Contents - MiTAC

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17) Treasury stock A. Treasury stock is stated at cost using the weighted average method and is reported as a deduction under stockholders’ equity. B. When treasury stock is disposed of, the related gain is credited to “capital reserve-treasury stock transaction” and any loss is offset against this capital reserve account. However, when the balance of this capital reserve account is insufficient to offset the loss, then the remaining amount should be charged against retained earnings. C. When treasury stock is retired, the treasury stock account is credited and all capital account balance related to the treasury shares, including capital reserve from paid-in capital in excess of par are debited on a proportionate basis. When the book value of treasury stock is higher than capital account balance, including additional paid-in capital in excess of par, the difference is debited to offset against this capital reserve from treasury stock. However, when the balance of this capital reserve account is insufficient to offset the difference, then the remaining amount should be charged against retained earnings. When the book value of treasury stock is less than the capital account balance, including additional paid-in capital in excess of par, the difference is credited to capital reserve from treasury stock. D. Effective January 1, 2003, the Company’s stock traded by subsidiaries was accounted for as treasury stock when preparing financial statements, and the disclosure of pro forma information for treating the treasury stocks described above as an investment is also enclosed in the income statement. 18) Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and reported amounts of revenues and expenses during the reported period. Actual results could differ from those estimates. 3. EFFECT OF CHANGE IN ACCOUNTING PRINCIPLES 1) Prior to January 1, 2001, the Company’s stocks traded by subsidiaries was recorded as investments. Effective January 1, 2002, pursuant to the regulations of R.O.C. Securities and Futures Commission (“SFC”) and Financial Accounting Standard (“SFAS”) No. 30, “Accounting Standard for Treasury Stock,” the Company’s stock traded by subsidiaries should be recorded as treasury stock, and no gain or loss can be recognized in profit and loss accounts. As a result of this change of accounting principle, long-term investment decreased $328,241, treasury stock increased $246,094, capital reserve-treasury stock transaction increased $1,019 as of December 31, 2002 and net income decreased $82,966 for the year ended December 31, 2002. 2) Effective January 2002, the Company adopted revised R.O.C. SFAS No.24, “Earnings per share” under which the calculation of diluted earnings per share is changed. The change in accounting principle did not have any impact on the assets and liabilities as of December 31, 2002 or on the profit and loss for the year ended December 31, 2002. - 55 -
3) Mitac Precision Technology Co., Ltd. (MPT) and its subsidiaries, as well as Tsu Fung Corp., which is one of MPT’s shareholders, had been included in the consolidated financial statements in 2002. In 2003, the ownership in MPT declined to below 50%, and MPT was accordingly excluded from the consolidated financial statements in 2003. Additionally, the 2002 consolidation financial statements of SSDL were restated for the changes in consolidated entities. Because of the changes in consolidated entities described above, the Company has restated its 2002 consolidation financial statements. As a result of the restatement, total assets and operating revenue as of and for the year ended December 31, 2002 decreased by $19,877,451 and $123,968,617, respectively, and the decreased amount were 56% and 348%, of the restated consolidated total assets and operating revenue respectively. 4. CONTENTS OF SIGNIFICANT ACCOUNTS 1) CASH AND CASH EQUIVALENTS - 56 - December 31, 2003 2002 Cash: Petty cash $ 2,272 $ 4,030 Checking and savings accounts 1,516,671 702,373 Time deposits 229,400 30,769 1,748,343 737,172 Cash equivalents: Repurchase bonds - 54,000 $ 1,748,343 $ 791,172 2) MARKETABLE SECURITIES December 31, 2003 2002 Mutual funds $ 1,749,607 $ 179,350 Listed equity securities - stock - 4,168 $ 1,749,607 $ 183,518 3) ACCOUNTS RECEIVABLE - NET December 31, 2003 2002 Third parties $ 5,517,638 $ 5,579,566 Less: Allowance for doubtful accounts ( 38,041 ) ( 22,026 ) 5,479,597 5,557,540 Related parties 3,669,333 1,777,539 $ 9,148,930 $ 7,335,079 4) INVENTORIES - NET December 31, 2003 2002 Materials $ 5,816,781 $ 4,967,113 Work in process 221,027 668,653 Finished goods 1,900,703 1,612,582 Inventories in transit 1,815 92,746 7,940,326 7,341,094 Less: Inventory reserve ( 510,690 ) ( 432,268 ) $ 7,429,636 $ 6,908,826
Page 1 and 2:
Contents A.Report To Shareholders..
Page 3 and 4:
Innovations in product R&D and work
Page 5 and 6: 4.Integrate Group resources, contin
Page 7 and 8: 1990 - In response to rapid busines
Page 9 and 10: MiTAC International's US subsidiary
Page 11 and 12: 2.1.2 Responsibilities of Major Dep
Page 13 and 14: Major Institutional Shareholders Ap
Page 15 and 16: Title Name Date Took Office Shares
Page 17 and 18: 3. Capital and Shares, Corporate Bo
Page 19 and 20: 3.5 Market Price, Net Value, Earnin
Page 21 and 22: 3.8 Treasury Stock Aapril 1, 2004 S
Page 23 and 24: 3.10 Employee Stock Options 3.10.1
Page 25 and 26: 1.1.3 New Products and Technologies
Page 27 and 28: this platform are being aggressivel
Page 29 and 30: 1.3.2 Technologies and Products Suc
Page 31 and 32: 1.4.3. Wireless communications prod
Page 33 and 34: (3) Wireless Communications Product
Page 35 and 36: C.Expand development of high value-
Page 37 and 38: 2.3 Supply of Key Components Compon
Page 39 and 40: As a professional computer assembly
Page 41 and 42: 8. Acquisition or Disposition of As
Page 43 and 44: 1.2 Concise Profit/Loss Statment Un
Page 45 and 46: 2.1 Financial Structure (1) Debt ra
Page 47 and 48: MITAC INTERNATIONAL CORP. AND SUBSI
Page 53 and 54: combined total assets or operating
Page 55: 11) Deferred charges A. Telephone i
Page 59 and 60: D. Tsu Fung Investment Corp. was no
Page 61 and 62: 11) OTHER LIABILITIES December 31,
Page 63 and 64: B. Undistributed earnings (a) In ac
Page 65 and 66: C. Components of deferred income ta
Page 67 and 68: 19) PERSONNEL EXPENSES, DEPRECIATIO
Page 69 and 70: E. Accounts payable December 31, 20
Page 71 and 72: 11. SPECIAL DISCLOSURE ITEMS A. Inf
Page 73 and 74: Investor Types Name of marketable s
Page 75 and 76: The company buying /selling product
Page 77 and 78: Item Sales of forward foreign excha
Page 79 and 80: Investor Investee Company 〃 Proco
Page 81 and 82: (4) The detail of marketable securi
Page 83 and 84: (8) Purchases or sales transactions
Page 85 and 86: C. Relevant Information Regarding I
Page 87 and 88: The prices that the Company and thi
Page 89 and 90: In order to reconcile the amounts o
Page 91 and 92: 2. Analysis of Business Results Yea
Page 93 and 94: 6. Risk Management 6.1 Influence of
Page 95 and 96: 6.5.2 Server Product Series: Due to
Page 97 and 98: Item Status 3. Designation of super
Page 99 and 100: 1. Information on Affiliates 1.1 Co
Page 101 and 102: 1.1.2 Affiliated Companies—Basic
Page 103 and 104: 1.1.3 Business and Inter-Relationsh
Page 105 and 106: 1.1.4 Directors, Supervisors, Gener
Page 107 and 108:
Company Name Title Name or Represen
Page 109:
1.1.5 Operations Overview of Afflia
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