HTC 2015 Annual Report Download - page 114

Financial information
Financial information
224
225
For the Year Ended December 31
2015
(Expected)
2014
(Actual)
Creditable ratio for
distribution of earning 34.37% 21.92%
Under the Income Tax Law, for distribution of earnings
generated after January 1, 1998, the imputation credits
allocated to ROC resident shareholders of the Company
was calculated based on the creditable ratio as of the
date of dividend distribution. The actual imputation
credits allocated to shareholders of the Company was
based on the balance of the ICA as of the date of dividend
distribution. Therefore, the expected creditable ratio
for the earnings may differ from the actual creditable
ratio to be used in allocating imputation credits to the
shareholders.
i. Income tax assessments
The Company's income tax returns through 2013 had
been assessed by the tax authorities. The Company
disagreed with the tax authorities' assessment of its
2013 tax return and applied for a re-examination.
Nevertheless, under the conservatism guideline, the
Company adjusted its income tax for the tax shortfall
stated in the tax assessment notices.
25. (LOSS) EARNINGS PER SHARE
Unit: NT$ Per Share
For the Year Ended
December 31
2015 2014
Basic (loss) earnings per share $(18.79) $1.80
Diluted (loss) earnings per
share $(18.79) $1.80
The (loss) earnings and weighted average number of
ordinary shares outstanding for the computation of (loss)
earnings per share were as follows:
Net (Loss) Profit for the Years
For the Year Ended December 31
2015 2014
(Loss) profit for the year $(15,533,068) $1,483,046
The exercise price equals to the closing price of the Company's ordinary shares on the grant date. For any subsequent changes in the
Company's ordinary shares, the exercise price is adjusted accordingly. Information on employee share options was as follows:
For the Year Ended December 31
2015 2014
Number of
Options
(In Thousands)
Weighted-average
Exercise Price
(NT$)
Number of
Options
(In Thousands)
Weighted-average
Exercise Price
(NT$)
Balance at January 1
Options granted
Options forfeited
31,908
1,000
( 7,944)
$140.37
54.50
15,000
19,000
( 2,092)
$149.00
134.50
Balance at December 31 24,964 137.20 31,908 140.37
Options exercisable, end of the year 5,905 -
Weighted-average fair value of options granted per unit (NT$) $ 15.00 $ 31.231
Shares
Unit: In Thousands of Shares
For the Year Ended
December 31
2015 2014
Weighted average number of ordinary
shares in computation of basic (loss)
earnings per share
Effect of dilutive potential ordinary shares:
Bonus issue to employees
826,784
-
824,194
622
Weighted average number of ordinary
shares in computation of diluted (loss)
earnings per share 826,784 824,816
If the Company was able to settle the bonuses paid to
employees by cash or shares, the Company presumed that
the entire amount of the bonus would be settled in shares
and the resulting potential shares were included in the
weighted average number of shares outstanding used in
the computation of diluted earnings per share, if the effect
is dilutive. Such dilutive effect of the potential shares was
included in the computation of diluted earnings per share
until the shareholders resolve the number of shares to be
distributed to employees at their meeting in the following
year.
26. SHARE-BASED PAYMENT
ARRANGEMENTS
Employee Share Option Plan of the Company
Qualified employees of the Company and its subsidiaries
were granted 15,000 thousand options in November 2013.
Each option entitles the holder to subscribe for one common
share of the Company. The options granted are valid for 7
years and exercisable at certain percentages after the second
anniversary from the grant date.
Qualified employees of the Company and its subsidiaries
were granted 19,000 thousand options in October 2014.
Each option entitles the holder to subscribe for one common
share of the Company. The options granted are valid for 10
years and exercisable at certain percentages after the second
anniversary from the grant date.
Qualified employees of the Company and its subsidiaries
were granted 1,000 thousand options in August 2015. Each
option entitles the holder to subscribe for one ordinary
share of the Company. The options granted are valid for 10
years and exercisable at certain percentages after the second
anniversary from the grant date.
Information about outstanding options as of the reporting
date was as follows:
December 31
2015 2014
Range of exercise price (NT$) $54.5-$149 $134.5-$149
Weighted-average remaining
contractual life (years)
7.30 years 8.22 years
Options granted in August 2015, October 2014 and November
2013 were priced using the trinomial option pricing model
and the inputs to the model were as follows:
August
2015
October
2014
November
2013
Grant-date share price
(NT$) $ 54.50 $ 134.50 $ 149.00
Exercise price (NT$) $ 54.50 $ 134.50 $ 149.00
Expected volatility 39.26% 33.46% 45.83%
Expected life (years) 10 years 10 years 7 years
Expected dividend yield 4.04% 4.40% 5.00%
Risk-free interest rate 1.3965% 1.7021% 1.63%
Expected volatility was based on the historical share price
volatility over the past 1 year. The Company assumed that
employees would exercise their options after the vesting
date when the share price was 1.63 times the exercise price.
Employee Restricted Shares
In the shareholder meeting on June 19, 2014 and June 2,
2015, the shareholders approved a restricted stock plan for
employees with a total amount of $50,000 thousand and
$75,000 thousand, consisting of 5,000 thousand and 7,500
thousand shares. On October 31, 2014, August 6, 2015, and
September 16, 2015, the Company's board of directors passed
a resolution to issue 4,600 thousand shares, 400 thousand
shares, and 4,006 thousand shares respectively.
The restrictions on the rights of the employees who acquire
the restricted shares but have not met the vesting conditions
are as follows:
a. The employees cannot sell, pledge, transfer, donate or in
any other way dispose of these shares.
b. The employees holding these shares are entitled to
receive cash and dividends in share.
c. The employees holding these shares have no voting
rights.
If an employee fails to meet the vesting conditions, the
Company will recall or buy back and cancel the restricted
shares. In April, July and October 2015, the Company retired
49 thousand, 117 thousand and 409 thousand restricted
shares for employees amounting to NT$492 thousand,
NT$1,167 thousand and NT$4,087 thousand. As a result, the
amount of the Company's outstanding employee restricted
shares as of December 31, 2015 was 7,243 thousand shares,
the other information was as follows:
Grant-date
December
23, 2015
August 10,
2015
November
2, 2014
Grant-date fair value
(NT$) $76.20 $57.50 $134.50
Exercise price Gratuitous Gratuitous Gratuitous
Numbers of shares
(thousand shares) 4,006 400 4,600
Vesting period (years) 1-3 years 1-3 years 1-3 years