HTC 2015 Annual Report Download - page 73
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Please find page 73 of the 2015 HTC annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.Financial status, operating results and risk management
Financial status, operating results and risk management
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206million.Fairvalueofthederivativeschangesasaresultofforexfluctuations.Adecreaseof1%inthe
quoted exchange rate of any one of the abovementioned currencies against the NT dollar would result in
a derivatives holding gain to HTC of approximately NT$50,978 million.
During2015,theUSdollarappreciatedfrom1:31.7againsttheNTdollartoapproximately1:33.Net
exchangeincomeearnedduring2015totaledNT$411.846million.Undereffectivemanagementbythe
Company, negative effects of exchange rate fluctuations on profits in recent years have been minimal.
InflationinTaiwanwasapproximately-0.3%in2015.InflationratesinNorthAmericanandEuropean
markets were also relatively negligible. Overall, inflation had no significant impact on HTC profits.
2. Risks associated with high-risk/high-leveraged investment; lending,
endorsements, guarantees for other parties and financial derivative
transactions
HTC does not engage in high-risk ventures or highly leveraged investments. Loaning of funds takes place
only between HTC subsidiaries. All such arrangements must be reviewed and approved by the board of
directorsinaccordancewiththeOperationalProceduresforFundLendingandRulesforEndorsements
and Guarantees. HTC engages in derivative products trading only to mitigate forex risks arising from
foreign currency assets and liabilities. All derivative trading is conducted according to stipulations
writtenintheProceduresforAcquisitionorDisposalofAssets.
3. Future R&D plans and anticipated R&D expenditures
TheCompany'sR&Dprogramsforthemostrecentfiscalyearprimarilyfocusonresearchand
development of applications related to the user experience and mobile data services, and on providing
product-related technical support and after-sales service.
Inadditiontofurtherdevelopingitsexistingsmartphoneproductline,theCompanywillcontinueto
research and develop technologies that enhance the user experience, such as wide-angle front camera
technologies that allow users to have an ever-more perfect self-shooting experience by enabling the
lens to image a broader background. The Duo Camera boasts a depth sensor that enables a wide range of
beautiful images and better user experiences. The high efficiency, low distortion headphone amplifiers
and built-in speakers make the sound even more stunning. Developing and enhancing all new Smart
Sensor Hub provide users new and more intuitive user experiences and provide more health information
byimprovingfitnessandsportapplicationthroughthefullintegrationwithHTCBlinkFeed™.HTCis
also exploring dual card, dual mode capabilities that permit dual card users to answer incoming calls
whethersurfingtheInternetordownloadinginformation,whilethephonesmoothlyjugglesallthe
necessarysystems.ThroughHTC'sadvancedtechnologiesuserswillcontinuetoenjoyricher,more
personalizedmobilephoneexperiences.Inaddition,throughmoreopendevelopingfunctionsand
environments (HTCDev), developers from all over the world can utilize the powerful hardware/software
functions of HTC smartphone such as strong computing processor, best camera and sound effects, smart
sensor,bestHTCSense™andHTCBlinkFeedtodevelopapplicationsthatenableuserstohavemoreand
best user experiences.
Since the launch of the widely acclaimed HTC Vive, we've been working relentlessly aiming to bring
the most immersive experience for our customers and to shape the future of virtual reality industry.
WelooktobuildHMDofhigherresolutionsandlighterweighttoprovideanevenmoreimmersive
user experience. We are also working with various partners to build a VR platform that brings
outtheadvantagesofbothsoftwareandhardware.Inthepast,HTCchangedtheworldofmobile
communication with leading technologies; in the future, HTC will continue to change people's lives in
the virtual world.
Starting2014,HTChasdevotedalotofresourcesondevelopingR&Dtalentsandtechnological
innovations,withacurrentcountforR&Dstaffsrepresentingcloseto30%ofthetotalworldwidestaff
count.ItsinvestmentonR&Dresourcesrepresentsapproximately11%ofitsoperatingincome.HTC
willcontinuetodevotemoreR&Dresourcesonvariousnewproductsandtechnologies.Inthefuture,
virtualreality,wearablesandIoTdeviceswillbethefocus,inadditiontocontinuousinnovationon
majorsmarthandheldproductsandcontinuedrefinementonuserexperiences.ThissignifiesthatHTC
will offer a future product line that is rich with selections and closely match users' needs by penetrating
into everyone's daily life and providing more information to the users. These smart products and
technologies will also push the HTC brand to a higher position, further strengthening the company's
long-term competitiveness.
4. Effects of domestic / foreign government policies and regulations on
HTC finances and response measures
he Financial Supervisory Committee (FSC) of the Executive Yuan has required all listed companies
inTaiwantopreparefinancialstatementsinaccordancewiththeInternationalFinancialReporting
Standards(IFRSs)startingfromJanuary1,2013.HTChasestablishedanIFRSsprojectteamandhas
launchedtheprojectplanforitsIFRSsadoption.Inaddition,theprogressofsuchadoptionisregularly
reportedtotheBoard.
AsofDecember31,2012,allpotentialsignificantdifferencebetweenIFRSsandcurrentaccounting
policyhadbeenidentified.FulldisclosureoftheIFRSsmaincontentandimplementationstatuswere
included in the footnote of the 2011 annual consolidated financial statements and the 2012 interim and
annualconsolidatedfinancialstatements.Startingfrom2013,HTChaspreparedfinancialstatementsin
accordancewithIFRSs.
TheTaiwan"NationalHealthInsuranceAct"wasamendedonJanuary26,2011,tocreateanobligation
tofundthehealthinsuranceschemebypayinganextra2%"supplementarypremium"(basedon
2%ofthetotalprofitsharingandvariablebonus)plusthebasicpremiumcharge.Suchextra2%
"supplementary premium" will be incurred in connection with future payouts of profit sharing and
variable bonus and increase the operation cost of the Company. HTC has studied the implications of
this new amendment and has taken the necessary managerial precautionary steps with respect to such
amendment.
5. Effects on HTC finances of changes in technology and industry trends
and response measures
WirelesstelecommunicationsisanimportantgrowthsectorwithintheITindustryandthesmartphone
is its flagship product. Responding to rapid mobile internet growth and communication technology
migrationto3G/4G,HTChasleveragedoutstandingR&Dcapabilitiesinpartnershipswithglobal