HTC 2015 Annual Report Download - page 117

Financial information
Financial information
230
231
bad debt expense had been recognized for the years ended
December 31, 2015 and 2014 for the amounts owed by related
parties.
Purchase and Outsourcing Expense
For the Year Ended December 31
2015 2014
Purchase
Subsidiaries
Other related parties - other
related parties' chairperson or
its significant stockholder, is
the Company's chairperson
$1,455,390
-
$ 3,338,212
4,454
$1,455,390 $ 3,342,666
Outsourcing expense
Subsidiaries $ 1,572,174 $10,920,530
Purchase prices for related parties and third parties were
similar. Outsourcing expenses were calculated based on
contracted processing rate.
The following balances of trade payables from related parties
were outstanding at the end of the reporting period:
December 31
2015 2014
Subsidiaries $384,914 $6,508,521
The outstanding of trade payables to related parties are
unsecured and will be settled in cash.
Compensation of Key Management Personnel
For the Year Ended December 31
2015 2014
Short-term benefits
Post-employment benefits
Share-based payments
$177,236
2,274
67,843
$379,623
1,726
52,461
$247,353 $433,810
The remuneration of directors and key executives was
determined by the remuneration committee having regard
to the performance of individuals and market trends.
Property, Plant and Equipment Acquired
2008, the Company filed declaratory judgment action
for non-infringement and invalidity against three of
IPCom's patents with the Washington Court, District of
Columbia.
In October 2010, IPCom filed a new complaint against
the Company alleging patent infringement of patent
owned by IPCom in District Court of Dusseldorf,
Germany.
In June 2011, IPCom filed a new complaint against
the Company alleging patent infringement of patent
owned by IPCom with the High Court in London, the
United Kingdom. In September 2011, the Company filed
declaratory judgment action for non-infringement and
invalidity in Milan, Italy. Legal proceedings in above-
mentioned courts in Germany and the United Kingdom
are still ongoing. The Company evaluated the lawsuits
and considered the risk of patents-in-suits are low. Also,
preliminary injunction and summary judgment against
the Company are very unlikely.
In March 2012, Washington Court granted on the
Company's summary judgment motion and ruled on
non-infringement of two of patents-in-suit. As for the
third patents-in-suit, the Washington Court has granted
a stay on case pending appeal decision. In January 2014,
the Court of Appeal for the Federal Circuit affirmed the
Washington Court's decision.
As of the date that the board of directors approved and
authorized for issuing parent company only financial
statements, there had been no critical hearing, nor had a
court decision been made, except for the above.
For the Year Ended
December 31
2015 2014
Other related parties - other
related parties' chairperson or
its significant stockholder, is the
Company's chairperson $2,695 $ -
Other Related-party Transactions
a. To enhance product diversity, the Company entered into
technology license agreement with subsidiaries. The
royalty expense were NT$186 thousand and NT$55,996
thousand for the years ended December 31, 2015 and
2014, respectively. As of December 31, 2015 and 2014 the
amounts of prepaid royalty were NT$54,061 thousand
and NT$54,529 thousand, respectively.
b. Subsidiaries and other related parties assisted the
Company to expand business overseas and render design,
research and development support, consulting services
and after-sales services. The Company recognized
related expenses amounting to NT$8,975,963 thousand
and NT$8,667,945 thousand for the years ended
December 31, 2015 and 2014, respectively. The unpaid
amount were NT$2,516,692 thousand and NT$2,366,626
thousand as of December 31, 2015 and 2014.
c. The Company leased staff dormitory owned by a related
party under an operating lease agreement. The rental
payment is determined at the prevailing rates in the
surrounding area. The Company recognized and paid
rental expenses amounting to NT$3,285 thousand and
NT$5,209 thousand for the years ended December 31,
2015 and 2014, respectively.
d. Other related parties provide selling and marketing
service to the Company. The selling and marketing
service expenses were NT$10,300 thousand and
NT$16,150 thousand for the years ended December 31,
2015 and 2014, respectively. As of December 31, 2014,
the unpaid selling and marketing service expenses was
NT$158 thousand.
30. COMMITMENTS, CONTINGENCIES
AND SIGNIFICANT CONTRACTS
Lawsuit
a. In April 2008, IPCom GMBH & CO., KG (“IPCom”)
filed a multi-claim lawsuit against the Company with
the District Court of Mannheim, Germany, alleging that
the Company infringed IPCom's patents. In November
b. In July 2014, US patent holding company Acacia
Research Corporation (“Acacia”) has enforced its 6
AMR-WB standard essential patent portfolio against
Deutsche Telekom and Vodafone separately in Germany
through its subsidiary Saint Lawrence Communications
GmbH (“SLC”).
In March 2015, SLC got granted 4 injunctions against
Deutsche Telekom by the Mannheim court. For the 1st
injunction, Deutsche Telekom had successfully stayed
the enforcement by posting a counter bond in late
March 2015. For the 2nd to 4th injunctions, SLC has not
enforced them against Deutsche Telekom yet. The way
SLC enforced this 6-patent portfolio is subject to the
anti-competition review by European Commission.
The litigations between SLC and Deutsche Telekom in
Manheim and Vodafone in Dusseldorf are still ongoing.
In order to protect the interest of the carrier customers,
the Company has officially intervened these 2 disputes
in the court procedure. In addition, the Company also
sued Acacia for a declaratory judgment action in United
States.
As of the date that the board of directors approved and
authorized for issuing parent company only financial
statements, there had been no critical hearing nor had a
court decision been made, except for the above.
c. On the basis of its past experience and consultations
with its legal counsel, the Company has measured
the possible effects of the contingent lawsuits on its
business and financial condition.
31. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES
The significant financial assets and liabilities denominated in foreign currencies were as follows:
December 31
2015 2014
Foreign Currencies Exchange Rate Foreign Currencies Exchange Rate
Financial assets
Monetary items
USD
EUR
JPY
RMB
$1,120,008
115,258
2,057,300
581,443
33.06
36.13
0.2747
5.03
$1,545,692
179,925
6,015,360
1,339,043
31.67
38.49
0.2648
5.10
(Continued)