2008 Annual Report - MiTAC International

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6. ASSETS PLEDGED AS COLLATERAL December 31, ASSETS 2008 2007 Subject of collateral Building $ - $ 560,922 Short-term debts and provisional seizure Building Long-term investments accounted for under the equity method: 507,316 - Short-term debts Marketable securities Treasury stocks: 927,106 925,792 Bonds payable Marketable securities - 66,344 Commercial paper payable Time deposits Other financial assets: 24,039 565,168 Development of Treasure Mountain, Letter for guarantee of customs duties, and royalty contract Time deposits 9,500 5,500 Guarantee for application for letters of credit Saving account 24,150 - Letter for guarantee of sponoring Expo 2010 $ 1,492,111 $ 2,123,726 7. COMMITMENTS AND CONTINGENT LIABILITIES 1) The Group had outstanding letters of credit for inventory purchases of approximately $0 and $68,451 at December 31, 2008 and 2007, respectively. 2) The Company has credit lines for guarantee of customs duties in 2008 and 2007. As of December 31, 2008 and 2007, the amount of customs duties guaranteed by the bank was $3,400 and $4,000, respectively. 3) The Company leased certain land (from 2008 to 2026), factories and offices (up to December 2026 and December 2009) under operating leases. Annual rental payments are approximately $45,879. 4) Mio International Limited, the Company’s subsidiary, entered into a software technology transfer agreement with Nav N Go Kft. Because the two parties were involved in a dispute about contract termination, Nav N Go Kft filed a separate lawsuit against the Company’s three subsidiaries, Mio International Limited, Mio Technology Benelux NV and Mio Technology USA Limited, alleging their violation of contract and infringement of its copyright. The three lawsuits are under the jurisdiction of the courts in the United States of America, Belgium and Hungary, respectively. 8. SIGNIFICANT DISASTER LOSS None. 9.SIGNIFICANT SUBSEQUENT EVENTS 1) On January 12, 2009, the Company and its overseas subsidiary-Silver Star Developments Ltd. (SSDL) and SSDL’s subsidiary signed an agreement to jointly purchase the assets of the Consumer Global Navigation Satellite Systems Division owned by Magellan Navigation, Inc. and its subsidiary, including navigation software, patent, trademark, technology transfer, intellectual property rights, management team, clients, sales channels, etc.. According to the purchase agreement, the total purchase price is up to US$96,000 and 128
the price is subject to adjustment based on the net asset value of that division on the acquisition date. As of April 6, 2009, the Company, SSDL and SSDL’s subsidiary had paid US$35,352 in advance for this purchase. Regarding the net asset value, discussions are still ongoing. 2) The Company decided to participate in the private placement of Loyalty Founder Enterprise Co., Ltd. and subscribe for 60,000,000 shares issued through the private placement in the amount of $150,000, with a subscription price of NT$2.5 (in dollars) per share. Therefore, the Company will hold 25.24% equity interest in Loyalty Founder Enterprise Co., Ltd. after this subscription. As of April 6, 2009, the Company had paid $80,000 for the share subscription. 10. OTHER INFORMATION 1) The fair values of the financial instruments. Financial Assets Financial assets with fair value equal to book value Financial assets at fair value through profit or loss Available-for-sale financial assets Financial assets carried at cost Forward foreign exchange Book value $ 18,595,829 - 1,283,106 1,435,961 December 31, 2008 December 31, 2007 Quotations in an active market $ - Fair value Fair value - 1,283,106 - 129 Evaluation model $ 18,595,829 - - 1,435,961 Book value $ 30,429,944 6,618 2,050,355 1,709,031 Quotations in an active market $ - 6,618 2,050,355 - Evaluation model $ 30,429,944 - - 1,709,031 $ 21,314,896 $ 1,283,106 $ 20,031,790 $ 34,195,948 $ 2,056,973 $ 32,138,975 $ 11,977 $ - $ 11,977 Interest rate Swap $ 1,045 $ - $ 1,045 Financial Liabilities Financial liabilities with fair value equal to book value Book value $ 18,914,020 $ 2,683 $ - December 31, 2008 December 31, 2007 Quotations in an active market $ - Fair value Fair value Evaluation model $ 18,914,020 Book value $ 27,045,335 Quotations in an active market $ - $ 2,683 Evaluation model $ 27,045,335 Bonds payable 1,740,500 1,712,369 - 5,000,000 5,056,816 - Purchase of forward foreign exchange $ 20,654,520 $ 1,712,369 $ 18,914,020 $ 32,045,335 $ 5,056,816 $ 27,045,335 $ 88,995 $ - $ 88,995 $ 19,601 $ - $ 19,601 Currency Swap $ 2,210 $ - $ 2,210 Interest rate Swap $ 10,983 $ - $ 10,983 The methods and assumptions used to measure the fair value of financial instruments are as follows: A. For short-term instruments, the fair values were determined based on their carrying values because of the short maturities of the instruments. This method was applied to Cash and cash equivalents, Notes receivable, Accounts receivable. Other receivables, Other financial assets, Refundable deposits, Short-term loans, Commercial paper payable, Notes payable, Accounts payable, Income tax payable, Accrued expenses, Other
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2008 Annual Report MiTAC Internatio
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Content I. To Shareholders ........
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Dear Shareholders: I. To Shareholde
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three brands: Mio, Navman and Magel
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ased subsidiary of MiTAC, and reali
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III. Business Operation Report 1. O
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2. Information on Directors, Superv
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3) General Manager, Vice GM, Assist
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Titles Names Dates took position Sh
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Below 2,000,000 Remuneration Rankin
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Titles Names MiTAC Salaries (A) In
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Managers Receiving Employee Bonuses
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c. Supervisors’ participation of
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Items Status Differentiation with o
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5) Charity: A. System: Actively spo
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i. The status that the company and
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Meeting Date Motions Resolutions 20
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QTY 1. Capital and stocks 1) The ca
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6) Dividend policy and its implemen
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2. Debenture issuance Types of debe
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MiTAC International Corp. Regulatio
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the merger cut-off date. If it is a
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efore the due date, if the outstand
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5. Employees’ stock options (1) E
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Type of employees’ stock options
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5 th Employees’ Stock Options (2
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Note 1: After deduction of given-up
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B. Enterprise products High-perform
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lightweight, inexpensive, low power
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terminals, and digital content and
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Table 2: Worldwide servers customer
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a camera, Wi-Fi, Bluetooth and GPS
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2. Market and sales overview (1) Ma
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added products, like all-in-one int
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MiTAC is devoted to developing PND,
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C. Supply of key components Names O
Page 77 and 78: 3. Workforce (1) Staff’s informat
Page 79 and 80: (a) Quality control system: Succeed
Page 81 and 82: company’s mission, to announce op
Page 83 and 84: VI. Financial Statement 1. Most rec
Page 85 and 86: 2. Financial analysis in most recen
Page 87 and 88: 3. Supervisors’ Report of the mos
Page 89 and 90: MITAC INTERNATIONAL CORP. AND SUBSI
Page 91 and 92: 2007 Common Stock MITAC INTERNATION
Page 93 and 94: Cash flows from operating activitie
Page 95 and 96: MITAC INTERNATIONAL CORP. AND SUBSI
Page 97 and 98: 2. SUMMARY OF SIGNIFICANT ACCOUNTIN
Page 99 and 100: and closed-end mutual funds are bas
Page 101 and 102: 17) Impairment of non-financial ass
Page 103 and 104: 25) Treasury stock A. Treasury stoc
Page 105 and 106: The above investments were measured
Page 107 and 108: B. Goodwill impairment test was con
Page 109 and 110: B. On August 12, 2006, the Company
Page 111 and 112: 17) Capital reserve The R.O.C. Comp
Page 113 and 114: Type of arrangement second stock op
Page 115 and 116: (b) As of December 31, 2008, the su
Page 117 and 118: G. The following sets forth the pro
Page 119 and 120: Type of arrangement Grant date Four
Page 121 and 122: C. Components of deferred income ta
Page 123 and 124: 22) Earnings per share For the year
Page 125 and 126: Cost of sales 125 For the year end
Page 127: E. Accounts payable F. Other payabl
Page 131 and 132: expects to have no significant mark
Page 133 and 134: 11. SUPPLEMENTARY DISCLOSURES A. In
Page 135 and 136: Note 2: The investor provided 47,50
Page 137 and 138: Note 1: Future cash flow: the Compa
Page 139 and 140: Investor Tsu Fung Investment Corp.
Page 141 and 142: (3) Endorsements and guarantees pro
Page 143 and 144: Security held by Type Name of marke
Page 145 and 146: Note 1 The collection period is 15
Page 147 and 148: Ending balance of investment from T
Page 149 and 150: 3) Property transactions: In 2008 a
Page 151 and 152: Company Name Name of the counterpar
Page 153 and 154: Company Name Silver Star Developmen
Page 155 and 156: 3) Export sales 155 2008 2007 Nort
Page 157 and 158: 2. Analysis of business results Ite
Page 159 and 160: (1) Major reasons for profits or lo
Page 161 and 162: was NT$ 974,892 thousand and 597,07
Page 163 and 164: (9) Expected values, possible risks
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Page 167 and 168: Company Name Date established Addre
Page 169 and 170: 4) Business operation of and relati
Page 171 and 172: Company name Title Name or Rep. 17
Page 173 and 174: 6) Operations overview of affiliate
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2008 Annual Report - MiTAC International

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