HTC 2010 Annual Report Download - page 92

182 2 0 1 0 H T C A N N U A L R E P O R T 183
FINANCIAL INFORMATION
as its programs to maintain operating eciency and meet its
capital expenditure budget and financial goals in determining
the stock or cash dividends to be paid. The Company's
dividend policy stipulates that at least 50% of total dividends
may be distributed as cash dividends.
The bonus to employees of NT$6,164,889 thousand for 2008
were approved in the stockholders' meeting in June 2009. The
bonus to employees included a cash bonus of NT$1,210,000
thousand and a share bonus of NT$4,954,889 thousand. The
number of shares of 13,357 thousand was determined by
dividing the amount of share bonus by the closing price (after
considering the eect of cash and stock dividends) of the
shares of the day immediately preceding the stockholders'
meeting. The approved amounts of the bonus to employees
were the same as the accrued amounts.
The bonus to employees of NT$4,859,236 thousand for 2009
were approved in the stockholders' meeting in June 2010. The
bonus to employees included a cash bonus of NT$2,915,542
thousand and a share bonus of NT$1,943,694 thousand. The
number of shares of 5,021 thousand was determined by
dividing the amount of share bonus by the closing price (after
considering the eect of cash and stock dividends) of the
shares of the day immediately preceding the stockholders'
meeting. The approved amounts of the bonus to employees
were the same as the accrued amounts.
Based on a resolution passed by the Company's board of
directors, the employee bonus for 2009 and 2010 should be
appropriated at 18% of net income before deducting employee
bonus expenses. If the actual amounts subsequently resolved
by the stockholders dier from the proposed amounts,
the dierences are recorded in the year of stockholders'
resolution as a change in accounting estimate. If bonus shares
are resolved to be distributed to employees, the number of
shares is determined by dividing the amount of bonus by the
closing price (after considering the eect of cash and stock
dividends) of the shares of the day immediately preceding the
stockholders' meeting.
As of January 18, 2010, the date of the accompanying
independent auditors' report, the appropriation of the 2010
earnings had not been proposed by the Board of Directors.
Information on earnings appropriation can be accessed online
through the Market Observation Post System website.
21. TREASURY STOCK
On October 7, 2008, the Company's board of directors passed
a resolution to buy back 10,000 thousand Company shares
from the open market. The repurchase period was between
October 8, 2008 and December 7, 2008, and the repurchase
price ranged from NT$400 to NT$500 per share. If the
Company's share price was lower than this price range, the
Company might continue to buy back its shares. The Company
bought back 10,000 thousand shares for NT$3,410,277
thousand during the repurchase period and retired them in
January 2009.
On July 31, 2009, the Company's board of directors passed a
resolution to buy back 13,000 thousand Company shares from
the open market. The repurchase period was between August
3, 2009 and October 2, 2009, and the repurchase price ranged
from NT$300 to NT$500 per share. If the Company's share
price was lower than this price range, the Company might
continue to buy back its shares. The Company bought back
7,085 thousand shares for NT$2,406,930 thousand during the
repurchase period and retired them in November 2009.
On February 9, 2010, the Company's board of directors passed
a resolution to buy back 15,000 thousand Company shares
from the open market. The repurchase period was between
February 10, 2010 and April 9, 2010, and the repurchase price
ranged from NT$280 to NT$500 per share. If the Company's
share price was lower than this price range, the Company might
continue to buy back its shares. The Company bought back
15,000 thousand shares for NT$4,834,174 thousand (US$165,951
thousand) during the repurchase period and retired them in
April 2010.
On July 11, 2010, the Company's board of directors passed a
resolution to buy back 10,000 thousand Company shares from
the open market. The repurchase period was between July 13,
2010 and September 12, 2010, and the repurchase price ranged
from NT$526 to NT$631 per share. If the Company's share
price was lower than this price range, the Company might
continue to buy back its shares. The Company bought back
4,786 thousand shares for NT$2,865,990 thousand (US$98,387
thousand) during the repurchase period.
On October 29, 2010, the Company's board of directors passed
a resolution to buy back 10,000 thousand and 10,000 thousand
Company shares from the open market between November 1, 2010 and November 30, 2010, and between December 1, 2010 and
December 31, 2010, respectively, with the repurchase price ranging from NT$565 to NT$850 per share. If the Company's share price
was lower than this price range, the Company might continue to buy back its shares. The Company bought back 5,000 thousand
shares for NT$3,986,503 thousand (US$136,852 thousand) during the repurchase period. The related treasury stock information for
the years ended December 31, 2009 and 2010 was as follows:
(In Thousands of Shares)
Purpose of Treasury Stock
Number of Shares,
Beginning of Year
Addition
During the Year
Reduction
During the Year
Number of Shares,
End of Year
Year ended December 31, 2009
To maintain the Company's credibility and shareholders'
interest 10,000 7,085 17,085 -
Year ended December 31, 2010
To maintain the Company's credibility and shareholders'
interest - 15,000 15,000 -
For transferring shares to the Company's employees - 9,786 - 9,786
- 24,786 15,000 9,786
Based on the Securities and Exchange Act of the ROC, the number of reacquired shares should not exceed 10% of the Company's
issued and outstanding stocks, and the total purchase amount should not exceed the sum of the retained earnings, additional paid-in
capital in excess of par, and realized capital reserve. In addition, the Company should not pledge its treasury shares nor exercise voting
rights on the shares before their reissuance.
22. PERSONNEL EXPENSES, DEPRECIATION AND AMORTIZATION
Function
2009 2010
NT$ NT$ US$ (Note 3)
Expense Item
Operating
Costs
Operating
Expenses Total
Operating
Costs
Operating
Expenses Total
Operating
Costs
Operating
Expenses Total
Personnel expenses $ 2,980,449 $ 8,964,593 $ 11,945,042 $ 5,265,747 $ 15,813,869 $ 21,079,616 $ 180,767 $ 542,872 $ 723,639
Salary 2,551,772 8,180,903 10,732,675 4,544,387 14,879,114 19,423,501 156,004 510,783 666,787
Insurance 155,481 253,081 408,562 224,738 446,621 671,359 7,715 15,332 23,047
Pension cost 66,029 163,977 230,006 101,749 194,391 296,140 3,493 6,673 10,166
Other 207,167 366,632 573,799 394,873 293,743 688,616 13,555 10,084 23,639
Depreciation 476,585 421,450 898,035 469,145 435,568 904,713 16,105 14,953 31,058
Amortization 34,561 38,053 72,614 36,244 60,592 97,196 1,244 2,093 3,337
23. INCOME TAX
HTC's income tax returns through 2007 had been examined by the tax authorities. However, HTC disagreed with the tax authorities'
assessment on its returns for 2001 to 2003 and applied for the administrative litigation of its returns. Nevertheless, under the
conservatism guideline, HTC adjusted its income tax for the tax shortfall stated in the tax assessment notices.
The income tax returns of Communication Global Certification Inc. and HTC Investment Corporation through 2008 had been examined
by the tax authorities.