40,000 thousand in OnLive, Inc. through HTC BVI, and the ownership percentage was
3.79%. In August 2012, OnLive, Inc. declared to have an asset restructuring due to the lack of operating cash and an inability
to raise new capital. HTC assessed that its investment could not be recovered and thus recognized an impairment loss of
US$40,000 thousand (NT$1,199,045 thousand).
In March 2011, HTC made an investment in KKBOX Inc. through HTC BVI. As of December 31, 2012, HTC's investment in
KKBOX Inc. had amounted to US$10,000 thousand (NT$291,290 thousand), and its ownership percentage was 11.11%.
In June 2011, HTC made an investment in TransLink Capital Partners II, L.P. through HTC BVI. As of December 31, 2012, HTC's
investment in TransLink Capital Partners II, L.P. had amounted to US$4,800 thousand (NT$139,819 thousand).
In May 2011, HTC made an investment in Shanghai F-road Commercial Co. through HTC HK Limited. As of December 31, 2012,
HTC's investment in Shanghai F-road Commercial Co., Ltd. had amounted to US$5,500 thousand (NT$160,610 thousand),
and its ownership percentage was 14.21%.
In August 2011, HTC made an investment in Primavera Capital (Cayman) Fund L.L.P. through HTC Investment One (BVI)
Corporation. As of December 31, 2012, HTC's investment had amounted to US$50,921 thousand (NT$1,483,286 thousand).
In August 2012, HTC made an investment in Magnet Systems Inc. through HTC BVI. As of December 31, 2012, HTC’s
investment had amounted to US$35,418 thousand (NT$1,031,702 thousand), and the ownership percentage was 17.10%.
These unquoted equity instruments were not carried at fair value because their fair value could not be reliably measured;
thus, the Company accounted for these investments by the cost method.
15. INVESTMENTS ACCOUNTED FOR BY THE EQUITY METHOD
Investments accounted for by the equity method as of December 31, 2011 and 2012 were as follows:
2011 2012
Carrying Value Ownership
Percentage Carrying Value Ownership
Percentage
NT$ NT$ US$
(Note 3)
Unquoted equity investments
Huada Digital Corporation $- - $241,309 $8,284 50.00
SYNCTV Corporation 71,732 20.00 56,687 1,946 20.00
Beats Electronics, LLC - - 5,650,859 193,994 25.14
71,732 5,948,855 204,224
Less: Accumulated impairment loss - (56,687) (1,946)
$71,732 $5,892,168 $202,278
Prepayments for royalty were primarily for discount
purposes and were classified as current or non-current in
accordance with their nature. As of December 31, 2011 and
2012, the non-current prepayments of NT$7,311,781 thousand
and NT$7,327,355 thousand (US$251,548 thousand),
respectively, had been classified as other assets - other (Note
30 has more information).
Prepayments to suppliers were primarily for discount
purposes and were classified as current or non-current in
accordance with their nature. As of December 31, 2011 and
2012, non-current prepayments of NT$2,956,977 thousand
and NT$2,121,432 thousand (US$72,829 thousand) had been
classified as other assets - other.
Prepayments for others were primarily travel and other
expenses.
13. HELD-TO-MATURITY FINANCIAL ASSETS
Held-to-maturity financial assets as of December 31, 2011
and 2012 were as follows:
2011 2012
NT$ NT$ US$ (Note 3)
Corporate bonds $204,597 $101,459 $3,483
Less: Current portion - (101,459) (3,483)
$204,597 $- $-
In 2010, the Company bought the corporate bonds issued by
Nan Ya Plastics Corporation, and these bonds will mature in
2013 at an effective interest rate of 0.90%. Half of the bonds
had been repaid in November 2012.
14. FINANCIAL ASSETS CARRIED AT COST
Financial assets carried at cost as of December 31, 2011 and
2012 were as follows:
2011 2012
NT$ NT$ US$ (Note 3)
Hua-Chuang Automobile
Information Technical
Center Co., Ltd.
$500,000 $500,000 $17,165
Answer Online, Inc. 1,192 1,192 41
BandRich Inc. 15,861 15,861 545
SoundHound Inc. 67,441 64,880 2,227
GSUO Inc. 242,232 233,032 8,000
Felicis Ventures II LP 68,128 120,157 4,125
WI Harper Fund VII 47,689 81,270 2,790
NETQIN MOBILE Inc. 75,698 - -
2011 2012
NT$ NT$ US$ (Note 3)
Luminous Optical
Technology Co., Ltd. 183,000 183,000 6,283
OnLive, Inc. 1,211,160 - -
KKBOX Inc. 302,790 291,290 10,000
TransLink Capital Partners
II, L.P. 99,921 139,819 4,800
Shanghai F-road
Commercial Co., Ltd. 166,555 160,610 5,514
Primavera Capital
(Cayman) Fund L.L.P. 428,179 1,483,286 50,921
Magnet Systems Inc. - 1,031,702 35,418
3,409,846 4,306,099 147,829
Less: Accumulated
impairment loss (1,192) (1,192) (41)
$3,408,654 $4,304,907 $147,788
(Concluded)
In January 2007, HTC acquired 10% equity interest in Hua-
Chuang Automobile Information Technical Center Co., Ltd.
for NT$500,000 thousand.
On March 1, 2004, HTC merged with IA Style, Inc., with
HTC as survivor entity, and thus acquired an 1.82% equity
interest, amounting to NT$1,192 thousand, in Answer Online,
Inc., an investee of IA Style, Inc. 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.
In April 2006, HTC acquired 92% equity interest in
BandRich Inc. for NT$135,000 thousand and accounted
for this investment by the equity method. However, HTC's
ownership percentage declined from 92% to 18.08%; thus,
HTC lost its significant influence on this investee. In July
2010, HTC transferred this investment to "financial assets
carried at cost" using the book value of NT$15,861 thousand.
In July 2009, through H.T.C. (B.V.I.) Corp. ("HTC BVI"), HTC
made an investment in SoundHound Inc. As of December
31, 2012, HTC's investment in SoundHound Inc. had
amounted to US$2,227 thousand (NT$64,880 thousand),
and its ownership percentage was 4.50%.
In May 2010, HTC made an investment in GSUO Inc. through
HTC BVI. As of December 31, 2012, HTC's investment in GSUO
Inc. had amounted to US$8,000 thousand (NT$233,032
thousand), and its ownership percentage was 10.32%.
In September 2010, HTC made an investment in Felicis
Ventures II LP through HTC BVI. As of December 31, 2012,
HTC's investment in Felicis Ventures II LP had amounted to
US$4,125 thousand (NT$120,157 thousand).
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