HTC 2014 Annual Report Download - page 132

• Financial information Financial information •
260 261
December 31
2014 2013
Present value of funded
defined benefit obligation $(443,642) $ (413,220)
Fair value of plan assets 552,780 538,935
Defined benefit assets $ 109,138 $ 125,715
Movements in the present value of the defined benefit
obligations were as follows:
For the Year Ended December 31
2014 2013
Opening defined benefit
obligation
Current service cost
Interest cost
Actuarial losses
Benefits paid
$ 413,220
9,864
7,744
34,762
(21,948)
$ 394,681
4,599
6,408
13,851
(6,319)
Closing defined benefit
obligation $ 443,642 $ 413,220
Movements in the present value of the plan assets in the
current year 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
$ 538,935
11,017
1,416
23,360
(21,948)
$ 513,954
9,885
(3,255)
24,670
(6,319)
Closing fair value of plan assets $ 552,780 $ 538,935
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$23,797
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 NT$19,126
thousand and 7,789 thousand treasury shares amounting
to NT$77,890 thousand, respectively. Also, in February
and October 2014, the Company retired 1,999 thousand
treasury shares amounting to NT$19,984 thousand
and 10,000 thousand treasury shares amounting to
NT$100,000 thousand, respectively. In November 2014,
the Company issued 4,600 thousand restricted shares
for employees amounting to NT$46,000 thousand. As
a result, the amount of the Company’s outstanding
common stock as of December 31, 2014 decreased to
NT$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, HTC issued 14,400 thousand
common shares corresponding to 3,600 thousand
units of Global Depositary Receipts (“GDRs”). For
this GDR issuance, HTC’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 HTC to redeem the GDRs to get HTC’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 HTC’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 NT$208,546 thousand in
additional paid-in capital - issuance of shares in excess of
par, NT$1,499 thousand in capital surplus - treasury shares,
NT$344 thousand in capital surplus - merger and NT$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 NT$630,292 thousand, and the
rest offset against unappropriated earnings amounting to
NT$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 HTC’s Articles of Incorporation, HTC 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
HTC’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, HTC 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. HTC’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.