Consolidated - CHUNGHWA PICTURE TUBES, LTD.

12. Others
(1) L.G. Philips LCD. Co., Ltd. (LGP) filed suit for patent infringement against the Company. The suit alleges
that certain TFT-LCD products currently utilized by the Company infringe patents registered by LGP in
Taiwan and U.S. As of the date of this report, due to the nature of the litigation, the Company cannot
predict the ultimate outcome of the lawsuit. The Company believes that the suit will not have a significant
impact on the Company’s operations.
(2) In 2004, the Company entered into accounts receivable factoring agreements in the amount of USD26,646
thousand, without recourse, with China Trust Commercial bank. Under the agreement, the Company bear the
risk arising from business dispute in connection with the receivable factored. As of December 31, 2004,
USD22,649 thousand has been paid to the Company and the remaining USD3,997 thousand has been
reserved for future business dispute. Accordingly, the Company derecognized USD22,649 thousand and
reclassified USD3,997 thousand to other receivable. The Company also issued a promissory note in the
amount of $5,000,000 to the bank as the security of future business dispute. Related information with respect
to the promissory note is as follows:
The range of interest
Bank Credit line Prepaid proceeds rate of prepayment
Chinatrust Commercial Bank $5,000,000 $722,902 2M Libor+40bps
(3) In September 2004, the liquidation of CPTUK was completed. The Company recognized a disposal gain of
$277,772, which was classified as non-operating income.
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