HTC 2011 Annual Report Download - page 84

As of December 31, 2011, the Company had bought back 100 thousand shares for NT$49,710 thousand (US$1,642 thousand). Other treasury stock
information for 2010 and 2011 were as follows:
(In Thousands of Shares)
Purpose of Treasury Stock Number of Shares,
Beginning of Year
Addition
During the Year
Reduction
During the Year
Number of Shares,
End of Year
Year ended December 31, 2010
To maintain the Company's credibility and stockholders' interest - 15,000 15,000 -
For transferring shares to the Company's employees - 9,786 - 9,786
- 24,786 15,000 9,786
Year ended December 31, 2011
To maintain the Company's credibility and stockholders' interest - 10,000 10,000 -
For transferring shares to the Company's employees 9,786 10,100 5,875 14,011
9,786 20,100 15,875 14,011
8.
Based on the Securities and Exchange Act of the ROC, the number of reacquired shares should not exceed 10% of the Company's issued and
outstanding shares, and the total purchase amount should not exceed the sum of the retained earnings, additional paid-in capital in excess of
par, and paid-in capital reserve. In addition, the Company should not pledge its treasury shares nor exercise voting rights.
(21) PERSONNEL EXPENSES, DEPRECIATION AND AMORTIZATION
2010 2011
NT$ NT$ US$ (Note 3)
Function
Expense Item
Operating
Costs
Operating
Expenses Total Operating Costs
Operating
Expenses Total Operating Costs
Operating
Expenses Total
Personnel expenses $4,599,227 $12,688,670 $17,287,897 $5,280,875 $13,366,157 $18,647,032 $174,407 $441,433 $615,840
Salary 3,995,447 12,103,004 16,098,451 4,265,616 12,511,284 16,776,900 140,877 413,200 554,077
Insurance 204,932 212,854 417,786 366,969 305,644 672,613 12,120 10,094 22,214
Pension cost 80,857 141,877 222,734 156,967 197,607 354,574 5,184 6,526 11,710
Other 317,991 230,935 548,926 491,323 351,622 842,945 16,226 11,613 27,839
Depreciation 299,285 322,728 622,013 504,199 424,575 928,774 16,652 14,022 30,674
Amortization 34,987 23,634 58,621 387,103 9,919 397,022 12,784 328 13,112
(22) INCOME TAX
The Company's income tax returns through 2008 had been examined by the tax authorities. However, the Company disagreed with the tax
authorities' assessment on its return for 2002 and applied for the administrative litigation of this return. Nevertheless, under the conservatism
guideline, the Company adjusted its income tax for the tax shortfall stated in the tax assessment notices.
Under the Statute for Upgrading Industries, the Company was granted exemption from corporate income tax as follows:
Item Exempt from Corporate Income Tax Exemption Period
Sales of pocket PCs (wireless) and smartphones 2005.12.20-2010.12.19
Sales of wireless or smartphone which has 3G or GPS function 2006.12.20-2011.12.19
Sales of wireless or smartphone which has 3G or GPS function 2007.12.20-2012.12.19
Sales of wireless or smartphone which has 3.5G function 2010.01.01-2014.12.31
Sales of wireless or smartphone which has 3.5G function (application for exemption under review by the Ministry of Finance
as of December 31, 2011) 2012.01.01-2016.12.31
efficiency 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.
(4) The bonus to employees of NT$4,859,236 thousand for
2009 was approved in the stockholders' meeting in June
2010. The bonus to employees consisted of a cash bonus of
NT$2,915,542 thousand and a share bonus of NT$1,943,694
thousand. The share number of 5,021 thousand was
determined by dividing the amount of share bonus by the
closing price (after considering the effect 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.
(5) The bonus to employees of NT$8,491,704 thousand for
2010 was approved in the stockholders' meeting in June
2011. The bonus to employees consisted of a cash bonus of
NT$4,245,852 thousand and a share bonus of NT$4,245,852
thousand (the amounts were NT$4,245,853 thousand and
NT$4,245,851 thousand, respectively, after taking into
account the effect that the amount less than one share will
be distributed in the form of cash). The share number of
4,006 thousand was determined by dividing the amount
of share bonus by the closing price (after considering the
effect 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.
(6) Based on the resolutions passed by the Company's board of
directors, the employee bonuses for 2010 and 2011 should
be appropriated at 18% and 10%, respectively, of net income
before deducting employee bonus expenses. If the actual
amounts subsequently resolved by the stockholders differ
from the proposed amounts, the differences 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 effect of cash and stock dividends) of the shares of the
day immediately preceding the stockholders' meeting.
As of February 14, 2012, the date of the accompanying
independent auditors' report, the appropriation of the 2011
earnings had not been proposed by the Board of Directors.
Information on earnings appropriation can be accessed on
the Market Observation Post System website.
(20) TREASURY STOCK
1.
On February 9, 2010, the Company's board of directors passed a
resolution to buy back 15,000 thousand of its 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 planned to continue to buy back its shares.
The Company bought back 15,000 thousand shares for NT$4,834,174
thousand during the repurchase period and retired them in April 2010.
2.
On July 11, 2010, the Company's board of directors passed a
resolution to buy back 10,000 thousand of its 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 planned to continue to
buy back its shares. The Company bought back 4,786 thousand
shares for NT$2,865,990 thousand during the repurchase period.
3.
On October 29, 2010, the Company's board of directors passed
a resolution to buy back 5,000 thousand and 5,000 thousand of
its 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 planned to continue to buy
back its shares. The Company bought back 5,000 thousand shares
for NT$3,986,503 thousand during these repurchase periods.
4.
In June 2011, the Company resolved to transfer 6,000 thousand
treasury shares to employees; the number of shares actually
transferred was 5,875 thousand.
5.
The Company resolved to transfer 6,000 thousand treasury
stocks to employees in June 2011, and the number of shares
actually transferred was 5,875 thousand.
6.
On July 16, 2011, the Company's board of directors passed a
resolution to buy back 10,000 thousand and 10,000 thousand of
its shares from the open market between July 18, 2011 and August
17, 2011, and between August 18, 2011 and September 17, 2011,
respectively, with the repurchase price ranging from NT$900
(US$30) to NT$1,100 (US$36) per share. If the Company's share
price was lower than this price range, the Company planned
to continue to buy back its shares. The Company bought
back 20,000 thousand shares for NT$16,086,098 thousand
(US$531,262 thousand) during the repurchase period and retired
10,000 thousand shares in December 2011.
7.
On December 20, 2011, the Company's board of directors passed a
resolution to buy back 10,000 thousand of its shares from the open
market between December 20, 2011 and February 19, 2012, with the
repurchase price ranged from NT$445 (US$15) to NT$650 (US$21)
per share. If the Company's share price becomes lower than this
price range, the Company planned to continue to buy back its shares.
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