HTC 2014 Annual Report Download - page 105

• Financial information Financial information •
206 207
For the Year Ended
December 31
2014 2013
Opening defined benefit obligation
Current service cost
Interest cost
Actuarial losses
Benefits paid
$411,522
9,864
7,716
34,579
(21,947)
$393,124
4,599
6,388
13,730
(6,319)
Closing defined benefit obligation $441,734 $411,522
Movement in the present value of the defined benefit
obligations were as follows:
For the Year Ended
December 31
2014 2013
Opening fair value of plan assets
Expected return on plan assets
Actuarial losses
Contributions from the employer
Benefits paid
$537,416
10,985
1,413
23,159
(21,947)
$512,646
9,858
(3,246)
24,476
(6,318)
Closing fair value of plan assets $551,026 $537,416
The major categories of plan assets at the end of the
reporting period for each category were disclosed based
on the information announced by Bureau of Labor Funds,
Ministry of Labor:
December 31
2014 2013
Equity instruments
Debt instruments
Others
49.69%
47.48%
2.83%
44.77%
54.44%
0.79%
100.00% 100.00%
The Company expects to make a contribution of NT$23,588
thousand to the defined benefit pension plan within one year
from December 31, 2014.
21. EQUITY
Share Capital
a. Common stock
December 31
2014 2013
Authorized shares
(in thousands of shares) 1,000,000 1,000,000
Authorized capital $10,000,000 $10,000,000
Issued and fully paid shares
(in thousands of shares) 834,952 842,351
Issued capital $8,349,521 $8,423,505
In September and November 2013, the Company retired
1,912 thousand treasury shares amounting to $19,126
thousand and 7,789 thousand treasury shares amounting
to $77,890 thousand, respectively. Also, in February
and October 2014, the Company retired 1,999 thousand
treasury shares amounting to $19,984 thousand and
10,000 thousand treasury shares amounting to $100,000
thousand, respectively. In November 2014, the Company
issued 4,600 thousand restricted shares for employees
amounting to $46,000 thousand. As a result, the amount
of the Company’s outstanding common stock as of
December 31, 2014 decreased to $8,349,521 thousand,
divided into 834,952 thousand common shares at NT$10
par value. Every common stock carries one vote per
share and a right to dividends.
50,000 thousand shares of the Company’s shares
authorized were reserved for the issuance of employee
share options.
b. Global depositary receipts
In November 2003, 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 offering consisted
of 6,819.6 thousand GDR units. Taking into account the
effect of stock dividends, the GDRs increased to 8,782.1
thousand units (36,060.5 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, 2014, there were 8,328.6 thousand units
of GDRs redeemed, representing 33,314.3 thousand
common shares, and the outstanding GDRs represented
2,746.2 thousand common shares or 0.33% of the
Company’s outstanding common shares.
Capital Surplus
December 31
2014 2013
Arising from issuance of common
shares $14,432,437 $14,640,983
Arising from treasury share
transactions - 631,791
Arising from merger 23,801 24,145
Arising from employee share
options 250,470 26,742
Arising from expired stock options 36,124 36,646
Arising from employee restricted
shares 397,855 -
$15,140,687 $15,360,307
The capital surplus arising from shares issued in excess of
par (including share premium from issuance of common
shares, treasury share transactions, merger and expired
stock options) and donations may be used to offset a deficit;
in addition, when the Company has no deficit, such capital
surplus may be distributed as cash dividends or transferred
to share capital (limited to a certain percentage of the
Company’s capital surplus and once a year).
In September and November 2013, the retirement of
treasury shares caused decreases of NT$168,625 thousand
in additional paid-in capital - issuance of shares in excess of
par, NT$9,727 thousand in capital surplus - treasury shares,
NT$278 thousand in capital surplus - merger and NT$422
thousand in capital surplus - expired stock options. The
difference the carrying value of treasury shares retired
in excess of the sum of its par value and premium from
issuance of common share was firstly offset against capital
surplus - treasury shares by NT$1,088,940 thousand, and the
rest offset against unappropriated earnings amounting to
NT$814,170 thousand.
In February and October 2014, the retirement of treasury
shares caused decreases of $208,546 thousand in additional
paid-in capital - issuance of shares in excess of par, $1,499
thousand in capital surplus - treasury shares, $344 thousand
in capital surplus - merger and $522 thousand in capital
surplus - expired stock options. The difference the carrying
value of treasury shares retired in excess of the sum of
its par value and premium from issuance of common
share was firstly offset against capital surplus - treasury
shares by $630,292 thousand, and the rest offset against
unappropriated earnings amounting to $8,208,915 thousand.
For details of capital surplus - employee share options and
employee restricted shares, please refer to Note 26.
Retained Earnings and Dividend Policy
Under the Company’s Articles of Incorporation, the
Company should make appropriations from its net income
in the following order:
a. To pay taxes.
b. To cover accumulated losses, if any.
c. To appropriate 10% legal reserve unless the total legal
reserve accumulated has already reached the amount of
the Company’s authorized capital.
d. To recognize or reverse special reserve return earnings.
e. To pay remuneration to directors and supervisors
at 0.3% maximum of the balance after deducting the
amounts under the above items (a) to (d).
f. To pay bonus to employees at 5% minimum of the
balance after deducting the amounts under the above
items (a) to (d), or such balance plus the unappropriated
retained earnings of previous years. However, the
bonus may not exceed the limits on employee bonus
distributions as set out in the Regulations Governing the
Offering and Issuance of Securities by Issuers. Where
bonus to employees is allocated by means of new share
issuance, the employees to receive bonus may include
the affiliates’ employees who meet specific requirements
prescribed by the board of directors.
g. For any remainder, the board of directors should
propose allocation ratios based on the dividend policy
set forth in HTC’s Articles and propose them at the
stockholders’ meeting.
As part of a high-technology industry and as a growing
enterprise, the Company considers its operating
environment, industry developments, and long-term
interests of stockholders as well as its programs to maintain
operating 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.
The employee bonus for the year ended December 31,
2014 should be appropriated at 5% 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.