richtek technology corporation/media/richtek/about richtek...available -for-sale financial assets...
TRANSCRIPT
Richtek Technology Corporation Financial Statements for the Years Ended December 31, 2012 and 2011 and Independent Auditors’ Report
- 2 -
RICHTEK TECHNOLOGY CORPORATION
BALANCE SHEETS
DECEMBER 31, 2012 AND 2011
(In Thousands of New Taiwan Dollars, Except Par Value)
2012 2011 2012 2011
ASSETS Amount % Amount % LIABILITIES AND SHAREHOLDERS’ EQUITY Amount % Amount %
CURRENT ASSETS CURRENT LIABILITIES
Cash (Note 4) $ 2,372,787 28 $ 1,776,110 23 Notes and accounts payable $ 879,150 10 $ 836,103 11
Notes and accounts receivable, net (Notes 2, 3, 7 and 21) 1,915,466 23 1,826,676 24 Income tax payable (Notes 2 and 17) 218,559 3 204,068 3
Other financial assets (Note 21) 2,058 - 3,251 - Accrued payroll and bonus 203,997 2 166,159 2
Inventories (Notes 2 and 8) 1,157,069 14 1,189,340 16 Financial liabilities at fair-value through profit or loss
Deferred income tax assets - current (Notes 2 and 17) 141,321 2 58,848 1 (Notes 2 and 5) 382 - 48 -
Prepaid expenses and other current assets (Note 21) 146,695 2 101,662 1 Bonuses payable to employees, directors and supervisors
Available-for-sale financial assets (Notes 2 and 6) 277,643 3 423,129 6 (Notes 2, 15 and 21) 394,935 5 354,701 4
Accrued expenses and other current liabilities (Notes 13
Total current assets 6,013,039 72 5,379,016 71 and 21) 227,723 3 206,724 3
LONG-TERM INVESTMENTS (Notes 2, 9 and 10) Total current liabilities 1,924,746 23 1,767,803 23
Investments accounted for by the equity method 753,235 9 716,110 10
Financial assets carried at cost - - 8,185 - LONG-TERM LIABILITIES
Other long-term payable 2,480 - 2,480 -
Total long-term investments 753,235 9 724,295 10
OTHER LIABILITIES
PROPERTY, PLANT AND EQUIPMENT (Notes 2 and 11) Guarantee deposits 23,576 - 23,966 1
Cost Deferred credits - intercompany gains (Note 2) 96 - 39 -
Land 326,428 4 326,428 4
Buildings 327,209 4 327,061 4 Total other liabilities 23,672 - 24,005 1
Machinery and equipment 510,539 6 238,503 3
Research and development 104,896 1 103,937 2 Total liabilities 1,950,898 23 1,794,288 24
Office equipment 78,747 1 74,425 1
Leasehold improvements 14,829 - 14,829 - SHAREHOLDERS' EQUITY (Notes 2, 15 and 16)
Other equipment 6,598 - 38,322 1 Capital stock
1,369,246 16 1,123,505 15 Capital stock - NT$10.00 par value
Accumulated depreciation (296,755) (4) (241,393) (3) Authorized: 200,000 thousand shares
Prepayments for business facilities and constructions 138,319 2 59,636 - Issued and outstanding: 149,517 thousand shares 1,495,173 18 1,495,173 20
Capital surplus
Net property, plant and equipment 1,210,810 14 941,748 12 Additional paid-in capital in excess of par value 388,610 5 388,610 5
Long-term investment 27,792 - 25,747 -
OTHER ASSETS Total capital surplus 416,402 5 414,357 5
Refundable deposits 19,691 - 20,444 - Retained earnings
Deferred charges, net (Notes 2 and 12) 335,947 4 375,003 5 Legal reserve 1,137,729 13 984,655 13
Deferred income tax assets - noncurrent (Notes 2 and 17) 1,270 - 90,754 1 Special reserve 69,839 1 34,534 -
Pledged bank deposits (Note 22) 18,218 - 21,318 - Unappropriated earnings 3,673,596 44 3,197,167 42
Other assets (Notes 2 and 14) 54,671 1 44,227 1 Total retained earnings 4,881,164 58 4,216,356 55
Other equity
Total other assets 429,797 5 551,746 7 Cumulative translation adjustments (34,015) - (21,659) -
Unrealized valuation loss on financial assets (49,212) (1) (48,181) (1)
Treasury stock (at cost) - 1,000 thousand shares (253,529) (3) (253,529) (3)
Total other equity (336,756) (4) (323,369) (4)
Total shareholders' equity 6,455,983 77 5,802,517 76
TOTAL $ 8,406,881 100 $ 7,596,805 100 TOTAL $ 8,406,881 100 $ 7,596,805 100
The accompanying notes are an integral part of the financial statements.
- 3 -
RICHTEK TECHNOLOGY CORPORATION
STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31, 2012 AND 2011
(In Thousands of New Taiwan Dollars, Except Earnings Per Share)
2012 2011
Amount % Amount %
GROSS SALES (Notes 2 and 21) $ 11,037,817 $ 10,735,496
SALES RETURNS AND ALLOWANCES (Notes 2
and 7) 29,737 76,632
NET SALES 11,008,080 100 10,658,864 100
COST OF SALES (Notes 8, 18 and 21) 6,652,130 60 6,637,163 62
GROSS PROFIT BEFORE REALIZED
INTERCOMPANY GAIN 4,355,950 40 4,021,701 38
REALIZED INTERCOMPANY GAIN (Note 2) 3 - 3 -
GROSS PROFIT 4,355,947 40 4,021,698 38
OPERATING EXPENSES (Notes 18 and 21)
Marketing 440,062 4 415,586 4
General and administrative 394,831 4 410,496 4
Research and development 1,430,368 13 1,261,183 12
Total operating expenses 2,265,261 21 2,087,265 20
OPERATING INCOME 2,090,686 19 1,934,433 18
NONOPERATING INCOME AND GAINS
Interest income (Note 20) 17,171 - 11,807 -
Gains on disposal of financial assets, net (Note 2) 3,881 - 3,382 -
Foreign exchange gain, net (Note 2) - - 26,658 1
Rental income (Note 21) 6,032 - 3,723 -
Valuation gain on financial instruments, net (Notes 2
and 5) 4,626 - - -
Others (Note 21) 11,275 - 4,932 -
Total nonoperating income and gains 42,985 - 50,502 1
NONOPERATING EXPENSES AND LOSSES
Interest expenses (Note 20) 51 - 4 -
Investment loss recognized under equity method
(Notes 2 and 9) 191,271 2 185,107 2
Loss on disposal of property, plant and equipment
(Note 2) 115 - 245 -
(Continued)
- 4 -
RICHTEK TECHNOLOGY CORPORATION
STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31, 2012 AND 2011
(In Thousands of New Taiwan Dollars, Except Earnings Per Share)
2012 2011
Amount % Amount %
Impairment loss on financial assets (Notes 2 and 10) $ 8,185 - $ 4,000 -
Valuation loss on financial instruments, net (Notes 2
and 5) - - 2,087 -
Foreign exchange loss, net (Note 2) 10,572 - - -
Others 20,007 - 3,134 -
Total nonoperating expenses and losses 230,201 2 194,577 2
INCOME BEFORE INCOME TAX 1,903,470 17 1,790,358 17
INCOME TAX (Notes 2 and 17) (199,041) (2) (259,613) (3)
NET INCOME $ 1,704,429 15 $ 1,530,745 14
2012 2011
Before
Income
Tax
After
Income
Tax
Before
Income
Tax
After
Income
Tax
EARNINGS PER SHARE (NEW TAIWAN
DOLLARS; Note 19)
Basic $ 12.82 $ 11.48 $ 12.05 $ 10.31
Diluted $ 12.54 $ 11.23 $ 11.74 $ 10.04
The accompanying notes are an integral part of the financial statements. (Concluded)
- 5 -
RICHTEK TECHNOLOGY CORPORATION
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 2012 AND 2011
(In Thousands of New Taiwan Dollars)
Capital Surplus (Note 15) Other (Notes 2, 15 and 16)
Common Stock Additional Unrealized
Issued and Outstanding Paid-in Capital Retained Earnings (Note 15) Cumulative Valuation Gain Total
Shares in Excess of Long-term Unappropriated Translation (Loss) on Shareholders'
(In Thousands) Amount Par Value Investments Legal Reserve Special Reserve Earnings Total Adjustments Financial Assets Treasury Stock Equity
BALANCE, JANUARY 1, 2011 149,517 $ 1,495,173 $ 388,610 $ 25,747 $ 766,386 $ 9,794 $ 3,394,604 $ 4,170,784 $ (35,242) $ 708 $ (253,529) $ 5,792,251
Appropriation of prior year's earnings
Legal reserve - - - - 218,269 - (218,269) - - - - -
Special reserve - - - - - 24,740 (24,740) - - - - -
Cash dividends - NT$10 - - - - - - (1,485,173) (1,485,173) - - - (1,485,173)
Translation adjustment on investments accounted for by the equity
method - - - - - - - - 13,583 - - 13,583
Equity in the valuation losses on available-for-sale financial assets
held by equity-method investees - - - - - - - - - (48,889) - (48,889)
Net income in 2011 - - - - - - 1,530,745 1,530,745 - - - 1,530,745
BALANCE, DECEMBER 31, 2011 149,517 1,495,173 388,610 25,747 984,655 34,534 3,197,167 4,216,356 (21,659) (48,181) (253,529) 5,802,517
Appropriation of prior year's earnings
Legal reserve - - - - 153,074 - (153,074) - - - - -
Special reserve - - - - - 35,305 (35,305) - - - - -
Cash dividends - NT$7 - - - - - - (1,039,621) (1,039,621) - - - (1,039,621)
Translation adjustment on investments accounted for by the equity
method - - - - - - - - (12,356) - - (12,356)
Adjustment arising from changes in percentage of ownership in
investees - - - 2,045 - - - - - - - 2,045
Change in unrealized gains on available-for-sale financial assets - - - - - - - - - 6 - 6
Equity in the valuation gains on available-for-sale financial assets
held by equity-method investees - - - - - - - - - (1,037) - (1,037)
Net income in 2012 - - - - - - 1,704,429 1,704,429 - - - 1,704,429
BALANCE, DECEMBER 31, 2012 149,517 $ 1,495,173 $ 388,610 $ 27,792 $ 1,137,729 $ 69,839 $ 3,673,596 $ 4,881,164 $ (34,015) $ (49,212) $ (253,529) $ 6,455,983
The accompanying notes are an integral part of the financial statements.
- 6 -
RICHTEK TECHNOLOGY CORPORATION
STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2012 AND 2011
(In Thousands of New Taiwan Dollars)
2012 2011
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 1,704,429 $ 1,530,745
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation 112,335 105,266
Amortization 231,786 210,520
Gains on disposal of financial assets, net (3,881) (3,382)
Investment loss recognized under the equity method, net 191,271 185,107
Impairment loss on financial assets 8,185 4,000
Loss on disposal of property, plant and equipment, net 115 245
Deferred credits - intercompany gains 57 24
Deferred income tax assets 7,011 32,140
Prepaid pension cost (10,444) (8,951)
Net changes in operating assets and liabilities
Financial assets at fair value through profit or loss - 2,674
Notes and accounts receivable, net (88,790) 53,527
Other financial assets 1,193 (1,065)
Inventories 32,271 233,702
Prepaid expenses and other current assets (45,033) (1,762)
Financial liabilities at fair value through profit or loss 334 48
Notes and accounts payable 43,047 (245,643)
Income tax payable 14,491 (23,433)
Accrued payroll and bonus 37,838 23,804
Bonuses payable to employees, directors and supervisors 40,234 (148,217)
Accrued expenses and other current liabilities (3,014) (40,097)
Net cash provided by operating activities 2,273,435 1,909,252
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions of:
Available-for-sale financial assets (2,674,223) (3,189,948)
Investments accounted for by the equity method (239,744) (258,393)
Property, plant and equipment (357,499) (188,141)
Proceeds of the disposal of:
Available-for-sale financial assets 2,823,596 3,320,650
Property, plant and equipment - 49
Increase in deferred charges (192,730) (252,826)
Decrease in refundable deposits 753 336
Decrease (increase) in pledged bank deposits 3,100 (10,073)
Increase in other assets - (27,101)
Net cash used in investing activities (636,747) (605,447)
(Continued)
- 7 -
RICHTEK TECHNOLOGY CORPORATION
STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2012 AND 2011
(In Thousands of New Taiwan Dollars)
2012 2011
CASH FLOWS FROM FINANCING ACTIVITIES
(Decrease) increase in guarantee deposits $ (390) $ 408
Cash dividends (1,039,621) (1,485,173)
Net cash used in financing activities (1,040,011) (1,484,765)
NET INCREASE (DECREASE) IN CASH 596,677 (180,960)
CASH, BEGINNING OF YEAR 1,776,110 1,957,070
CASH, END OF YEAR $ 2,372,787 $ 1,776,110
SUPPLEMENTAL CASH FLOW INFORMATION
Income tax paid $ 197,318 $ 250,906
Interest paid $ 51 $ 4
INVESTING ACTIVITIES AFFECTING BOTH CASH AND
NONCASH ITEMS
Acquisition of property, plant, and equipment $ 381,512 $ 171,643
(Increase) decrease in payables for equipment purchased (under
"accrued expenses and other current liabilities") (24,013) 16,498
$ 357,499 $ 188,141
The accompanying notes are an integral part of the financial statements. (Concluded)
- 8 -
RICHTEK TECHNOLOGY CORPORATION
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2012 AND 2011
(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)
1. ORGANIZATION AND OPERATIONS
Richtek Technology Corporation (the “Corporation” or “Richtek”) was incorporated on September 18, 1998
and started operations on September 28, 1998. The Corporation’s shares have been listed on the Taiwan
Stock Exchange since October 21, 2003.
The Corporation designs, tests and sells integrated circuits (ICs) and information software.
As of December 31, 2012 and 2011, the Corporation had 728 and 677 employees, respectively.
2. SIGNIFICANT ACCOUNTING POLICIES
The financial statements have been prepared in conformity with the Guidelines Governing the Preparation
of Financial Reports by Securities Issuers, Business Accounting Law, Guidelines Governing Business
Accounting, and accounting principles generally accepted in the Republic of China (ROC).
For readers’ convenience, the accompanying financial statements have been translated into English from
the original Chinese version prepared and used in the ROC. If inconsistencies arise between the English
version and the Chinese version or if differences arise in the interpretations between the two versions, the
Chinese version of the financial statements shall prevail.
Significant accounting policies are summarized as follows:
Foreign Currencies
Nonderivative foreign-currency transactions are recorded in New Taiwan dollars at the rates of exchange in
effect when the transactions occur. Exchange differences arising from the settlement of foreign-currency
assets and liabilities are recognized in profit or loss.
At the balance sheet date, foreign-currency monetary assets and liabilities are revalued using prevailing
exchange rates; and the exchange differences are recognized in profit or loss.
If the functional currency of an equity-method investee is a foreign currency, translation adjustments will
result from the translation of the investee’s financial statements into the reporting currency of the
Corporation. These adjustments are accumulated and reported as a separate component of shareholders’
equity.
Accounting Estimates
Under the above guidelines, law and principles, certain estimates and assumptions have been used for the
allowance for sales returns and discounts; allowance for doubtful accounts; allowance for loss on
inventories; depreciation of properties; plant and equipment; income tax; pension cost; amortization of
deferred charges; bonuses to employees, directors and supervisors; etc. Actual results may differ from
these estimates.
- 9 -
Current and Noncurrent Assets and Liabilities
Current assets include cash and cash equivalents and those assets held primarily for trading purposes or to
be realized, sold or consumed within one year from the balance sheet date. All other assets such as
property, plant and equipment and intangible assets are classified as noncurrent. Current liabilities are
obligations incurred for trading purposes or to be settled within one year from the balance sheet date. All
other liabilities are classified as noncurrent.
Financial Assets/Liabilities at Fair Value through Profit or Loss
Derivatives that do not meet the criteria for hedge accounting are initially recognized at fair value, with
transaction costs expensed as incurred. The derivatives are remeasured at fair value on the balance sheet
date, with changes in fair value recognized in profit or loss. On derecognition of a financial asset or a
financial liability, the difference between its carrying amount and the sum of the consideration received and
receivable or consideration paid and payable is recognized in profit or loss. All regular way purchases or
sales of financial assets is recognized and derecognized on a trade date basis.
Fair value is estimated using valuation techniques incorporating estimates and assumptions that are
consistent with prevailing market conditions. When the fair value is positive, the derivative is recognized
as a financial asset; when the fair value is negative, the derivative is recognized as a financial liability.
Available-for-sale Financial Assets
Available-for-sale financial assets are initially measured at fair value plus transaction costs that are directly
attributable to the acquisition. At each balance sheet date subsequent to initial recognition,
available-for-sale financial assets are remeasured at fair value, with changes in fair value recognized in
equity until the financial assets are disposed of, at which time, the cumulative gain or loss previously
recognized in equity is included in profit or loss for the year. All regular way purchases or sales of
financial assets are recognized and derecognized on a trade date basis.
The fair value of open-end mutual funds is measured at their net asset value on the balance sheet date.
An impairment loss is recognized when there is objective evidence that the financial asset is impaired.
Any subsequent decrease in impairment loss for an equity instrument classified as available-for-sale is
recognized directly in equity.
Financial Assets Carried at Cost
Investments in equity instruments with no quoted prices in an active market and with no fair values that
cannot be reliably measured, are carried at their original cost. Cash dividends are recognized as
investment income upon the approval by an investee’s shareholders but are accounted for as a reduction to
the original cost of investment if these dividends are declared on the earnings of the investee attributable to
the period before the purchase of the investment. Stock dividends are recorded as an increase in the
number of shares held and do not affect investment income. The cost per share is recalculated on the basis
of new total number of shares. If there is objective evidence of financial asset impairment, an impairment
loss is recognized. A reversal of this impairment loss is not allowed.
Impairment of Accounts Receivable
Accounts receivable are assessed for impairment at the end of each reporting period and considered to be
impaired when there is objective evidence that, as a result of one or more events that occurred after the
initial recognition of the accounts receivable, the estimated future cash flows of the asset have been
affected. Objective evidence of impairment could include:
Significant financial difficulty of the debtor;
Accounts receivable becoming overdue; or
- 10 -
It becoming probable that the debtor will enter into bankruptcy or undergo financial reorganization.
Accounts receivable that are assessed as not impaired individually are further assessed for impairment on a
collective basis. Objective evidence of impairment for a portfolio of accounts receivable could include the
Corporation’s past experience of collecting payments and an increase in the number of delayed payments.
The Corporation’s collection period is generally short; thus, any impairment loss recognized is the
difference between the carrying amount of the accounts receivable and estimated future cash flows without
considering the discounting effect.
The carrying amount of the accounts receivable is reduced through the use of an allowance account.
When accounts receivable are considered uncollectible, they are written off against the allowance account.
Recoveries of amounts previously written off are credited to the allowance account. Changes in the
carrying amount of the allowance account are recognized as bad debt in profit or loss.
Allowance for Sales Returns and Discounts
An allowance is provided for any sales returns and discounts, which are estimated on the basis of historical
experience and any known factors that would affect the allowance. This allowance is deducted from sales
in the year the products are sold.
Inventories
Inventories consist of raw materials, work-in-process and finished goods. Inventories are stated at the
lower of cost or net realizable value. Inventory write-downs are made by item, except where it may be
appropriate to group similar or related items. Net realizable value is the estimated selling price of
inventories less all estimated costs of completion and costs necessary to make the sale. Inventories are
recorded at weighted-average cost.
Investments Accounted for by the Equity Method
Investments in which the Corporation holds 20 percent or more of the investees’ voting shares or exercises
significant influence over investees’ operating and financial policy decisions are accounted for by the
equity method.
The acquisition cost is allocated to the assets acquired and liabilities assumed on the basis of their fair
values at the date of acquisition, and the acquisition cost in excess of the fair value of the identifiable net
assets acquired is recognized as goodwill. Goodwill is not being amortized. In addition, goodwill should
be assessed for impairment annually or whenever an event or circumstances would result in the goodwill
reduction.
When the Corporation subscribes for its investee’s newly issued shares at a percentage different from its
current percentage of ownership of the investee, the Corporation records the difference as an adjustment to
long-term investments, with the corresponding amount charged or credited to capital surplus. If the
amount of the adjustment made to debit capital surplus is more than the balance of capital surplus arising
from long-term equity investment, then the resulting difference is debited to retained earnings.
If an investment is identified as significantly impaired, the carrying amount of the investment in excess of
its recoverable amount is recognized as impairment loss. For those investees over which the Corporation
holds a controlling interest, the assessment of impairment is based on an estimation of the value in use of
the cash-generating units of the consolidated investees.
Profits from downstream transactions with an equity-method investee are eliminated in proportion to the
Corporation’s percentage of ownership in the investee; however, if the Corporation has control over the
investee, all the profits are eliminated. Profits from upstream transactions with an equity-method investee
are eliminated in proportion to the Corporation’s percentage of ownership in the investee.
- 11 -
Property, Plant and Equipment
Property, plant and equipment are stated at cost less accumulated depreciation. Major additions and
improvements to property, plant and equipment are capitalized, while costs of repairs and maintenance are
expensed currently.
If significant asset impairment is determined on the balance sheet date, the carrying amount of an asset in
excess of its recoverable amount is recognized as a loss. If the recoverable amount increases, the
impairment loss reversal is recognized as a gain. However, the increased carrying amount of an asset due
to impairment loss reversal should not exceed the carrying amount that would have been determined (net of
depreciation) had no impairment loss been recognized for the asset in prior years.
Depreciation is calculated using the straight-line method over useful lives, which are initially estimated as
follows: land and buildings, 3 to 50 years; machinery and equipment, 3 to 6 years; research and
development equipment, 3 to 6 years; and office equipment, 3 to 6 years; lease improvements are amortized
over the rental period and miscellaneous equipment, 3 to 6 years. Property, plant and equipment still in
use beyond their initially estimated useful lives are further depreciated over the newly estimated useful
lives.
The related cost, accumulated depreciation and accumulated impairment losses on property, plant and
equipment are derecognized from the balance sheet upon their disposal. Any gain or loss on disposal of
the asset is included in nonoperating gains or losses in the year of disposal.
Deferred Charges
Deferred charges primarily refer to photo masks, software and telephone devices. Amortization is
calculated using the straight-line method over three to six years.
If significant asset impairment is determined on the balance sheet date, the carrying amount of an asset in
excess of its recoverable amount is recognized as a loss. If the recoverable amount increases, the
impairment loss reversal is recognized as a gain. However, the increased carrying amount of an asset due
to impairment loss reversal should not exceed the carrying amount that would have been determined (net of
amortization) had no impairment loss been recognized for the asset in prior years.
Expenditure on research activities is recognized as an expense when incurred. An internally generated
intangible asset arising from development activities is capitalized and then amortized on a straight-line
basis over the estimated life of the asset if the recognition criteria for intangible asset have been met;
otherwise, the development expenditure is recognized as an expense when incurred.
Pension Costs
Pension cost under a defined benefit plan is determined by actuarial valuations. Contributions made under
a defined contribution plan are recognized as pension cost during the year in which employees render
services.
Income Tax
The Corporation applies the inter-year tax allocation method to its income tax. Deferred income tax assets
and liabilities are recognized for the tax effects of temporary differences and unused tax credits. Valuation
allowances are provided to the extent, if any, that it is more likely than not that deferred income tax assets
will not be realized. A deferred tax asset or liability is classified as current or noncurrent in accordance
with the classification of the related asset or liability. However, if a deferred tax asset or liability does not
relate to an asset or liability in the financial statements, then it is classified as current or noncurrent on the
basis of the expected length of the realization or settlement period.
- 12 -
If the Corporation can control the timing of the reversal of a temporary difference arising from the
difference between the book value and the tax basis of a long-term equity investment in a foreign subsidiary
or joint venture and if the temporary difference is not expected to reverse in the foreseeable future and will,
in effect, exist indefinitely, then a deferred tax liability or asset is not recognized.
Tax credits for purchases of machinery, equipment and technology, research and development expenditures,
and personnel training expenditures are recognized using the flow-through method.
Adjustments of prior years’ tax liabilities are added to or deducted from the current year’s tax provision.
According to the Income Tax Law, an additional tax at 10% of unappropriated earnings is provided for as
income tax in the year the shareholders approve to retain the earnings.
Treasury Stock
Treasury stock is stated at cost and shown as a deduction in shareholders’ equity.
Revenue Recognition
Revenue from sales of goods is recognized when the Corporation has transferred to the buyer the significant
risks and rewards of ownership of the goods, primarily upon shipment, because the earnings process has
been completed and the economic benefits associated with the transaction have been realized or are
realizable. The Corporation does not recognize sales revenue on materials delivered to subcontractors
because this delivery does not involve a transfer of risks and rewards of materials ownership.
Revenue is measured at the fair value of the consideration received or receivable and represents amounts
agreed upon between the Corporation and the customers for goods sold in the normal course of business,
net of sales discounts and volume rebates. For trade receivables due within one year from the balance
sheet date, as the nominal value of the consideration to be received approximates its fair value and
transactions are frequent, fair value of the consideration is not determined by discounting all future receipts
using an imputed rate of interest.
3. EFFECTS OF CHANGES IN ACCOUNTING PRINCIPLES
Financial Instruments
On January 1, 2011, the Corporation adopted the newly revised Statement of Financial Accounting
Standards (SFAS) No. 34 - “Financial Instruments: Recognition and Measurement.” The main revisions
include (1) finance lease receivables are now covered by SFAS No. 34; (2) the scope of the applicability of
SFAS No. 34 to insurance contracts is amended; (3) loans and receivables originated by the Corporation are
now covered by SFAS No. 34; (4) additional guidelines on impairment testing of financial assets carried at
amortized cost when a debtor has financial difficulties and the terms of obligations have been modified; and
(5) accounting treatment by a debtor for modifications in the terms of obligations. This accounting change
did not have a significant effect on the Corporation’s financial statements as of and for the year ended
December 31, 2011.
Operating Segments
On January 1, 2011, the Corporation adopted the newly issued SFAS No. 41 - “Operating Segments.” The
requirements of the statement are based on the information about the components of the Corporation that
management uses to make decisions about operating matters. SFAS No. 41 requires the identification of
operating segments on the basis of internal reports that are regularly reviewed by the Corporation's chief
operating decision maker in order to allocate resources to the segments and assess their performance. This
statement supersedes SFAS No. 20 - “Segment Reporting.” This accounting change had no significant
effect on the disclosures of operating segments of the Corporation.
- 13 -
4. CASH
December 31
2012 2011
Cash on hand and petty cash $ 771 $ 660
Checking accounts and deposits in banks 576,716 765,050
Time deposits 1,795,300 1,010,400
$ 2,372,787 $ 1,776,110
5. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS
December 31
2012 2011
Trading financial liabilities
Forward exchange contracts $ 382 $ 48
The Corporation entered into derivative contracts in 2012 and 2011 to manage exposures due to fluctuations
of foreign exchange rates. The derivative contracts entered into by the Corporation did not meet the
criteria for hedge accounting. Therefore, the Corporation did not apply the hedge accounting treatment to
its derivative contracts.
Outstanding forward exchange contracts as of December 31 2012 and 2011 were as follows:
Contract Amount
Currency Maturity (In Thousands)
December 31, 2012
Sell US$/NT$ 2013/01/07-2013/01/24 US$5,000/NT$145,293
December 31, 2011
Sell US$/NT$ 2012/01/05-2012/01/10 US$6,000/NT$181,689
On the above financial instruments held for trading, the Corporation had net gains of NT$4,626 thousand in
2012 and net losses of NT$2,087 thousand in 2011.
6. AVAILABLE-FOR-SALE FINANCIAL ASSETS
December 31
2012 2011
Open-end mutual funds $ 277,643 $ 423,129
- 14 -
7. NOTES AND ACCOUNTS RECEIVABLE, NET
December 31
2012 2011
Related parties $ 1,892 $ 1,996
Third parties 1,932,229 1,858,185
Allowance for sales returns and discounts (16,456) (31,306)
Allowance for doubtful accounts (2,199) (2,199)
$ 1,915,466 $ 1,826,676
8. INVENTORIES, NET
December 31
2012 2011
Finished goods $ 490,433 $ 527,779
Work in process 342,784 277,875
Raw materials 323,852 383,686
$ 1,157,069 $ 1,189,340
As of December 31, 2012 and 2011, the allowances for inventory devaluation were NT$373,294 thousand
and NT$264,861 thousand, respectively.
The costs of inventories recognized as cost of goods sold were NT$6,652,130 thousand in 2012 and
NT$6,637,163 thousand in 2011, which included NT$108,433 thousand and NT$62,600 thousand,
respectively, due to write-downs of inventories. The inventory losses from scrap were NT$45,176
thousand in 2012 and NT$11,813 thousand in 2011
9. INVESTMENTS ACCOUNTED FOR BY THE EQUITY METHOD
December 31
2012 2011
% of % of
Owner- Owner-
Amount ship Amount ship
Unlisted companies
Li-Yuh Investment Ltd. $ 272,082 100 $ 280,195 100
Richpower Microelectronics Corporation
(“Richpower”) 248,459 100 221,517 100
Ironman Overseas Co., Ltd. (“Ironman”) 144,064 100 125,369 100
Richstar Group Co., Ltd. (“Richstar Group”) 45,171 100 42,955 100
Richtek Europe Holding B.V. 22,976 100 21,797 100
Richtek Holding International Limited (“Richtek
International”) 15,223 100 17,462 100
Richnex Microelectronics Corporation
(“Richnex”) 5,260 70 6,815 66
$ 753,235 $ 716,110
- 15 -
Li-Yuh Investment Ltd. (“Li-Yuh”), a Corporation subsidiary, invests in marketable securities, including
various funds.
For promoting the Corporation’s products as well as rendering consulting services, the Corporation
established wholly owned subsidiaries, Ironman, Richstar Group, Richtek Europe Holding and Richtek
International in 2003.
Richnex is a dedicated fabless IC design company that designs and tests integrated circuits (ICs) and
renders information and software services. Further, the Corporation subscribes for additional shares of its
investees at a percentage different from its existing ownership in 2012. As a result, the Corporation’s
percentage of ownership increased from 66% to 70%.
The Corporation invested US$3,000 thousand to acquire 51% equity in Richpower. In June and
September of 2011, the Corporation acquired 6.5% and 42.5% equity in Richpower at US$429 thousand
and US$2,888 thousand, respectively, from Jombo Faith Technology Limited and Wise Power Investment
Limited, respectively; thus, the Corporation’s equity in Richpower increased from 51% to 100%.
Richpower and Richpower Taiwan, a 100% owned subsidiary of Richpower, design, test, and sell ICs;
render services on information technology and software; and provide consulting services.
The investment gains (losses) in 2012 and 2011 were as follows:
2012 2011
Li-Yuh Investment Ltd. $ (7,048) $ 7,541
Richpower 31,965 12,813
Ironman (34,963) (42,743)
Richstar Group (114,197) (108,369)
Richtek Europe Holding B.V. 1,540 (1,275)
Richtek International (31,101) (26,659)
Richnex (37,467) (26,415)
$ (191,271) $ (185,107)
The investment gains (losses) in 2012 and 2011 were was based on the investees’ audited financial
statements for periods the same as those of the Corporation.
The consolidated financial statements as of and for the years ended December 31, 2012 and 2011 included
all subsidiaries.
10. FINANCIAL ASSETS CARRIED AT COST
December 31
2012 2011
% of % of
Owner- Owner-
Amount ship Amount ship
Unlisted common stock
Nexcera Corporation Limited $ - 6 $ 8,185 6
In October 2008, the Corporation acquired the above stock, which did not have a quoted market price in an
active market and had no fair value that could be reliably measured; thus, this investment was measured at
cost.
The Corporation assessed the recoverable amount of Nexcera Corporation Limited and then recognized
impairment losses of NT$8,185 thousand in 2012 and NT$4,000 thousand in 2011.
- 16 -
11. PROPERTY, PLANT AND EQUIPMENT, NET
Year Ended December 31, 2012
Item
Balance,
Beginning of
Year Additions Disposals Reclassification
Balance,
End of Year
Cost
Land $ 326,428 $ - $ - $ - $ 326,428
Buildings 327,061 148 - - 327,209
Machinery and equipment 238,503 260,827 31,749 42,958 510,539
Research and development 103,937 17,655 17,353 657 104,896
Office equipment 74,425 8,096 3,774 - 78,747
Lease improvements 14,829 - - - 14,829
Other equipment 38,322 16,103 4,212 (43,615) 6,598
Prepayments for business facilities
and constructions 59,636 78,683 - - 138,319
1,183,141 $ 381,512 $ 57,088 $ - 1,507,565
Accumulated depreciation
Buildings 25,674 $ 6,550 $ - $ - 32,224
Machinery and equipment 123,721 57,860 31,749 20,258 170,090
Research and development 34,643 22,494 17,342 137 39,932
Office equipment 31,591 12,453 3,670 - 40,374
Lease improvements 5,787 5,327 - - 11,114
Other equipment 19,977 7,651 4,212 (20,395) 3,021
241,393 $ 112,335 $ 56,973 $ - 296,755
$ 941,748 $ 1,210,810
Year Ended December 31, 2011
Item
Balance,
Beginning of
Year
Additions
Disposals
Balance,
End of Year
Cost
Land $ 325,768 $ 660 $ - $ 326,428
Buildings 330,533 1,827 5,299 327,061
Machinery and equipment 212,034 51,487 25,018 238,503
Research and development 68,470 57,300 21,833 103,937
Office equipment 66,993 10,771 3,339 74,425
Lease improvements 13,736 4,634 3,541 14,829
Other equipment 36,324 4,146 2,148 38,322
Prepayments for business facilities
and constructions 18,818
40,818
- 59,636
1,072,676 $ 171,643 $ 61,178 1,183,141
Accumulated depreciation
Buildings 24,210 $ 6,763 $ 5,299 25,674
Machinery and equipment 93,694 55,045 25,018 123,721
Research and development 37,461 18,956 21,774 34,643
Office equipment 22,736 11,958 3,103 31,591
Lease improvements 4,173 5,156 3,542 5,787
Other equipment 14,737 7,388 2,148 19,977
197,011 $ 105,266 $ 60,884 241,393
$ 875,665 $ 941,748
- 17 -
12. DEFERRED CHARGES, NET
Year Ended December 31, 2012
Item
Balance,
Beginning of
Year Additions Disposals
Balance,
End of Year Amortization
Cost
Photo masks $ 646,803 $ 177,056 $ 169,402 $ 654,457 3 years
Software 55,351 15,674 22,036 48,989 3-6 years
Telephone devices 787 - 140 647 5 years
702,941 $ 192,730 $ 191,578 704,093
Accumulated amortization
Photo masks 298,803 $ 215,236 $ 169,402 344,637
Software 28,834 16,400 22,036 23,198
Telephone devices 301 150 140 311
327,938 $ 231,786 $ 191,578 368,146
$ 375,003 $ 335,947
Year Ended December 31, 2011
Item
Balance,
Beginning of
Year
Additions
Disposals
Balance,
End of Year
Amortization
Cost
Photo masks $ 536,284 $ 231,719 $ 121,200 $ 646,803 3 years
Software 53,873 21,023 19,545 55,351 3 years
Telephone devices 863 84 160 787 5 years
591,020 $ 252,826 $ 140,905 702,941
Accumulated amortization
Photo masks 225,002 $ 195,001 $ 121,200 298,803
Software 33,025 15,354 19,545 28,834
Telephone devices 296 165 160 301
258,323 $ 210,520 $ 140,965 327,938
$ 332,697 $ 375,003
13. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
December 31
2012 2011
Payables on engineering experiments and product research $ 48,797 $ 51,990
Payables on commission and marketing 37,961 31,456
Payables to equipment suppliers 25,847 1,834
Payables on insurance 22,161 10,155
Payables on service fees 11,309 5,210
Payables on declaration expenses and transportation 8,580 19,897
Others 77,068 86,182
$ 227,723 $ 206,724
- 18 -
14. PENSION PLANS
The pension plan under the Labor Pension Act (LPA) is a defined contribution plan. Based on the LPA,
the rate of the Corporation’s monthly contributions to employees’ individual pension accounts is at 6% of
monthly salaries and wages. Related pension costs were NT$37,157 thousand in 2012 and NT$31,669
thousand in 2011.
The Corporation has a defined benefit plan under the Labor Standards Law, which provides benefits based
on an employee’s length of service and average monthly gross salary or wage of the six months before
retirement. The Corporation contributes amounts equal to 2% of total monthly salaries and wages to a
pension fund administered by the pension fund monitoring committee. The pension fund is deposited in
the Bank of Taiwan in the committee’s name. Related pension costs were NT$1,469 thousand in 2012 and
NT$1,167 thousand in 2011.
Other information on the defined benefit plan is summarized as follows:
a. Components of net pension cost:
2012 2011
Service cost $ 69 $ 53
Interest cost 1,333 1,240
Projected return on plan assets (1,069) (852)
Amortization 1,136 726
$ 1,469 $ 1,167
b. Reconciliation of the funded status of the plan and prepaid pension cost as of December 31, 2012 and
2011:
December 31
2012 2011
Benefit obligation
Vested benefit obligation $ - $ -
Non-vested benefit obligation (38,239) (34,693)
Accumulated benefit obligation (38,239) (34,693)
Additional benefit based on future salaries (56,937) (31,961)
Projected benefit obligation (95,176) (66,654)
Fair value on plan assets 64,489 52,013
Funded status (30,687) (14,641)
Unrecognized net transitional obligation 1,222 1,324
Unrecognized net loss 57,035 30,443
Prepaid pension cost $ 27,570 $ 17,126
Vested benefit $ - $ -
c. Actuarial assumptions
December 31
2012 2011
Discount rate used in determining present values 1.75% 2.00%
Future salary increase rate 5.00% 3.50%
Expected rate of return on plan assets 1.75% 2.00%
- 19 -
d. Contribution and payment status
2012 2011
Contributions to the fund $ 11,913 $ 10,118
Payments from the fund $ - $ -
15. SHAREHOLDERS’ EQUITY
Capital Surplus
The capital surplus from shares issued in excess of par (additional paid-in capital from issuance of common
shares, conversion of bonds and treasury stock transactions) and donations may be used to offset a deficit.
In addition, when the Company has no deficit, capital surplus may be distributed as cash dividends or
transferred to capital (limited to a certain percentage of the Company’s paid-in capital and once a year).
The capital surplus from long-term investments, employee stock options and conversion options may not be
used for any purpose.
Appropriation of Earnings and Dividend Policy
The Corporation’s Articles of Incorporation provide that, when allocating the net profits for each fiscal
year, the Corporation should first offset its deficits in previous years, appropriate 10% of profits as legal
reserve, and retain special reserve(s) pursuant to applicable laws. The remainder, combined with
unappropriated earnings in previous years, should be appropriated as follows under a resolution passed at
the shareholders’ meeting:
a. Bonus to employees of not less than 5%, which may include bonus in stock to subsidiaries’ employees
under certain conditions;
b. Remuneration to directors and supervisors of up to 3%; and
c. Remainder, as dividends.
Earnings appropriation is approved by the shareholders in, and given effect to in the financial statements of,
the year following the year of earnings generation.
In distributing earnings, the Corporation considers its future working capital demand. Profits of the
Corporation may be distributed as cash dividend or stock dividend, of which at least 20% should be in the
form of cash. This distribution should be based on a board of directors’ proposal approved at a
shareholders’ meeting.
For 2012 and 2011, the estimated bonuses to employees were NT$376,235 thousand and NT$337,701
thousand, respectively, and the estimated remunerations to directors and supervisors were NT$18,700
thousand and NT$17,000 thousand, respectively. The bonus to employees was based on certain
percentage of net income. Material differences between these estimates and the amounts proposed by the
Board of Directors in the following year are adjusted for in the current year. If the actual amounts
subsequently resolved by the shareholders differ from the proposed amounts, the differences are recorded in
the year of shareholders’ resolution as a change in accounting estimate. If a share bonus is resolved to be
distributed to employees, the number of shares is determined by dividing the amount of bonuses by the
closing price of the shares on the day preceding the shareholders’ meeting after considering the effect of
cash and stock dividends.
- 20 -
Based on a directive issued by the Securities and Futures Bureau, an amount equal to the net debit balance
of certain shareholders’ equity accounts (for example, cumulative translation adjustments and unrealized
gain or loss on financial instruments, but excluding treasury stocks) shall be transferred from
unappropriated earnings to a special reserve. Distribution of earnings should only be made after the
special reserve is appropriated. Any special reserve appropriated may be reversed to the extent of the
reversal of the net debit balance.
Legal reserve should be appropriated until this reserve equals the Company’s paid-in capital. Legal
reserve may be used to offset deficit. If the Company has no deficit and the legal reserve has exceeded
25% of the Company’s paid-in capital, the excess may be transferred to capital or distributed in cash.
Except for non-ROC resident shareholders, all shareholders receiving the dividends are allowed a tax credit
equal to their proportionate share of the income tax paid by the Corporation.
The appropriation of the 2011 and 2010 earnings was approved in the shareholders’ meetings held on June
13, 2012 and June 10, 2011, respectively. The appropriations, including that of dividends per share, were
as follows:
Dividends Per Share
Appropriation of Earnings (NT$)
For Fiscal For Fiscal For Fiscal For Fiscal
Year 2011 Year 2010 Year 2011 Year 2010
Legal reserve $ 153,074 $ 218,269
Special reserve 35,305 24,740
Cash dividends 1,039,621 1,485,173 $ 7.00 $ 10.00
The bonus to employees and the remuneration to directors and supervisors as proposed by the board of
directors for 2011 and 2010 and approved in the shareholders’ meetings were as follows:
Year Ended December 31
2011 2010
Cash Stock Cash Stock
Bonus to employees $ 337,701 $ - $ 484,918 $ -
Remuneration to directors and
supervisors 17,000 - 18,000 -
The approved amounts of the bonus to employees and the remuneration to directors and supervisors were
consistent with those stated in the resolution passed at the meeting of Board of Directors.
Information on the bonus to employees, directors and supervisors is available on the Market Observation
Post system web sites of the Taiwan Stock Exchange.
- 21 -
Cumulative Translation Adjustments
For the years ended December 31, 2012 and 2011, movements of cumulative translation adjustments were
as follows:
2012 2011
Exchange differences arising from the translation of the
financial statements of foreign operations
Balance, beginning of year $ (21,659) $ (35,242)
Recognized in shareholders’ equity (12,356) 13,583
Balance, end of year $ (34,015) $ (21,659)
Unrealized Gain or Loss on Financial Instruments
The movements of unrealized gain or loss on financial instruments in 2012 and 2011 were as follows:
Available-
for-sale
Financial Assets
Equity-method
Investments Total
Year ended December 31, 2012
Balance, beginning of year $ - $ (48,181) $ (48,181)
Recognized in shareholders’ equity 3,887 (1,037) 2,850
Transferred to profit or loss (3,881) - (3,881)
Balance, end of year $ 6 $ (49,218) $ (49,212)
Year ended December 31, 2011
Balance, beginning of year $ - $ 708 $ 708
Recognized in shareholders’ equity 3,382 (48,889) (45,507)
Transferred to profit or loss (3,382) - (3,382)
Balance, end of year $ - $ (48,181) $ (48,181)
16. TREASURY STOCK
Under the Securities and Exchange Act, the Corporation should neither pledge treasury shares nor exercise
shareholders’ rights on these shares, such as rights to dividends and to vote.
- 22 -
17. INCOME TAX
a. A reconciliation of income tax expense based on “income before income tax” at the statutory rate and
income tax expense was as follows:
2012 2011
Income tax expense based on “income before income tax” at the
statutory rate $ 323,590 $ 304,361
Tax effects of adjusting items:
Permanent differences
Tax-exempt income (142,502) (92,398)
Others 31,856 32,043
Temporary differences 18,543 12,242
Additional 10% income tax on unappropriated earnings 30,274 45,450
Investment tax credits used (41,579) (96,474)
Income tax payable in current year 220,182 205,224
Net changes in deferred income tax assets
Investment tax credits 113,084 157,280
Temporary differences (20,875) (9,863)
Valuation allowance (85,198) (115,277)
Adjustments for prior years’ income tax (28,152) 22,249
Income tax expense $ 199,041 $ 259,613
b. Movements of income tax payable were as follows:
2012 2011
Balance, beginning of year $ 204,068 $ 227,501
Current income tax expense 220,182 205,224
Income tax paid (197,318) (250,906)
Adjustments for prior years’ income tax (8,373) 22,249
Balance, end of year $ 218,559 $ 204,068
c. Net deferred income tax assets (liabilities) were as follows:
December 31
2012 2011
Current
Investment tax credits $ 108,551 $ 7,543
Temporary differences 73,572 51,305
Valuation allowances (40,802) -
$ 141,321 $ 58,848
Noncurrent
Investment tax credits $ 3,852 $ 217,944
Temporary differences (2,582) (1,190)
Valuation allowances - (126,000)
$ 1,270 $ 90,754
- 23 -
d. Movements of deferred income tax assets were as follows:
2012 2011
Balance,
Beginning of
Year
Recognized in
Statement of
Income
Balance,
End of Year
Balance,
Beginning of
Year
Recognized in
Statement of
Income
Balance,
End of Year
Temporary differences
Unrealized sales allowance $ 5,322 $ (2,524 ) $ 2,798 $ 2,798 $ 2,524 $ 5,322 Unrealized loss on
inventories 46,703 17,758 64,461 34,384 12,319 46,703
Others (1,910 ) 5,641 3,731 3,070 (4,980 ) (1,910 )
$ 50,115 $ 20,875 $ 70,990 $ 40,252 $ 9,863 $ 50,115
Unused tax credits Investment tax credits $ 225,487 $ (113,084 ) $ 112,403 $ 382,767 $ (157,280 ) $ 225,487
e. Integrated income tax information is as follows:
December 31
2012 2011
Balance of the imputation credit account (ICA) $ 229,200 $ 173,716
The expected and actual creditable ratios for the distribution of the earnings of 2012 and 2011,
respectively, were 12.19% and 11.55%, respectively.
The imputation credits allocated to the shareholders are based on the balance of the imputation credit
account (ICA) as of the date of dividend distribution. The expected creditable ratio for 2012 may be
adjusted depending on the ICA balance on the date of dividend distribution.
f. As of December 31, 2012, investment tax credits were as follows:
Regulatory Basis of
Tax Credits Item
Total
Creditable
Amounts
Remaining
Creditable
Amounts
Expiry
Year
Statute for Upgrading Purchase of machinery and equipment $ 4,113 $ - 2012
Industries 1,834 1,834 2013
3,852 3,852 2014
$ 9,799 $ 5,686
Research and development expenditures $ 7,955 $ - 2012
136,228 106,717 2013
$ 144,183 $ 106,717
g. As of December 31, 2012, the profits generated from the following expansion projects are exempt from
income tax for a five-year period:
Expansion Project Tax-Exemption Period
Sixth expansion of the construction January 1, 2008 to December 31, 2012
Seventh expansion of the construction February 1, 2009 to January 31, 2014
Eighth expansion of the construction September 1, 2010 to August 31, 2015
h. The tax returns through 2009 had been assessed and cleared by the tax authorities.
- 24 -
18. LABOR COST, DEPRECIATION AND AMORTIZATION EXPENSES
Year Ended December 31
2012 2011
Classified as
Cost of Sales
Classified as
Operating
Expenses Total
Classified as
Cost of Sales
Classified as
Operating
Expenses Total
Labor cost
Wage and salary $ 190,239 $ 1,012,387 $ 1,202,626 $ 181,303 $ 910,484 $ 1,091,787
Pension 8,737 29,889 38,626 7,512 25,324 32,836
Meal 3,320 11,746 15,066 3,091 10,545 13,636
Welfare 3,343 9,467 12,810 2,840 8,976 11,816
Employee insurance 12,682 55,087 67,769 9,251 39,682 48,933
Others 224 1,613 1,837 638 2,361 2,999
$ 218,545 $ 1,120,189 $ 1,138,734 $ 204,635 $ 997,372 $ 1,202,007
Depreciation $ 67,564 $ 44,771 $ 112,335 $ 64,199 $ 41,067 $ 105,266
Amortization $ 3,020 $ 228,766 $ 231,786 $ 1,607 $ 208,913 $ 210,520
19. EARNINGS PER SHARE
Earnings per share (EPS) were computed as follows:
Number of EPS (NT$)
Amounts (Numerator) Shares Before After
Before After (Denominator) Income Income
Income Tax Income Tax (In Thousands) Tax Tax
2012
Basic EPS
Income attributable to common
shareholders $ 1,903,470 $ 1,704,429 148,517 $ 12.82 $ 11.48
Effect of potential dilutive common
shares
Bonus to employees - - 3,227
Diluted EPS
Income attributable to common
shareholders (plus effect of potential
dilutive common shares) $ 1,903,470 $ 1,704,429 151,744 $ 12.54 $ 11.23
2011
Basic EPS
Income attributable to common
shareholders $ 1,790,358 $ 1,530,745 148,517 $ 12.05 $ 10.31
Effect of potential dilutive common
shares
Bonus to employees - - 3,946
Diluted EPS
Income attributable to common
shareholders (plus effect of potential
dilutive common shares) $ 1,790,358 $ 1,530,745 152,463 $ 11.74 $ 10.04
- 25 -
If the Corporation decides to grant cash or stock bonuses to employees, the Corporation should presume
that the entire amount of the bonus to employee will be settled in shares, and, if the resulting potential
shares have a dilutive effect, these shares should be included in the weighted average number of shares
outstanding used in the calculation of diluted EPS. The number of shares is estimated by dividing the
amount of bonus to employees by the closing price of the common shares on the balance sheet date. The
dilutive effect of potential common shares should be included in the calculation of diluted EPS until the
shareholders resolve the number of shares to be distributed to employees at their meeting in the following
year.
20. FINANCIAL INSTRUMENTS
a. Fair values of financial instruments were as follows:
December 31
2012 2011
Carrying Carrying
Amount Fair Value Amount Fair Value
Financial assets
Available -for-sale financial assets $ 277,643 $ 277,643 $ 423,129 $ 423,129
Financial assets carried at cost - - 8,185 -
Financial liabilities
Finance liabilities at fair value
through profit or loss 382 382 48 48
b. Methods and assumptions used in determining fair values of financial instruments:
1) Not included in the above financial instruments are cash, receivables, other financial assets, pledged
bank deposits and payables because these assets or liabilities are expected to be converted to cash,
sold, consumed or paid in a very short term and their carrying amounts approximate their fair
values.
2) The above financial instruments also exclude refundable deposits and guarantee deposits, which
have fair values that are based on their carrying values because they have no maturity.
3) For financial instruments designated as at fair value through profit or loss and with no quoted
market prices, their fair values are determined using valuation techniques incorporating estimates
and assumptions consistent with those generally used by other market participants to price financial
instruments.
4) Fair values of available-for-sale financial assets are based on their quoted prices in active markets.
5) Financial assets carried at cost are investments in non-publicly traded stocks, which do not have
quoted prices in an active market and entail an unreasonably high cost to obtain verifiable fair
values. Therefore, no fair value is presented.
c. On financial instruments with fair values determined using valuation techniques, valuation losses were
NT$382 thousand in 2012 and NT$48 thousand in 2011.
- 26 -
d. As of December 31, 2012 and 2011, financial assets exposed to fair value interest rate risk and cash
flow interest rate risks were as follows:
December 31
2012 2011
Fair value interest rate risk
Financial assets $ 1,720,754 $ 1,252,704
Cash flow interest rate risk
Financial assets $ 936,824 $ 961,753
e. As of December 31, 2012 and 2011, the interest income (expense) associated with financial assets
(liabilities) other than those at FVTPL were as follows:
Six Months Ended June 30
2012 2011
Total interest income $ 17,171 $ 11,807
Total interest expense 51 4
f. Financial risks
1) Market risk. Derivative financial instruments categorized as financial assets/liabilities as at fair
value through profit or loss are mainly used to hedge against the adverse effects of exchange rate
fluctuations of foreign-currency assets and liabilities. The gains or losses on derivatives have a
highly negative correlation on the losses or gains on the hedged items. Disclosures of forward
exchange contracts are presented in Note 5 to the financial statements. Available-for-sale
open-end mutual funds held by the Corporation are exposed to risks on changes in interest rates and
market prices.
2) Credit risk. The Corporation will incur a loss if the counter-parties or third-parties breach
financial instrument contracts, which are affected by such factors as the concentrations of credit
risk, components of financial instruments, contract amounts, and other receivables on the contracts.
Thus, contracts with positive fair values on the balance sheet date are evaluated for credit risk.
Since the counter-parties to the asset transactions are reputable financial institutions, management
believes its exposure to default by those parties is low.
3) Liquidity risk. The Corporation has sufficient operating capital to meet the cash demand upon
settlement of contract obligations. Thus, the liquidity risk is low. However, investments in
financial assets carried at cost have no quoted prices in an active market; thus, the liquidity risk on
these investments exists.
4) Cash flow interest rate risk. The Corporation does not have any assets and liabilities related to the
changes of interest rate in the long-term. Thus, the Corporation expects no significant cash flow
interest rate risk.
- 27 -
21. RELATED-PARTY TRANSACTIONS
Related-party transactions, in addition to those disclosed in other notes, are summarized as follows:
a. Related parties:
Related Party Relationship with the Corporation
Ironman Overseas Co., Ltd. (“Ironman”) Subsidiary
Richnex Subsidiary
Richpower Subsidiary
Richtek Europe Holding B.V. (“Richtek Europe”) Indirect subsidiary
RichTek USA. Inc. (“RichTek USA”) Indirect subsidiary
Richpower Microelectronics Co., Ltd. (“Richpower
Shanghai”)
Indirect subsidiary
Richpower Microelectronics Corporation.
(“Richpower Taiwan”)
Indirect subsidiary
Richtek Education Foundation. (“Richtek Education”) Nonprofit organization of which the funds
donated by the Corporation exceed one third
of the nonprofit organization’s total funds
b. Related-party transactions:
2012 2011
Amount % Amount %
For the year
Net sales
RichTek USA $ 16,683 - $ 9,523 -
Purchases
Richpower Taiwan $ 664 - $ - -
Richpower 241 - 748 -
$ 905 - $ 748 -
Service expense
Richpower Taiwan $ - - $ 15,034 1
Commissions
Ironman $ 114,312 26 $ 113,108 27
RichTek Europe 20,910 5 16,511 4
$ 135,222 31 $ 129,619 31
Rental income
Richnex $ 1,082 18 $ 1,082 29
Service income
Richpower $ 978 13 $ 1,153 24
Richpower Shanghai 117 2 107 2
$ 1,095 15 $ 1,260 26
- 28 -
2012 2011
Amount % Amount %
Operating expense
Richtek Education $ 5,000 1 $ 3,500 1
Richpower Taiwan 157 - - -
$ 5,157 1 $ 3,500 1
Deferred expenses - masks
Richpower Taiwan $ - - $ 11,814 5
At end of year
Accounts receivable
RichTek USA $ 1,892 - $ 1,996 -
Other receivable
Richpower $ - - $ 2,629 81
Richpower Taiwan - - 100 3
$ - - $ 2,729 84
Accrued expense
Ironman $ 9,043 4 $ 7,740 4
Richtek Europe 2,001 1 962 -
Richpower Taiwan - - 6,358 3
$ 11,044 5 $ 15,060 7
For related parties, transactions terms, including those for payment, the commissions, service fees,
rental income and rental expenses, as well as other terms are determined in accordance with mutual
agreements.
Other receivable is primarily payment on behalf of others.
Terms of sales and purchases between the Corporation and its related parties were made at normal
commercial prices and terms with reference to the costs and market prices.
Prices and terms for the purchase of deferred charges were determined in accordance with mutual
agreements.
As of December 31, 2012, the endorsements provided by the Corporation to related parties were as
follows:
2012 2011
Richnex $ 30,000 $ 30,000
Richpower 60,000 60,000
$ 90,000 $ 90,000
- 29 -
c. Compensation of directors, supervisors and management personnel:
2012 2011
Salaries $ 43,186 $ 41,664
Incentives 3,439 5,823
Bonus 44,000 40,000
$ 90,625 $ 87,487
The information about the compensation of directors, supervisors and management personnel is available in
the annual report for the shareholders’ meeting. The total compensation for the year ended December 31,
2011 included the bonuses appropriated from the 2011 earnings, which were approved by the shareholders
in the annual meeting held in 2012. The total compensation expense for the year ended December 31,
2012 includes estimated bonuses to employees and directors of the Corporation that were appropriated from
the 2012 earnings and will be paid in the following year. The actual amount will be finalized and
approved upon the passage of the related resolution at the annual shareholders’ meeting in 2013.
22. PLEDGED OR MORTGAGED ASSETS
The following assets had been pledged or mortgaged as collaterals in line with certain customs and patents
litigation requirements:
December 31
2012 2011
Pledged bank deposits $ 18,218 $ 21,318
23. COMMITMENTS AND CONTINGENCIES
As of December 31, 2012, the Corporation was leasing factory buildings, a marketing office, a network
equipment and vehicles from third parties under renewable operating lease agreements expiring in January
2016. Rent is payable monthly, and amounts are subject to adjustments of the rental agreements.
Future minimum lease payables were as follows:
Year Amount
2013 $ 42,865
2014 42,077
2015 16,398
2016 33
$ 101,373
For cost saving and future operating developments; the Board of Director resolved on August 24, 2011 to
buy a factory building, office, and parking lots. Under the purchase agreement, the Corporation have paid
NT$106,600 thousand in advance as of December 31, 2012. Further, the Corporation will pay for these
purchases in installment for one year, as follows:
Year Amount
2013 $ 358,260
- 30 -
24. SIGNIFICANT FOREIGN-CURRENCY FINANCIAL ASSETS AND LIABILITIES
The significant financial assets and liabilities denominated in foreign currencies were as follows:
December 31
2012 2011
Foreign
Currency (In
Thousands)
Exchange Rate
(Note)
Foreign
Currency (In
Thousands)
Exchange Rate
(Note)
Financial assets
Monetary items
USD $ 36,627 29.04 $ 30,998 30.275
Investments accounted for by the
equity method
USD 13,567 29.04 11,507 30.275
EUR 597 38.49 556 39.18
Financial liabilities
Monetary items
USD 22,973 29.04 20,850 30.275
Note: Exchange rate represents the units each foreign currency could be converted into New Taiwan
dollars.
25. ADDITIONAL DISCLOSURES
Except for the following, the Corporation had no other significant transactions, investees and investments
for which disclosure is required by the Securities and Futures Bureau:
a. Endorsement/guarantee provided: Table 1 (attached)
b. Marketable securities held: Table 2 (attached)
c. Marketable securities acquired and disposed of at costs or prices of at least NT$100 million or 20% of
the paid-in capital: Table 3 (attached)
d. Acquisition of individual real estate properties at costs of at least NT$100 million or 20% of the paid-in
capital: Table 4 (attached)
e. Names, locations, and related information of investees on which the Corporation exercises significant
influence: Table 5 (attached)
f. Information about derivatives of investees over which the Corporation has a controlling interest:
None.
g. Information on investment in Mainland China
1) The name of the investee in mainland China, the main businesses and products, its issued capital,
method of investment, information on inflow or outflow of capital, percentage of ownership, equity
in the net gain or net loss, ending balance and the limitation on investment: Table 6 (attached)
- 31 -
2) Significant direct or indirect transactions with the investee, its prices and terms of payment and
unrealized gain or loss: Please see Notes 9 and 21.
26. SEGMENT INFORMATION
On January 1, 2011, the Corporation adopted the newly issued Statement of Financial Accounting
Standards (SFAS) No. 41 - “Operating Segments.” The requirements of the statement are based on the
information about the components of the Corporation that management uses to make decisions about
operating matters. SFAS No. 41 requires the identification of operating segments on the basis of internal
reports that are regularly reviewed by the Corporation's chief operating decision maker in order to allocate
resources to the segments and assess their performance. The results of measurement and operation are
shown in the consolidated income statements for 2012 and 2011. The assets of the Corporation’s
reportable segments are shown in the consolidated balance sheets as of December 31, 2012 and 2011.
- 32 -
TABLE 1
RICHTEK TECHNOLOGY CORPORATION
ENDORSEMENT/GUARANTEE PROVIDED
YEAR ENDED DECEMBER 31, 2012
(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)
Number Name of Endorser
Endorsee
Upper Limit of
Endorsement to a
Single Entity
(Notes 1 and 2)
Highest Outstanding
Balance During the
Year
Ending Balance of
Endorsement
(Note 4)
Amount of
Endorsement
Collateralized by
Assets
Cumulative Amount
of Endorsement as a
Percentage of Net
Asset Value in the
Most Recent
Financial Statements
Aggregate
Endorsement Limit
for All Endorsees
(Note 3)
Name Relationship
1 Richtek Technology Corporation Richnex 70% subsidiary $ 1,291,197 $ 30,000 $ 30,000 $ - - $ 6,455,983
(the “Corporation”) Richpower 100% subsidiary 1,291,197 60,000 60,000 - 1% 6,455,983
Note 1: The amount endorsed to a single entity by the Corporation should not exceed 20% of the Corporation’s net asset value at the end of the year.
Note 2: The above limit does not apply to subsidiaries.
Note 3: The amount endorsed by the Corporation should not exceed the amount of the Corporation’s net assets at the end of the year.
Note 4: As of December 31, 2012, the endorsement balance was unused.
- 33 -
TABLE 2
RICHTEK TECHNOLOGY CORPORATION
MARKETABLE SECURITIES HELD
DECEMBER 31, 2012
(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)
Holding Company Name Marketable Securities Type and
Name/Issuer
Relationship
with the
Holding
Company
Financial Statement Account
December 31, 2012
Note Shares
(Thousands/
Units)
Carrying Value Percentage of
Ownership (%)
Market Value
or Net Asset
Value
Richtek Technology Corporation Fubon Chi-Hsiang Money Market Fund - Available-for-sale financial assets - current 5,300 $ 80,802 - $ 80,802 Notes 1 and 4
Prudential Financial Money Market Fund - Available-for-sale financial assets - current 4,062 62,403 - 62,403 Notes 1 and 4
Eastspring Inv Well Pool Money Market Fund - Available-for-sale financial assets - current 3,921 51,777 - 51,777 Notes 1 and 4
ING Taiwan Money Market Fund - Available-for-sale financial assets - current 3,191 50,566 - 50,566 Notes 1 and 4
Franklin Templeton Sinoam Money Market Fund - Available-for-sale financial assets - current 3,000 30,040 - 30,040 Notes 1 and 4
Franklin Templeton Global Fund - Available-for-sale financial assets - current 152 2,055 - 2,055 Notes 1 and 4
Li-Yuh Investment Ltd. Subsidiary Investments accounted for by the equity method 31,275 272,082 100 272,082 Notes 1 and 4
Richpower Microelectronics Corporation Subsidiary Investments accounted for by the equity method 12,500 248,459 100 189,530 Notes 1 and 4
Ironman Overseas Co., Ltd. Subsidiary Investments accounted for by the equity method 8,880 144,064 100 144,064 Notes 1 and 4
Richstar Group Co., Ltd. Subsidiary Investments accounted for by the equity method 10,665 45,171 100 45,171 Notes 1 and 4
Richtek Europe Holding B.V. Subsidiary Investments accounted for by the equity method 1,000 22,976 100 22,976 Notes 1 and 4
Richtek Holding International Limited Subsidiary Investments accounted for by the equity method 26 15,223 100 15,223 Notes 1 and 4
Richnex Microelectronics Corporation Subsidiary Investments accounted for by the equity method 12,587 5,260 70 5,260 Notes 1 and 4
Nexcera Corporation Limited Investee Financial assets carried at cost 500 - 6 - Notes 2 and 4
Li-Yuh Investment Ltd. ING Taiwan Hong-Yang Money Market Fund - Available-for-sale financial assets - current 2,223 36,946 - 36,946 Notes 1 and 4
ING Taiwan Money Market Fund - Available-for-sale financial assets - current 2,165 34,314 - 34,314 Notes 1 and 4
Eastspring Inv Well Pool Money Market Fund - Available-for-sale financial assets - current 2,600 34,334 - 34,334 Notes 1 and 4
Prudential Financial Money Market Fund - Available-for-sale financial assets - current 1,507 23,150 - 23,150 Notes 1 and 4
Allianz Global Investors Taiwan Money Market Fund - Available-for-sale financial assets - current 2,501 30,405 - 30,405 Notes 1 and 4
MassMutual Life - common stock - Available-for-sale financial assets - current 132 2,374 - 2,374 Notes 3 and 4
ENE Technology Inc. - common stock - Available-for-sale financial assets - noncurrent 1,717 23,526 2 23,526 Notes 3 and 4
RichWave Technology Corp. - common stock Investee Financial assets carried at cost 1,915 14,479 5 14,843 Notes 2 and 4
Taiwan Electrets Electronics Corporation Limited -
common stock
Investee Financial assets carried at cost 1,000 3,000 4 4,432 Notes 1 and 4
MassMutual Mercuries Life - preferred stock - A Investee Bond Investment with no Active Market 2,000 22,000 2 22,000 Notes 2 and 4
MassMutual Mercuries Life - preferred stock - B Investee Bond Investment with no Active Market 160 3,204 - 3,204 Notes 2 and 4
Asia Global Venture Capital II Investee Financial assets carried at cost 1,000 32,296 10 28,588 Notes 1 and 4
Corporate Event Limited Subsidiary Investments accounted for by the equity method 52 1,956 51 1,512 Notes 1 and 4
Ironman Overseas Co., Ltd. Cosmic-Ray Technology Limited Subsidiary Financial assets carried at cost 5,530 79,588 100 79,588 Notes 1 and 4
Richstar Group Co., Ltd. RichTek USA, Inc. Subsidiary Investments accounted for by the equity method 1,000 64,840 100 64,840 Notes 1 and 4
Richtek Europe Holding B.V. Richtek Europe B.V. Subsidiary Investments accounted for by the equity method 750 12,911 100 12,911 Notes 1 and 4
Cosmic - Ray Technology Limited Li-We Technology Corp. Subsidiary Investments accounted for by the equity method - 47,724 100 47,724 Notes 1 and 4
(Continued)
- 34 -
Holding Company Name Marketable Securities Type and
Name/Issuer
Relationship
with the
Holding
Company
Financial Statement Account
December 31, 2012
Note Shares
(Thousands/
Units)
Carrying Value Percentage of
Ownership (%)
Market Value
or Net Asset
Value
Richpower Microelectronics Richpower Shanghai Subsidiary Investments accounted for by the equity method - $ 22,799 100 $ 22,799 Notes 1 and 4
Corporation Richpower Taiwan Subsidiary Investments accounted for by the equity method 10,000 51,083 100 51,083 Notes 1 and 4
Note 1: The fair value was based on the net asset value and, the investee’s net assets as of December 31, 2012.
Note 2: The fair value of the investment was based on its carrying value as of December 31, 2012
Note 3: The market value was based on the closing price as of December 31, 2012.
Note 4: As of December 31, 2012, the above marketable securities had not been pledged or mortgaged.
(Concluded)
- 35 -
TABLE 3
RICHTEK TECHNOLOGY CORPORATION
MARKETABLE SECURITIES ACQUIRED AND DISPOSED OF AT COSTS OR PRICES OF AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL
YEAR ENDED DECEMBER 31, 2012
(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)
Company Name Marketable Securities Type and
Name/Issuer Financial Statement Account
Counter-
party
Nature of
Relationship
Beginning Balance Acquisition Disposal Ending Balance
Shares
(Thousands)
Amount
(Note)
Shares
(Thousands) Amount
Shares
(Thousands) Amount
Carrying
Value
Gain on
Disposal
Shares
(Thousands)
Amount
(Note)
Richtek Technology Corporation Allianz Global Investors Taiwan
Money Market Fund
Available-for-sale financial assets - - 14,223 $ 171,808 14,223 $ 172,092 28,446 $ 344,464 $ 343,900 $ 564 - $ -
Fubon Chi-Hsiang Money Market
Fund
Available-for-sale financial assets - - - - 46,227 702,070 40,927 622,070 621,268 802 5,300 80,802
Prudential Financial Money Market
Fund
Available-for-sale financial assets - - 3,323 50,728 34,407 526,747 33,668 515,747 515,072 675 4,062 62,403
Eastspring Inv Well Pool Money
Market Fund
Available-for-sale financial assets - - 11,487 150,578 53,682 705,835 61,248 805,835 804,636 1,199 3,921 51,777
ING Money Market Fund Available-for-sale financial assets - - 3,178 50,015 31,742 501,419 31,729 501,419 500,868 551 3,191 50,566
Note: Including unrealized valuation gain on financial instruments.
- 36 -
TABLE 4
RICHTEK TECHNOLOGY CORPORATION
ACQUISITION OF INDIVIDUAL REAL ESTATE PROPERTIES AT COSTS OF AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL
YEAR ENDED DECEMBER 31, 2012
(In Thousands of New Taiwan Dollars)
Company Name Type of Property Transaction Date Transaction
Amount Payment Term Counter-party
Nature of
Relationship
Prior Transaction made by Related Counter-party Price Reference
Purpose of
Acquisition Other Terms
Owner Relationship Transfer Date Amount
Richtek Technology
Corporation
Land and building August 24, 2011 $ 464,860 According to contract Winsome Construction
Corporation
- - - - $ - Appraisal report Operating
purposes
-
- 37 -
TABLE 5
RICHTEK TECHNOLOGY CORPORATION
NAMES, LOCATIONS, AND RELATED INFORMATION OF INVESTEES ON WHICH THE CORPORATION EXERCISES SIGNIFICANT INFLUENCE
DECEMBER 31, 2012
(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)
Investor Company Investee Company Location Main Businesses and Products
Investment Amount Balance as of December 31, 2012 Net Income
(Loss) of the
Investee
Investment
Gain (Loss)
Note
(Relationship
of Investee to
Investor)
December 31,
2012
December 31,
2011
Shares
(Thousands)
% of
Ownership
Carrying
Value
Richtek Technology Corporation Li-Yuh Investment Ltd. Hsin-chu, Taiwan Investment $ 240,000 $ 240,000 31,275 100 $ 272,082 $ (7,048) $ (7,048) Subsidiary
Ironman Overseas Co., Ltd. British Virgin Islands, Tortola Investment 341,704 282,866 8,880 100 144,064 (34,963) (34,963) Subsidiary
Richstar Group Co., Ltd. British Virgin Islands, Tortola Investment 559,190 441,417 10,665 100 45,171 (114,197) (114,197) Subsidiary
Richnex Microelectronics Corporation Taipei, Taiwan Product design 134,268 100,400 12,587 70 5,260 (42,849) (37,467) Subsidiary
Richtek Europe Holding B.V. Netherlands Investment 47,224 47,224 1,000 100 22,976 1,540 1,540 Subsidiary
Richtek Holding International Limited British Virgin Islands, Tortola Investment 123,460 94,195 26 100 15,223 (31,101) (31,101) Subsidiary
Richpower Microelectronics Corporation Cayman Selling ICs 199,239 199,239 12,500 100 248,459 31,965 31,965 Subsidiary
Li-Yuh Investment Ltd. Corporate Event Limited British Virgin Islands, Tortola Customer service and technical
supporting activities
1,537 - 52 51 1,956 880 449 Subsidiary
Ironman Overseas Co., Ltd. Cosmic-Ray Technology Limited SAMOA Investment 184,098 184,098 5,530 100 79,588 2,497 2,497 Subsidiary
Richstar Group Co., Ltd. RichTek USA, Inc. California, USA Selling ICs and providing related
consulting
149,398 149,398 1,000 100 64,840 10,777 10,777 Subsidiary
Richtek Europe Holding B.V. Richtek Europe B.V. Netherlands Selling ICs and providing related
consulting
35,169 35,169 750 100 12,911 1,468 1,468 Subsidiary
Cosmic-Ray Technology Limited Li-We Technology Corp. Guangdong, China Selling ICs and providing related
consulting
83,080 83,080 - 100 47,724 2,495 2,495 Subsidiary
Richpower Microelectronics
Corporation
Richpower Shanghai Shanghai, China Selling ICs and providing related
consulting
41,178 41,178 - 100 22,799 12,931 12,931 Subsidiary
Richpower Taiwan Hsin-chu, Taiwan Designs and tests circuits (ICs) 100,000 100,000 10,000 100 51,083 (140) (140) Subsidiary
- 38 -
TABLE 6
RICHTEK TECHNOLOGY CORPORATION
INFORMATION ON INVESTMENT IN MAINLAND CHINA
YEAR ENDED DECEMBER 31, 2012
(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)
Investee Company Main Businesses and
Products
Total Amount
of Paid-in
Capital
(US$ and RMB
in Thousands)
Investment
Type
Accumulated
Outflow of
Investment
from Taiwan as
of
January 1, 2012
(US$ in
Thousands)
Investment Flows Accumulated
Outflow of
Investment
from Taiwan as
of December 31,
2012 (US$ in
Thousands)
Percentage of
Ownership in
Investment
Investment
Loss
(Note 2)
Carrying Value
as of
December 31,
2012
Accumulated
Inward
Remittance of
Earnings as of
December 31,
2012
Outflow
(US$ in
Thousands)
Inflow
Richpower Shanghai Selling ICs and providing
related consulting
$ 106,669
(US$ 3,200)
Note 1 $ 106,669
(US$ 3,200)
$ - $ - $ 106,669
(US$ 3,200)
100% $ 12,931 $ 22,799 $ -
Li-We Technology Corp.
(Guangdong)
Selling ICs and providing
related consulting
83,080
(US$ 2,500)
Note 1 83,080
(US$ 2,500)
- - 83,080
(US$ 2,500)
100% 2,495 47,724 -
Con Dien (Xi’an) Hi-Tech
Ceramics Corporation
Manufacturing and selling fine
ceramics
71,825
(RMB 15,001)
Note 1 16,185
(US$ 500)
- - 16,185
(US$ 500)
6% - - -
Accumulated Investment in Mainland
China as of December 31, 2012
(US$ in Thousands)
Investment Amount Authorized by
the Investment Commission, MOEA
(US$ in Thousands)
Upper Limit on Investment
(US$ in Thousands)
$ 205,934
(US$ 6,200)
$ 205,934
(US$ 6,200)
$ 3,873,590
(Note 2)
Note 1: The investments were made through a company in the third region.
Note 2: This limit was 60% of net asset value, based on the “Guidelines Governing the Approval of Investments or Technical Cooperation in Mainland China,” which was amended by the Investment Commission under the Ministry of Economic
Affairs on August 29, 2008.