HTC 2008 Annual Report Download - page 111

Financial Information | 87
86 | 2008 Annual Report
18.OTHER CURRENT LIABILITIES
Other current liabilities as of December 31, 2006,
2007 and 2008 were as follows:
2006
2007
2008
NT$
NT$
NT$
US$
(Note 3)
Reserve for warranty
expenses
$1,393,995
$3,469,957
$5,228,603
$159,408
Other payable
38,699
66,755
389,103
11,863
Agency receipts
145,373
226,124
285,914
8,717
Advance receipts
57,426
177,150
180,504
5,503
Directors’
remuneration
21,842
21,842
21,842
666
Others
4,668
8,204
2,730
83
$1,662,003
$3,970,032
$6,108,696
$186,240
The Company provides warranty service for one to
two years, depending on the contracts with our
customers. The warranty liability is estimated on
management’s evaluation of the products under
warranty and recognized as warranty liability.
In October 2008, H.T.C. (B.V.I.) Corp. acquired
100% equity interest of One & Company Design,
Inc., and paid the investment to the original
stockholders of One & Company Design, Inc. in
several installments based on the agreement. Of
the investment, NT$122,700 thousand (US$3,741
thousand) had not been paid as of December 31,
2008.
The Company also estimated a contingent liability of
NT$259,450 thousand (US$7,910 thousand) due to
an increased financial risk from the customer. If the
customer cannot pay its payments, the upstream
firms might dun the Company for the customer’s
liabilities. The Company is still negotiating with the
customer to resolve this issue.
Agency receipts were primarily overseas
value-added tax, employees’ income tax, insurance,
and other items.
19.LONG-TERM BANK LOANS
2006
2007
2008
NT$
NT$
NT$
US$
(Note 3)
Secured loans (Note 28)
NT$50,000 thousand, repayable
from July 2006 in 16 quarterly
installments; 1% annual interest
$ -
$31,250
$18,750
$ 572
NT$65,000 thousand, repayable
from July 2008 in 16 quarterly
installments; 1% annual interest
-
65,000
56,875
1,734
Less: Current portion
-
(20,625
)
(28,750
)
(877
)
$ -
$75,625
$46,875
$1,429
20.PENSION PLAN
The Labor Pension Act (the “Act), which provides for
a new defined contribution plan, took effect on July 1,
2005. Employees covered by the Labor Standards
Law (the “Law”) before the enforcement of the Act
were allowed to choose to remain to be subject to
the defined benefit pension mechanism under the
Law or to be subject instead to the Act. Based on
the Act, the rate of the Company’s required monthly
contributions to the employees’ individual pension
accounts is at least 6% of monthly wages and
salaries, and these contributions are recognized as
pension expense in the income statement. The
pension fund contributions were NT$90,488
thousand in 2006, NT$113,985 thousand in 2007
and NT$162,692 (US$4,960 thousand) in 2008.
Under the Law, which provides for a defined benefit
pension plan, retirement payments should be made
according to the years of service, with a payment of
two units for each year of service but only one unit
per year after the 15th year; however, total units
should not exceed 45. The rate of the Company’s
contributions to a pension fund was 2% after the Act
took effect. The pension fund is deposited in the
Bank of Taiwan (the Central Trust of China merged
with the Bank of Taiwan in 2007, with the Bank of
Taiwan as the survivor entity) in the committee’s
name. The pension fund balances were
NT$311,532 thousand, NT$348,853 thousand and
NT$389,216 thousand (US$11,866 thousand) as of
December 31, 2006, 2007 and 2008, respectively.
H.T.C. (B.V.I.) Corp., HTC HK, Limited, and High
Tech Computer Asia Pacific Pte. Ltd. have no
pension plans.
Under their respective local government regulations,
other subsidiaries have defined contribution pension
plans covering all eligible employees. The pension
fund contributions were NT$3,006 thousand in 2006
NT$15,728 thousand in 2007 and NT$41,827
(US$1,275 thousand) in 2008.
Based on the Statement of Financial Accounting
Standards No. 18 - “Accounting for Pensions” issued
by the Accounting Research and Development
Foundation of the ROC, pension cost under a
defined benefit pension plan should be calculated by
the actuarial method.
The Company’s net pension costs under the defined
benefit plan in 2006, 2007 and 2008 were as follows:
2006
2007
2008
NT$
NT$
NT$
US$
(Note 3)
Service cost
$
5,259
$
4,930
$
5,194
$
158
Interest cost
9,400
8,629
8,743
267
Projected return on plan
assets
(
10,320
)
(
8,988
)
9,980
)
(304
)
Amortization
1,708
2,256
1,561
47
Curtailment gain
-
-
(
211
)
(
6
)
Net pension cost
$
6,047
$
6,827
$
5,307
$
162
The reconciliations between pension fund status and
prepaid pension cost as of December 31, 2006,
2007 and 2008 were as follows:
2006
2007
2008
NT$
NT$
NT$
US$
(Note 3)
Present actuarial value
of benefit obligation
Vested benefits
$
-
$
-
$
-
$
-
Non-vested benefits
153,371
172,092
164,214
5,006
Accumulated benefit
obligation
153,371
172,092
164,214
5,006
Additional benefits on
future salaries
159,023
145,809
176,784
5,390
Projected benefit
obligation
312,394
317,901
340,998
10,396
Plan assets at fair value
(
311,532
)
(
348,853
)
(
389,216
)
(
11,866
)
Funded status
862
(30,952
)
(
48,218
)
(
1,470
)
Unrecognized net
transitional obligation
-
(1,032
)
(
564
)
(
17
)
Unrecognized pension
loss
(
74,882
)
(63,229
)
(
68,630
)
(
2,092
)
Additional minimum
pension liability
-
953
475
14
Prepaid pension cost
$(
74,020
)
$(
94,260
)
$(
116,937
)
$(
3,565
)