HTC 2012 Annual Report Download - page 87

16. PROPERTIES
Properties as of December 31, 2011 and 2012 were as follows:
2011 2012
Carrying Value Cost Accumulated
Depreciation Carrying Value
NT$ NT$ NT$ NT$ US$ (Note 3)
Land $7,462,281 $7,462,489 $- $7,462,489 $256,188
Buildings and structures 2,742,684 9,520,993 1,190,386 8,330,607 285,990
Machinery and equipment 2,887,919 8,732,565 5,158,999 3,573,566 122,681
Computer equipment 97,861 500,978 346,166 154,812 5,315
Transportation equipment 3,777 6,570 3,683 2,887 99
Furniture and fixtures 68,496 240,906 159,975 80,931 2,778
Leased assets 65 - - - -
Leasehold improvements 131,642 220,726 99,182 121,544 4,172
Prepayments for construction-in-progress and equipment-in-transit 2,027,620 208,750 - 208,750 7,166
$15,422,345 $26,893,977 $6,958,391 $19,935,586 $684,389
In April 2011, the Company bought land approximately 49 thousand square meters adjacent to its Taoyuan plant for
NT$1,770,000 thousand, the price based on the appraisal report, from an unrelated party to build up a complete HTC
technology park and meet the future capacity expansion requirements.
The construction of a new office building and factory was completed in June 2012, and a construction amount of NT$5,615,958
thousand (US$192,796 thousand) was transferred from prepayments for construction in progress to buildings and structures.
There were no interests capitalized in 2011 and 2012.
17. ACCRUED EXPENSES
Accrued expenses as of December 31, 2011 and 2012 were as follows:
2011 2012
NT$ NT$ US$ (Note 3)
Marketing $25,556,956 $15,531,875 $533,210
Bonus to employees 7,238,637 5,712,075 196,096
Salaries and performance bonuses 2,500,248 3,451,869 118,503
Services 2,760,164 2,429,101 83,391
Materials and molding expenses 1,848,332 1,900,218 65,234
Import, export and freight 1,197,075 443,604 15,229
Repairs, maintenance and sundry purchase 264,044 391,726 13,448
Insurance 188,970 180,272 6,189
Meals and welfare 153,108 122,628 4,210
Pension cost 110,560 105,776 3,631
Donation 235,800 - -
Others 310,337 268,092 9,204
$42,364,231 $30,537,236 $1,048,345
In October 2009, the Company and its subsidiary, High Tech Computer Asia Pacific Pte. Ltd., acquired equity interests of 1%
and 99%, respectively in HTC Holding Cooperatief U.A, whose main business is international holding investment, for EUR0.28
thousand and EUR27.72 thousand, respectively. As a result, the Company has accounted for this investment by the equity
method since the acquisition date.
In December 2009, the Company acquired 100% equity interest in Huada Digital Corporation ("Huada"), whose main business
is software services, for NT$245,000 thousand and accounted for this investment by the equity method. In September 2011,
the Company increased this investment by NT$5,000 thousand. As of December 31, 2012, the Company's investment in Huada
had amounted to NT$250,000 thousand (US$8,583 thousand). In September 2011, the Fair Trade Commission Executive
Yuan, R.O.C. (Taiwan) approved an investment by Chunghwa Telecom Co., Ltd. ("CHT") in Huada and the registration of this
investment was completed in October 2011. After CHT's investment, the Company's ownership percentage declined from
100% to 50%. In March 2012, Huada held a stockholders' meeting and re-elected its directors and supervisors. As a result, the
investment type was changed to joint venture and the Company accounted for this investment by the equity method.
In 2011, the Company made a new investment of US$320,002 thousand in HTC Investment One (BVI) Corporation, whose
main businesses are an acquisition of 100% equity interests in S3 Graphics Co., Ltd. and general investing, and accounted
for this investment by the equity method. The Company increased this investment by US$32,190 thousand in 2012. As of
December 31, 2012, the Company's investment in HTC Investment One (BVI) Corporation had amounted to US$352,192
thousand. Because the registration of this investment had not been completed as of December 31, 2012, an amount of
US$11,546 thousand (NT$338,653 thousand) was temporarily accounted for under "prepayments for long-term investments."
In February 2012, the Company acquired 100% equity interest in FunStream Corporation, whose main business is design, research
and development of three-D technology, for NT$45,090 thousand (US$1,548 thousand) and accounted for this investment by
the equity method. In addition, during the fourth quarter of 2012, the Company determined that the recoverable amount of this
investment was less than its carrying amount and thus recognized an impairment loss of NT$45,017 thousand (US$1,546 thousand).
In 2011 and 2012, gain (loss) on equity-method investments were as follows:
2011 2012
NT$ NT$ US$ (Note 3)
H.T.C. (B.V.I.) Corp. $10,304 ($1,129,506) ($38,776)
Communication Global Certification Inc. 47,000 100,631 3,455
High Tech Computer Asia Pacific Pte. Ltd. 2,733,831 2,779,241 95,411
HTC Investment Corporation 1,121 3,566 122
HTC I Investment Corporation 817 4,939 170
Huada Digital Corporation 1,006 (9,380) (322)
HTC Investment One (BVI) Corporation (75,717) (1,131,840) (38,856)
FunStream Corporation - (43) (1)
$2,718,362 $617,608 $21,203
The financial statements of equity-method investees had been examined by independent auditors.
Under the revised SFAS No. 7, "Consolidated Financial Statements," which took effect on January 1, 2005, the Company
included the accounts of all its direct and indirect subsidiaries in the consolidated financial statements as of and for the years
ended December 31, 2011 and 2012. All intercompany balances and transactions have been eliminated.
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