HTC 2010 Annual Report Download - page 67

132 2 0 1 0 H T C A N N U A L R E P O R T 133
FINANCIAL INFORMATION
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 for the years ended
December 31, 2009 and 2010 were NT$182,271 thousand and
NT$219,565 thousand (US$7,537 thousand), respectively.
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
eect. The pension fund is deposited in the Bank of Taiwan
in the committee’s name. The pension fund balances were
NT$416,688 thousand and NT$447,728 thousand (US$15,370
thousand) as of December 31, 2009 and 2010, respectively.
Based on the Statement of Financial Accounting Standards
No. 18 - “Accounting for Pensions,” issued by the Accounting
Research and Development Foundation of the ROC, pension
cost under a defined benefit pension plan should be calculated
by the actuarial method.
The Company’s net pension costs under the defined benefit
plan in 2009 and 2010 were as follows:
2009 2010
NT$ NT$ US$(Note 3)
Service cost $ 5,255 $ 4,915 $ 169
Interest cost 9,351 6,539 224
Projected return on plan
assets ( 11,076) ( 8,582) ( 294)
Amortization of
unrecognized net
transition obligation, net -- -
Amortization of net
pension benefit 1,349 297 10
Net pension cost $ 4,879 $ 3,169 $ 109
The reconciliations between pension fund status and prepaid
pension cost as of December 31, 2009 and 2010 were as
follows:
2009 2010
NT$ NT$ US$(Note 3)
Present actuarial value of
benefit obligation
Vested benefit obligation $ 1,334 $ 1,525 $ 52
Non-vested benefit
obligation 177,557 190,908 6,554
Accumulated benefit
obligation 178,891 192,433 6,606
Additional benefits on
future salaries 148,040 150,480 5,166
Projected benefit
obligation 326,931 342,913 11,772
Fair value of plan assets ( 416,688) ( 447,728) ( 15,370)
Funded status ( 89,757) ( 104,815) ( 3,598)
Unrecognized pension loss ( 47,896) ( 54,130) ( 1,858)
Prepaid pension cost $ ( 137,653) $ ( 158,945 ) $ ( 5,456)
Assumptions used in actuarially determining the present value
of the projected benefit obligation were as follows:
2009 2010
Weighted-average discount rate 2.00% 2.00%
Assumed rate of increase in future
compensation 3.50% 3.75%
Expected long-term rate of return on
plan assets 2.00% 2.00%
The vested benefits as of December 31, 2009 and 2010
amounted to NT$1,511 thousand and NT$1,702 thousand (US$58
thousand), respectively.
18. STOCKHOLDERS’ EQUITY
Capital Stock
The Company’s outstanding common stock as of January
1, 2009 amounted 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 and 7,085 thousand treasury shares at NT$100,000
thousand and NT$70,850 thousand, respectively. In June
2009, the stockholders approved the transfer of retained
earnings amounting to NT$372,697 thousand and employee
bonuses amounting to NT$133,573 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, divided into 788,936 thousand common shares at
NT$10.00 par value.
In April 2010, the Company retired 15,000 thousand treasury
shares at NT$150,000 thousand (US$5,150 thousand). Also, in
June 2010, the stockholders approved the transfer of retained
earnings amounting to NT$386,968 thousand (US$13,284
thousand) and employee bonuses amounting to NT$50,206
thousand (US$1,724 thousand) to capital stock. As a result,
the amount of the Company’s outstanding common stock as
of December 31, 2010 increased to NT$8,176,532 thousand
(US$280,691 thousand), divided into 817,653 thousand
common shares at NT$10.00 (US$0.34) par value.
Global Depositary Receipts
The Company issued 14,400 thousand common shares
corresponding to 3,600 thousand units of Global Depositary
Receipts (GDRs). For this GDR issuance, the Company’s
stockholders, including Via Technologies, Inc., also issued
12,878.4 thousand common shares, corresponding to 3,219.6
thousand GDR units. Thus, the entire oering consisted
of 6,819.6 thousand GDR units. Each GDR represents four
common shares, and was issued, at a premium, at NT$131.1.
For this common share issuance, net of related expenses,
NT$1,696,855 thousand was accounted for as capital surplus.
This share issuance for cash was completed and registered on
November 19, 2003.
The holders of these GDRs have the same rights and
obligations as the stockholders of the Company. However,
the distribution of the oering and sales of GDRs and the
shares represented thereby in certain jurisdictions may be
restricted by law. In addition, the GDRs oered and the shares
represented are not transferable, except in accordance with the
restrictions described in the GDR oering circular and related
laws applied in Taiwan. Through the depositary custodian in
Taiwan, GDR holders are entitled to exercise these rights:
a. To vote; and
b. To receive dividends and participate in new share issuance
for cash subscription.
Taking into account the eect of stock dividends, the GDRs
increased to 8,804.8 thousand units (35,219.1 thousand shares).
The holders of these GDRs requested the Company to redeem
the GDRs to get the Company’s common shares. As of
December 31, 2010, there were 3,131.9 thousand units of GDRs
redeemed, representing 12,527.5 thousand common shares, and
the outstanding GDRs represented 22,691.6 thousand common
shares or 2.81% of the Company’s common shares.
Capital Surplus
Under the Company Law, capital surplus can only be used
to oset a deficit. However, the capital surplus from share
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 capitalized, which however
is limited to a certain percentage of the Company’s paid-in
capital. Also, the capital surplus from long-term investments
may not be used for any purpose.
The additional paid-in capital was NT$4,374,244 thousand
as of January 1, 2009. In January and November 2009, the
retirement of treasury stock caused a decrease of additional
paid-in capital amounted to NT$57,907 thousand and
NT$81,330 thousand, respectively. The bonus to employees
of NT$6,164,889 thousand for 2008 was approved in the
stockholders’ meeting in June 2009. Of the approved amount,
NT$4,954,889 thousand, representing 13,357 thousand, which
was determined by fair value, would be distributed by common
stock in 2009. The dierence between par value and fair value
of NT$4,821,316 thousand was accounted for as additional
paid-in capital in 2009. As a result, the additional paid-in
capital as of December 31, 2009 was NT$9,056,323 thousand.
Also in April 2010, the retirement of treasury stock caused a
decrease of additional paid-in capital amounted to NT$172,188
thousand (US$5,910 thousand). The bonus to employees
of NT$4,859,236 thousand (US$166,812 thousand) for 2009
were approved in the stockholders’ meeting in June 2010. Of
the approved amount, NT$1,943,694 thousand (US$66,725
thousand), representing 5,021 thousand common shares which
was determined by fair value, would be distributed by common
stock in 2010. The dierence between par value and fair
value of NT$1,893,488 thousand (US$65,001 thousand) was
accounted for as additional paid-in capital in 2010. As a result,
the additional paid-in capital as of December 31, 2010 was
NT$10,777,623 thousand (US$369,984 thousand).