HTC 2012 Annual Report Download - page 112

The employee bonus in 2011 and 2012 should be appropriated at 10% and 5%, respectively, of net income before deducting
employee bonus expenses. Accrued bonuses as of December 31, 2011 and 2012 were as follows:
2011 2012
NT$ NT$ US$ (Note 3)
Accrued bonus to employees for the current year $7,238,637 $976,327 $33,517
Cash bonuses approved by the stockholders for prior years - 4,735,748 162,579
$7,238,637 $5,712,075 $196,096
The Company accrued marketing expenses on the basis of related agreements and other factors that would significantly
affect the accruals.
In September 2009, HTC's board of directors resolved to donate to the HTC Cultural and Educational Foundation
NT$300,000 thousand, consisting of (a) the second and third floors of Taipei's R&D headquarters, with these two floors
to be built at an estimated cost of NT$217,800 thousand, and (b) cash of NT$82,200 thousand. This donation excludes
the land, of which the ownership remains with HTC. In June 2012, HTC handed over the foregoing donated building to the
HTC Cultural and Educational Foundation. The actual construction cost was NT$218,636 thousand (US$7,506 thousand).
The difference between the estimated construction cost and the actual construction cost was NT$836 thousand (US$29
thousand) and was recognized as an adjustment on the donation to the HTC Cultural and Educational Foundation in 2012.
19. OTHER CURRENT LIABILITIES
Other current liabilities as of December 31, 2011 and 2012 were as follows:
2011 2012
NT$ NT$ US$ (Note 3)
Warranty provisions $13,080,394 $8,058,509 $276,649
Provisions for contingent loss on purchase orders 2,052,881 823,005 28,254
Advance receipts 433,072 535,110 18,370
Other payable 512,941 325,701 11,182
Agency receipts 440,862 301,868 10,363
Advance revenues 140,815 102,137 3,506
Others 646,390 848,990 29,146
$17,307,355 $10,995,320 $377,470
The Company provides warranty service for one year to two years depending on the contract with customers and recognizes
estimable warranty liabilities.
Other payables were payables for patents, and agreed installments payable to the original stockholders of subsidiaries.
Agency receipts were primarily employees' income tax, insurance, royalties and overseas value-added tax.
The provision for contingent loss on purchase orders is estimated after taking into account the effects of changes in the
product market, in inventory management and in the Company's purchases.
20. PENSION PLAN
The pension plan under the Labor Pension Act (the "LPA") is a defined contribution plan. Based on the LPA, HTC and
Communication Global Certification Inc. ("CGC") make monthly contributions to employees’ individual pension accounts
at 6% of monthly salaries and wages. Such pension costs were NT$351,762 thousand in 2011 and NT$413,458 thousand
(US$14,194 thousand) in 2012.
2012
Patents Goodwill Deferred
Pension Cost Other Total
NT$ NT$ NT$ NT$ NT$ US$ (Note 3)
Cost
Balance, beginning of year $11,608,540 $10,905,878 $342 $911,962 $23,426,722 $804,240
Additions
Acquisition 11,464 - - 497,874 509,338 17,486
The difference between the cost of
investment and the Company's share in
investees' net assets
- 45,017 - - 45,017 1,545
Adjustments of acquisition cost - (26,226) - - (26,226) (900)
Reclassification - (5,717,960) - 5,717,960 - -
The changes in deferred pension cost - - (73) - (73) (3)
Disposal of Subsidiary (35,323) (3,485,380) - (5,713,752) (9,234,455) (317,019)
Translation adjustment (345,127) (39,768) - (81,322) (466,217) (16,005)
Balance, end of year 11,239,554 1,681,561 269 1,332,722 14,254,106 489,344
Accumulated amortization
Balance, beginning of year 456,442 - - 316,178 772,620 26,524
Amortization 1,625,124 - - 333,424 1,958,548 67,237
Disposal of Subsidiary (1,893) - - (115,699) (117,592) (4,037)
Translation adjustment (20,793) - - (6,546) (27,339) (938)
Balance, end of year 2,058,880 - - 527,357 2,586,237 88,786
Accumulated impairment losses
Balance, beginning of year - 93,314 - - 93,314 3,203
Impairment losses - 57,621 - - 57,621 1,978
Translation adjustment - (3,740) - - (3,740) (128)
Balance, end of year - 147,195 - - 147,195 5,053
Net book value, end of year $9,180,674 $1,534,366 $269 $805,365 $11,520,674 $395,505
18. ACCRUED EXPENSES
Accrued expenses as of December 31, 2011 and 2012 were as follows:
2011 2012
NT$ NT$ US$ (Note 3)
Marketing $29,104,665 $20,872,536 $716,555
Bonus to employees 7,238,637 5,712,075 196,096
Salaries and performance bonuses 3,433,649 5,619,290 192,910
Materials and molding expenses 1,854,932 1,904,181 65,371
Services 1,324,631 1,020,609 35,038
Import, export and freight 1,397,747 644,432 22,123
Repairs, maintenance and sundry purchase 466,135 573,355 19,683
Insurance 191,931 243,046 8,344
Meals and welfare 193,721 169,711 5,826
Pension cost 123,877 119,833 4,114
Travel 96,085 96,726 3,321
Donation 236,630 - -
Others 508,650 400,699 13,756
$46,171,290 $37,376,493 $1,283,137
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