HTC 2008 Annual Report Download - page 85

Financial Information | 35
34 | 2008 Annual Report
2006
2007
2008
NT$
NT$
NT$
US$
(Note 3)
Bonus to employees
$
451,000
$
-
$
6,164,889
$
187,954
Marketing
983,088
3,007,021
5,810,533
177,150
Services
49,221
615,365
1,180,716
35,998
Salaries & bonuses
762,942
914,062
1,012,048
30,855
Export expenses
162,221
127,867
447,814
13,653
Research materials
119,075
189,469
397,075
12,106
Meals and welfare
57,436
58,287
99,952
3,047
Repairs and maintenance
23,759
32,564
76,171
2,322
Insurance
40,398
46,967
69,978
2,134
Research and development
-
-
65,600
2,000
Pension for defined
contribution plan
26,327
32,918
48,405
1,476
Travel
58,027
40,777
30,714
936
Others
57,635
204,532
229,041
6,983
$
2,791,129
$
5,269,829
$
15,632,936
$
476,614
As discussed in Note 4 to the financial statements,
the Company adopted Interpretation 96-052 -
“Accounting for Bonuses to Employees, Directors
and Supervisors.” As a result, the Company
accrued an employee bonus payable of
NT$6,164,889 thousand (US$187,954 thousand).
Based on a resolution passed by the Company’s
board of directors in February 2008, the employee
bonus payable should be appropriated at 18% of net
income less employee bonus expenses.
Also, in the stockholders’ meetings of 2006, 2007
and 2008, the stockholders approved the
appropriation from the net earnings of 2005, 2006
and 2007, and the employee bonuses were
NT$451,000 thousand, NT$2,000,000 thousand and
NT$1,210,000 thousand (US$36,890 thousand),
respectively. Only employee bonus payable of
NT$451,000 thousand had not been paid on
December 31, 2006.
The Company accrued marketing expenses on the
basis of related agreements and other factors that
would significantly affect the accruals.
17.OTHER CURRENT LIABILITIES
Other current liabilities as of December 31, 2006,
2007 and 2008 were as follows:
2006
2007
2008
NT$
NT$
NT$
US$
(Note 3)
Reserve for warranty expenses
$1,393,995
$3,469,957
$5,225,862
$159,325
Other payables (Note 25)
149,292
310,582
634,417
19,342
Agency receipts
122,897
107,618
255,853
7,801
Deferred credits - profit from
intercompany transactions
164,011
175,075
134,091
4,088
Advance receipts
37,340
105,424
120,504
3,674
Directors’ remuneration
21,842
21,842
21,842
666
Others
23,245
106,860
16,207
494
$1,912,622
$4,297,358
$6,408,776
$195,390
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.
Other payables to related parties were payables for
investments accounted for by the equity method,
miscellaneous expenses of overseas sales offices
and repair materials.
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.
Deferred credits - profit from intercompany
transactions were unrealized profit from
intercompany transactions.
18.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$89,723
thousand in 2006, NT$110,723 thousand in 2007
and NT$158,050thousand (US$4,818 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$348,439 and
NT$388,641 thousand (US$11,849 thousand) as of
December 31, 2006, 2007 and 2008, respectively.
Based on the Statement of Financial Accounting
Standards No. 18 - “Accounting for Pensions,”
issued by the Accounting Research and
Development Foundation of the ROC, pension cost
under a defined benefit pension plan should be
calculated by the actuarial method. Related
disclosure is as follows:
The Company’s net pension costs under the defined
benefit plan in 2006, 2007 and 2008 were as follows:
2006
2007
2008
NT$
NT$
NT$
US$
(Note 3)
Service cost
$
5,259
$
4,930
$
5,194
$
158
Interest cost
9,400
8,591
8,699
265
Projected return on plan assets
(
10,320
)
(
8,979
)
(
9,967
)
(
303
)
Amortization of unrecognized net
transition obligation, net
-
-
-
-
Amortization of net pension benefit
1,708
2,182
1,487
45
Net pension cost
$
6,047
$
6,724
$
5,413
$
165
The reconciliations between pension fund status and
prepaid pension cost as of December 31, 2006,
2007 and 2008 were as follows: