HTC 2009 Annual Report Download - page 92

The Company’s net pension costs under the defined benefit plan in
2008 and 2009 were as follows:
2008 2009
NT$ NT$ US$ (Note 3)
Service cost $ 5,194 $ 5,255 $ 164
Interest cost 8,743 9,377 293
Projected return on plan assets ( 9,980 ) ( 11,094 ) ( 347 )
Amortization of unrecognized net
transition obligation, net 74 74 3
Amortization 1,487 1,349 42
Curtailment gain ( 211 ) --
Net pension cost $ 5,307 $ 4,961 $ 155
The reconciliations between pension fund status and prepaid pension
cost as of December 31, 2008 and 2009 were as follows:
2008
2009
NT$ NT$
US$ (Note
3)
Present actuarial value
of benefit obligation
Vested benefits $ - $ 1,334 $ 42
Non-vested
benefits 164,214 178,468 5,579
Accumulated
benefit obligation 164,214 179,802 5,621
Additional benefits
on future salaries 176,784 148,200 4,632
Projected benefit
obligation 340,998 328,002 10,253
Plan assets at fair
value ( 389,216 ) ( 417,407 ) ( 13,048 )
Funded status ( 48,218 ) ( 89,405 ) ( 2,795 )
Unrecognized net
transitional obligation ( 564 ) ( 490 ) ( 15 )
Unrecognized pension
loss ( 68,630 )
( 48,090 ) ( 1,503 )
Additional minimum
pension liability 475 523 16
Prepaid pension cost $ ( 116,937 ) $ ( 137,462 ) $ ( 4,297 )
Assumptions used in actuarially determining the present value of
the projected benefit obligation were as follows:
2009 2008
Weighted-average discount rate 2.00% 2.75%
Assumed rate of increase in future
compensation 2.0%-3.5%
2%-4%
Expected long-term rate of return on
plan assets 2.00%
2.75%
The vested benefits as of December 31, 2008 and 2009 amounted
to NT$0 thousand and NT$1,511 thousand (US$47 thousand),
respectively.
21. STOCKHOLDERS’ EQUITY
Capital Stock
The Company’s outstanding common stock as of January 1, 2008
amounted to NT$5,731,337 thousand, divided into 573,134
thousand common shares at NT$10.00 par value. In June 2008,
the stockholders approved the transfer of retained earnings
amounting to NT$1,719,401 thousand and employee bonuses
amounting to NT$103,200 thousand to capital stock. As a result,
the amount of the Company’s outstanding common stock as of
December 31, 2008 increased to NT$7,553,938 thousand, divided
into 755,394 thousand common shares at NT$10.00 par value.
In January and November 2009, the Company retired 10,000
thousand treasury shares at NT$100,000 thousand (US$3,126
thousand) and 7,085 thousand treasury shares at NT$70,850
thousand (US$2,214 thousand), respectively. Also, in June 2009,
the stockholders approved the transfer of retained earnings
amounting to NT$372,697 thousand (US$11,650 thousand) and
employee bonuses amounting to NT$133,573 thousand (US$4,175
thousand) to capital stock. As a result, the amount of the
Company’s outstanding common stock as of December 31, 2009
increased to NT$7,889,358 thousand (US$246,620 thousand),
divided into 788,936 thousand common shares at NT$10.00
(US$0.31) par value.
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Other payables were payables for contingent loss of purchase orders
which was recognized as other loss. In December 2008, the
Company also estimated a contingent liability of NT$125,663
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.
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. In November 2009, One & Company
Design, Inc. was sold to High Tech Computer Asia Pacific Pte. Ltd. in
line with the reorganization of the Company’s overseas subsidiaries’
investment structure. Related liabilities between One & Company
Design, Inc. and H.T.C. (B.V.I.) Corp. were transferred as well. Of the
investment, NT$96,438 thousand (US$3,015 thousand) had not been
paid as of December 31, 2009.
19. LONG-TERM BANK LOANS
Long-term bank loans as of December 31, 2008 and 2009 were as
follows:
2008 2009
NT$ NT$ US$(Note 3)
Secured loans (Note 28)
NT$50,000 thousand,
repayable from July 2006
in 16 quarterly
installments; 1% annual
interest $
18,750 $ 6,250 $ 195
NT$65,000 thousand,
repayable from July 2008
in 16 quarterly
installments; 1% annual
interest 56,875 40,625 1,270
Less: Current portion ( 28,750 )( 22,500 ) ( 703 )
$
46,875 $ 24,375 $ 762
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$162,692 thousand in 2008, and
NT$186,811 thousand (US$5,840 thousand) in 2009.
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 in the committee’s name. The
pension fund balances were NT$389,216 thousand and
NT$417,407 thousand (US$13,048 thousand) as of December 31,
2008 and 2009, 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$41,827 thousand in 2008 and NT$38,234 thousand (US$1,195
thousand) in 2009.
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.
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