Letter To Shareholders - Mitac

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6. ASSETS PLEDGED AS COLLATERAL December 31, ASSETS 2009 2008 Subject of collateral Building $ 510,280 $ 507,316 Short-term debts Long-term investments accounted for under the equity method: Marketable securities 977,749 - Medium-term loans from banks Marketable securities - 927,016 Bonds payable Other financial assets: Time deposits 3,283 - Guarantee deposit for land leasing in Science Park Time deposits 1,404 - Guarantee deposit for dorm leasing in Science Park Time deposits 9,500 9,500 Guarantee for application for letters of credit Time deposits - 24,150 <strong>Letter</strong> for guarantee of sponoring Expo 2010 Saving account 20,755 - Trading agreement of forward foreign exchange for hedging Time deposits - 24,039 Development of Treasure Mountain, <strong>Letter</strong> for guarantee of customs duties, and royalty contract $ 1,522,971 $ 1,492,021 7. COMMITMENTS AND CONTINGENT LIABILITIES 1) The Company has credit lines for guarantee of customs duties in 2009 and 2008. As of December 31, 2009 and 2008, the amount of customs duties guaranteed by the bank was $3,200 and $3,400, respectively. 2) The Company leased certain land (from 2008 to 2026), factories and offices (up to December 2026 and March 2011) under operating leases. Annual rental payments are approximately $84,175. 3) Mio International Limited, the Company’s subsidiary, entered into a software technology transfer agreement with Nav N Go Kft (NNG). Because the two parties were involved in a dispute about contract termination, NNG 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 concerned parties had reached an agreement and NNG received the settlement money prescribed by the agreement. As a result, the case was subsequently closed and there is no possibility that the Company will incur any loss caused by the case. 8. SIGNIFICANT DISASTER LOSS None. 9. SIGNIFICANT SUBSEQUENT EVENTS None. ~136~
10. OTHER INFORMATION 1) The fair values of the financial instruments. Financial Assets Book value December 31, 2009 December 31, 2008 Quotations in an active market Fair value Evaluation model Book value Quotations in an active market Fair value Evaluation model Financial assets with fair value equal to book value $ 19,249,959 $ - $ 19,249,959 $ 18,555,790 $ - $ 18,555,790 Available-for-sale financial assets 1,858,385 1,858,385 - 1,283,106 1,283,106 - Financial assets carried at cost 1,456,963 - - 1,435,961 - - $ 22,565,307 $ 1,858,385 $ 19,249,959 $ 21,274,857 $ 1,283,106 $ 18,555,790 Forward foreign exchange $ 26,293 $ - $ 26,293 $ 11,977 $ - $ 11,977 Interest rate Swap $ - $ - $ - $ 1,045 $ - $ 1,045 December 31, 2009 December 31, 2008 Fair value Fair value Quotations in an active market Evaluation model Quotations in an active market Evaluation model Book value Book value Financial Liabilities Financial liabilities with fair value equal to book value $ 19,883,843 $ - $ 19,883,843 $ 18,914,020 $ - $ 18,914,020 Bonds payable 240,500 237,734 - 1,740,500 1,712,369 - Long term loans 1,500,000 - 1,500,000 - - - $ 21,624,343 $ 237,734 $ 21,383,843 $ 20,654,520 $ 1,712,369 $ 18,914,020 Purchase of forward foreign exchange $ 6,068 $ - $ 6,068 $ 88,995 $ - $ 88,995 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, Long term notes and accounts receivables, Short-term loans, Notes payable, Accounts payable, Income tax payable, Accrued expenses, Other payables, Provision for product warranty, Other current liabilities and Deposit in. The book value of long-term loans is used as fair value as the loans bear floating interest rates. B. Available-for-sale financial instruments are based on the market value of securities. C. Fair value of bonds payable is estimated using the market value. D. The book value of long-term loans is used as fair value as the loans bear floating interest rates. E. Derivative financial instruments: The estimated fair values are the expected cash flow (using rates quoted by financial institutions) if the contracts are terminated at the balance sheet date, including unrealized gains or losses. The quotes from financial institutions are available for most of the Company’s derivate financial instruments. ~137~
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009 ANNUAL REPORT StockNo:2315 2009
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Contents 1. 7. Assessment Letter To
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competitiveness Letter in the marke
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2007 2009 2008 2005 2006 2007 Compa
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2007 2009 2008 2005 2006 2007 Compa
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3.1.2 Responsibilities of major dep
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Names Chairman Mathew Miau Director
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Titles Names Dates took position Sh
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Titles Vice president Vice presiden
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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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3.3.2 Supervisors’ participation
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Items Status Differentiation with o
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3.3.4 Social contribution to enviro
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3.3.6 Important resolutions reached
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3.4. CPA’s dues Range of Audit Re
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3.7 Relationships between the top t
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3.8 Aggregate shareholding percenta
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2. Preferred stock: None 4.1.4 Majo
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latest financial year after taking
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MiTAC International Corp. Regulatio
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converting price is to be adjusted
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total issuance value, the Company m
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4.3 Employees’ stock options 4.3.
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April 30, 2010 Type of employees’
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April 30, 2010 Units:NT$ Thousand/
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April 30, 2010 Units:NT$ Thousand/S
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‧Personal computers with wire or
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(6) Since many worldly famous compa
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communication technologies mature i
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manufactured for the mainstream mar
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state-of-the-art hardware with navi
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devices, establishes connection wit
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downstream technologies to develop
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2009, and 1.3 million units sold in
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customer satisfaction for a greater
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5.2.2 Important applications and pr
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Volume/value Year 2008 2009 Major p
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5.4.2 MiTAC’s environmental healt
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consumption. To comply with the REA
Page 89 and 90: and the integration of all our comp
Page 91 and 92: 6. Financial Statement 6.1. Most re
Page 93 and 94: 6.2. Financial analysis in most rec
Page 95 and 96: 6.3. Supervisors’ Report of the m
Page 97 and 98: MITAC INTERNATIONAL CORP. AND SUBSI
Page 103 and 104: 2.Research, development, manufactur
Page 105 and 106: 4) Classification of current and no
Page 107 and 108: 11) Allowance for doubtful accounts
Page 109 and 110: 18) Convertible bonds For convertib
Page 111 and 112: C. When a company’s treasury stoc
Page 113 and 114: B. The Company's investee, G. Marso
Page 115 and 116: D. Lian Jie Investment Co., Ltd. ma
Page 117 and 118: than the sum of carrying value of i
Page 119 and 120: 14) Long-term loans December 31, Ba
Page 121 and 122: 17) Capital reserve The R.O.C. Secu
Page 123 and 124: 19) Share-based payment ─ employe
Page 125 and 126: (b) As of December 31, 2009, the su
Page 127 and 128: G. (a) A summary of the movements u
Page 129 and 130: (c) The Company assumed the employe
Page 131 and 132: exceed the sum of retained earnings
Page 133 and 134: C. Components of deferred income ta
Page 135 and 136: 21) Earnings per share Income befor
Page 137 and 138: treasury stock. 23) Personnel, depr
Page 139: E. Accounts payable As of December
Page 143 and 144: (c) Short-term financial instrument
Page 145 and 146: 11.SUPPLEMENTARY DISCLOSURES A. Inf
Page 147 and 148: Note 2: 47,500,000 shares were pled
Page 149 and 150: (8) Receivables from related partie
Page 151 and 152: B. Information of Subsidiaries: (1)
Page 153 and 154: Note 3: Equal to 50% of the net wor
Page 155 and 156: (5) Marketable securities for which
Page 157 and 158: (10) Information on derivative tran
Page 159 and 160: ) Major transactions with the subsi
Page 161 and 162: D) The relation of business and imp
Page 163 and 164: 12. SEGMENT INFORMATION 1) Operatio
Page 165 and 166: 7 Assessment of financial condition
Page 167 and 168: 7.3 Cash flow analysis Unit: NT$ Th
Page 169 and 170: 7.5.2 Influences of the interest ra
Page 171 and 172: (4) Enterprise and channel servers/
Page 173 and 174: 8.1. Information of affiliates 8.1.
Page 175 and 176: 2. Affiliated companies - basic dat
Page 177 and 178: Company Name Date established Addre
Page 179 and 180: MiTAC (U.K.) Ltd. Sales of MiTAC’
Page 181 and 182: Company name Title Name or Rep. Sha
Page 183: 8.2. MiTAC’s stocks held or dispo
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Letter To Shareholders - Mitac

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